5 Biggest Challenges in Digital Transformation

And How to Overcome Them

In the last 20 years, there has been an astonishing technological evolution, and that has led us to what I’d like to call the golden age of digital business. In this era, companies have an incredibly vast technology stack that brings about a variety of opportunities. They use it to increase their efficiency and deliver better user experiences. But with this evolution, customers keep asking for more, creating increasing digital transformation challenges.

An Evolving Journey

For the past few years, I’ve been watching how our customers in Northern Europe have been adapting their digital agendas to ever-changing customer expectations and needs. Before, their business focus was on enhancing operational efficiency. But these days, that focus is on enhancing customer interactions and using new or updated digital core systems to unlock better business models.

And that’s not the only change. In a recent survey about the state of digital transformation in Europe, IDC showed that although the number of companies embracing a digital journey increased from 17 percent in 2015 to 24 percent in 2017, about 55 percent of the enterprises still get stuck in the second phase of digital transformation.

The way I read this, it means that companies are able to launch individual digital projects and can even become digital players, but they’re not able to digitally transform their entire organization.

That raises the question: Why are companies hitting this digital deadlock? And the answer: as business priorities change, a new set of challenges appears.

The 5 New Digital Transformation Challenges

If you have ever planned a digital transformation roadmap, you know there are a few challenges that every company faces. Legacy systems, lack of resources, and limited budget are a just a few of these. But as your journey moves and evolves, new challenges surface and either block or slow down any digital strategy.

These are the top five digital transformation challenges that can lead you into a digital deadlock:

  • Outdated KPIs: Companies embrace digital agendas but continue to use traditional indicators to measure the new digital business instead of finding new KPIs for benchmarking digital performance against their updated agenda.
  • Siloed organizational structures: Legacy hierarchical cultures and processes, like waterfall, slow down the evolution of organizations from 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 constant evolution.
  • Silos of innovation: Usually, when a company starts planning its digitalization, the digital IT environment is separated from traditional IT. As a consequence, there isn’t a singular technology architecture, and silos are created that inhibit communication and fracture cohesive digital strategy.
  • Limited expertise: The lack of digital capabilities, that is. A mixture of technology, talent, governance, processes, and data significantly affects the value companies can bring to their customers.

 

Overcoming Digital Deadlock

Nowadays, as you probably already know, innovation is a crucial part of winning in any competitive market. The ability to evolve from a player to a disruptor must be an essential part of your digital strategy. So, how can you break the anchor and surpass the digital deadlock?

There is only one answer to this challenge: You need to connect your silos and enable business agility. But, that simple answer has several sides. Let’s break them down.

Focus on the Ability to Scale Digital Initiatives

Companies should start their digital initiatives outside traditional IT with a single use case, then gradually increase their portfolio while aggressively modernizing 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.

Accelerate Development Cycle Times and Developer Productivity

According to the IDC survey referred to earlier, accelerating development cycle times and productivity is one of the most significant app modernization challenges for European companies. To overcome this challenge, consider providing your existing teams with an enriched toolbox for solving business problems quickly.

Embrace a Business-Centric Collaboration

When it comes to digital transformation, business and IT must be aligned. And DevOps can be key to eliminating 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.

Manage Existing Talent

In the same IDC research, it was proven that a third of European companies are struggling with acquiring development talent. So, talent management has become a key weapon. Companies need to focus on reskilling, cultivating, and retaining the existing workforce.

Closing the Digital Transformation Framework Loop

In the end, it all comes down to productivity, agility, communication, talent, and a scalable digital transformation roadmap. That way, you lay the foundation for excelling in continuous delivery and thus keep the digital machine running full speed ahead.