Every organization will face obstacles during its digital transformation journey.
For companies that can overcome these barriers to change – and achieve transformation – the rewards are well worth it.
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According to a 2018 study by Jabil, many companies recognize that value.
They surveyed manufacturing companies and found that:
- 85% of executives understand and support digital transformation
- 95% expect the rate of digital transformation to accelerate
- 62% say that board-level visibility has increased in the past two years
At the same time, digital transformation has its obstacles.
According to their survey respondents:
- A full 99% report challenges
- 74% say that cultural changes are more challenging than technology changes
- Top challenges included a lack of expertise to lead digital transformations (40%) and a mismatch of existing tool sets (40%)
On any digital transformation journey, overcoming such challenges is critical.
Below, we’ll look at some of the top obstacles you’ll face during digital transformation. Then we’ll discuss a few strategies for overcoming them.
Top Obstacles You’ll Face In Your Digital Transformation Journey
Let’s look at a few of the top obstacles that organizations must overcome to succeed at digital transformation.
Culture is one of the most important elements of any organization.
As we have discussed elsewhere on this blog, cultural changes can also be the most difficult.
And according to Jabil’s report, this also holds true in digital transformation.
As we saw above, 74% of their survey respondents report this as the biggest challenge.
Changing the “soft stuff,” such as culture, can certainly be difficult, but it can be done.
Here is a 4-step process outlined by customer service consultant, Micah Solomon:
- Begin – In other words, start by making a choice and a commitment.
- Codify – Create a mission statement that embodies your decision and direction.
- Hire – Change hiring practices to reflect these changes.
- Onboard – Improve communication during onboarding to emphasize and stress that cultural aim.
This is one good starting point for cultural changes.
Lack of Expertise
Expertise is critical for any endeavor that requires specialized skills.
And digital transformation is no exception.
In fact, digital transformation is even more challenging.
To successfully evolve, companies must adopt entire toolboxes full of technology.
On top of that, many of these technologies are still emerging, making it difficult to find true experts.
However, there are a few ways to overcome these challenges:
- Work with digital consultancies
- Make your in-house IT team more robust
- Train and increase general digital literacy across the organization
- Dedicate time and resources to innovation, research, and development
The more digitally literate your employees, the easier it will be to grasp, integrate, and execute new ideas.
Employee pushback was another obstacle reported in the Jabil study.
This pushback – also called employee resistance – is very common in organizational change initiatives.
In worst case scenarios, it can completely cripple a change project.
Overcoming pushback can be accomplished through:
- Communication – Change consultancies such as Prosci tell us to start with communication: build an awareness of and a desire for change. Fail to accomplish these critical steps, and employees are more likely to feel alienated, isolated, and besieged by change.
- Training – Effective employee training is essential. Without the skills and knowledge to change, employees won’t be able to use new software, implement new processes, or operate effectively. This will also result in frustration and resistance.
- Incentives – Employees are self-interested, like everyone else in business. Change initiatives that benefit them personally – for instance, by offering digital skills that improve long-term job prospects – are more likely to be supported.
These are a few good ways to tackle employee pushback. For more, feel free to browse our articles on overcoming employee resistance.
Limited budgets are another common problem for businesses engaged in digital transformation.
On the surface, this barrier may seem insurmountable…
After all, if you haven’t got the money to change, then you simply can’t change.
However, there are strategies to work around this problem:
- Change Incrementally – Your digital transformation journey doesn’t have to happen overnight. Incremental, strategic changes can take place over months or years.
- Cut Costs Elsewhere – Budget cuts in other business areas may not be desirable. But given the strategic, competitive advantage of effective transformation, the returns may be worth it.
- Weigh ROI Carefully – Calculating ROI of software, technology, and digital strategies can be difficult. But it’s not impossible. In many cases, managerial teams may avoid the issue because of its complexity. But doing that will only delay necessary transformations.
- Transform Other Business Functions – Digital transformation isn’t restricted to technology adoption. Evolving other business functions – for instance, by adopting lean management or manufacturing – can cut costs as well.
Naturally, budget can be one of the most difficult obstacles to overcome.
However, innovative approaches to finance can help a business make and save money in creative ways. To use a cliché – think outside the box.
These are just a few of the obstacles you can expect during your digital transformation journey.
Overcoming these barriers to digital transformation requires a variety of tactics.
Which strategies are effective depend on the circumstances. They can range from hiring third-party consultants to changing the corporate culture.
However, digital transformation is critically important in today’s economic climate.
Businesses should do everything they can to overcome these obstacles and transform.