cost is the major challenges, while access to quality manpower is second challenges. But these challenges are not surmountable once they have quality manpower that will develop cost effective solutions.
The understanding: make sure your counterpart speaks the same language and has the same understanding. In my experience simple topics like personalization for example need sound qualification to ensure everybody is on the same boat.
Rather a sweeping question because it is a very broad concept. Over the past 15 (or so) years I’ve been witnessing a technological evolution that led me to what I like to call the age of digital business. You recognise it where companies have an incredibly vast technological stack that they can (and should) use to increase their efficiency and deliver better user experiences. But as the variety of opportunities increases so do customer expectations and digital transformation challenges.
For the past few years, I’ve been watching how customers have been adapting their digital agendas to ever-changing customer expectations and needs. Before the business focus was on enhancing operational efficiency, today that focus has moved to improve customer interactions and using new or updated digital core systems to unlock new business and go-to-market models.
And that’s not the only change. In a recent survey showed that although the number of companies embracing a digital journey has increased from 17% in 2015 to about 30% in 2019, about 55% of the enterprises still get stuck in the second phase of digital transformation, meaning that companies are able to launch individual digital projects and even become a digital player, but they’re not able to digitally transform their entire organization.
So, the question arises: Why are companies hitting this digital impasse and deadlock? The (short) answer: as the business priorities change, a new set of challenges appears.
Here are my top 5 digital transformation challenges that can lead to a digital deadlock:
Outdated KPIs: In my opinion, the preoccupation with metrics such as Key Performance Indicators (KPIs) is an attempt to over-simplify the managerial task by confusing mediocrity with excellence – it is easy to measure the quantity, but much harder to measure quality. Most occupations are multidimensional, but you can’t have KPIs covering every dimension. In which case you can always meet your KPIs by neglecting some dimension - some aspect of quality – that is not covered by a KPI. You can really measure just about anything and lots of people try. Or at least they’ll measure just about everything that’s easy to measure. Or that has already been measured in the past. Or they’ll measure whatever they have data for. But they rarely measure what matters.
Silos in organisational structures: Legacy hierarchical cultures and processes, like waterfall, continue to be one of the main factors that slow down the evolution of organisations from being digital players to real digital disruptors.
Tactical plans: Most companies build initial digital transformation roadmaps focused on achieving short-term goals, which are not easy to translate into continuing and on-going evolution.
Silos of innovation: Usually, when a company starts planning its digitalisation, the digital IT environment is born as a separate section of traditional IT. As a consequence, there isn’t a singular technology architecture, and silos are created.
Limited expertise: The lack of digital capabilities, that is, a mixture of technology, talent, governance, processes, and data significantly affects the value they bring to their customers.
I don’t need to tell you that innovation is a crucial part of winning in any competitive market. So, the ability to evolve from a player to a disruptor must be an essential part of your digital strategy. So, how can you break out off and surpass the digital deadlock?
Companies should start their digital initiatives outside of the traditional IT with a single-use case. And then, gradually increase the portfolio while aggressively modernising the internal IT environment into an intelligent core in parallel.
At the same time, they should enable modern development to support the new way of running the business, processing data, reacting to changing market conditions, and engaging with customers.
When it comes to digital transformation, business and IT must be aligned. And DevOps can be key to connecting the silos across IT and business that inhibit change. With DevOps, you have the support to increase agility and business innovation, all while enhancing customer experiences.
Companies are struggling with acquiring development talent. So, talent management has become key. Companies need to focus on reskilling, cultivating, and retaining the existing workforce.
In the end, it all comes down to productivity, agility, communication, talent, and a scalable digital transformation roadmap. That way, you can lay the foundation for excelling in continuous delivery and, thus, keeping the digital machine on the move. But it’s easier said than done. To break the digital deadlock, there’s one more piece to the puzzle, one that will glue all this together: you need the right leaders and the tools to support your digital initiatives.
Digitalization is meant to assist organisations to improve business processes. This therefore assumes that there must be, in the very least, a process that needs improvement. If there is no business process, then nothing can be improved by digitalization. With this in mind, usually small business don’t define processes in their environments. The reason for this is that in most cases, entrepreneurs are the owners of small businesses. Generally entrepreneurs do not like anything that is seen as bureaucratic, including having processes. They want their ideas to be executed with speed and with little governance around defining processes. Therefore small businesses cannot leverage extensively on digitalization because of lack of defined processes that need improvement.
In cases where there are some processes, the small businesses may not have metrics to measure efficiencies of their processes. So when they embrace digitalization they cannot really define an improvement. It is important to have means of defining the “before” and “after” picture that can be used to determine what level of efficiencies were improved by leveraging on digitalization.
Thirdly, because these businesses are small in size, the impact from digitalization may not be that huge compared to bigger organizations. The small business process can involve one to three persons, while a business process for a big organization may involve more than 20 persons. So improving a business process for a huge organisation has tremendous benefits.
Lastly, small businesses may not have capacity to provide necessary security required for a successful digitalization project. Digitised documents can be manipulated if they are not digitally signed. However having technologies such as digital signatures can be expensive for small enterprises.
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