UPGRADING a business through digitalization is no easy feat.
If we can recall in our previous article, we’ve established that digital transformation is an effort to improve existing business models by integrating advanced technologies. After learning this simple definition, what exactly can curtail these efforts in the long run? For digital transformation to be successful, it is crucial for business owners to consider all possible challenges brought about by the introduction of new technologies and an unfamiliar culture to the workplace.
Many companies in the country are already jumpstarting their digital transformation initiatives to boost productivity and to introduce customer-centric business models. Others are only beginning to explore the opportunities digital transformation can bring. Regardless of where a business is situated in the transformation process, business owners and leaders must make sure to assess the challenges while making the transition.
The first and arguably the most difficult challenge in assuring success in digital transformation is altering work culture – which involves shaking up the structural and repetitive operations some workforce has grown accustomed to. A workforce that observes a traditional organizational culture has the potential to refuse to adopt new ways of working. These include long-term employees, risk-aware managers, corporate politics and other cultural factors, which can slow down the process of implementing digital initiatives.
One way to avoid overwhelming the workforce with new processes is creating a workforce transition plan. This plan should consist of a communication strategy informing employees of the digital transformation process, its objectives, benefits and the carefully curated project timeline. The plan must also identify any gaps that will be addressed by the project in question. By making employees aware of the digital transformation plan, companies will be able to ease employees into upskilling and training. The workforce transition plan also helps illustrate that transformation takes time – it will set expectations and make the process easier for employees.
The second challenge involves creating a digital strategy and vision that accurately addresses the organizational problems a company may have. One example of this is the competition-induced pressure companies face to deliver their customer facing apps. To meet market demands, companies might fail to recognize the underlying process to seamlessly offer the new experience brought by the app is also required. One such scenario would be offering products online, allowing for bigger market access, but the inventory or fulfillment process of the company is still tied to their traditional process, which might not be able to keep up with the increased demand since it was not considered as part of the improvement. Another example would be companies that continuously rely on outdated success metrics, which might not apply to the new process that could lead to management making wrong decisions.
To prevent this, businesses must have well-defined goals and targets for their digital transformation initiatives. A good strategy will require a vision for the ideals a digitally transformed company must meet, the steps needed to get to it as well as appropriate metrics that will materialize the progress toward that vision. Moreover, the vision must illustrate how transformation can put a spotlight on a company’s competencies and strengths.
The third challenge in digital transformation is securing reliable IT infrastructure and digital expertise. In addition, employees will most likely lack experience with the technologies that will be used in a digital transformation initiative. In preventing these difficulties, companies may consider adopting a bimodal IT approach. This approach entails launching new technology and processes while maintaining existing practices. This not only helps manage risks; it is also an approach that can help determine the steps a company must take could be based on the level of adoption of the workforce.
The last challenge in digital transformation involves a disorganized organizational structure. When structures are not clearly defined, data might not be visible across teams, feedback can be misconstrued, and workflows may become rigid and stagnant in improving efficiency. This obstacle can be easily overcome by aligning workflows with the customer journey, starting with processes at the leadership level. These workflows must trickle down to staff, resulting in autonomous and adaptable teams that can quickly react to customer needs.
It can be observed that these challenges heavily involve the people in an organization. Digital transformation involves technological and digital processes through electronic tools and platforms but it all boils down to a workforce that is open, adaptable, efficient and well-trained. Investments in digital transformation not only include those in the form of webpages and applications but also involve upskilling the people behind a company.
When planning your digital transformation strategy, do not forget to take people into account, for digital transformation exists to make human life easier and more convenient.
Herbert Bactong is the director for Digital Transformation Services of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing firms in the Philippines with 24 partners and more than 900 staff members. We’d like to hear from you! Tweet us: @GrantThorntonPH, like us on Facebook: P&A Grant Thornton, and email your comments to [email protected] For more information, visit our website: www.grantthornton.com.ph.