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Challenges in Digital Transformation – How to overcome them?

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“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” Charles Darwin

The Essence of Digital Transformation:

A business leveraging on the advantages that the digital realm is no longer a luxury or a distinction, but a bare essential when it comes to territories like client service, process efficiency management, workflow management, and marketing efforts. No field has been spared from experiencing the bone of digital transformation. There are a variety of business functions like purchase, human resources, Information Technology, finance and sales and marketing that have gotten the best of digital transformation and the organizations that have adopted digital transformation have seen phenomenal results in terms of recognition, revenue, and respect.

Gartner survey shows that one of the top priorities of chief executive officers for 2018 and 19 is to embrace the digital culture. While 40 % of the respondents talked about simple growth, 33 % of them have been referring to using digital transformation for corporate structural development.

Standing on the shoulders of Giants:

Thankfully, a lot of organizations can be considered pioneers and harbingers of digital transformation. As much as they are relishing the fruits of their success, they also had to pay for a lot of mistakes and the tough learnings that they had over the course of time in changing their organization, their culture, and the Expectations they have had from their customers.

The story of early digital adopters might bring in mixed emotions. However, if we were to look at things on the brighter side, we are standing on top of their mistakes and looking at the future with a greater clarity and a lesser degree of uncertainty.

Another major advantage that organizations have these days is the psyche of the consumer. The consumer of today has digital as a Lifestyle that a specific habit confined to certain times of the day. Gone are the days when the internet access was only available through a wired desktop. Today, the Internet has access to us at all times of the day, and with the advent of the Internet of Things, even our sleep pattern is not an exception!

Challenges and Solutions for Digital Transformation Adoption

With all these in place, we might think that there are not many challenges that could stop the adoption of digital transformation. However, there are a few organizations that are rooted so deep in their definition of a process, culture and customers it that they might have an abhorrence towards digital transformation.

Source: Simply Communicate

Culture

As abstract as it might sound, culture is one of the greatest stumbling blocks when it comes to companies adopting digital transformation. A defined culture should be about rigid values and ethics with flexibility in processes and Technology. However, for a few companies, it works the other way round where there is a compromise on ethics and there is none on technology. Openness to change is one of the most basic requirements for Digital transformation or any other kind of advantageous transformation for that matter. This openness to change might come in because of a specific need that has mandated an initiative or for some organizations, it comes naturally.

Advantage open culture is open communication which is one of the biggest advantages and aspects of digital transformation. We are talking more about collaboration then just communication. It is to be great that any transformation has to face its inertia of change and if communication is effective, the Chaos will be quite minimal.

Image Source: Capgemini

This chart shows the market share of the American icon Kodak. Kodak once dominated the space of photography and imaging and in fact, Kodak was The pioneer of digital imaging and Digital Photography. It was only because of their complacency and resistance to the change that was imbibed in their culture that caused their downfall from being the market leaders both in share and innovation to being bankrupt.

One of the key elements in driving a cultural change would be learning from the failures of others who did not adapt to it. In addition to this, the leadership team getting on the ground with the employees could also solve the problem of Universal cultural acceptance when the entire company appreciates and understands the digital transformation and not just the leadership team.

The Absence of Leadership Support

“The biggest impediment to the future success of a company is the past success of the company!” Dan Schulman, Chief Executive Officer, Paypal

It has to be agreed that in most of the companies, the executive leadership staff or what is commonly referred to as the C-Suite, is very likely to be a group of digital immigrants or border-residents at the best. It would have taken a long time for them to adapt to some two tasks like texting, emailing, surfing, and more importantly, understanding the impact of social media on businesses. If the leadership does not embrace and appreciate the importance and awesomeness of digital transformation, it would be very difficult for the company to adapt. It might partly be because of the leadership not showing the direction but it is also because of the innate fear of the employees in offending the leadership.

A lot of companies that are driven by the ‘vision’ of their leaders do not falter and failed to catch up on the bandwagon of digital transformation. However, if the vision of the leadership is short-sighted, things might prove detrimental to the company.

There are practical challenges in educating the leadership. However, it is the small Steps from different levels of people highlighting the importance of digital transformation thataccumulate into what would become a learning for the leadership. Little instances of customer feedback coming in from places like Twitter and Facebook, and how the competition is leveraging on this kind of platforms would give a broad perspective to the leadership about digital transformation.

On the other hand, people who are closer to the leadership might consider educating them on how certain digital transformation can bring about a better return on investment. After all, there is nothing that is more enticing to an executive officer then better revenue!

Collaboration

It is quite possible that the frivolous attitude of a single department in a company can slow down the entire pace of transformation. It is essential or rather imperative That All the departments work together in tandem with each other to minimise the gaps and to collectively contribute in the segmenting of data. It is not an exaggeration to say that data is one of the most significant backbones of digital transformation and data does not proceed just from one source or one department.

