Overcoming Key Challenges in Digital Transformation

January 9, 2024
by
David Woodbury

Businesses must adopt digital transformation to stay competitive in a digital world but face challenges like resistance to change, lack of expertise, and budget constraints. Successful transformation requires strategic planning, skilled implementation, and often collaboration with external experts like The C2 Group.

Digital Transformation

Table of Contents

Digital Transformation Challenges
  1. Resistance to Change
  2. Deficiency in Expertise
  3. Strategic Planning Gaps
  4. Budgetary Limitations
Digital Transformation Barriers
  1. Effective Change Management
  2. Building and Acquiring Expertise
  3. Strategic and Tactical Execution
  4. Security and Data Management

Today's world is one of continuous digital development, and with these developments come changes in customer behavior and competition. To thrive amidst these changes, businesses must continually adapt—going beyond merely integrating digital tools as the need arises.  

Integrating new technology into businesses is referred to as digital transformation, and it can improve efficiency, enhance the employee and customer experience, tighten security, and increase profitability. It may seem simple enough, but beneath the process lie challenges including resistance to change, lack of digital expertise, outdated organizational structures, budget limitations, and cybersecurity concerns.  

Overcoming business transformation challenges requires comprehensive planning, data-driven decision-making, and knowledgeable software implementation and training. Thus, many organizations forego an exclusively DIY approach in favor of partnering with external experts to ensure a smooth transition.  

Prevalent Digital Transformation Challenges  

According to Dave Rogers, a Columbia University professor and DX author, 70 percent of digital transformation efforts fail. This is because the way a business has always done business changes when undergoing digital transformation. About much more than new tools and technology, successful digital transformation begins by shifting organization-wide mindsets, developing new skills, creating a strategic plan, and setting an appropriate budget.  

1. Resistance to Change  

Resistance to change affects both individual employees and entire organizations. Until new systems are paid for and team members receive appropriate training, they can be seen as more of a hassle than a help.  

This is often especially problematic if the old tools are still deemed effective. It can be hard to envision the benefits of advancing technology, but doing so is integral to staying competitive and creating growth opportunities.  

Employee Pushback

Individual change is hard, and gathering change-resistant individuals to create organizational change is an even bigger lift. Employee pushback is common when company culture holds a change-averse mindset.  

Approaching digital transformation challenges with an understanding of change resistance is integral. Identifying cultural obstacles helps leadership develop a strategy and roadmap that embraces and addresses these issues to minimize employee pushback.  

Adapting to New Technologies  

Many companies rely on legacy systems despite the availability of new technology. There are many reasons for IT challenges, including cost, the need for employee training, and fear of change. However, continuing to employ outdated systems reduces employee efficiency, negatively impacts the customer experience, and increases security risks.  

2. Deficiency in Expertise  

Digital transformation is both complex and fast-paced. Its scale requires knowledgeable stakeholders capable of being agile and outcome-focused. The best approach to a deficiency in expertise is often two-fold, with companies upskilling current team members alongside bringing in outside talent.  

Talent Shortages  

Nearly every business role requires some level of digital skills, from basic to advanced, and each role will likely need to increase its technological know-how when undergoing digital transformation. Meeting these increased needs generally involves hiring outside help, bringing on new talent, and training existing staff on new tools.  

Skill Development and Training  

To keep pace with evolving technology, businesses must train team members on software implementation and integration, data analytics, and cybersecurity measures. This can be particularly challenging since tech continues to develop at such a rapid rate. Many organizations find it beneficial to strategically outsource some development to experts in the field who can bring their IT team up to speed.  

3. Strategic Planning Gaps  

A strategic approach to digital transformation ensures aligned business goals and the integration of new tools with existing processes while addressing both current and future needs.  

Lack of a Unified Digital Strategy

According to KPMG’s 2023 global tech report, a lack of coordination in the technology function is the top roadblock to effective digital transformation. To ensure efficiency and collaboration that increases innovation, companies must create a unified digital transformation strategy considering the business as a whole.  

When department data and goals remain siloed, developing a company-wide strategy is happenstance rather than intentional. This is inefficient from both a process and budgetary standpoint.  

Alignment with Business Goals  

Not only do disparate departments need unification, but the entire business must prioritize its strategy to align digital investments with specific company goals. For companies that use siloed data stored in legacy systems, developing a vision that drives outcomes by improving company-wide programs is a particular challenge.  

4. Budgetary Limitations  

Spending on digital transformation is expected to reach $3.4 trillion globally in 2026. For individual businesses, budget constraints can limit the scope and speed of transformation. To effectively manage costs, businesses must develop a plan that incorporates digital transformation priorities and changes in phases.  

Financial Planning for Transformation Efforts  

Developing a comprehensive financial plan is one of the most integral aspects of successful digital transformation implementation. With costs for things like new tools, training, and hiring, it’s easy for expenses to balloon beyond the budget if proper limits aren’t in place. Working with a partner who understands all costs and can help prioritize and stage the strategy to avoid budgetary issues and maximize returns is often the best approach.

Cost Management  

Since digital transformation can be expensive, many companies hesitate to invest without fully understanding the potential return. Changing this understanding involves getting companies to see digital transformation as a growth strategy rather than merely an operational expense. By partnering with a knowledgeable firm that can illustrate how DX can ultimately reduce overhead and manage costs while increasing revenue, its value becomes clear.  

