The 4 Challenges of Digital Transformation (and how to overcome them!)

Driving digital transformation can be a challenge for each and every enterprise that embarks on this most exciting – and lucrative – of business odysseys. But succeed, and the spoils of victory could propel your enterprise forward to new avenues of growth, powered by exciting digital technologies, new innovations and a future-focused digital transformation strategy embedded at the heart of each and everything you do.

While there are many factors that contribute to a successful digital transformation, there are just as many challenges that need to be met head-on – and overcome – to grab the long-term digital success that every enterprise needs to remain relevant and competitive.

Today, we’re looking at 4 of the common challenges businesses report when it comes to digital transformation – jump in and see if any of these sound familiar!

Challenge One | Lack of available or appropriately-skilled talent

Fact: 44% (169m) of Europeans between the ages of 16 and 74 years don’t possess basic digital skills. In the not so distant future, 9 out of every 10 jobs will require digital skills. Houston, we have a problem.

The short-term solution is always going to be to source your digital talent externally, while you craft a more pragmatic, long-term solution using a little creative thinking:

  • Identify the technical and ‘human’ skills needed to future-proof your business.
    Planning on being ‘the one to beat’ come 2025? It’s a really good idea then to start planning for where you see your business heading, and then freeing up the resources to make it happen. Is there Machine Learning driving incredible customer service?  reality powering brand loyalty? Artificial Intelligence securing your data? All three? Decide on what skills you’ll need across the board, then start re-skilling your workforce now.
  • Implement company-wide, inclusive, lifelong learning initiatives.
    Platforms like Udemy or Udacity support the digital business by delivering courses across key areas such as AI, IoT, Data Science and more. You could also check out The World Economic Forum which has launched their own IT industry skills platform, SkillSet, along with PWC. It’s free, and offers access to a range of training materials. You can find out more about it here.
  • Look beyond your usual go-to talent pools
    Hiring from diverse backgrounds, including young people, older people, minority groups and those that have never even seen the doors of a university, we can all tap into a hugely underutilised pool of talent that could have an enormously positive impact within your business.

Challenge Two | Inefficient – or ‘legacy’ – technology

‘Legacy technology’ isn’t a new problem, but it’s as pertinent as it’s ever been when it comes to digital transformation. Modernising because it feels like one system needs to be replaced by another from a purely technology-focused viewpoint shouldn’t be your focus. Business outcomes must be the starting point from which all of your investment decisions will be made. Large integration or upgrade projects that mean existing business processes and functionalities will be compromised are never a great idea. Rather, it helps if you can establish the raison d’etre of your legacy tech and then make the moves to replace or remove the most erroneous systems over a planned period of time.. The result? You’ll be investing only where it’s needed, and with the long-term business view as your driver.

Challenge Three | The Legacy business model

Change, wherever you find it, is about smashing the status quo (something we talk about a LOT at WHQ!) – and so you need to be interested in having the status quo smashed.

“The biggest impediment to a company’s future success is its past success.”
Dan Schulman | CEO of PayPal

The business model delivering the most successful outcomes is the ‘digital platform’ model. An incredible 70% of the world’s most valuable businesses – think Apple, Amazon, Microsoft etc – and the same number of the $1bn Unicorn startups, operate with this model, yet less than 2% of every other business does. Time to get up to speed!

Business Model Pie chart graph Apple Amazon Microsoft

 

  • Look at how digital platform business models are delivering for those that are doing it well, then look at what it means for your business and where it might fit in.
    Investigate what the early adopters are doing – and what makes them successful – then start planning how you’re going to be a contender in the same space, preferably with the backing and support of the wider executive team.
  • Make the moves to implement a digital platform philosophy business-wide
    Once your team understands the new opportunities offered by the digital platform model, you can start thinking about what this means for the way you communicate your organisation’s offering, putting digital-thinking at the heart of your business growth strategy. Will you be merely a Logistics Operator – or will you be the “global provider of transportation and logistics services, with a highly integrated network of people, technology and physical assets”? I know who I’d be more inclined to call when I need a truck or two!
  • Allocate capital – and people- to your digital platform model
    Capital reallocation is the best way of turning your planned strategy into a working business model. Similarly, identify who you need along with you for your digital odyssey – a robust team of expertise, commitment and a clear, long-term view will go a long way to making a success of your digital transformation.

Challenge Four | Cultural Change

As we’ve seen so far, digital transformation is reliant on many elements, all working seamlessly together to drive the business forward across the digital landscape. What’s going to bring it all together to make it a successful digital transformation is the business culture.

“An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.”
Jack Welch | Former CEO of General Electric

It doesn’t matter how many new processes you bring in, or the new tech you convince your CFO to sign-off on, or how bright you envision your new digital future to be – if you don’t have buy-in from the very people that have already made your enterprise the success it is, none of it will matter.

If you’re already planning your digital transformation journey but haven’t yet cracked your plan for driving change across the organisation, it’s time to start:

  • Be clear about what your digital transformation looks like – then share it!
    What are the goals you’re working towards? What technologies will you be bringing on board? And what needs to happen to make your goals a reality? What’s expected of your workforce? How do you expect your workforce to contribute – individually and together? What are the likely disruptions different business units and employees will face? Established in as much detail as you can what the route looks like, then share it!
  • Identify cultural strengths – what’s working, and what isn’t?
    A good place to start is communication – interviews, workshops and surveys, for example, can, over time, help you identify where you’re measuring up, and where you’re falling short. Asking employees questions around company values, enterprise leadership, support around advancement, aspects of their roles that they both love and perhaps don’t like so much. Acknowledging and addressing the insights you glean will put you in a good position to drive the positive change your digital transformation seeks to implement.
  • Decide who your transformation ‘evangelists’ are
    It’s going to pay dividends to have the right people by your side. You’ll already have a good idea of who these individuals are – the ones that enjoy what they do, that are good at motivating others, and will instinctively know the best ways to do so when it comes to the disruptions and opportunities your transformation will herald in. This kind of informal, word-of-mouth approach can be a very powerful method in nurturing the enthusiasm that impactful business transformations often need, driving the opportunities for conversation, ideas-sharing, honest feedback, and staff involvement that management may struggle to create alone.

Conclusion

Whilst the idea of digital transformation may seem overwhelming, every business has to start somewhere. Be clear about your goals, the people you need to make it happen, the elements that are going to help, then take a step-by-step (flexible!) approach. Don’t allow the challenges your enterprise will face to become the potholes that hold you up – rather, be clear about what your challenges will be, make plans to find the solutions to overcome them, and look forward to your digital future. Ready? Go!


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