Five Challenges of Digital Transformation and How to Overcome Them
With the invention of the digital electronic computer in the 1950s, a new course was set for society. Computing machines had the ability to solve complex logical problems in a fraction of a time it took even the best mathematicians. Before long computers were adopted for use in science, manufacturing, communication, finance, and others areas, transforming each substantially.
This process has continued to the present day with undiminished intensity. The invention of the internet has accelerated the process further, connecting computers world-wide into a vast computational network. However, society still hasn’t caught up with these changes. Even typically innovation-focused social forms such as modern companies are yet to fully embrace the digital transformation of the world. Questions such as how to effectively serve internet-savvy consumers, what is an appropriate working environment for digital workers, or how to leverage data for business growth are some of the more pertinent questions modern businesses are asking themselves.
If you wish to know more about the challenges of digital transformation, and how companies are responding to them, you can check out our concise overview of the topic in the article below.
1. Evolving Customer Experience
Customers were quicker to adapt to the effects of digital transformation than companies were. This created a disconnect between the two in terms of expectations. Customers believe that modern digital technologies can facilitate seamless experiences with brands. They feel that everything should work at the touch of a button, from online shopping to finding answers to questions, to receiving customer support. While most companies share the same view, they often find it difficult to implement measures that are necessary to produce these kinds of experiences. Nevertheless, some progress has been made, from the adoption of chatbots for customer service, to one-click shopping, to semantic search. The key to adapting to the transformative effects of customer experience is, unsurprisingly, keeping in touch with customers on all channels, and listening to their feedback.
2. Employee Resistance
Even if a business is ready to adapt to digital transformation, it can run into roadblocks from within in the form of employee resistance. The reasons behind employee pushback in this scenario is the changing nature of work in the digital age. Constant technological innovation has turned the labour market upside-down. Established jobs get phased out as a result of automation or changing trends, and new ones get created on a regular basis. This has made work more precarious, as employees can never be sure if their jobs are next on the technological chopping block. Companies are trying to respond to this challenge by providing training seminars for new technologies, slowing down the rate of technological adoption, and sticking with older tech for longer periods of time to avoid disruption.
3. Disruptions in Hiring
Another aspect of workforce-related difficulties associated with digital transformation is the changing nature of the hiring process. Long-term, office-based employment is on the decline, and is being replaced by project-based remote work. Companies that were used to the former are finding it difficult to decide who to hire in this new environment. On one hand, there is a choice between hiring specialists (to speed up the production process) or generalists (to build resistance to changing market conditions). There is also the question of hiring for potential (workers who are digital natives) or experience (workers with industry knowledge). Companies are trying to meet this challenge by introducing AI software in the selection process.
4. Overabundance of Data
Data is the primary fuel for digital transformation. As larger, more diverse data-sets became available in recent years, the possibility arose for an extensive data-driven optimisation of the business process. Or at least, it was made possible in theory. In reality, apart from ultra-success stories such as those of Google, Facebook, Amazon, and other tech giants, many businesses are still lagging behind when it comes to product data utilisation. This can be attributed to difficulties in determining the value of different kinds of data (e.g. email open rates, social media likes, time spent on site, etc.), the lack of means to process data effectively, and the gap between customer experience and its representation in the form of data. To overcome this challenge, companies are increasingly looking for data-specialists to add to their payroll.
5. Conflicting Business Models
Digital transformation has brought about a whole range of new business models, and it has made many of the old ones obsolete in the process. The difficulty with this is that these new models are not always better than the ones they replaced. For example, while the move towards marketing automation has certainly brought something new to the digital marketing arena, going overboard with automation will harm your business more than it helps (i.e. you will be marked as a spammer if you send too many automated emails). Another issue is that with the wealth of business models currently available, it is difficult to determine which ones would serve your company best. Companies are pushed towards adopting the latest models through digital marketing, whether or not it is a good fit for their industry niche. The only effective solution that has been found so far is spending more time to devise a solid business strategy before implementing any specific business model.
The process of digital transformation is showing no signs of stopping. Constant technological innovation is now a part of everyday reality, and there is little use in trying to stop it. Instead, what’s needed is a new attitude, one of embracing change and answering the challenges of evolving customer experience, data inflation, and others we have described. And the sooner you adopt this kind of attitude, the greater the odds that you will come out ahead in the aftermath of digital transformation.