The need for digital transformation is a message you hear in most business circles. But, there is still some ambiguity about what constitutes a transformation. 

The meaning of digital transformation varies with the business and industry. In healthcare, for instance, it can mean maintaining electronic health records and Internet of Things (IoT)- based apps to monitor patient health. In retail, it can mean automated supply chain management and self-checkout systems.

Regardless of the meaning of this change, there is no doubt about its importance. With an increasingly digital-native population, going online and choosing gadgets that solve problems is the norm.

Digital Transformation Facts, Challenges, and Solutions

While transformation is the need of the day, making it happen is not easy. Research suggests that a large number of businesses fail to implement digital solutions. 

McKinsey reports that no more than 26% of tech or media businesses can transform themselves successfully. 

The percentage is even lower for auto and some other industries adds the report. 

What is Making The Change Hard for Businesses?

Digital change usually involves using technologies to overhaul the business model of the company. The aim is to improve customer experience and stay up to speed with market developments. Transforming in this way can be difficult for several reasons, including the following:

The Culture of The Company

The success of the digital strategy depends on various factors, including human factors like the culture of the company. Changing the culture can involve several different initiatives. It may include switching from a project-based approach to a customer experience-led strategy or a more collaborative approach toward work. 

A McKinsey survey suggests cultural and behavioural change is the top barrier to digital transformation. However, there are solutions for overcoming this barrier. For instance, skill development programs to coach others in new ways of working. According to research, the success rate of companies offering such programmes is 1.9x higher than others.

Information Silos

Besides personal communication, communication between different departments is also a part of effective digital transformation. Information silos result from using multiple programs to manage workflow and stop departments from sharing available information. 

According to an Airtable and Forrester survey, employees spend nearly 12 hours/ week looking for key information they need to perform their duties, reports VB.

This problem can be solved by deploying technologies that streamline information-sharing and by developing a culture of collaboration.

Top Leadership of the Company

Good leadership is vital whether you need to improve company culture, build and implement technologies, or create a workforce for the future. 

Research shows that a company is over 3x more likely to have a successful transformation if the management has “a clear change story for the transformation.” Leadership can also help by creating a sense of urgency for transforming and encouraging employees to innovate, adds the report.

The Role of Data in Decision-Making

Data-based decisions eliminate the need to rely purely on experience. The company can use data to, for example, define which skill-building programmes are necessary and quantify the gap between current and needed skills. 

Unfortunately, many companies are not proficient in data collection and analytics. By investing in these areas, businesses can introduce a data-driven approach to their decision-making.

The Size of The Organization

Large enterprises find technology transformation harder than smaller organisations, reports McKinsey. The enterprise may have legacy infrastructure that relies on human intelligence instead of built-in intelligence available with newer technologies. These legacy systems, while out-of-date, are hard to replace at once because of the costs and disruption to the business. 

The solution for enterprises with legacy systems is using APIs. APIs allow large enterprises to deploy user-friendly applications without a complete overhaul. 

Digital transformation is a decision many companies are making or will have to make in the near future. The exact nature of this change depends on the industry and state of the business. However, a successful update requires that top leadership and employees invest in the change. 

Small and large organisations looking for change can consider using the services of a dedicated digital transformation consultancy.