The digital shift is now essential for any firm that is keen to not only remain in business but thrive in the current challenging environment where constant innovators are the winners.
Adoption of advanced technologies such as IoT, Big Data, Machine Learning, and Enterprise Resource Planning (ERPS) tools is no longer an option, as failure to do so can spell doom for a business, however well-established.
While a good number of firms have made admirable progress in integrating technology into their operations, some are yet to get their footing right in the digital world. So the question is: Why do some firms struggle in their digital transformation journey while others seem to be having it easy?
Many hurdles have been cited in firms’ transformation journey. These challenges, however, are not insurmountable if businesses adjust how they implement their digital strategy.
Reliance on temporary service advisors
Many businesses tap external service providers with no deep insights into their business operations. This is likely to lead to a bungled process and the objectives of the digital transformation undermined. It is therefore vital for businesses to make and manage their digital roadmap. Businesses should, therefore, seek the services of a trusted advisor for the digital journey to attain the desired success.
“The importance of vendor relationships was borne out by a study done by Deloitte on first-time vs. second-time ERP buyers,” says Mark Wilson, the Chief Executive Officer, SYSPRO Europe, Middle East and Africa.
“The top two criteria for first-time buyers were price and ease of implementation, whereas the top two criteria for second-time buyers were vendor’s level of support, and vendor’s performance track record. Second-time buyers understood the importance of relationships.”
He adds that a vendor who has a good understanding of both their business and products can properly fit the system’s features to address their requirements.
Although this mainly applies during the implementation phase, both business and the software will continue to evolve, making it even more important that the relationship must continue to grow with it.
Skills gap remains
For a digital transformation to be successful, there is a need for sufficient skills. Firms must therefore strive for a team that possesses the right mix of advanced skills crucial for driving the shift.
However, building this team is getting harder. As more companies pursue new technologies, labour deficit is developing.
Many businesses have no intention of building long terms skills training programmes to enable a digital workforce. Manufacturers and distributors are simply not engaging with the new workforce yet the new workforce is digital-savvy and could assist in business transformation.
“Businesses that fail to pay sufficient attention to skills development will likely suffer from a variety of productivity-related challenges,” says the head of customer and ecosystem enablement for SYSPRO Africa Doug Hunter.
“This failure to acquire or adequately train the future generation of workers for the digitally driven economy will lead to greater income disparity, increased unemployment, and overall global economic losses.”
Lack of organisational change management
One of the hurdles that companies face as they set off on their digital journey is the entrenched cultured and old way of doing things.
Any changes always draw resistance, but the adoption of new technology seems to draw stronger opposition from members of staff, especially those who feel they do not have the skills required for the new dispensation.
Experts say outdated organisational structures, inefficient workflows, and rigid leadership styles can all impede digital transformation success. This is the reality that many firms faced when Covid-19 struck and employees were required to work from home. Some businesses that had not started the digital transformation found themselves having to navigate the pandemic storms from the deep end. Introducing digital tools so suddenly shocked the systems of many firms and individual employees.
To avoid resistance, firms ought to not just focus on the technology in question, but adequately prepare employees for the dawn. What is required, therefore, is a strategic change management plan. From the C-suite and middle-level management to the staff below, everyone should be involved. Support from the top leadership in the organisation is particularly indispensable in the digital shift.
Analysts say the top champions of digital transformation within businesses are middle managers followed by C-level management. Generally, top leadership support is imperative for businesses to digitally transform.
“Some of you might say that this is not a new problem and that we all know that change management is crucial for all IT projects. By its very nature, digital transformation is different. Transformation implies that the business model must change. And the new model must first be “sold” before the change can be implemented,” adds Mr Hunter.
Evolving customer needs
Customers are always the heartbeat of any business. And because of a wide variety of choices and technologies that have made it easy to order goods online, a business has to be hyper-sensitive to the needs of the customers. Thus, before going digital, it is imperative to listen to the customers and get to know their needs.
“Customer centricity in manufacturing requires a real shift in business strategy that puts the customer first, both for your products and your services,” notes Mr Hunter.
“It offers a way for companies to satisfy increasing customer expectations, differentiate with more personalised products and retain more customers with exceptional customer service.”
Lack of a defined strategy
Successfully reaching the destination of a digital journey presupposes a clear roadmap from the beginning. Shifting from the old analogy ways of doing things to modern digital models should never be a guesswork process, but a watertight strategy that is well-thought-out.
Firms that take time to plan the execution of the digital transformation have the highest chances of reaping the fruits of the process. However, businesses that adopt technological systems without clearly defining their strategy are bound to experience a multiplicity of challenges and ultimately they may fail altogether in their digital plans.
Budget concerns and constraints
It is always thought that going digital is an expensive affair. Well, it can be but it doesn’t have to be necessarily so. Currently, there is a wide range of digital solutions available in the market and you can select what fits your budget while satisfying your needs. When faced with budget constrained, firms should have a strategy in place, as without it they are likely to make decisions that result in little to no benefit yet increase their budget and timeline.
“The fact is that every business requirement differs from one another and so does the price,” notes Mr Hunter.
“While high-end, innovative ERP solutions can still carry a hefty price tag, technical advancements such as mobile and cloud computing are expected to make ERP software more affordable.”
Business applications, he adds, can be run on mobile devices, with employees from all levels of the organisation benefiting.
Ineffective data management
Customer data is one of the key pillars of digital transformation. It is from data that companies can glean deep insights into their buyers’ preferences, behaviours, and potential future decisions. It is therefore essential that they collect, and collate in an organised manner. To achieve this, all departments need to work in tandem in a way that makes it easy to have data at a central point. Firms whose departments work in silos find it difficult to make data centrally accessible.
The data strategy all boils down to the needs of customers.