Understanding the challenges of digital transformation

Getting to grips with the challenges of digital transformation

May 07, 2019 by Oana Chetves, Business Development Manager & Luiza-Maria Lazar (Turlacu), CRM Analyst

No matter its size, goal or industry, at Stefanini, we are acutely aware of the potential that digital innovation has to completely transform an organisation. Whether it be a mobile application to interact with customers, or cloud technology to eliminate the need to maintain an expensive server, our technological capabilities impact every aspect of business; from sales and marketing to strategy and customer service.

In short, technology is essential to fostering development and competitiveness in the modern workplace, and there is intense market demand for the best hardware, software and insight. You’ll struggle to find a business that isn’t reliant - in some way - on digital technology. Creating and putting a digital transformation strategy into action doesn’t happen overnight though, and we must be aware that for some organisations, making this change can be a major challenge.

At Stefanini, we want to better understand these challenges, and we are constantly taking steps to do just that. In our most recent initiative, we have carried out a new survey, in which we spoke with our contacts throughout EMEA about the existing technology that they have in place, the scope of their digital transformation strategies and the obstacles that are standing in their way.

The customer journey

Adopting new technologies can be a challenge for any business. Leaders have to consider more than simply incorporating new hardware or software; they might also have to provide training for employees or investigate how the changes will impact their customers.

 

Our main priority with this survey, therefore, was to understand the specific challenges that organisations are facing when it comes to implementing a digital transformation strategy. Whether it be budgetary constraints, a lack of technical understanding or gaining approval from senior management, our research was to understand the perception of digital technology in the business community, and to determine the level of understanding surrounding the impact of digital innovation on different business processes.

To ensure that our insights were accurate and met the survey objectives, we targeted decision makers from companies in a range of different sectors, such as FMCG, logistics and outsourcing, finance, automotive.

One of our key findings was that respondents appear to be prioritising digital transformation in the most customer-facing areas of their companies. When asked which processes are being redefined by digital technology, three-in-five (60%) said the sales process, while half (49%) said customer service.

While this discovery is, of course, very encouraging, it comes hand-in-hand with the revelation that internal processes are being greatly overlooked. Just one-in-five (12%) respondents said that their HR processes are being redefined by digital technology.

These findings might suggest that technology is being seen primarily as a means to serve and attract new customers, as opposed to improving the workplace for employees. It’s possible that this mentality is being driven by the cost of implementing new technology. Digital transformation is an expensive process, and it takes time. Indeed, the fact that just 6% of our respondents said the primary benefits of digital transformation are growing revenue and reducing costs might be evidence of the fact that many companies have yet to see a strong return on their investment in new technology.

A collaborative effort

While the purpose of this survey was to gather new information on the market, the question of which technologies are being used already produced some results that were more in line with our expectations.

The fact that three quarters (72%) of respondents currently use digital tools for data gathering and analytics, for example, came as no surprise. As doing business becomes an increasingly digital exercise, companies are gathering vast amounts of customer information and are – quite rightly – looking for ways to make use of it. Likewise, as remote working becomes an ever-more viable option, it makes sense that more than two-fifths (44%) of companies are implementing agile ways of working.

The most under-used technology seems to be blockchain, with just one-in-five (19%) saying that it was currently utilised by their company. All-in-all though, the uptake of technology appears to be fairly high.

One explanation for this may be that different technologies often come – or work most effectively when they come – hand-in-hand, and to implement one digital solution in a company often requires the simultaneous introduction of another. To rollout artificial intelligence or machine learning, for example, might also require the addition of Internet of Things or Robotic Process Automation in order to make full use of its capabilities.

Looking to the future

Whatever challenges organisations may be facing, the results of our research showed definitively that digital transformation is underway. Indeed, just one-in-five (19%) companies that we spoke with said that they have no digital strategy or roadmap for digital transformation in place. It’s encouraging, therefore, to see that the majority of companies are embracing this change.

More work is needed, though. A quarter (23%) of our respondents believed lack of support from top management was one of the greatest obstacles keeping their company from achieving digital transformation, suggesting a great deal more involvement is required from business leaders.

In an ideal world, we believe that a company should have a special team or department, with its own budget, dedicated to digital transformation. In scenarios where this isn’t possible, senior leaders need to be better educated on the benefits that technology can bring to their companies. Admittedly, it’s true that the technical knowledge often sits within IT departments, so it may be difficult for senior managers to fully understand the full potential of digital transformation. To overcome this particular obstacle, there needs to be more communication between IT staff and business strategists.

What’s critical though, is that leaders understand a digital transformation strategy can sometimes take months, if not years to implement. For a digital strategy to be a success, our leaders must be more open to taking risks. It requires detailed planning and long-term commitment. More than that though, it requires courage. This is the key takeaway from our report, and we will be anxious to see how this challenge is responded to over the coming years.

Share:
See more

Do you want to know more about digital transformation?

We use cookies on our site to give you the best experience possible. By continuing to browse the site, you agree to this use. For more information on how we use cookies, see our Privacy Policy.