An Introduction to Digital Transformation — Challenges, Goals, and Getting Started

CoachHub · 12 August 2022 · 4 min read

While the term ‘digital transformation’ feels like another buzzword, it actually refers to a vital process that can revolutionize a business and helps to future-proof its growth; an essential step in the modern business landscape.

However, while it’s so important and all businesses go through it, why is it that over 70% of companies fail in their digital transformation efforts? Where do they fall short? What challenges do they face?

How can your business overcome them?

Let’s find out.

What is a digital transformation?

The term ‘digital transformation’ describes a process where digital technology is introduced to a business to improve efficiency and organization, increase company value, or streamline the ability to carry out certain tasks.

For example, a business might introduce accounting software that automatically tracks incoming and outgoing payments and expenses, saving the finance department time, money and other vital resources.

This aims to give companies a competitive edge, provide better products and services, and ultimately create opportunities to scale and grow.

Digital Transformation in Action

Why are digital transformations important?

Digital transformations are vital for a business’s success, but they mean so much more than just investing in new technologies. It’s the process of setting up a business to succeed in the future, and installing the infrastructure that makes that success possible and sustainable.

Modern-day businesses must take this into account.

The rise of cryptocurrency and blockchain technology has taken the world by storm. Artificial intelligence and big data is continuously redefining how businesses operate and what they’re capable of achieving.

Technology is changing everything, and businesses have to invest in ways like never before, whether it’s cloud infrastructure, remote and hybrid working environments, reducing carbon footprints to keep up with public expectations, protecting yourself against cybersecurity threats and more.

If your business can properly adopt modern solutions, you can gain a substantial competitive edge against your competitors.

Look at any financial, productivity, or industrial averages. It’s always the digitally mature companies that are leading the way.

What you choose to invest in and focus on is up to you, but never understate the importance of the decisions you make and the direction your business will go because of them.

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What are the challenges of a digital transformation?

While essential, digital transformations don’t come without their difficulties.

Many businesses struggle to meet their goals and actually better their operations, but it’s never usually the introduction of technology that’s the issue, but rather with the people within the business who use it.

While problems are typically individual to the business, such challenges can include;

  • Overcoming broad or non-specific goals
  • Poorly managed change strategy
  • Failed motivation to adopt new tools and working operations
  • A lack of defined strategy
  • Not addressing security concerns or implementing risk management
  • Not adhering to budget constraints
  • Not adopting a growth mindset
  • Not considering customer needs or expectations

Failure in any sense can cost a business massively in terms of financial and time investment. Research (2017) shows that 89% of enterprises say technology is disruptive to their operations, even when they’re spending an average of $5.7 million on digital transformations over the past year.

With 80% of IT leaders feeling the pressure to improve their organization’s customer experience using digital solutions, but with 90% of these projects failing to meet expectations, there’s a clear need for chief operation managers to step up and be proactive in addressing the issues.

Issues like this can cripple growth. Frustration and low morale caused by such situations, poor communication, or general discomfort toward change can be devastating.

For example, in 2012, Procter & Gamble devised the goal to become ‘the most digital company on the planet’, the ultimate adoption of digital transformation. However, having such a broad goal resulted in a lack of purpose and made several mistakes, costing them over $1 billion in sales (9% down on the prior year), cutting 2,000 jobs worldwide, and ultimately the CEO was asked to resign.

So many issues from a poorly executed digital transformation plan and so many global companies face the same issues.

What should the goals of a digital transformation be?

The primary focus of a digital transformation of any scale should always be people.

Your staff. Your customers and clients. Your management teams. Without empowering your teams through developing skills, training, and encouraging a positive mindset, no digital transformation project will pay off. While it’s important to have industry metrics in place to track the success of your transformation, the goals you set should always revolve around people.

Again, the challenges you face will be individual to your business, so your goals need to reflect the problems you identify. Your bottlenecks and challenges.

Say you want to improve operational efficiency and productivity.

A great goal to have, but to make it people-orientated, focus on training all levels of staff and management to ensure they’re capable of using the new technological infrastructure without issue.

You should ensure communication is optimized between management levels and that there are opportunities for collaboration to take place. You can use technology to monitor data metrics to ensure this is the case.

For example, you can track the number of employee complaints or issues raised at the shopfloor level. You can use data to ensure the customer experience is maintained or improved. You can provide automated ways for your workforce to raise concerns on culture and approach, giving your teams the information they need to make actionable changes in real-time, rather than using guesswork or heading in blind.

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