5 Challenges that Brands Face on their Digital Transformation Journey
Despite much ado, there has not been any single definition that can sum up ‘digital transformation’ in its entirety. While the world is still trying to decode it, the wave of digital transformation has surely swept many industries, and changed them forever. Many understand it as a journey of moving the manual business processes to automated systems which are faster, more affordable, and enhance the user experience. However, it is more exhaustive in nature. Digital transformation is an evolutionary process of investment in people, process, and infrastructure, rather than moving everything to digital applications overnight. The impact of this transformation has been felt equally by B2B as well consumer facing industries.
For example, according to a study by Statista1, more than 2 billion people all over the world are expected to buy goods and services online in 2019, as compared to 1.46 billion in 2015. While brands could be excited about this massive rise in business opportunity, they also need to shift from conventional to digital model to tap this opportunity before others. Below are the 5 top challenges that brands face on their digital transformation journey: -
Confused Priorities- Often, brands (enterprises, mid-size, or startups) fail to set their priorities in place before they start their digital journey and hence avail only temporary benefits. -The first step should always be to list down the priorities. This could be anything ranging from customer acquisition, engagement, efficiency, information management, and analytics and so on, or even a combination of these. Getting these priorities in order leads to the next step -, which is defining a detailed digital strategy for transformation.
Missing Strategy- A strategy starts with right priorities, vision, assessment of available and required resources, and operational plan. Without all these elements, any digital transformation endeavor will always misfire. The organization also needs to decide whether to go aggressive and all out for this transformation, or take one step at a time. Remember, you do not have to do what everyone else is doing. Digital transformation is ‘for a reason’ specific to your brand, and the transformation strategy should clearly address this reason.
Missed cost-benefit analysis- A large number of organizations would know the importance of digital transformation but don’t initiate a full-fledged campaign as they fail to visualize the short & long term benefits vis a via financial investments. Most often, they consider digital transformation as an operating expenditure (‘Opex’) rather than capital expenditure (‘Capex’). As long as their operations are running without any additional investment, they may not like to pump in extra money. However, once they realize that digital transformation is an investment towards the future (think of it like a new machine in a factory which recovers its value over the years), there will be more C-Suite buy-in for it. It is also up to executives to make a compelling pitch to the management about the long term benefits of recommended digital journey.
If it is Rigid, it only Breaks- Businesses, like humans, are resistant to change. A well-thought out and funded digital transformation exercise may fail at the implementation stage due to people’s resistance from the existing model, processes, or platform. Therefore, it is important to include a communication plan within the overall transformation strategy. This will sensitize all the stakeholders about the reasons for the initiative, expectations from them, and the incentives that they may expect. This structured communication may bring down their resistance to the transformation and make the ride smoother.
Lack of technical skills- Once the organization has got its priorities, transformation strategy, funding, and culture in place, it needs to find the right resources who are technically equipped to enable the change. However, it may sound easy, this could be the most critical roadblock. Some of the most important technical skills required for digital transformation are: -Full stack development, Experience Design, DevOps, Data Management, Analytics, Artificial Intelligence, and Information Security etc. Most of these skills are still relatively new around the world and it is hard to find the experienced and suitable professionals for these sills. It is not too long ago when the academic institutions around the world started offering structured courses in these areas. The scenario is even more recent in India. Internal trainings and up-skill is a solution towards this. But it could be a long and costly process.
As brands and their technology partners are still learning about digital transformation every day, more challenges, approaches, and solutions are discovered. The above is only a list of top line challenges. Every brand discovers its own challenges, and you may add yours too.
-by Narinder Kumar, EVP Technology Services, TO THE NEW
Read the complete article here.