5 Critical Digital Transformation Challenges to Overcome in Q2 and Q3 of 2024
Realizing your digital transformation goals requires taking things a step at a time. This is why Gartner recommends a blueprint for a step-by-step implementation process. Unfortunately, many small and medium-sized businesses do not have an implementation program, which is why approximately 70% of digital transformation strategies do not achieve their goals.
Despite any setbacks you may have experienced, starting the adoption process is the first step to success. With more information, you can always tweak your implementation plans to achieve set goals. Hence, this post analyzes the top 5 challenges SMBs experience with implementing digitalization and successfully reaping its benefits. Note that the difficulties outlined apply to every digital transformation process regardless of the technology you adopt.
Top Challenges to Adopting and Implementing Digital Transformation Technologies
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Merging Legacy Systems with Cutting-edge IT - Every enterprise faces the challenge of replacing or optimizing legacy equipment, business processes, or solutions with digital technologies. These challenges arise due to compatibility issues, the unwillingness of legacy employees, implementation skill gaps, or simply because you chose to bite off more than you can chew. An unsuccessful merger of the old (legacy systems) and the new (digital transformation technologies) will eventually lead to failure.
Solution: Having a plan before merging or replacing legacy systems with digital solutions reduces these challenges. We recommend that SMBs conduct thorough IT due diligence before implementing a merger. If that ship has sailed, then evaluating the merged system should be the target for Q2. Accurate evaluations provide the insight needed to correct errors or identify specific areas of concern. Insight into causation factors ensures they can be dealt with to realize targeted goals by year’s end. -
Complex, Ever-changing Digital Solution Stack - The ever-changing technology landscape is a challenge SMBs must take on when adopting digital transformation. A few years back, multi-factor authentication and on-premise IT systems were enough to secure your IT infrastructure, but today, encryption and constant updates of security certificates are best practices to ensure security. Likewise, the manual lathe machine was enough to cut materials into shape, but today, computer numerical control machines are programmed to automate cutting processes.
Solution: The average SMB struggles with the dynamic digital environment, which is understandable. Eliminating these challenges requires extensive upskilling for both employees and management. In scenarios where upskilling or learning new processes is not feasible, conducting extensive research to find plug-and-play digital solutions becomes the next step. Here, it is essential to note that easy-to-use digital transformation solutions may come with more expensive subscription plans. -
Increasing Security Threats - The increased efficiency, accuracy, and productivity digital transformation supports come with diverse security implications. Hackers continue to employ traditional methods, including phishing, ransomware, and DDoS attacks, to overwhelm systems and steal customer data or intellectual property. Also, integrating new technologies such as IoT, edge computing, and the digital twin has increased attack surfaces and led to hackers adopting new strategies. Today, bad actors leverage AI to automate and execute attacks.
Solution: Now is the time to prioritize cybersecurity for your IT infrastructure. With approximately two cybersecurity attacks occurring every second and 70% of SMBs experiencing hacking attempts, you will likely be a target in Q2 and Q3. Hence, conducting an extensive cybersecurity assessment alongside your digital transformation program is crucial to ensuring security. Consider taking advantage of the expertise of cybersecurity professionals and SIEM tools to protect your digital transformation initiative and IT systems. -
Inadequate Digital Transformation Strategy and IT Skillset - Although the first quarter of the year is not enough time to analyze your digital transformation results, you can still analyze accomplished growth against your expected goals. If your strategy analysis highlights inconsistencies or difficulties with utilizing the transformation to its full potential, now is the time to restrategize. A strategic analysis should also unearth skill and technology gaps that hinder implementing a successful digital transformation process.
Solution: 54% of SMBs struggle to implement digital transformation strategies because they lack IT professionals to manage the implementation process. Two solutions can be employed to eliminate this challenge: setting up a capable in-house team with a digital transformation leader to lead the change or outsourcing strategy implementation to a professional. Outsourcing becomes the right choice if money is a critical consideration in your decision-making. Implementing a consistent evaluation program also ensures that the digital transformation process is used to meet specified goals. -
Budget Constraints and Expected ROI — Pursuing a digital transformation strategy is expensive despite its scope limitations. SMBs routinely spend approximately $50,000 to adopt digital transformation solutions. According to a Deloitte study, the costs of implementing transformations are so high that 62% of SMBs see them as barriers to adoption. So. SMBs who choose to go ahead with digital transformation programs rightly expect to see some returns in record time. Thankfully, this is the case. SMBs who adopt digital transformation to optimize processes increase profit by approximately 23%. Making it a worthwhile initiative.
Solution:Here is another benefit of having an implementation strategy that identifies both long-term and short-term goals: It allows you to invest according to your financial capacity and make increases in line with achieved goals. Outsourcing, working with managed service providers or using a digital transformation platform, and leveraging open-source solutions enable you to meet your digital transformation goals at reduced cost.
Stay Agile to Achieve Success
Integrating new technology is at the core of implementing a digital transformation strategy. Just as technology continuously advances, your digital transformation process must remain flexible to take advantage of new solutions and opportunities that come knocking. Choosing the digital transformation route highlights your ability to stay flexible. Lean into this ability and take chances with more affordable solutions or experiment with new methodologies to optimize legacy processes with digital technology. The result will be increased productivity, yield time, and profit by year’s end.