With companies around the world updating their operations to better suit the modern world, finding the right digital transformation solution is more important than ever. Persisting with outdated legacy systems is simply no longer worth the problems they cause.
However, digitalization can pose certain risks and challenges, as well as opening businesses up to potentially expensive mistakes. Given how extensive the best digital transformation processes are, it’s no surprise that they’re incredibly difficult undertakings. If you want to completely re-imagine how your company operates, you must be prepared for this to possibly involve some difficulties.
Fortunately, the challenges of digitalization can be overcome with detailed planning and appropriate preparation. Read on for advice on smoothly implementing a digital transformation solution for your enterprise.
Types of digital transformation
Digital transformation is currently one of the most important trends in the commercial world. However, many people lack a solid understanding of how it can improve their business.
All types of digital transformation include increased integration of technology. There are four different forms that are helpful to consider.
Process transformation
One way digitization can transform your enterprise is through process transformation. This is when you use technology to improve processes that are fundamental to your business.
This could be using AI to perform basic but time-consuming tasks, optimizing marketing analysis with data analytics, or opting to integrate data using a hybrid integration platform.
The aim of process transformation should be to increase business efficiency, using modern technological solutions to lower costs and boost productivity.
Business model transformation
While process transformation is about elevating specific elements of your business, business model transformation reshapes your aims and strategy. If you’re worried about how new technology will affect your business model, this could be the solution for you.
An example might be a book publishing company that re-orients its business model toward e-books or a financial services business that moves its focus to mobile banking apps.
Business model transformations can be a great way to ensure your company’s aims are future-proofed.
Domain transformation
A domain transformation is when your enterprise decides to enter a completely new domain. While this doesn’t always mean you’ll need to undergo a digital transformation, the most exciting new domains tend to be in the digital arena.
An example of a domain transformation that focused on technology solutions is Amazon expanding into web services with Amazon Web Services.
Organizational transformation
The most popular form of digital transformation is organizational. It’s also the most wide-ranging transformation type.
Implementing an organizational transformation is about making sure your company is optimized for the digital world from top to bottom. You will have to communicate a clear vision to help all your employees have a mindset open to technological innovation.
An organizational transformation involves overhauling each element of your business. By adopting a digital-first mindset, rather than worrying about digitizing specific business operations, your organization will be able to make the most of opportunities for technology-driven growth.
An organizational transformation is arguably the most difficult form of digital transformation, as bringing about significant changes in your company mindset can be challenging. However, it can reap huge benefits as the world moves toward an increasingly digital age.
Six reasons digital transformation solutions fail—and how to overcome them
Regardless of the specific type of digital transformation your business might plan to take, there are many obstacles that can lead to failure.
Digital transformation projects often need a sizable investment to get off the ground, so it’s important that you can recognize the main reasons why digital transformations fail and how to avoid them.
1. Resistance to change
When it comes to implementing a digital transformation plan, inflexible mainframes might not be the only obstacle you have to contend with. Rather than struggling with outdated technology, businesses often find outdated mindsets are their biggest challenge.
It’s perfectly reasonable that your employees might be resistant to change. Some will see automation as a threat to their jobs, rather than something that will make their roles easier. Others will be skeptical of the benefits new technology can bring to the workplace.
There’s no easy fix to overcoming this resistance to change, and the only way you’ll be able to get your entire workforce on board is through open dialogue and supportive leadership. Consider establishing a transformation leadership team, where innovative employees from across departments could work together to build a consensus around digitization.
As well as taking on responsibility for making the digital transformation process as smooth as possible, a dedicated team can help you listen and respond to the concerns of your employees.
2. Complicated software and technology
Overhauling your business processes can involve a steep learning curve, especially if it includes the use of unfamiliar and complex technology. For example, data integration solutions for large companies are often inherently complicated.
If you’re not prepared for this challenge, your digital transformation will be slowed down, and you could even be forced to abandon it entirely if your employees cannot work effectively. This means it’s important to consider how you will train your workforce to use new technology.
A great way to help them get to grips with complex software is a digital adoption platform (DAP). DAPs allow you to create interactive walkthroughs, tutorials, and tips for your employees. These can help in onboarding employees with new software.
You should also make sure each department has a specialist who’s been pre-trained to use your new technology. These individuals can then take responsibility for guiding other employees through the technology’s adoption.
3. Lack of a digital transformation plan
The mistake some enterprises make is diving head-first into digitization without a strategy. This can result in large amounts being spent on new technology that cannot be used effectively. Therefore, you should start by defining your goals and identifying areas you want to improve through digitization.
Work together with your leadership team to produce and communicate this strategy. This will enable you to focus on the legacy processes that need to be updated most urgently and ensure your digital transformation is fully aligned with your overall business goals. It will also help convince your employees of the benefits of digitization.
4. Insufficient IT expertise
If you want to successfully implement digital transformation solutions, you will need a team of people with the skills to guide your company through digitization. Surprisingly, few businesses have an extensive IT department that feels comfortable leading a wide-ranging digital transformation.
