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Avoiding Four Common Digital Transformation Obstacles

In pursuit of solutions, manufacturers typically encounter these unforeseen challenges.

Connected Machinery

In the era of growing demands and rapid changes, companies are turning to digital transformation more than ever before to make their businesses more competitive, improve sluggish activities, and increase revenue. However, in pursuit of the top-notch software solutions and trending approaches, they may often face a number of unforeseen challenges related to the process. But before examining possible pitfalls and the ways to deal with them, let’s first dive deeper into the three primary advantages of this trend.

  1. According to The Economic Times, employees spend almost 25 percent of their working time searching for the required information, and about 50 percent of their time performing routine tasks. The integration of robust software, such as a document management system (DMS), allows shifting from paper-based documentation, searching, and daily manual tasks towards automation

  2. Another benefit, in terms of finances, is related to the reduction of operational costs. The absence of highly-functional digital tools has a direct correlation to excessive spendings. If the employees don’t have robust software, they can’t make efficient data-driven decisions, detect and examine poorly functioning processes. Thus, digital changes within the organization can lead to cutting costs and, as a result, more resources for further transformations. Statistics show that those companies with annual revenue from $500k up to $1 million managed to save almost $40k per year by shifting from paper-based activities towards digital document management.

  3. Companies can obtain a better comprehension of their customers’ needs and requirements. An omnichannel approach, embedded metrics, data visualization for better analytics, and monitoring of customer behavior are just a few examples of tools that may be used to enhance the customer experience. As a result of such transformations, companies may reduce customer churn and convert users into loyal ones, hence, increase the revenue.

According to the research conducted by Gartner, 56 percent of CEOs confirmed that digital transformation resulted in a significant revenue increase.

However, digital transformation is a complicated process that may not bring the desired results if it isn't approached correctly. According to the Forbes survey, almost 50 percent of the companies fail due to the inability to conduct this transformation properly. Below you will find the four most common challenges the companies face on their way to digital changes.

  1. Absence of a thoroughly-designed strategy. Digital transformation may turn into a chaotic process without a well-planned strategy regarding software integration. And it isn’t surprising since there are too many alluring solutions on the market. Thus, it’s advisable to identify the company’s inefficient activities, perform research regarding the most suitable problem-solving tools, and conduct a comparative analysis of all options. It’s also required to perform a stress test of each solution to define the best fit to the requirements. The absence of a well-defined strategy and careless integration of software may also lead to vendor lock-in, the situation when you are dependent on a particular service provider.

  2. Employee unwillingness to adapt to changes. The companies’ executives often face the obstacle of personnel pushback on the integration of new technology. To make sure the organization undergoes the transition smoothly, the leadership should explain why the transformation of certain processes is necessary, namely, provide an overview of a current state of affairs and point out underperforming processes. Statistics and numbers may be rather helpful persuasive tools that can support the statement with undeniable proof and credibility. 

  3. Lack of proper expertise and required technical skills. The absence of the necessary workforce or weak digital literacy among the non-technical employees may often be the obstacle on the way towards changes. Thus, proper training of the existing personnel and the creation of the pool of IT specialists with the required skills are necessary prior to the actual adoption of new practices and software solutions. It’s also desirable to constantly foster a digital culture within the company so that the entire upcoming transformation will be performed seamlessly.

  4. Budget management. Financial constraints may become a significant problem for companies that aim to integrate a set of digital solutions at the same time. In order not to face significant budgetary issues during the actual transformation, it’s necessary to design a long-term strategy in advance. It should include resource management planning, the division of the digital transformation journey into consecutive stages, and estimation of possible hidden costs and risks that will come with the software integration and its support.

Digital transformation is not a short path to immediate changes. It requires a thorough preparation from the leadership and strong readiness of the employees. Most importantly, the ultimate goal of digital transformation is not to adopt a higher number of software solutions but rather to use them as tools to rethink all the company’s processes and close gaps in problematic areas.

Maxim Ivanov is the CEO & co-founder of Aimprosoft.

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