Source: VTS Blog

No department will back off from collaborating if they knew the massive impact that digital transformation would make to their company. For that, the managers of various departments should be briefed on the organization-wide digital transformation strategy and let them know that their department plays an important role in this innovation that could as well be called a revolution.

Whatever we have discussed in the above sections is where the answer lies for this section. It is all about a cultural transformation and having an able leadership-team who will have the efficiency, efficacy, expertise, and empathy to communicate this to the different levels at which the collaboration needs to happen. It again comes down to the vision of the top leadership in the company. An interesting thing to note about collaboration is that digital transformation will become its own fuel for the process to get better. For example, an internal social network in a company can help connect the right teams who can complement each other or even facilitate collaboration between two specific resources with skill sets who might be able to bring out a bigger solution for Digital transformation of the company.

Human beings are social by nature and collaboration comes to them naturally. It is all about creating an environment that is congenial for collaboration and creativity. It is to be remembered that digital transformation is more about Innovation and implementation than just a process.

Finding the Right Resources

When we talked about collaboration, we talked about facilitating interaction between people with the digital skill sets. For this interaction to happen, it is to be ensured that people with the right skill sets are in the company. With so much of change that is happening, the impediments to finding the right resources are on the rise. The crumbs could be in terms of Technology, data science, creativity, process efficiency and Management.

Anything said and done, the landscape of skills has become flatter by the day. With Global exposure, it has also become relatively easier to choose and filter out the right resources for the organisation. If the classical constraints like having studied in a premier Institute, having a qualification and relevant experience can take a backseat giving way for practical usage of skill sets, finding the right resources could become less of a challenge. In the long run, when the education system also aligns itself with the industry and the process of education also undergoes a digital transformation, we do not need to look at a huge chasm to be crossed when transitioning from education to employment.

Customer-First Approach

There was a time when the customers did not have an option but to just take what the brands have had to offer and it was a unidirectional approach. However, with the rise of companies like Uber, Airbnb, Amazon, and Tesla, the expectations of users has changed in terms of their expectations. The surge in the entrepreneurial mindset of the younger generation has created a lot of crowd in every niche and has subsequently created competition as well. Companies that have been existing for decades and centuries and that have been used to giving something which the customer is forced to take have now started to face the brunt of the success of customer-driven companies that are relatively new but have been more successful. The understanding of customers takes a lot of learning, patience, openness and above everything, a mechanism to understand the emotions of customers. More than the understanding of customers being a challenge to digital transformation, the lack of digital transformation is a challenge when it comes to understanding customers.

One of the biggest advantages of digital transformation is that The customers have gotten a platform to directly communicate with the brands. It is not essentially by social media but even by emotions and word of mouth. With the advent of Technologies like IoT, there is a lot more we can learn from customers.

It is to be noted that customers have always been talking about brands. However, before the Digital Era, it was more confined to coffee shops and women’s club meetings. Today, it has just changed places. While this might seem like a lot of chaos to handle, the incorporation of big data and analytics, which again are elements of digital transformation, can transform the way in which customers are being understood. Rather than addressing every customer, it is better to address a problem that customers face at large.

Identifying the right opportunities

For some companies, the priority is to jump into the digital revolution. Digital Revolution is not a narrow path but more of a massive ecosystem that changes a lot of things. There are a lot of elements in the massive ecosystem that the companies need to choose according to their business model, their customers and the comfort of the company itself.

Some companies take the first available path into digital transformation without properly gauging the above said aspects. This results in a failure of implementation and might also translate into bitter experiences at board meetings.

It is to be totally agreed that digital transformation is essential but at the same time it should not Trump the logic of execution. It sounds better to say that I am slow but successful in implementing digital transformation than to say that I was early but I failed.it takes a meticulous and Holistic understanding of the business, the customers and the comfort levels of the company to find out the right avenues for Digital transformation for their first step and when it goes at the right pace and in the right areas, digital transformation is going to be yet another success story for the company as well!

The problem lies when the digital transformation is treated more like a corporate fat than a tool for better efficiency and revenue. The challenges are not challenges if you were to open an optimistic perspective to them – they are opportunities for the company to transform before the company transforms into anything digital.

In all of this, there is a bright side that most of the companies today have even their senior and meet senior employees as people who have been experiencing the awesomeness of the digital aspects of life ever since the late 1990s. This would mean that the resistance to transformation is a bit less and they also have a considerable experience of what the corporate world was before the advent of Technology, although not essentially a first hand experience. When these two combine together, it is bound to give more favorable results with calculated risks. It would be very safe and right to say that if there is a right time for Digital transformation of your company, it is right now!

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