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govtech Addict

by Brian Chidester
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DX strategies face multiple challenges to success. Here are seven ways to overcome them.

Digital transformation has become crucial now for many organizations to gain strategic competitive advantage. Companies are embarking on the transformation process to adopt newer digital technologies to upgrade their operations, increase efficiency or revenue and gain an advantage over others. According to a recent report, digital leaders gained over 5 percentage points of market share and over 5% more market capitalization over the initial two years of the pandemic.


70% of digital leaders also expect to gain a further five percentage points of market share over the next three years. However, there are also challenges galore as complete digital transformation is a massive undertaking. Navigating the digital transformation journey of any corporation amid rapidly changing consumer behavior, expectations and overall business environment can be difficult.


McKinsey Global Surveys found that less than 30% of the respondent organizations were able to turn their technology transformation into a competitive advantage. So what constrains companies from succeeding in this endeavor? Here are the 7 digital transformation challenges that organizations face, and the ways to overcome them:



Clarity of Purpose: Digital transformation is about enabling long-term business goals through technology. It is crucial for companies to know why they want to overhaul existing systems to digital, what verticals require an upgrade, and how it will aid their business goals. This will help them have a clear direction and avoid confusion or resistance from the organization. With a clearly defined strategy for digital transformation, firms will also be able to communicate it better to their key stakeholders – the employees, partners, and customers.


Agility: Organizations that are slow to adapt to changes and have complex legacy processes often lag in terms of digital transformation. Legacy systems, with their outdated technologies, can make it difficult to keep up with the times and adapt to the rapid changes in the business environment. Companies also must overcome cultural roadblocks by being agile. Digital transformation is smooth when people and processes across departments adapt quickly. Multi-disciplinary autonomous cross- functional teams help in bringing about successful digital transformation in organizations.


C-Suite Alignment: This is one of the biggest challenges that technology leaders running digital transformation strategy encounter. While many CXOs sponsor digital initiatives, sometimes they are siloed or lack shared accountability on common goals which can impact the transformation process. Siloed initiatives fail to accomplish the common business goal, as each of those will be focused on their own problem. Successful digital transformations are led by C-Suite teams that work jointly on objectives, own the outcomes and are on the same page.


Digital Skill Gap: A workforce, that possesses skills and capabilities in line with the rapidly evolving digital technologies, is a must for digital transformation. But this can also be a challenge due to the lack of talent. Digital technology specialists also command high salaries in the market, thus making the hiring process also expensive. Organizations can train their existing talent pool and assure them about the benefits of upskilling; however, it is a massive investment on the part of the companies, in terms of time, effort and money. Re-skilling initiatives for digital transformation are necessary for technology, cloud, collaboration tools, digital experience, and data-based decision-making. Companies lacking IT professionals can also opt to outsource the above work.


Security: Many companies that rushed the digital transformation process found their businesses exposed to cybersecurity risks. Undertaking the transformation involves companies putting their data in the cloud which leaves them vulnerable to customer data theft, privacy breaches and other risks.


Organizations can overcome cybersecurity threats by focusing on data privacy and protection and taking the help of cybersecurity experts for optimum implementation.


Customer Focus: Organizations undertaking the digital transformation journey must understand their customer base and the customer demands, expectations, and market trends appropriately. Losing sight of any of these can result in lower yield from the digital transformation initiatives being planned to be implemented. Organizations that prioritise customers over cost efficiency have been more successful in their digital transformation journey. Focusing on targets such as new markets, growth, or increased customer engagement results in a more sustainable transformation, giving the companies a competitive advantage over others. Organizations will also need to be quick on their feet to adapt or change to newer technologies to meet changing customer needs and secure themselves against competition from digitally native firms.


Budget Constraints: Budget provisioning for a digital upheaval also needs to shift from the legacy method to a more flexible approach. While implementing digital transformation can be expensive, firms will have to be prepared for budgetary constraints or for carrying out the upgrade over a longer term based on their capabilities. This will help organizations avoid compromising on deadlines and results. On the other hand, insufficient funds can also hold back or disrupt the transformation process, which is not desirable. Committing to long-term goals and making data-based decisions will help achieve the required goals.


While these are some of the key challenges, digital transformation remains a necessity for most companies in the current business environment, and therefore, addressing the roadblocks is imperative for all stakeholders. Successful digital transformation requires solutions that work across the organization, as opposed to being limited to a department or location of the business. This should also be guided by a common set of goals for the organization and its customers, followed by adequate preparedness and flexibility to take on emerging issues and risks. Companies can become digital leaders by sustaining their transformation to generate better revenue, and services and increase their long-term resilience.

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