4 Digital Transformation Pitfalls and How To Avoid Them

This post was originally published on rtinsights.com

In 2020, digital transformation is no longer a thing of the future. Fueled by the ever-growing world of technology and the changing customer expectations, this inevitable evolutionary process has become the norm for organizations worldwide. In addition to the considerable increase in operational efficiency, reduced product development costs, and improved quality of products/services, digital transformation enables organizations to effectively prepare for the numerous current and future challenges the world throws at us. And while digital transformation has indeed become a competitive necessity, doing it right is what’s truly essential if you want your business to not just survive but prosper.

Digital transformation is a lot harder than it seems. It’s probably one of the most challenging initiatives your organization will ever undertake. The major reason why a staggering 70% of digital transformations fail is that they aren’t doing it wisely. The successful change runs a lot deeper than just the adoption of new technologies. 

Here are four of the biggest digital transformation mistakes you should avoid making if you want to ensure the continued and long-standing success of your digital transformation initiatives.

1. Adopting technology for the sake of technology

Many companies out there simply don’t know what to do and where to start when it comes to digital transformation. Some companies adopt new tech because it’s trendy, some follow the digital transformation paths of their competitors, thinking: “If it worked for them, it’ll definitely do us good.” In most cases, however, blindly chasing trends or someone else’s dreams won’t get you far. Technologies that worked for some might not work for others.

We have to understand that those successful companies the majority of others follow did not adopt new technologies for the sake of adopting them. They succeeded in digital transformation because they followed their own specific goals and carefully prepared for that digital journey. They estimated their own resources and timelines, assessed their own strengths and weaknesses, and found their own starting point. The road that led them to their great destination might not get you anywhere even close to that. So what should you do?

First off, don’t get overwhelmed by the ubiquity of digital transformation and don’t plunge into the unknown head first. Take your time to create a firm strategy that will alleviate business risks and intelligently streamline your organization through the digital transformation process. 

Be clear on what you’re trying to achieve. These are just some of the questions you need to find solid answers to before starting your digital transformation project:

• Is your idea actionable?
• How will it impact your customers?
• Will it improve the efficiency of your business?
• What metrics are you trying to drive?
• What other products/processes can be evolved?
• Are there quantifiable business benefits in doing so?
• Do you have the right skills and expertise on the team?

Whatever your digitalization ideas are, you should always test the waters and set your goals upfront. Avoid making snap decisions before you get yourself into a situation where you’ve spent a fortune on something that would sooner derail your business than bring you any real value.

2. Considering digital transformation a one-time thing

Digital transformation isn’t something you can do easily and in one day (or even a year). In fact, it’s a continuous pursuit that involves evolving your organization through frequently changing digital technology, transforming your processes, products, and services to meet the new market needs, and adapting your business to the challenges of tomorrow. 

Of course, the “everything now” approach won’t work, and trying to adopt too much too soon will only lead to confusion among both your employees and customers. Therefore, the transformation process should never be taken as a one-time thing but rather a sustained improvement in every aspect of your business. 

Every new technology or innovative strategy you adopt will inevitably lead to more changes in the processes and priorities of your digital transformation. It will impact every side of your business in some way. But this doesn’t mean you should be overwhelmed and discouraged by its ever-increasing scope. What you should do is understand that digital transformation is not all about technological progress—it’s the evolution of your entire organization from branding and marketing to HR and sales. When you think these things through, you will see how far and wide the digital transformation process can ultimately take your business.

3. Collecting data and failing to use it

Successful digital transformation requires data-informed decisions. Many companies fail to understand that they need a solid data foundation before they can actually move forward with the transformation. Moreover, there are many more collecting vast amounts of data and not even using it when building their business strategies. This is a huge mistake which means your digital transformation is very likely to fall short without a solid data-backed plan.

Data is an incredibly valuable resource. Use it! Analyze and leverage the data you collect from business and customer activity to produce actionable insights and encourage data-informed decisions in your digital transformation efforts—identify inefficient business processes that need optimization; shift your business priorities based on deeper customer intelligence; design new products/services to enter new markets; simulate future market scenarios to make better strategic decisions. Never trivialize the importance of data-backed insights for building your digital transformation strategy.

4. Underestimating the importance of cultural change

One of the biggest mistakes an organization can make when starting their digital transformation journey is maintaining a silo mentality towards it. Digital transformation is not just the business of C-level executives and those “IT guys,” it’s everyone’s business. A huge part of a successful transformation depends on establishing a free flow of information, the C-level willingness to openly share knowledge with employees and vice versa—providing a company-wide input on the transformation process. A cultural change will prevent any confusion or rebuffs towards the change within your organization. It will increase the overall morale and ultimately make the process ever so efficient.

Even though your digital transformation strategy should definitely start at the top, every department, every employee needs to clearly understand their role in the process and how their work contributes to reaching those goals. Avoid “siloing” the information. Be consistent and clear in communicating the goals you’re trying to achieve, the impact of digital transformation on the organization, and the tangible benefits. Get feedback from everyone in the company. Successful digital transformation can only be driven through close collaboration between all business units and functions within your organization.

Last but not least, your success may very well require a company-wide mindset shift and a capability change in the course of digital transformation. You will have to create new roles and gradually redefine the existing ones to improve the efficiency of the process and get everyone on the same page, ready for the future. Adopt courses and extensive training programs to close the possible skill/knowledge gap among your employees. Hire a professional tech partner to share their experience, expertise, and broad domain knowledge with your digital transformation project teams and facilitate the process. Remember, no matter how innovative the technologies you adopt are, they won’t be of any service if no one understands them or knows how to properly utilize them.