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Top 4 Digital Transformation Challenges and to Overcome

February 22 2018
Author: v2softadmin
Digital Transformation Challenges

What is a digital transformation? Is it an act of embracing new technology?

Yes, that is partially right. Digital transformation is a process in which you invest in newer technologies, people and processes to keep yourself up to date with the digital economy.

With a constant focus on customer experience and advancements in technology, businesses cannot think of ignoring digital transformation. IDC reaffirms that.

According to them, by the end of 2017, two-thirds of the CEOs of Global 2000 companies will have digital transformation at the center of their corporate strategy.

It comes as no surprise when Gartner says

Two-thirds of all business leaders believe that their companies must pick up the pace of digitalization to remain competitive.” 

Adopting digital transformation has multiple benefits. To name a few, it will help you assess the potential impact of technology, develop strategies for adapting to constant change, boost sales, improve customer satisfaction and experience.

But, digital transformation has its own challenges. We will discuss the top 4 Digital transformation challenges in 2018 and how to overcome them.

Digital Transformation challenges

Digital Transformation challenges

General Data Protection Regulation (GDPR) Compliance vs. Cloud Services

May 2018 is nearing and we hope that you are on the verge of being fully compliant with GDPR.

You will now have increased levels of responsibility and transparency if you handle personal data of customers in any form. Its stringent nature is visible from the humongous penalty which can range up to four percent of your global turnover.

But, why do we talk about GDPR in digital transformation?

Because, all organizations are embarking on a digital transformation journey. This involves integrating latest technologies (especially cloud) into their existing systems. While integrating these technologies could increase revenue and keep you competitive, it may hinder your ability to comply with GDPR and that’s the first digital transformation challenge in 2018.

We understand that public cloud and hybrid cloud models involve data that is not on-premises but processed, stored and distributed (and sometimes replicated and backed up somewhere else) on third party systems.

According to a survey conducted by Calligo, only 26 percent of respondents said they picked a cloud provider because they trust its GDPR effectiveness. That is surprisingly less.

What can you do -

  • Understand your cloud service provider’s mechanism for storing and managing the data.
  • Include a GDPR compliance clause in all tenders for IT service contract. It is important because you can be held liable even though the breach occurred at the other party’s end.
Dealing with GDPR

Dealing with GDPR

  • Subscribe to Cloud Access Security Broker (CASB) for a month to begin with. It will help you know what cloud applications are used in your organization, what data is transferred to/from those applications, and with whom data is shared. CASBs also has the capability to scan the data-in-transit and data-at-rest for cloud-delivered apps and identify personal information. Once you identify data, CASBs can help you with
    • Geofencing information
    • Controlling access from unmanaged or unprotected devices, 
    • Control external sharing, and 
    • Encrypt data upon download.
  • CASBs can also help solve the problem of Shadow IT. For those of you who aren’t fully aware, Shadow IT refers to the hidden data transfers which occur due to the projects that are managed outside of the IT department. According to CEB, 40% of all IT spending at a company occurs outside the IT department. In a survey last year, Spiceworks found that more than 80 percent of IT pros say their end users have implemented unauthorized cloud services and other software in their organizations. As discussed before, CASB can help you know what cloud applications are used in your organization. You can also refer to this checklist to deal with Shadow IT concerns.

Finding Flexible Technology

Survey respondents rated "current IT systems" as the third biggest obstacle to achieving digital transformation.

All organizations have a system in place but change is inevitable. Outdated technology poses significant risks to the business. Not only do they become costlier to maintain and build new processes around it, it also becomes time consuming to update and tedious to handle.

But, organizations cannot change the processes and system by waving a magic wand. They are long standing processes which can take a lot of time (a few months to a year) to change and businesses don’t have that time or resources to spare.

The best way is to deal with this challenge is to embrace wrapper technologies. You are looking at platforms that can support integrations with your currents systems. However, ensure that your wrapper vendor provides continued maintenance and support along with constantly modified and optimized technology.

Resistance to Change and Lack of Familiarity with Technology

That brings us to the next digital transformation challenges.

We all know that change happens through people and the natural human resistance to change is a challenge. But, you cannot avoid it.

It is worrisome that 51% of organizations are either resistant to transformational change or at least have mixed views on the topic. In fact, only 39% of organizations with high levels of digital transformation projects already in place appear to support transformation at a cultural or organizational level.

What should you do -

  • Empower your digital leadership: A project fizzles out if you don’t receive support from the management. It is important that the digital transformation leaders are just as much involved as the employees.
  • Actively involve your counterparts: Involve leaders whose team needs to adopt the change. Instead of forcing them to work according to the top management, let the implementers suggest the best way out. They can always discuss it with their teams and provide the solutions agreeable to all. Your task is to make it easier for them to lead the change.
  • Develop a learning culture in the organization where everyone (new employees or existing) is valued and provided equal opportunities to learn and grow
dealing with resistance

Dealing with Resistance

  • Pair employees with different skills to share knowledge. It will help you grow teams who will work together. 
  • Invest in continual training: While organizations invest in training, by the time the employees master it, the technology could be obsolete. Instead, you should look at continual investment in people and training them extensively. 
  • Improve digital literacy: Organizations have the opportunity to improve digital literacy of their employees in many ways. So, do not wait for months/years when those skills become the need of the hour. Start now. After all, 52% of executives site "a lack of familiarity with technology" as a barrier to digital transformation.
  • Invest in various SaaS application which can help your employees DIY. Make use of personal assistant to free people from low value task to focus on training and development. 

Mapping Customer Needs Before Starting your Digital Transformation Journey

A recent Altimeter report “the 2016 State of Digital Transformation” states that the mapping of the customer experience has become a top driver of digital transformation, yet only half of the companies studied have mapped or are mapping their customer's journey.

Is it all about increasing efficiency, boosting revenue, staying competitive in the market and updated with latest digital technology? Why tech-savvy organizations are giving so much importance to digital transformation?

The reason is: customer success. They obviously want to meet the expectations and needs of their customers in terms of digital experience.

In order to be successful with any digital transformation step, businesses need to understand their market, customers, needs and technologies that complement their customer journey.

But, what if you have little or no idea about who your customers are or their journey?

You will be surprised to know that only 72% of brands are familiar or very familiar with buyer personas): a lot of companies have only a vague idea of who their potential clients are and what communication channels they prefer. Only 34% have mapped out the complete customer journey. If that wasn’t shocking enough, the Gartner survey revealed that “although more and more CEOs have digital ambitions, nearly half of the CEOs have no digital transformation success metric”

According to Kissmetrics, “the value of mapping includes recognizing functional silos, identifying growth factors, and establishing development priorities. If you don’t know how your customers flow through the sales cycle, it’s harder to serve their needs”

You may increase efficiency within the organization but how do you expect transformation efforts to go right if you are unaware of your customer behaviors, journey and needs? So start mapping your customer journey 

Have you embarked on your digital transformation journey? What are the digital transformation challenges that you faced? Do you have any advice for other organizations? Please comment below and share your experience with us