• Daniel Kioria

5 Common Digital Transformation Challenges & How to Overcome Them

What kind of challenges should businesses expect to deal with in their digital transformation process?


According to Statista, 4.66 billion people around the world are connected to the internet. That's 59.5% of the world's population. In cognizance of such statistics, it would be foolish for any organization to ignore digital transformation. Any business that does not take digital transformation seriously, especially during the current pandemic landscape, will lack resilience and agility, impacting business continuity.


While digital transformation comes with many exciting opportunities, it might not be as easy as it sounds for most businesses. The digital transformation process presents a unique set of challenges. Companies have to find a way to overcome these challenges for them to enjoy the opportunities offered by successful digital transformation.


Before we discuss digital transformation challenges, let's drill down on what exactly digital transformation is.


What is Digital Transformation?


Digital transformation, as the name suggests, is an overhaul of a business' business model, operations, and engagements with customers to incorporate modern technology solutions. A digital transformation process would not only affect the business and its employees, but also customers and partners.


But why is digital transformation important? Here are some key benefits of digital transformation:

  • Streamlined operations and workflow

  • Access to new markets and opportunities

  • Accurate and real-time business analytics.

  • Easier and more effective marketing

  • Seamless customer engagement, acquisition, and retention

  • Business resilience, agility, and mobility


So, what kind of challenges should businesses expect to deal with during the digital transformation process? How can companies overcome these challenges? Let's explore!


Common Digital Transformation Challenges


1. Scarcity of the Required IT Skills


According to Digital Marketing Institute, only 20% of today's workforce has skills that will be required for future jobs. A successful digital transformation process takes the dedication of a skilled team of IT experts. Digital transform involves many small parts that are developed independently and then joined together to complete the bigger picture. Finding the right talent to develop each of those parts can be a headache.

The search for relevant talent also presents a new challenge for companies. Companies are likely to suffer push-back from existing employees who feel as if their jobs are being threatened. A lot of the existing employees might not have the skills needed to work with new digital systems. The news of a new digital system and the search for IT experts will most likely kill their work morale.


Companies can seek the services of digital transformation or software development consultants to overcome the challenge of skills shortage. The consultants will be able to visualize the company's objectives and recommend the best course of action. They can also help companies put together the best team of experts. When it comes to push-back from existing employees, employee training and upskilling is the way to go. Businesses should strive to retain the employees who have their culture at heart and understand the customer experience that they must provide. Training and upskilling might come at a cost, but they would pay off in the long run.


2. Maintaining Great Customer Experience


In the modern business world, customer experience is everything. If you are dealing with a customer base whose needs are constantly changing, it can be challenging to consistently provide an outstanding customer experience. Digital transformation can change customer experience for the better or worse. The goal is to improve customer experience, but it can change for the worse if the digital transformation process is mishandled. In most cases, it is not the results of the transformation that affect customer experience but the digital transformation process itself.


Customers are becoming consistently discerning of the quality of experience they get from the businesses they interact with. Before embarking on any digital transformation journey, you must access how it will affect your customers. Market research will help you incorporate your customers' needs into the digital transformation process and ensure it produces the best results for them.


If you anticipate that the process will disrupt customer experience, you need to alert your customers and let them know how their experience with your business might change. Focus on letting them know how the results of the transformation are going to enhance their experience.

Any digital transformation journey you embark on should enhance your customers' experience.


3. Wrong or Poor Analytics


We mentioned earlier that business analytics is one of the main reasons businesses are undergoing digital transformation. However, it can be challenging to determine which data you should collect and which data to leave out. If you end up with a system that collects the wrong data set, you'll be stuck with useless business analytics.


Business analytics drive business decisions in this digital era. Business environments are changing rapidly, and most businesses are finding it difficult to build systems that can adapt quickly. Poor business analytics will affect your business operations, customer experience, and profitability. The solution to the challenge of analytics is including AI and Machine Learning technology in your digital transformation. AI and Machine Learning allow your systems to adapt to consistently changing business environments easily.


AI and machine learning will ensure your systems know which data they should collect under certain circumstances. The technology helps you personalize your digital systems and cater to your business's unique requirements.


4. Lack of Clear Strategy and Roadmap


There is a mad rush to digitize business all around the world. Most companies are getting into a digital transformation process without a clear strategy and pathway to where they want to be. You could easily waste resources on a process that will not benefit your business if you embark on a transformation without clear objectives. Every digital transformation journey must have a clearly defined destination.


You need to understand how digital transformation would uniquely benefit your business. You should then create objectives, formulate a strategy, and map out a pathway for the digital transformation process. Digital transformation can mean different things to different companies.


5. Insufficient Resources or Poor Budget Management


A digital transformation can be a costly affair. The Internation Data Corporation (IDC) estimates that the global cost of digital transformation could hit $2.3 trillion by 2023. Hiring experts, implementing the latest technology, and many other expenses of a digital transformation can inflate your budget. Many times, small businesses do not have enough resources for a complete digital transformation.


Even when you have enough capital for a digital transformation project, poor budget management can mess up everything. You need to budget for everything that will be needed in the process and strictly adhere to the budget. If you are struggling with insufficient resources, you should divide the digital transformation process into milestones. Start with small and realistic milestones that suit your budget. You should still have the bigger picture in mind, and each milestone should be tailored towards fully transforming your business digitally.



Set Up Your Business for Successful Digital Transformation


Successful digital transformation is a result of careful planning and meticulous execution of the plan. Don't jump onto the bandwagon just because you've seen every other business adopting a particular technology. You need first to establish how that technology can transform and benefit your business.