4 top challenges to digital transformation

Change doesn’t come easy. We may all acknowledge that it’s a part of life, but that doesn’t mean many of us don’t see it as a lion-sized threat that activates our fight-or-flight response.

The fact that most businesses understand the importance of digital transformation—80% already have a plan in place or in mind—doesn’t mean the journey into or through it is easy. The remaining 20% of companies, with no plan for moving into the digital future, are frozen in their tracks by the challenges of accomplishing comprehensive transformation into the digital age.

Here are four of the biggest obstacles to successful digital transformation faced by companies across the board:

1. Fear of the unknown 

This one is a whopper. Organizations as a whole can’t take on transformation projects when individuals are not open to change. Change means risk, and risk is scary… What happens if it doesn’t work? How will this change affect my job? Will I lose my livelihood? Team members, from the CEO to employees at the bottom of the barrel, may be living with a fixed mindset, unwilling and unable to face the risks and failures that come with innovation and improvement. 

Gartner research analyst and vice president Graham Waller recently explained that change aversion is the most paralyzing impediment to transformation. He goes on to say that cultural hacking—or small interventions that change behavior—can lead to the growth mindset necessary to develop, implement, and carry out transformation projects successfully. Digital transformation is a journey into the unknown, and a change in mindset is essential to success

2. Legacy debt

Legacy companies that have invested extraordinary amounts of time and money into complex programming systems, and have relied on age-old business models, can find it difficult to let go. Although many existing assets can be integrated with new technologies, seemingly getting the best of both worlds for the move forward, this type of integration is controversial.

A recent chat between CIOs on cio.com revealed that many think spending energy and resources to integrate legacy systems with digital is counterproductive. They said it’s like “paving a cow path”—in other words, simply making bad processes run faster, without creating a better process. The key to true transformation is to let go of the legacy in order to create new, value-adding products, services, and systems. 

3. Money, money, money

Many businesses feel hindered by budget restraints on their trip into transformation. According to IDC, companies spend as much as 90 percent of their IT budgets on their current systems. That means there’s no money left over to enter into transformation processes and innovation. The digital age moves fast, requiring resources—primarily, money—to innovate. Organizations that are spending the bulk of IT resources on simply maintaining the status quo, have a difficult time keeping up with competitors. 

4. Lack of leadership and vision

A successful journey down the digital path means having a clear vision of the final destination and the ability to communicate that vision. Many businesses get off track or fail to become their best digital selves because they have not clearly outlined their goals. While a digital transformation plan should be flexible, moving with new technologies to build a digital platform while adapting the company’s operating model, the purpose of the project should be clear. Leaders who lack the ability to clearly communicate the vision, explain the long process—that is necessarily filled with challenges and roadblocks to overcome—have a hard time maintaining support for the transformation in both the short and the long term.

Changes in technology happen exponentially, and the pressure to enter the digital age is not going to ease up any time soon. But the transformation of a business or organization is not complex and challenging simply because of the pace at which new technologies pop up. The human factor—fear of and resistance to change—has been shown to be the biggest barrier to a company’s digital future and success. The digital age is not just about transformative technologies—it’s about transforming mindsets.

Hailing from Indianapolis, Indiana, Meagan Gardner has been working in content creation and editing for the past four years. She now proudly serves as Rewire Mag’s Editor-in-Chief, and works hard to ensure its content inspires current and future HST students to drive change in the new world of work. Link up with her here.