Top Challenges In Digital Transformation
Technology disruption has deeply redefined how businesses engage with employees, interact with customers, and determine how value is traded across the digital spectrum. Industries on a global scale are going through a technological and strategic transformation, and spearheading these changes comes with numerous challenges.
Future Businesses are most likely to redefine rules and evolve from a legacy brick-and-mortar establishment to a self-paced, self-learning digital entity.
End-user expectations are changing, a single user interaction can open up a stream of opportunities. Businesses need to be dynamic enough to adapt and respond to these market changes and consumer expectations.
An agile enterprise is what the modern digital landscape requires.
Future businesses will be driven by cutting-edge technologies and we will witness a radical shift in CTO’s role from technology advisor to a value-centric technology enhancer.
The Not So Discussed Element “A Resilient CTO”
CTO to digital transformation is like a “concertmaster” to an orchestra, both stretching nodes and making creative strides to stay ahead of their game. The technology rush has enticed most businesses to grab a share of the marvel it comes with. Though the initiative seems good, at the center of this is the CTO, who now has to put together a framework around people, culture, and processes to perceive value and drive profitable digital boosting.
Digital transformation is a journey that is not complete without a resilient captain. When hopping on the DX wagon, it’s critical to understand the business requirements. Identifying opportunities and onboarding technologies that have realistic applications and long-term value propositions is important. CTOs need to put down a contextual technology approach to build around the needs wants, and realities.
CTO’s at the center of digital innovation. Most businesses fail to discern the idea that digital transformation is not technology upgradation. A shiny new tech does not have the vigor to transform your entire business. Digital transformation is a collaborative effort that requires trust and support from the C-suite and other stakeholders to personify digital acceleration. CTO should be a key player in the business transformation journey and should not be sidelined to supervise a separate transformation unit.
Benefits of Digital Transformation
The future seems so interesting that people will work alongside intelligent and invisible technologies.
In a hyper-connected and consumerist society, either you transform or you let your business be obsolete. Businesses that started to leverage modern technologies have reaped numerous benefits. The best part is that the outcomes have a cascading effect.
- Empower employees to make smart data-driven decisions
- Improve transparency, interoperability, and efficiency
- Create an inclusive culture that supports learning
- Boost compliance and draft future strategies
- Drive sustainable growth initiatives
- Redefine customer experience
- Optimize cost/overhead
Critical Challenges of Digital Transformation
Digital transformation is often approached with a pinch of fear, in most cases the term is loosely related to an extensive overhaul of a business. Digital transformation is not a technology buzzword or a “One Size Fit All” approach.
Is DX a Fad?
Most DX initiatives are short-lived because they lack setting up the right expectations. Digital transformation is not about bringing in new technologies and digitizing an existing process, it’s an initiative to create a business model that adds value to the customers in novel ways. With digital transformation, you are about to set a new order, a bold new stroke redefining how core business processes are handled on a day-to-day basis. Having a digital mindset, a disposition to embrace change, and a zest towards continuous learning (learning new skills) is essential for digital success.
Before You Invest Understand The Need To Invest
Transformation is absolute, and so is the agile trap, and still there is a clear up-trend in technology investments by businesses across the globe. Based on stats published on Statista the global DX spending is forecast to reach 3.4 trillion US $ by 2026.
Encouraging a start-up mind may not be the ideal strategy when your organization is spread across the globe. The bigger you are the more complex it gets, and transformation takes a toll in breaking down rigid legacy processes with a complex organizational structure.
“If everything seems under control, you’re not moving fast enough.” – Mario Andretti (The only person to be named “United States Driver of the Year” for three decades)
The future belongs to the fast but focused. Before you go on the techno-buying spree, understand the requirements. Early adoption can lead to better business outcomes, only when it’s done right. Set aside a problem statement, plan for achievable milestones, and have a clear vision of what goals need to be achieved at set milestones. Without adopting the right technology, the right approach, and the right talents, digital transformation can fall short of its potential.
Getting the C-Suite Onboard
It’s important to have the C-suites involved at all levels of digital transformation initiatives. Mainly when the initiative is to establish a future-proof business. Considering the degree of changes digital transformation requires (fundamentally changing your product strategy, your business model, and even how you generate revenue and manage costs) a clear vision and a strategic roadmap approved by the C-suite becomes a necessity to align technology initiatives with business goals. The C-Suite leaders provide the vision and direction necessary to guide the organization through the complex process of digital transformation.