Overcoming Digital Transformation Barriers  

To overcome digital transformation pitfalls and mitigate internal resistance, organizations must communicate effectively, provide comprehensive training, and demonstrate the benefits of new technologies. They will want to consider the overall impact of digital transformation on business, including customer engagement, cost, and alignment with goals.  

To succeed, it’s integral to go into the process with a well-thought-out plan, which is much easier alongside an experienced implementation partner.  

1. Effective Change Management  

As decision-making grows increasingly complex, increased communication is key to involving stakeholders in effective change management.  

Communication and Leadership Engagement  

It’s much easier to engage stakeholders if leadership has identified and measured company-wide change resistance prior to digital transformation. Understanding employee perspectives, increasing communication to address concerns, and requesting ongoing feedback are effective ways to maintain team member support.

Employee Involvement and Support  

Because digital transformation takes time, leadership and team members must stay involved and supportive for the long term. This generally means providing process updates, reporting on quick wins, and adapting to unforeseen obstacles and remaining opportunities for training and support.  

2. Building and Acquiring Expertise  

True digital transformation goes beyond integrating a new tool to create a wholesale shift in processes and employee and customer experience. The sheer scale of changes involved requires upskilling existing team members and bringing in outside help.  

Upskilling Current Workforce  

Like all company successes, an effective digital transformation strategy is highly dependent on the skills of the team members implementing it. When leadership creates a company-wide growth mindset built on agility, team members appreciate developing new skills that make them more valuable while easing repetitive manual tasks and solving pain points.  

Hiring and Partnering for Necessary Skills  

While growing the skill set of existing team members is an absolute must, it is also generally necessary to seek outside help. Knowledgeable vendor partners can be helpful from the planning stages onward. They can help track, organize, and store relevant information for data-informed decision-making. They can aid in tool selection, training, and troubleshooting. They also serve as positive actors for motivating team members and championing transformation changes.  

Choosing vendors with a long track record of successfully aiding in digital transformation is an excellent way to manage costs, improve efficiency, and maintain progress.  

3. Strategic and Tactical Execution  

Almost no business attempts digital transformation alone. Experienced partners are key to the proper strategy and tactics necessary for successful digital transformation.  

Developing a Comprehensive Digital Roadmap  

The best digital transformation strategies account for the workforce, capital, and technological tools that must be incorporated and procured. Businesses must understand where their tech stack sits at the beginning of the process to determine which solutions are digital transformation priorities for company-wide evolution. Ideally, a comprehensive digital roadmap considers the availability of preferred tools and includes backup options should procurement run into a resource shortage.  

Prioritizing Customer-Centric Approaches  

One of the disadvantages of digital transformation is that ROI can take time to realize. While a business waits for easily quantifiable data to become available, it can maintain momentum and support by looking to customer experience first.  

By prioritizing customers, employees can immediately target processes that need further attention and those delivering quick wins. Addressing customer pain points ensures organizations meet evolving expectations while creating the momentum necessary for long-term success.  

4. Security and Data Management  

As businesses adopt new digital technologies, they must also update their cybersecurity measures to protect against evolving threats.  

Implementing Robust Cybersecurity Measures  

Bringing in new vendors means verifying the security of each one—a daunting task, even for companies with knowledgeable tech teams. Companies must have forward-looking cybersecurity measures that help them choose responsible vendor partners and resolve issues before they become serious breaches.  

In an increasingly digital world, robust cybersecurity technology must remain consistent to keep employees, customers, and the company secure.  

Case Study: Efficient Data Management Practices  

Many organizations using legacy manual systems are surprised to discover the degree to which their teams have been operating in isolation. By undergoing digital transformation, siloed data, processes, and goals benefit from improved communication, reconfigured resource allocation, and a unified approach to achieving company-wide outcomes. Streamlined and efficient data management increases communication and collaboration for quicker and better decision-making that leads to growth.  

As an example, The C2 Group helped Presence Marketing, a leader in natural foods brokerage, update its data management away from outdated scanners and inefficient pen-and-paper systems. By developing a new app for automatically syncing handheld tablets, Presence united its more than 200 nationwide field staff, enabling the brokerage to easily track data, collaborate, and keep products in stock. Thanks to their agile development process, The C2 Group had the tech in place and staff trained on its use in under 6 weeks.  

Screenshot of Presence Marketing's new app.

What are the barriers to rapid digital transformation?  

To boost growth and successfully navigate changes in the digital landscape, businesses must embrace transformation. They can attempt a DIY approach or walk alongside a knowledgeable partner. Since digital transformation can be costly and time-consuming, successful and rapid improvements depend greatly on comprehensive planning.  

The Necessity of Navigating Challenges for Success  

Navigating digital challenges isn’t as easy as choosing new technology. Businesses face internal and external issues that must be addressed to be successful, and forward-thinking leaders understand that digitization is necessary to improve efficiency, increase customer loyalty, and drive revenue.  

Hiring C2 for your digital transformation  

One of the simplest ways to navigate the digitalization challenges is to employ The C2 Group as your expert partner. The C2 Group specializes in guiding businesses through digital transformation—providing proactive training and support to facilitate adopting new technologies based on personalized strategies and analytics.  

C2’s expertise covers both front- and back-end solutions, including CMS and e-commerce integrations and the training, documentation, and measurement tools necessary for successful implementation. With high client satisfaction and an excellent project management track record, C2 is a strategic ally for businesses looking to overcome the challenges of digital transformation.