Digitalization is turning a product or service into a digital format. It can be hard to get started with digitalization, but it’s also an ongoing task that needs to be done for your business to stay competitive and relevant. Here are some of the common obstacles to digitalization and how you can overcome them.
Technological Challenges
Technology challenges are not insurmountable. With the right strategy, you can overcome these obstacles and reap the benefits of digitalization.
For example, many manufacturers are struggling to figure out how to implement analytics at their companies. This is because they don’t clearly understand what data they should be using or where they’re doing well or poorly in terms of efficiency and quality. Without this information, it’s hard for them to know where to start with implementing analytics solutions that will transform their operations for the better.
An IT partner can help businesses overcome these technological challenges. These partners have years of experience helping companies with different needs achieve digitalization. Hence, if you plan to implement digital technologies, seeking help from an IT partner like IT Ally LLC can be a smart move. Such agencies can also help you by providing training sessions on new technologies and software and ongoing support as needed.
Lack of Leadership
Lack of leadership can be a significant obstacle to digitalization. Leadership is needed to set the tone for the organization and communicate its vision and strategy. Leaders must also motivate employees, ensuring people understand their role in helping achieve those goals.
A study by Infosys found that CEOs are leading the way to a digital workplace transformation in 45% of companies, and 63% of firms have their top leaders involved in the process.
To establish this kind of leadership, you need leaders willing to change their behavior first. They also need to trust the people they’re leading, which means sharing information and giving them responsibility for their own work. It can be difficult for leaders who are used to being in charge of everything.
Complexity
Complexity is the main obstacle in the path of digitalization. A study by BCG in 2020 revealed that only 30% of digital transformations succeed in achieving their objectives. It’s not easy to simplify a business process or an IT infrastructure, but thankfully there are proven ways to do so.
For example, you can test and perform experiments with your software development processes, such as trying new tools and methods and identifying bottlenecks and potential improvements. This can help you reduce complexity by identifying problems that were previously hidden from sight, as well as by helping your team work more efficiently and effectively together.
Security Concerns
Security concerns are one of the significant obstacles in the path to digitalization. It’s a concern for all companies and industries, whether physical or digital assets are involved, whether internal or external users are affected, and whether employees or customers are at risk.
In 2020, the U.S. was the target of 46% of cyberattacks, more than twice that of any other country, according to the 2021 Microsoft Digital Defense Report.
The security risks in the digital world differ significantly from those in the physical world. The main difference is that while a physical asset can only be stolen, copied, or damaged by someone with physical access, digital assets can be accessed remotely without any physical interaction.
Changing Customer Needs
The way customers interact with your brand has changed. Today, they demand more from you and the technology you use. They are no longer satisfied with a simple transaction but instead want to be able to interact with the company in a more personal way.
The younger generations are especially demanding, so companies need to adapt if they want to stay relevant and competitive in this new era of digitalization. PwC’s CFO Pulse survey found that companies that invest in digital transformation have a 17% higher profit margin growth over three years.
If you don’t provide your customers with an experience that meets their expectations, then someone else will. And as you know, competition can be fierce when it comes to attracting new customers and keeping existing ones loyal.
Budget Constraints
Many companies have budget constraints when it comes to implementing digitalization strategies. This can be a real problem for those looking to make their business more efficient through new technologies and software solutions.
However, there are ways for companies to overcome this obstacle. For example, you could consider partnering with another company that has more resources and can assist you with your digitalization efforts.
Another option is asking existing clients if they would like any of your products or services digitally delivered instead of physically shipped out. Another great way to overcome this obstacle is by educating yourself on how technology works so that when you’re ready to implement something new at work, it won’t come as such a shock.
Lack of Buy-In From Employees
Suppose you’re trying to move your organization forward in the digital age. In that case, it’s helpful to remember that your efforts will go nowhere if you don’t have buy-in from employees. For example, data shows that around 65% of Canadian businesses are ready for digital transformation. However, employees’ resistance to digital change has always been a significant hurdle for businesses, leading to failure.
Employees need to feel they have a stake in the outcome. They need to see the benefits of digitalization and understand how it will impact them. This may seem obvious, but often companies don’t take enough time to explain why they’re doing things a certain way or what people can expect once changes are made.
Employees who feel like their voices are being heard have an easier time embracing change. And that’s true whether you’re shifting toward new processes for internal operations or external marketing initiatives.
Conclusion
With all the obstacles outlined above, it’s easy to see why digital transformation has been slow to take off. But now that you have a better understanding of what these roadblocks look like, you can begin to formulate strategies that will help you tackle them head-on. At the end of the day, what matters most is having a plan and sticking with it, so get out there and make things happen.
