Digital transformation is the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and deliver value. It helps streamline operations, increase efficiency, gain deeper insights into customers’ needs and behavior, foster innovation, and drive business growth.
Digital transformation is no longer a choice; it’s a necessity for organizations to remain competitive. While digital transformation can bring many benefits to organizations, it also poses a handful of challenges.
These are the top 7 barriers that organizations may face during digital transformation.
1. Change resistance
One of the most significant challenges during a digital transformation is resistance to change.
Even if a change sets your organization up for future success, some people won’t quickly warm to the idea. Employees and managers may resist using new tools and technologies due to fear of change in their workflow. Change is uncomfortable, but it’s also inevitable, and resistance can slow down the transformation process.
Digital transformation leaders and CEOs should communicate the reasons for the change, focusing on the benefits and what employees can expect. Addressing employees’ concerns is also key to overcoming this challenge. Leaders must listen to the reason for the resistance and provide solutions to any concerns.
Remember that your view of the change and digital transformation can highly affect your employees. If you communicate uncertainty and fear, your employees will too. Demonstrate a positive attitude and model the desired mindset for your employees.
[ Also read Digital transformation: How to teach the language of change. ]
There are many reasons that organizations still use legacy systems that are incompatible with modern digital solutions. First, replacing those legacy systems can be a very time-consuming and expensive process. Second, many organizations feel more comfortable using what they already know and fear the uncertainty and the investment in a new digital solution that requires user training and time for adoption.
This digital transformation challenge is tied to change resistance, and overcoming both can be achieved through effective communication. Clearly communicate with your employees the benefits of the new technology and how it can help them in their daily workflow. Assure them that the necessary training will be provided and that positive or negative feedback is welcome.
3. Communication and collaboration silos
Difficulties communicating and collaborating with team members remains a challenge to digital transformation. An all-in-one digital workplace becomes of great value to organizations looking to increase productivity and improve communication and collaboration.
All-in-one digital workplaces are an integral part of digital transformation. They provide teams with the tools to get their work done, including the means to manage workload and projects efficiently and effectively.
Tools that integrate crucial digital transformation aspects like project and content management, chat, and data analytics in one software can increase productivity, communication, and results.
4. Technology choices
While undergoing a digital transformation journey, CIOs and digital transformation leaders are under constant pressure. They must search the market for the right technology to replace their legacy systems and processes. However, when in a rush to satisfy CEO and stakeholder requests, this all-important decision-making process suffers.
Another challenge during the digital transformation process is the abundance of choices on the market. Your organization should have a strategic plan and know what’s needed to solve problems prior to evaluating which technologies to invest in.
The first step is conducting a thorough needs assessment to define your organization’s requirements and goals. Then you can effectively evaluate different technology options, considering factors such as ease of use, scalability, integration, flexibility, adaptability, and cost.
[ How can automation free up more staff time for innovation? Get the complementary eBook: Managing IT with automation. ]
5. Security concerns
Cybersecurity and privacy are a top priority for organizations, but they are also a great concern. Most digital transformations involve moving business data to the cloud and integrating it into one centralized system for easier access.
To address security concerns, organizations must implement a comprehensive security strategy that includes risk assessment, security policies and procedures, employee security training, and incident response plans.
Cybersecurity measures currently in place by businesses are increasingly being rendered obsolete by the growing sophistication of cybercriminals, according to The World Economic Forum’s The Global Risks Report 2022. More innovative security breach methods could more easily target and damage organizations with poor system integrations. API abuse can seriously affect organizations by exposing their company secrets and even lead to hackers stealing customer data.
To address security concerns, organizations must implement a comprehensive security strategy that includes risk assessment, security policies and procedures, employee security training, and incident response plans. And finally, continuous monitoring is key to identifying and preventing security threats before they occur.
6. Evolving customer needs
While evolving customer needs present opportunities for businesses, they can also pose significant challenges during the digital transformation process. Organizations will need to take these needs into consideration as they implement new digital channels. When an organization is struggling with digital transformation, providing a seamless customer experience online, on mobile, on social media, and in-store can be a real challenge.
Organizations need to invest in the right technologies and strategies to meet customer needs that can change over time. They must build a customer-centric culture, embrace data analytics tools to gain deep insights into customer behavior, and incorporate AI technologies and automation to improve customer experience.
7. Inefficient data management
Data is one of the foundations of digital transformation. Customer insights give you information about their behavior, preferences, and potential future buying decisions. So, the way you collect and organize this data is crucial. Effective data management can give your organization a competitive edge. Ineffective data management, however, can lead to lost customers and flawed business decisions.
Prioritizing efficient data management practices is the solution to this challenge. This involves establishing processes and policies that enable your organization to collect, store, retrieve, analyze, and utilize data in a way that is secure, accurate, and compliant with relevant regulations. This is no easy task, and it requires a lot of knowledge and expertise.
Fortunately, there are many reputable data analytics, data management, and data storage services available. Finding a partner that can accommodate all your data needs and be trusted with your organization’s and customers’ data is the best way to conquer this digital transformation challenge.
The world is becoming more digitally connected, and organizations that do not adapt increase their chances of failure. Digital transformation is not an option—it’s a necessity. Although the digital transformation process comes with its own set of challenges, those who implement it well will find greater productivity, improved efficiency, enhanced customer experience, and ultimately business growth and profits.
[ Where is your team’s digital transformation work stalling? Get the eBook: What’s slowing down your digital transformation? 8 questions to ask. ]