Digital Transformation Risk and Obstacles Ahead

Digital Transformation – Risk and Obstacles Ahead

So…you are strategizing, planning, or starting to roll out a Digital Transformation initiative?

Most people agree Digital Transformation is not only financially beneficial but also will be a necessity of survival. However, across the manufacturing industry, Less than half (41%) of companies are in the “Rollout” phase of their Digital Transformation Journey according to PTC. That means 59% are still figuring it out!

And if that isn’t surprising enough, according to Boston Consulting Group (BCG), roughly 70% of digital transformation initiatives fall short of their objectives. That is crazy!!!

What are the most common symptoms of digital transformation failures across the industry?

▪️ Not investing in the right culture. Many processes and activities will change for most employees – Make sure as much effort is spent on the cultural change as the technological implementation.

▪️ Not having clear transformation objectives. Before selecting a single technology or pilot application, be sure to have clear objectives that link back to desired business outcomes.

▪️ Not hiring the right talent. Don’t just hire technical wizards. Select the right change agents who know how to guide the implementers. If you don’t have the knowledge and skills in-house, consider hiring consultants who do this for a living.

▪️ Not thinking beyond the implementation. This is a company-wide transformation and therefore will most likely require changes and course corrections along the way. Let the goal guide you, not the technology.

▪️ Not letting go of the old ways (technology and processes) If you try to digitally transform merely by adding new technologies on top of existing systems and processes, you are bound to create redundancies, inefficiencies, unnecessary complexity, and be arbitrarily constrained by old systems.

▪️ Not grasping how to budget for digital transformation. Have a long-term strategy in place that leverages a flexible budgeting model based on a continual stream of incremental initiatives, successes, and easily demonstratable ROI.

▪️ Not putting enough emphasis on security Don’t overestimate the importance and potential complexity of cybersecurity when digitally transforming. Net Solutions’ digital transformation report for 2020 states that a company’s successful digital transformation journey relies on its ability to secure its digital operations.