While there are more technological capabilities at our fingertips than ever before, the path forward isn’t always easy. From securing funding to transitioning from legacy systems, there are many obstacles that can hinder even the most ambitious digital transformation initiatives.
Today, we’ll discuss the latest trends in digital transformation and how organizations can overcome the challenges they face. We’ll also share some practical advice for successful digital transformation.
ERP Selection Guide
This ERP Selection Guide will help you determine the necessary steps to select technology that will support your organization for at least the next ten years.
What is Digital Transformation?
Put simply, digital transformation is the application of digital technologies to create new business models. The aim is often to solve business pain points, improve efficiencies, and deliver a more personalized customer experience.
Digital transformation is based on the notion that digital tools, such as ERP solutions, can benefit every area of a business. These tools can help companies improve their processes and culture so they can remain competitive and relevant.
For many companies, digital business transformation is necessary for long-term survival in a competitive market. By moving in this direction, companies can derive benefits such as:
• An improved customer experience
• More reliable data insights that enable decision-making
• Improved flexibility, agility, and innovation
The Latest Trends in Digital Transformation
1. The increasing adoption of cloud computing
Cloud computing is becoming the preferred platform for businesses of all sizes, as it offers a scalable, reliable, and cost-effective way to host applications and data. Cloud computing also makes it easier for businesses to adopt new technologies, as they can quickly and easily spin up new instances of cloud-based services.
2. The growing importance of cybersecurity
Cybersecurity is a major challenge for businesses in the digital age. As businesses collect and store more data, they become more vulnerable to cyberattacks.
Businesses are increasingly investing in strong cybersecurity measures to protect their data and systems from attack.
3. The rise of artificial intelligence and machine learning
Companies are using AI and machine learning to automate tasks, improve decision-making, and personalize customer experiences. Businesses that adopt these technologies are positioning their company to succeed in the digital age.
4. The increasing demand for data-driven decision-making
Businesses are realizing the value of using data to make business decisions. Companies are gaining intelligent insights into their customers, operations, and markets, and using this information to improve products and services, optimize operations, and make better strategic decisions.
7 Digital Transformation Challenges
1. Lack of Dedicated IT Skills
Behind every successful digital transformation is a dedicated, highly-skilled IT team. However, building this team is getting harder.
As more companies implement modern and emerging technologies, a labor deficit is developing. It has been particularly challenging to attract and retain talent with digital skills, such as:
• Technical architecture
• Enterprise architecture
• Advanced data analytics
• Compliance with new regulations, such as the General Data Protection Regulation (GDPR)
• Managing risks associated with new technologies
2. A Lack of Organizational Change Management
Training employees on new tools is hard enough, but when you add change resistance to the mix, digital transformation can begin to look impossible.
Fortunately, a focus on organizational change management can help your company prepare employees for what lies ahead. Instead of just focusing on the technical side of digital transformation, you need to consider the people it directly affects by developing a comprehensive change management plan.
3. Evolving Customer Needs
Customers are more discerning and demanding than ever before. Now, resources like touchless checkout options are no longer nice-to-have options. They’re increasingly becoming expectations.
Rather than assume you know which technologies your customers want you to provide, we recommend taking the time to perform market research. This way, you can see what they actually want, as well as what the competition is doing to win their business.
4. Lack of a Defined Strategy
Digital transformation is far more than a buzzword. Yet, it often gets thrown around without any clear definition. This leads companies to forge ahead in murky waters, confident that they need to be moving but not quite sure where they’re going.
Without a strategy in place, your transformation could fail to get off the ground. So, ask yourself: What are my company’s goals and priorities? Are they consistent across the organization, or are some stakeholders on completely different pages?
5. Budget Concerns and Constraints
Another issue that arises when you don’t have a clear-cut strategy is difficulty setting or sticking to a budget.
It’s common to experience scope creep as you respond to customization requests and evolving customer needs. Without a strategy in place, you’re bound to make decisions that result in little to no benefit yet increase your budget and timeline.
We recommend looking at the long-term goals of your transformation and using these milestones to develop a realistic project plan. To do so, you’ll need to clearly understand the digital solutions you’re implementing, as well as the culture you’re integrating them into.
6. Inefficient Business Processes
Do your current business processes reflect the growth you expect your company to achieve?
If not, you may need to adjust workflows, change business rules, and leverage data in different ways than you envisioned when you implemented your legacy systems.
7. Ineffective Data Management
Reliable data is one of the pillars of digital transformation. However, data issues abound in most organizations.
For example, if you’re working with siloed systems, it can be difficult to consolidate data to make it centrally accessible.
To prevent any type of data issue, it’s important to develop a data strategy before selecting software. This way, you know what information you need to clean, standardize, and migrate to the new system so the system can give you the insights you need.
A data strategy can also help you identify new data sources you may want to leverage to augment the insights your new software provides. Implementing IoT, for instance, can enable insights such as machine status and uptime.
Ensuring a Successful Digital Transformation
The seven digital transformation challenges listed above might seem overwhelming, but they don’t mean you should just keep your company as is. Learning how to prepare for, identify, and work around these issues is key.
Many problems begin by rushing into the effort starry-eyed about the shiny new technologies promoted by ERP vendors. By taking your time, researching your options, and preparing your employees, you can realize all of the benefits you hoped to achieve.
Our team of ERP consultants can help you at every step of this journey. Contact us below for a free consultation.