Digital Transformation: Key Factors Of Success
Digital transformation is a critical opportunity for small and medium-sized businesses to thrive in the digital age. However, not every business is capable of doing so. This article will examine the challenges and key success factors in digital transformation.
Why digital transformation is necessary
As mentioned in the article Digital Transformation: Definition and Essence, "Digital transformation is the process of transforming the overall and comprehensive operations of the government, the economy, and society into a digital environment."
This definition defines digital transformation as a systemic economic and societal change. Changing the system completely creates value and opportunities for society as a whole. This is the future that businesses must aim for to keep up with technological trends and market demands.
Businesses can use digital transformation to maximize their potential and capacity. Many positive changes will occur in organizations as a result of solutions integrated into core operations, including:
- More centralized and efficient information and resource management.
- Enhanced flexibility and connectivity between departments.
- Cost reduction, time-saving, and improved operational efficiency.
- Improved customer experience.
- Enhanced competitiveness of the enterprise.
- Difficulties and challenges in digital transformation
According to Forrester, only 11% of businesses succeed in their digital transformation efforts. This is clear evidence of the difficulties and challenges of the digital transformation process, which are key factors in determining a company's success or failure.
Businesses will face numerous challenges during the digital transformation process. Changing non-digital habits is the most difficult of these.
Businesses have been working in a non-digital environment for a long time. The culture of the organization is also based on that mindset and is deeply ingrained in the collective perception. When transitioning to a digital environment, long-standing business habits such as fear of change, non-responsiveness, being rough around the edges, and waiting for the perfect moment must all be changed.
On the other hand, while changing an individual's habits is difficult, changing the habits of an entire organization is far more difficult. This requires tenacity on the part of business leaders.
According to a survey conducted by human resources consulting firm Capgemini (France), 62% of respondents identified corporate culture as the most challenging aspect of the digital transformation process. A company that lacks a digital mindset and an innovative culture will struggle to succeed in digitalization.
Businesses must focus on building a digital culture, avoiding old habits, creating a flexible and collaborative work environment, and forming a digital mindset to eliminate old habits in order to succeed in the digital transformation process.
Consciousness and accurate perception
The most difficult challenge in business digital transformation is raising awareness and correct perception.
Digital transformation is, in essence, a revolutionary shift. As a result, it cannot be done without profound awareness. The business leadership team understands the importance of a long-term and firm transformation strategy. This team, however, is currently dealing with serious misconceptions about digital transformation.
Digital transformation is extremely costly.
Businesses will spend more than $2 trillion on digital transformation projects, according to IDC. This may cause small businesses to feel pressed and unprepared to carry out their digital transformation process.
However, in reality, according to a recent survey, 88% of large corporation Chief Information Officers (CIOs) admit to having failed or had to postpone their digital transformation.
Money, therefore, is not the solution to the problem of successful digital transformation.
Digital transformation is a playground for Tech titans.
When it comes to the success of digital transformation, people frequently think of impressive technological development Tech unicorns. Uber and Grab, for example, defeated traditional taxi services with more efficient business models. Netflix competes with traditional entertainment channels by providing diverse and convenient content. Furthermore, Spotify is redefining global music listening by establishing a music ecosystem that connects users with artists, etc.
The above mindset has had a significant impact on businesses. Some traditional businesses mistakenly believe that digital transformation is only for high-tech unicorns and startups, which causes concern among small and traditional businesses.
However, the truth is that the size of the company has no bearing on whether or not digital transformation is successful. Every business can be digitally transformed, and the person at the top is the decision-maker.
According to the IDG report, 38% of large corporations are pursuing digital transformation, while 55% of start-ups are. In addition, there are numerous examples of SMEs that have successfully undergone digital transformation.