In a rapidly evolving business landscape, active participation from the C-suite level is required to provide strategic direction, stakeholder engagement, change management, risk management, etc.
Business transformation can never succeed when implemented in silos, it’s a collaborative adventure. In most scenarios, cross-functional teams are not involved enough in planning, developing, or implementing DX strategies, a bulk of this work is done by the IT department. Make sure to engage all business and technology expertise right from the technology audit.
The Need for Cultural Shift
Digital transformation and corporate culture go hand in hand, both need to work in tandem to deliver the best results. The digital imperative has recalibrated how businesses operate from the ground up. This calls forth a progressive cultural shift.
No two companies follow the same culture, most businesses have nurtured a risk-averse culture that slackens DX initiatives. The extent to which transformation can be brought into reality, or the ability to innovate depends on the culture/ value that’s practiced within the organization.
“The biggest part of our digital transformation is changing the way we think,” Monique Shivanandan, group CIO of Aviva.
Failing to Realize [The Creative Flair + The Technology Opportunity]
Eg:- AIA Vitality was one of the few to leverage digital transformation at its best, and used technology to impact customers’ lives. The personalized, science-backed health and well-being program helps the customer base make healthier lifestyle choices. By creating online experiences and communities, the company introduced a reward system. By tracking healthy habits like exercising, eating better, or stopping smoking the app captures progress, and each progress is rewarded with a voucher, discounts on the premium, etc.
Organizations that embrace disruptive technologies often lead the way, encouraging employees from different departments to pool ideas to optimize processes, chase innovative ideas, make smart data-driven decisions, etc.
Making Changes to Existing Policies
When we make changes to processes and how we realign our day-to-day tasks our existing policies need to be reiterated. With increasing concerns around data, businesses should frame stringent policies around how data is shared and managed.
Fear of Enabling AI-Driven Initiatives
Data is at the core of AI-driven initiatives and businesses need to enable and encourage employees to leverage its benefits. When DX is limited to top-level management, big-data strategy becomes far less of a mission-critical moat, it becomes extremely difficult to put the essence into practice. Setting up a smart framework or a data literacy program will be a great option to prompt digital adoption.
The increasing operational cost is a puzzle most businesses long to solve. When the operating profit margin drops, it’s a clear indication to lay down a pivot strategy or come up with a disruptive idea to bring down your operating cost.
With the increasing cost of retaining talent, most businesses have set their eyes on AI. Cognition automation can be the answer to it. A smooth integration of cognitive automation into businesses, requires a skilled partitioner, large amounts of structured data, and a clear process. Organizations are frequently faced with a considerable skills gap as they struggle to find professionals with the necessary skill sets to lead digital transformation initiatives. Moreover, tenured employees can raise resistance thinking there is nothing wrong with existing practices.
Future business initiatives will be driven towards achieving and delivering an experience economy. Guess what, most businesses have placed AI at the center to drive these initiatives.
Security Challenges – Make Sure Every Bit of Data is Well Secured
Cloud computing is an integral part of digital transformation. To enable scalability, flexibility, and cost-efficiency most businesses should move their on-premise technologies to the cloud. Your cloud becomes your single most valuable repository of data. When you progress with digitalization, digitizing and storing every bit of data relevant to your business, your business becomes an attractive target.
It’s common for businesses to take third-party services to bridge the gap between in-house skill sets and cost. However, this comes with certain risks. Businesses should take the time to evaluate 3rd party security measures to ensure data security and a clear contractual agreement should be laid down.
The importance of data security needs to be stressed at every level of the organization. Regular training and awareness programs should be conducted, and employees need to be encouraged to practice the do and don’ts that compromises the security measures within the organization.
When integrating legacy systems make sure they are designed to work in tandem with modern security measures. Businesses should take measures to safeguard sensitive information. Implementing robust data governance frameworks, intrusion detection systems, and data encryptions can prevent data breaches and cyber-attacks.
In a Nutshell
Digital transformation is not a silver bullet that transforms happen overnight, it’s an experiential journey that slowly enables an organization to embrace digitalization. Beyond technology, it’s the human element that drives transformation.