Barriers to Digital Transformation

70% or more of digital transformations fail. You’ve probably heard that statistic before. It’s one of the most quoted figures going around. But there’s one big problem with this statistic: it sets the wrong mindset about digital transformation.

Yes, change is hard. But just because it’s difficult and doesn’t always go exactly to plan, doesn’t mean it’s a failure.

Whether your initiative fails or succeeds, you still learn something. Maybe you learn where the biggest hurdles are, or which stakeholders to engage earlier. Whatever the lessons, you will go into your next change initiative with more experience and knowledge.

So, what are some of the major barriers to digital transformation?

1. You take a technology-first approach
2. You have a limited understanding of the processes
3. You ignore the client experience
4. You invest in technology without investing in new skills and capabilities

1. You take a technology first approach

Many organisations do not see their digital transition for what it is: an opportunity to remove redundant business processes wherever possible. Sure, any digital transformation will involve the delivery of new technologies but, rolling out new technology without spending the time to understand what you actually do means you simply end up running old processes slightly faster.

That’s not enough. For a digital transformation to be effective, it must start with a cultural leap. That means a thorough analysis and overhaul of current business processes. Business process improvement provides the strong foundation for digital transformation. Develop a plan for business process improvement and avoid investing in new technology that simply speeds up old processes.

2. You have a limited understanding of the processes

Standardising processes in any organisational environment is tough. Why? Because one of the major challenges is that everyone does not see the same set of problems.  Business processes are often not documented and can often rely on the heroics of a few team members to ensure everything goes to plan.

Understanding HOW to visualise your work and continuously improve your processes is a core skillset that every organisation needs to develop.  Once you have a clear understanding of your processes you can start to analyse where the problems exist and assess the impact of new technologies.

3. You ignore the client experience

Companies who successfully implement a customer experience strategy achieve higher customer satisfaction rates, reduced customer churn and increased revenues. Research suggests that customer-centric companies are 60% more profitable than companies who aren’t.

As outlined by HBR ‘Customer experience encompasses every aspect of a company’s offering – the quality of customer care, advertising, packaging, product and service features, ease of use and reliability.’  Yet few of the people responsible for these areas across an organisation have given sustained thought to how their separate decisions shape customer experience.

You need to have a clear understanding of your end-to-end customer journey so you can see the world as your customers do.  This helps you to design a customer experience that mobilises your employees around customer needs.

4. Invest in new skills and capabilities

Due to the COVID-19 pandemic, the adoption of cloud based and mobile friendly platforms across all organisations has been rapid. We have seen more adoption of new technology in the past twelve months than we will see in the next five years.

However, all of this new technology creates a new challenge: How do you build new skills and capabilities required to proficiently manage your new processes and systems? The adoption of new technologies can often be viewed as an administrative burden by staff, meaning they learn just enough to get by. You need to invest in the right skills and capabilities to use the new technology to its full advantage.

Conclusion

Digital transformation is about fundamentally changing the way you operate to deliver value to your customers.  To be successful in a digital world, your mindset needs to shift to continuously think about HOW your products or services are being delivered to your customers.  The key element to understand in a digital world is that you must be easy to do business with.