Challenges to a successful Digital Transformation Journey !
As Digital takes the world by a storm, firms in B2B space are at a critical time in their life cycle. As Digital transforms from a marketing and branding tool and pervades into every aspect of business, leaders are perplexed. Business leaders, especially in traditional and non tech sector are struggling on how to cope with this new onslaught of technology that is forcing them to create a digital strategy, change old organisation structures and make their organisation lean, mean and efficient. A recent survey by Russel Reynolds Associates, clearly maps out that almost all industry leaders from Media to heavy industry are expecting digital disruption to the way they do business in next few months.
As leaders scramble to incorporate Digital transformation in their line of business, there are challenges that need to be met and there is a need for leaders to make educated and wise decision to be successful in their adventure. However, based on previous research*, the decision makers often have poor understanding of the big picture which makes planning for digital transformation a complex exercise given that in today’s times the industry and market behaves in ways, unheard of before.
Let’s have a brief look at the challenges that a firm faces as it takes the Digital Journey. These challenges are applicable to organisations of all shape and size but will stand out more for traditional companies.
Should we or should we not? Now or later?
As studies by management consultants reveal, the impact of Digital transformation on organisations along with the pressure under which senior management takes these steps translates into confusion among leaders on when and how to start this process ,especially in non tech sector. There are people who want to start right away and many who want to wait and watch. However, the jury is out on this front. The earlier the better!
Lack of management directive
Leaders in organisations are adopting Digital change to remain relevant in their industry. However, this adoption may not be propagating across the organisation effectively. Once the top management has decided to start the digital journey, the same needs to be cascaded down the chain of command to one and all. This should be seen as part of the organisation wide strategy and not seen something as related to do with the marketing or the IT department. Clear roles and responsibilities during and after the transformation is something that the leaders need to work beforehand and the same be communicated to once and all. Further, KPIs need to be put in place so that people know that they are being measured on how they are delivering on the digital front.
Ineffectiveness of IT to respond to change
The IT departments of non tech companies have been working in a specific way for last few years, primarily as an MIS agency. Though in many traditional firms, they have taken a more proactive role then what an MIS department would be. Needless to say ,IT division still has a lot at stake when an enterprise starts to digitally transform itself. The slow responsiveness of the IT could be attributed to lack of new skills amongst the staff, lack of understanding of new business strategy, working in silos, lack of coordination with other divisions etc. The reasons can be many but IT has to pull up the socks and deliver.
This is an area where the HR has to play an important role during the digitalization of an organisation. It’s seen in many non tech companies that there is a culture of risk aversion amongst the employees, the reason may be many. It’s possible that some managers may feel insecure. They may perhaps do not understand digital well enough themselves and the same may be status of their teams below. Such people need counselling plus clearer and more precise instructions from their superiors on how to proceed than what they currently had.
Lack of collaboration
When internal cooperation is lacking, management teams often fall back on the same few strategies to improve it: organization restructuring, business-process re engineering, cross-unit incentives, teamwork training. Some yield the occasional success, but few manage to dismantle organizational silos or make a real impact on business results**.
The above quotation from a research report is indeed true, but for an organisation undergoing digital transformation it has to outright reject these kind of non-collaborative work culture as these are the reasons that may fail the transformation journey. Changing the business processes and work culture to make it collaborative is a must have condition for a successful transformation journey.
The above are some of the most important issues that leaders face when they start their transformation journey. Knowing them beforehand, is battle half won. Leaders would do well to articulate and have a strategy in place right at the start of the journey. This will ensure that the above issues do not create bottlenecks and waste time and energy of the enterprise on sorting them out at the last moment.
* (Luftman, Papp & Tom 1999) (Fitzgerald et al. 2013) (Westerman et al.2011)
** (McKinsey & Co, How do I drive effective collaboration)