Nowadays, the need for digital transformation is recognized by most business owners. And yet, not everyone is ready to take this step. What’s the matter? The thing is that the digital transformation process is associated by many with the need for investment and serious risks. The risks may lead to the unsuccessful implementation of the transformation process, which may further result in the closure of the enterprise as the worst-case scenario. This fear often forces software companies to convince their customers that a reasonably thought-out application development strategy can indeed make a difference.
There are a lot of reasons why digital transformation may go sideways. We have already mentioned one of them — fear. Because of it, the process doesn’t just fail. It never begins, leaving the company far behind the competitors who have successfully gone digital. Successful digital transformation is possible if you analyze all the pitfalls, benefits and plan the process in as much detail as possible.
Below, we outline three main reasons why digital transformation can be a failure. Study them carefully.
Wrongly defined goals
The most important parameter of successful digital transformation is understanding why it is being done and what goals the company is trying to achieve. The very concept of “goals” includes many things — for example, which areas need to be prioritized and which ones can be put on the back burner. Also, it is necessary to understand how the success of transformation will be measured, which metrics will be used as a benchmark.
It is crucial that all employees have this understanding. So, the task of managers is to convey this understanding to team members. This is important, as the digital transformation process will ultimately affect everyone.
The best option for setting transformation goals is to create a roadmap. The document should reflect how each department will undergo a transformation process, which tasks will have a higher priority, what result it should lead to, and how to measure the final success. The task of top management is to make sure that this roadmap has been introduced to and understood by all employees.
To summarize: increasing the number of customers from 10,000 to 100,000 by creating or improving digital channels is not a goal. It’s a dream. Following this path, the company will face a complete reorganization of all processes, including the sales funnel, lead generation strategies, and others. Transformation of all these areas, with a clear plan of action — that is the goal.
Focusing on technology instead of customers
The second common mistake is that during digital transformation, the emphasis is on the overall digitalization of the enterprise, and not on meeting the needs of customers and employers using digital means. The ultimate goal of any enterprise is to bring value to customers. And digital transformation should be carried out with the same idea in mind.
Imagine a company that has invested a huge amount of resources and man-hours to move all processes online and set up new sales funnels. At the same time, digitalization remained the goal itself, but no one thought about the value for users. As a result, the digital transformation process is completed, but customers no longer need the company’s products or services.
It is important to remember that digitalization leads to a change in the operating models of an enterprise. It will very likely turn out that in this new model, there is no place for existing customers. They are not ready for this form of cooperation or simply do not understand how to interact with the company now. The lack of a client-oriented approach during the transformation process is the reason.
In order not to take this wrong path, you need to initially approach the process with the question of how business can bring more value to users and employees. After that, consider which technologies need to be introduced in order to make this possible. Here, you should focus not on global changes, but on the rapid implementation of technological solutions that will be beneficial to all parties and bring feedback.
Failure to educate employees
As we said, the digital transformation process will affect everyone in one way or another. Therefore, it is important to make sure that people understand what it is and why it is being done. The psychological aspect is also crucial because ordinary employees will be afraid of losing their job to digital solutions.
There are several steps to take in this case. Thanks to them, employees understand why the company needs digital transformation and moreover, they grow optimistic about that:
- The teams have an understanding of how their positions and the company as a whole will benefit after the transformation process is completed;
- Employees are educated on the planned risk management strategies;
- Employees feel that the new paradigm will continue to benefit the company and customers.
It is essential for all team members to feel that they are part of something big, part of something important. Digital transformation, no doubt, is such a process.
These are just the three main problems that entrepreneurs face on the way of digital transformation. In fact, there are many more of them and each can be discussed in a separate article.
Many of these problems begin from the very first stages — from a misunderstanding of the concept itself. “I want to make my business digital” — it is not the right approach and it is very likely to lead to failure. “I want to improve the performance of my business and increase the value for users through the introduction of digital solutions and process optimization” — this is the right approach to start from.
As a result, the ultimate goal of digital transformation for a company is to become a more modern, agile, and optimized version of itself.