In this digital-era, it is hard to find a commercial enterprise or firm that's yet to reconfigure its organizational structure to include various technological aspects. Ever since the advent of the internet, innovation in technology has grown at an unprecedented rate and exerted its influence across all commercial sectors. However, despite the overwhelming digital influence, a substantial number of small-scale and medium-scale businesses out there depend on analogous, conventional operations. It is fair to say that digital transformation is essential for every type of organization regardless of its operational scale or product-type. Although digital transformation has a myriad benefits and helps businesses remain competitive in their respective markets, this strategy of going digital also has its own set of flaws. Let’s examine the various challenges that are often associated with digital transformation.
What exactly is digital transformation?
Before we delve into the different types of challenges that may arise from embracing this strategy, it is crucial to properly establish the correct definition of digital transformation. Nowadays, the term digital transformation has become a buzzword that is thrown around by business managers and executives along with other tech terms such as “cloud computing” or “artificial intelligence”.
But this, in no way, diminishes the imperativeness of digital transformation. To put it simply, digital transformation is a business decision that is aimed to streamline processes and enhance commercial value. Given the broad interpretation of the term, let us lay down a few essential characteristics that are definitely indicative of the digital transformation phenomenon. For instance, an enterprise that has been digitally reinvented is likely capable of rolling out products to the market at a high velocity. Similarly, any project management strategies that are characteristic of the agile methodology can be considered to be technologically proficient.
The many risks of ‘Going Digital’
Given the substantive digital movement, it is easy to be swept up by recent trends without sparing a moment to think about the possible repercussions of transforming and digitizing an entire business that is built from the ground-up. In this regard, let’s take a look at a few negative implications of digital transformation:
Strategic risks and failures
Research studies have shown that the primary challenge to a successful digital transformation involves business strategy. For most companies, undertaking the task of digital transformation means causing significant market disruption. Due to it being a question of their survival, business owners and executives are reluctant to change their conventional strategies and replace them with something entirely new as well as untested.
Impact on organization and culture
Apart from having reservations about digital transformation on the strategic front, small and medium-scale businesses also have significant organizational and cultural stakes in their existing practices. They find it impossible to abandon the old ways and cannot imagine how to go about setting up a digital culture at their workplace.
Lack of commitment and spirit
Another significant hurdle in a business's path to digital fulfillment is the absence of will displayed by company executives and proprietors. Due to the enormous changes that may ensue from this strategy, it becomes the CEO's burden to oversee these new changes and ensure that no one or nothing is left behind.