New digital technologies allow companies, firms, industries and organisations to radically change and improve their business models. To keep pace with the new digital reality and meet the digital transformation challenges, organisations need to define and implement an unmistakable digital transformation strategy that embrace the implications of digital transformation and drive operational performance.
Why Digital Transformation?
Digital transformation is the integration of digital technology into all areas of an organisation. It results in fundamental changes to the way an organisation operates. Organisations across industries enjoy the benefits of digital transformation: It enables businesses to modernise legacy processes, accelerate efficient workflows, strengthen security, and increase profitability.
90% of organisations are doing business in the cloud. As these organisations migrate data to the cloud, much of what is being done is to replicate existing services in a digital format. But true digital transformation is so much more than that: A digital transformation can actually be transformative across the organisation — creating a technology framework to funnel these services and data into actionable insights that can improve just about every facet of an organisation.
Digital Transformation Challenges
Digital transformation is supposed to be the departure from the old way of doing work and creating an innovative way that will fetch better and more efficient results, but it has its challenges. People have reactions, and at times, digital transformation does not align with the goals and objectives of the organisation. A better future that is supposed to usher in a new way of approaching a challenge and overcoming it with the available insights becomes bleak. Organisations can no longer withstand competition and facilitate growth in the existing work area or the newer areas because of digital transformation challenges.
On the other hand, leading the digital transformation strategy formulation within organisations and reducing the ambiguity and misunderstanding regarding digital transformation strategies is proving to be another challenge. Several projects are usually in place to address digital strategies. They identify and discuss their concerns and roadmaps. However, they do not address the core digital transformation challenges.
The most common digital transformation challenges any organisation should know:
Challenge 1: Difficulties in changing business and employee habits
Digital transformation requires transforming organisational habits and practices while this factor is long-term, challenging to implement, and highly dependent on the head of the organisation. Some organisations have applied software, but employees do not apply, or only partially apply, resulting in non-achievement of digital transformation goals of the organisation.
Challenge 2: Lack of internal human resources to apply digital technology
When organisations target digital transformation, they encounter difficulties with the lack of staff with experience, knowledge, and skills to implement digital transformation projects. The lack of experts and internal staff knowledgeable about digital technology is a bottleneck for organisations, making the ability to succeed in digital transformation lower. Besides that, being concerned about the high cost of hiring specialised staff makes digital transformation more difficult.
Challenge 3: Investment and technology application costs
Organisations believe that the cost of investing in digital technology solutions and deploying and maintaining the technology is relatively high compared to other expenses that businesses are incurring. In contrast, the efficiency of technology application is relatively high. Technology in production and business activities is not precise in the short term.
Specifically, digital transformation projects can cost much investment, while the financial capacity of the organisation is still quite limited. Some costs in the process of digital transformation in an organisation, such as personnel training costs, investment costs for information technology infrastructure, costs in building systems, ensuring security, safety, and risk prevention.
Challenge 4: Lack of digital technology infrastructure
Digital technology infrastructure is one of the most critical factors when organisations perform a digital transformation. Therefore, it is increasingly making the digital transformation process more difficult. However, it is still challenging to hire infrastructure service providers because of budget constraints, as most digital transformation infrastructure service providers charge hefty premiums.
Challenge 5: Integration of digital technology solutions
Using management software, serving production and organisational activities sporadically and without planning makes it difficult for organisations to integrate technology solutions into a seamless system. Causing difficulties for organisations when performing the digital transformation.
This is a challenge and a severe problem that already own a digitised system with a large amount of data. Managing applications and information flows that need to be connected and integrated into the same ecosystem is complicated.
Challenge 6: Fear of personal/business data leakage
Digital transformation is no longer a new concept. Still, there are concerns about information security(risks) when using technology solutions, making organisations not dare to step out of the safe limit to change.
At Gestaldt we partner with organisations to help them consider everything when taking on a digital transformation initiative – from how people will react to the change, how it will impact customer relations, the cost, how it will align to organisational goals and how to navigate challenges. We ensure that digital transformations empower organisations to take their business into the future, and position them to withstand competition and grow into new areas.