Common Barriers to Digital Transformation

Top Three Common Barriers to Digital Transformation

Emerging technologies, increasing demand in creating an immersive and seamless customer experience, and the continuous quest for business process innovation are the three key driving forces that enable companies to focus on the digital transformation over the next few years. Looking at the monthly search volume at Google Trends, about 3,600 searches take place when it comes to digital transformation in the last 12 months. As many companies and decision-makers realised the importance of digital transformation to their business growth, planning to implement the digital transformation activities within the division becomes the top strategic priority. According to the latest Managing Digital Marketing Research report released by Smart Insights in August 2017, 33% of the respondents are planning to start a digital transformation programme within the next 12 months.

Whilst prioritizing the digital transformation as a critical move in the organization, few businesses are both technical and managerial ready yet. The Forbes study found that only 35% of cross-functional teams in responding organisations are actually implementing steps to digital transformation. Without any doubt, successfully digital transformation requires significant changes across each area where triggers a lot of resistance in terms of adoption and adaption. Knowing the common barriers to digital transformation is necessary prior to commencing with the project as those barriers highlight the main risks that need to be addressed, managed or even mitigated in a transformation project.

Common Barriers to Digital Transformation

Three Common Barriers to Digital Transformation

1. Culture and behavioural challenges

Employee’s perspective and C-level’s attitudes towards digital transformation play a significant role in proceeding transformation project. This is perhaps the most difficult barrier for organizations to overcome in order to succeed. Those employees who are used to the old operation process may need to change their daily activities to adapt to the new system. This requires a long-lasting learning process and some practices. The request for behavioural changes will trigger corresponding resistance somehow as they may end up with learning something completely new to them by stepping out of their comfort zone. Additionally, if the consensus has been reached among key decision-makers beforehand, it’s possible that the project fails to be delivered due to the lack of management support and internal alignment. It is necessary for organizations to adopt an inside out approach to facilitate these changes. In other words, creating and fostering the culture of digital aspirations where all employees need to buy into the idea of moving towards the digital age with innovation and technologies is critical to the success of the digital transformation.

2. Lack of IT infrastructure

Embracing digital transformation also means the IT infrastructure is ready in place. Dealing with the legacy system or migrating to a modern platform can be an overhaul within the current IT infrastructure. According to the IBM IT infrastructure report, which reflects the results collected from 750 CTOs, CIOs and other senior technology executives from a variety of industries and company sizes in 18 countries, less than 10% of the organizations said their existing IT infrastructure is fully prepared to meet the needs of digital transformation such as business process automation, big data, cloud computing and mobile technologies. Working in a tech-driven environment where IT infrastructure is becoming more important, the lack of IT infrastructure potentially exposes organizations to the failure of revenue growth due to the loss of competitive advantage in terms of business intelligence and industry trends.

3. Lack of resources

This challenge is less surprising compared with the other two barriers and it appears to be a trend across all sectors. Whenever commencing a digitization project, technology capabilities, talent for digital, dedicated funding, data support as well as the internal alignment are the key determining factors in the success of the digital transformation. Even though this may take 5 to 8 years to overcome, businesses today are going great lengths to find ways of breaking down this barrier.

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