Digital transformation is a major undertaking for any company. It requires you to restructure and rethink your business approach, which can be shaky ground for any company to enter.
While there are many digital transformation pain points to be aware of, they don’t have to derail your project. Today, we’re sharing a few of the most common roadblocks you may encounter and how to avoid them.
6 Digital Transformation Pain Points
1. Lack of Executive Buy-In
For a digital transformation to be successful, your C-suite must be behind it.
This doesn’t just mean supporting it with money and resources. Upper management must visibly demonstrate their support, leading by example to encourage the rest of your workforce to follow suit.
To obtain this level of buy-in, you must ensure that these stakeholders are aligned on project priorities. With so many opinions at the table, it can be difficult to reach an agreement. Everyone will have their own view of which areas to prioritize and how to measure success.
To reach alignment, open and frequent communication is key. We recommend performing a business requirements analysis to understand what the transformation should ultimately achieve and what you need to do to make it happen.
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2. Employee Resistance
Digital transformations are more than just technical. They require you to shift your entire workplace.
As you dive into such an initiative, you may find that you need to put other projects on hold. You may also start looking at your various legacy systems and best practices, evaluating their effectiveness and determining if they still bring value.
Eventually, you’ll be implementing new systems and processes.
As you make all these changes, you’re bound to encounter some degree of employee resistance. Fortunately, organizational change management (OCM) can help you mitigate it. Some of the pillars of OCM include:
- Actively listening to employee concerns
- Keeping all lines of communication open
- Sharing project updates clearly and regularly
- Treating employees as valuable allies
- Demonstrating the benefits that the change will bring
By understanding that digital transformation affects every part of your company, you can take a proactive approach to curtail resistance and encourage user adoption.
3. Lack of Strategic Direction
Without a clear roadmap for your digital transformation, it’s bound to veer off track. Yet, many companies proceed hastily and gloss over the planning phase.
These planning meetings are critical because they give your project team the opportunity to strategically define exactly what the project will look like. This includes:
- Creating clear roadmaps
- Setting realistic, achievable goals
- Defining resource requirements
- Formalizing methods to collect internal feedback
- Determining the data needed to track success metrics
These meetings help to break down the transformation into smaller phases and make the project feel more attainable.The strategies you set during the planning phase should span the entire lifecycle of the implementation. At each critical touchpoint, the project team should:
- Complete part of the plan
- Test the results
- Collect actionable data
- Analyze feedback
- Evaluate areas of success and opportunities for improvement
Then, they can use those results to change the overall strategy as required.
4. Lack of Dedicated IT Skills
At the same time, you still need skilled IT professionals to oversee the technical side of the project.
Some of the areas you’ll need to prioritize include:
- Enterprise architecture
- Technical architecture
- Advanced data analytics
Filling these roles can be a challenge for many companies, especially as more companies need technical skills and the labor deficit is growing.
To keep this problem from paralyzing your project, consider outsourcing some of your in-house efforts to outside subject matter experts (SMEs) and enterprise software consultants.
5. Time and Budget Overruns
It’s not uncommon for a digital transformation to run over time and over budget.
Sometimes, these overruns occur because of scope creep. This happens when stakeholders come to team leaders in the later stages of the project and ask for changes, additions, or revisions to the original scope of work. If their requests are approved, it could mean a significant amount of re-work, which is costly and time-consuming.
Another reason organizations go over budget and over schedule is that the project is ill-planned from the beginning.
Resist the urge to assign a quick turnaround to the project, or to significantly underestimate what it will cost. By doing so, you might think you’re more likely to gain executive approval, but that authorization won’t last long once the requests for extensions start coming in.
Take the time to understand what the project will cost and how long it will take. As you do, avoid hinging your estimates on vendor promises, which aren’t always realistic gauges of how things will go.
6. Slow Return on Investment
You’ve gone live with your digital transformation. Shouldn’t you experience incredible results right away?
Not quite. Sometimes, it can take longer than you’d think to see the type of long-term change you envision.
While there’s no concrete solution to this frustration, the best thing to do is understand that these things take time. Let stakeholders know that it may be a while before you can see meaningful change and use data to explain the timeline for realizing digital transformation benefits.
Of course, this doesn’t mean your efforts aren’t essential now. As your team members use the new CRM, SCM, or manufacturing ERP systems and become more adept at them, you’ll start to unlock new efficiencies. The more you work toward meeting your goals, the clearer the fruits of your labor will become.
Keep Your Eyes Wide Open
Digital transformation can transform your organization for the better, allowing you to save money, improve productivity, and stay competitive for the long term.
As you pursue this enterprise-wide technology initiative, it’s more important than ever to understand what you’re getting into so you can prepare for common digital transformation pain points.
As you take the next step, our ERP consultants can help you move forward in confidence. Request a free consultation below.