Top Challenges with Digital Transformation

Top Challenges for Companies

Digital Transformation doesn’t just have the capability to transform your systems; it has the potential to transform and revitalize your entire organization. Run more efficiently, get better data, make better decisions, and drive a better customer experience. Digital Transformation done right is well worth the investment and can pay dividends for a very long time to come, but as with any significant initiative, certain pitfalls and obstacles can cause headaches or cause your entire initiative to fail. We’ll help you spot these in advance and avoid them.

Endeavor Management’s approach to Digital Transformation avoids and mitigates these pitfalls by following a clearly defined strategic approach to align your ecosystem to your business objectives and separate your systems from your processes to transform both in harmony, rather than piecemeal.

Poorly Defined Objectives

If you don’t know where you’re going, chances are you’re not going to get there. It’s important that you don’t have a digital strategy separate from your business strategy. You have one strategy which includes a digital component.

Too many organizations fall prey to the mentality “digital for the sake of digital,” where they invest in digital technologies or transformation in the mistaken belief that the investment equates to better results. The reality is that digital transformation done purely for its own sake is almost destined to fail. The digital technologies you invest in are meant to serve as accelerators for your strategy.
Put simply, the real powerhouse of your business should be your approach and processes, independent of the technology you use as a vehicle for execution.

As long as you clearly define your objectives for your digital transformation—and stick to them—your efforts are overwhelmingly more likely to be successful. When you know where you’re going and why, you’re much better able to wisely select the vehicle to take you there.
Through this process, it’s equally important to seek consensus from the key stakeholders and empower those necessary with the ability to make decisions and clearly articulate their reasoning.

The Business’s Tech Ecosystem

Some organizations have decades-old technology. Again, it’s meant to be an accelerator, not the goal itself. That’s why, at the outset, it’s imperative that we evaluate not only your current-state systems but the business processes they interact with. I say “interact” because your organization may have processes that don’t directly involve your systems but are nonetheless in place as part of a broader ecosystem and, as such, are related to the overarching pursuit of your business goals.

We gain a thorough understanding of how you go about achieving your business goals, not just the systems involved. We also recognize the need in many cases to layer a transformation and integrate new systems with legacy systems. In this way, we can most appropriately strategize the digital transformation itself.

Tragically, organizations replacing antiquated (but still mission-critical) systems often fail to transform their business processes as well. Many of these business processes were put into place to work around the inherent limitations of those antiquated systems, but when designing and implementing the new system, they ended up configuring it to cater to the business processes which were workarounds to begin with. This artificially and needlessly hobbles your digital transformation.

By considering your business objectives first, your processes second, and your systems third, Endeavor Management ensures our clients unlock the most potential for their organization.

Budgetary Constraints

In precisely zero transformational efforts will you have more money than you need. Sorry to be the bearer of bad reality. Therefore, with limited resources, business priorities need to be set.

Generally speaking, we want to do a cost-benefit analysis—you guessed it—not by system, but by business function, with consideration for the cost of migrating to systems and processes to more efficiently or effectively facilitate the achievement of your business objectives.

It may cost $50 million to update one of the aforementioned antiquated systems. If it’s not mission-critical and you don’t stand to gain that much and more back, it’s not likely your most immediate priority. However, it does indicate that at the minimum, you need to start developing a phase-out plan since you never want to be that reliant on an older system that costs that much to replace.

Clear directives from leadership help establish priorities and keep things in perspective.

Resistance to Change

Countless books have been written about change and humans’ resistance to it. One notable book is “Who Moved My Cheese?” People resist change for a variety of reasons. As a consultant, when first talking with a client’s staff, I have to assure them I’m not “the Bobs” from “Office Space.” When change comes—particularly with enterprise transformation efforts, people naturally fear becoming irrelevant or losing their job.

Change is resisted not just by individuals but by entire organizational cultures. It’s rare to find an organization where nobody thinks anything can be improved, but just go try to change it, and an entire organization can push back.

The only way to approach it to set yourself up for success is to socialize change beforehand and genuinely seek input from everyone involved. If people have concerns and feel they’re not being heard, they’re not going to make change easy. Likewise, you can’t cram the Good News of change down people’s throats and expect them to buy in. It takes genuine listening, discussion, and consensus-building.

Training and Coaching

Any digital transformation initiative is going to reveal some skills gaps where existing staff lack some of the skills necessary in the new ecosystem.

Identify these in advance!

Additionally, this is part of overcoming the resistance to change. Make sure the people who are going to be lacking know that resources will be made available to them, and they’ll be trained. This will be reassuring in a way that will dramatically contribute to the success of your transformation.

The training should be varied depending on the needs and may encompass self-help, self-paced training, group training, one-on-one training, and on-demand coaching. Likewise, you should identify coaches within your organization to “Train the Trainer.” These coaches can help train others and can also help you identify any gaps in the training plan.

Data Migration, Cleansing, and Security

Here’s a golden opportunity to identify the Source of Truth for all data in your organization. You’ll get no better opportunity to clean up your data and data sources. You may have a dozen versions of the same data floating around among various systems, and it was always to much of a pain to fix it. Well now is your chance! Instead of building the inefficiency into the new ecosystem, use this opportunity to fine-tune your organization’s data and data management.

This includes the ability to transform your data to better meet your needs, or change the year field from 2 digits to 4 digits to avoid the Apocalypse. It can’t hurt to prevent the Apocalypse. I’m just saying. Of course, it may be a less dramatic transformation such as taking the opportunity to split your customers’ street number out from the street name and storing them in two separate fields.

Migrating your data to the new systems is an important task that shouldn’t be short-changed. Make use of tools to confirm you’re migrating properly, and test your processes in the new systems to make sure the data model didn’t break in the migration.

Additionally, pay careful attention to how you move that data and treat Personally Identifiable Information (PII) and sensitive data with the care and security it requires.

Conclusion

The challenges to a successful digital transformation initiative are many, including, notably, setting clear objectives, budgetary constraints, and resistance to change. While daunting, proper planning can mitigate or overcome all of these.

You’re investing a lot in your digital transformation, so to minimize the risk of a failed investment, make the extra effort to develop a solid strategy and appropriate planning. Identifying individual risks in advance and planning around them will set you up for success. Our approach at Endeavor Management considers your processes ties them to business objectives, and deliberately identifies the potential obstacles to success in order to preemptively overcome them.

It’s not all a challenge though. The rewards for a digital transformation done properly are numerous and can yield a significant return on investment. As long as your goals for the transformation are clear, you’re much more likely to meet them.