Make sure you have sufficient resources to manage the size of the transformation you want to take on. If you only have a small IT department, for example, you might want to consider optimizing one specific business operation at a time.
Companies can benefit from outsourcing their IT work to consultants, including professionals who specialize in digital transformations.
However, it is important to consider that digitalization will mean your enterprise will become more reliant on technological solutions in the long term. Therefore, part of your transformation should be upskilling existing employees and/or hiring externally to ensure your workforce has the necessary technical skills to work effectively in a digital environment.
5. Cybersecurity and data privacy concerns
With large data migrations and reliance on external cloud servers being part of any significant digital transformation solution, it’s unsurprising that many companies are concerned about cybersecurity and data privacy. Rather than keeping physical records in-house, personal data is increasingly stored using external cloud services.
This can be especially crucial for businesses undertaking digital transformation in healthcare, financial services, or other industries that deal with personal data. Stringent regulations mean that companies working with customer data in these industries have to be extra cautious about cybersecurity.
If you don’t already have one, consider bringing in a cybersecurity expert to lead this aspect of your digital transformation. It’s also important to evaluate the cybersecurity policies of any software you plan to integrate into your business. This will allow you to identify potential vulnerabilities before you begin your transformation.
As business operations become more reliant on the cloud, you should also ensure that your employees are given extensive cybersecurity training. This will help reduce opportunities for cyberattacks or data leaks.
6. Financial limitations
As they can involve overhauling the majority of your hardware and software, it is unsurprising that digital transformations can be expensive operations. You must be careful to budget for your investment, including factoring in additional costs, such as consultants.
This is another area where the benefits of a clear strategy are obvious. Without a detailed plan, you might find costs start to spiral, which could lead to your digital transformation being left unfinished.
A detailed plan and budget will also help you to prioritize the parts of your operation you most want to upgrade.
Key proficiencies to look for in technology transformation services
Now that you’re able to recognize and overcome the key challenges faced by companies undertaking digital transformations, you should start to think about how to develop a workforce that can thrive during digitalization.
While you might believe technical IT skills are the only proficiency necessary for success, there are actually three important core skills that are relevant for your workforce.
These are:
Digital proficiency
It’s crucial to have a team that can recognize which business operations will benefit from increased automation and digitization. This means employees should be aware of recent trends in technology and be able to find relevant software or hardware to boost productivity.
After the best new technology transformation services have been identified, you need your workforce to use digital literacy to make the most of the digitized workplace. You should encourage employees to be agile and adaptable to new technologies, otherwise, you’ll struggle to see the benefits of your digital transformation.
Training videos and courses can help to upskill your workforce’s technical skills. Understanding something as simple as the differences between Infrastructure as a Service (IaaS), Software as a Service (SaaS), and Platform as a Service (PaaS) examples can help boost digital proficiencies.
Data proficiency
While technology is an obvious focus, using large volumes of data is another key aspect for any business that has undergone a digital transformation. Data is crucial for recognizing trends, analyzing strengths, and making effective decisions.
Technology can automate a lot of data processing, saving your employees time by taking over repetitive manual tasks. However, you will still need employees that are able to read data effectively and recognize the strengths and weaknesses of different datasets to fully take advantage of the benefits of data analysis.
Having data proficiency across your organization will allow you to make decisions informed by real-time data analysis. With swift innovation and responses to market changes, you can make the most of your digital transformation and grow your business in a smart way.
Design proficiency
Technology is only useful if it’s easy to use. This is especially the case when you’re transforming customer-facing operations. To ensure your new digital transformation solutions don’t alienate customers, it’s important for your workforce to have design proficiency.
Think about the specific audience your operations should be tailored toward, and consider designs that will make your technology simple and approachable. Test different forms of your design on members of your target audience.
This is a process that can be aided by data insights. You should also analyze the design choices of your competitors.
While design proficiency can be supported by external consultants, it's useful to have a base of employees with the skills to make your digital transformation suited to the needs of your customers.
Optimize your digitalization with OpenLegacy's technology transformation for legacy systems
There’s no doubt that digitalization is unavoidable for enterprises across the world. While your legacy systems may have brought you success up to this point, digital transformation is the only way to ensure you stay on top of business trends going forward.
It’s important to undergo digital transformation intelligently. OpenLegacy can provide a hybrid approach to digital transformation for businesses that require continued access to legacy data, processes, and applications. Our automated hybrid integration accelerates and simplifies modernization, setting you up for success from the word “go”.
FAQs about digital transformation solutions
What are the three Ds of digital transformation?
The three Ds of digital transformation are digitization (turning physical data into a digital form), digitalization (using technology to speed up business processes), and digital transformation (overhauling your company’s strategy to make the most of technology).
What is the importance of mindset in digital transformation?
Having a digital mindset, where the members of your organization are open to the innovations technology can bring to the workplace, is crucial to digital transformation. It will ensure that you are well-placed to stay up-to-date with the constantly evolving world of technology.
Is automation the same as digital transformation?
Although digital transformation will often include the automation of tasks, it’s about much more than just this.
A digital transformation should implement transformation solutions across your organization, ranging from changing your company mindset to creating an effective digital environment.
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