Organizations grab every opportunity to use technology to their advantage. This includes automating manual processes and introducing new techniques. With so many having gone through the process what are the key risks we can learn from this process?
Some lessons to take away about the risks of digital transformation in an established company include understanding digital transformation, estimating costs, involving stakeholders, and setting clear goals.
Over the past few years, companies have been grabbing every single opportunity to go digital. This shift includes adopting digital practices to manage operations and employees, e-commerce platforms to boost sales, cloud services for storage, etc. It comes with certain security risks that organizations must mitigate.
12 Lessons to Take Away About Risks of Digital Transformation
Business leaders must understand the risks associated with taking their business digital. Understanding these and preparing for them is essential to avoid losing time and money during the process.
Here are some risks of going digital and tips on avoiding and overcoming them.
Lesson 1 – Include Everyone in the Conversation
One of the most prominent mistakes executives and owners make is not including the frontline workers and the technical experts before shifting to digital platforms.
These people are the closest to business operations and their problems. They play a key role in the day to day business and know the current processes inside and out. That gives each business unit an unrivalled understanding of where changes should be made to improve efficiency.
Excluding them from the conversation can mean delayed buy-in or even rejection of change. Let them be part of the conversation, let them try out any new digital tools before committing to a full digital transformation iniative, and their feedback could save you a huge amount of time and money.
Lesson 2 – Understand the Task at Hand
Before going through such a drastic change, you need to understand what this transformation means for your business, department, or team.
Companies often rush into the process under the pressure of competitors going through the exact change.
Each business and its dynamics are unique. You must understand the process and the changes you will have to make to achieve transformation for your particular business.
Lesson 3 – Consider All Phases
Digital transformation is a continuous process. It is not something done once and then left as is. It starts from the planning phase and goes beyond the launch stage.
The process involves understanding how the transformation will affect the entire operations cycle and how this change will impact each department.
So, remember that once you start the process, it will continuously evolve based on the outcomes.
Lesson 4 – Make a Collective Effort
Digital transformation is more than just changing processes and systems. It is a cultural shift. It involves people changing the way they work and the way they approach problems and their solutions.
You may think that new technology is what will make you digital. However, if the leadership team is unable to make a cultural and mindset shift to using new platforms or digital tools you will find you end up with an ineffective business model that combines the new with staff still trying to use the old due to refusal to adopt.
Understand the cultural dynamics at play in your organization and make changes accordingly. If you can’t change mindsets and approach toward digital transformation, all your other efforts will be useless in the end.
Lesson 5 – Set Clear Goals and Outcomes
If you go into doing something completely blind, chances are you won’t be very successful. One of the biggest missteps companies take is initiating transformation without having a clear goal in mind or understanding the effects of transformation.
For example, a company may want to generate X% of business through digital channels instead of traditional ones. Now, decision-makers and executives must determine what steps and changes need to be made to achieve this goal.
Setting clear goals will help you determine the success of your transformation journey and help you pivot when it’s necessary.
Lesson 6 – Prioritize Diverse Skill Sets
Digital transformation craves diversity. Instead of banking on traditional tech skill sets, organizations should prioritize diverse skill sets, the ability to ask the right questions, and solving problems creatively.
It’s essential to have individuals with varied experiences and talents in your team to fuel the transformation.
These are qualities that will allow your teams to be more adaptable to change when it comes.
Lesson 7 – Have the Right Processes in Place
Analyzing what needs to be done is only the first step. The going gets tricky when it’s time to execute.
Companies need to have the right processes and tools in place.
Your processes and tools should enable your employees to execute the transformation according to the goals you set in your initial analysis phase. This is where a dedicated programme manager (either in house or hired consultant) steps in to drive forward the digital transformation efforts.
Lesson 8 – Estimate Costs Wisely
Companies have a history of using certain systems and extracting ROI from them. These systems can benefit significantly from modernization.
However, this modernization and digital transformation come with costs.
Many companies underestimate the costs required to modernize processes and systems and the operational changes that come from them.
It’s not just about paying for a new system, you’ve got to keep in mind that these systems will require updates, the users will require training, and bugs will require addressing.
On the other hand it’s not just about cost. What benefits are created by the new system, does it make your teams more efficient? Does it allow you to introduce new ways of working? Does it improve staff satisfaction?
You must estimate the costs properly and understand that your current systems are essentially paid for at this point. New ones will naturally cost you but will bring more ROI in the long run.
Lesson 9 – Invest in Resources
Successful transformation is a long journey and a tedious process. Companies often fail at this because they expect their current resources to do their jobs and also transform the organization.
It’s important you set aside some time from their day-to-day responsibilities to focus on the digital transformation aspect. Otherwise, the process will take longer and cause your employees to burn out.
Lesson 10 – Don’t Jump on the Bandwagon
It may make sense just to do whatever everyone else is doing regarding digital transformation. However, your organization is unique and has its dynamics and needs you need to cater to.
It would help if you did a proper analysis of the required changes and the risks associated with those changes.
Lesson 11 – Transformation Isn’t Magic
Digital transformation doesn’t mean automation in everything. It also doesn’t mean you’re getting rid of paper.
It’s the use of technology and automation to streamline processes and help those executing these processes.
It’s beneficial to understand that digital transformation isn’t a magic wand to eliminate all your operational woes. However, executing well can help you increase your efficiency and ROI.
Lesson 12- Understand That It’s a Journey
Lastly, it is important to understand that digital transformation is a journey, not a one-off thing. It will take time and patience and should fall into a continuious improvement cycle.
This process involves constant evolution and improvement, which means there is no end to it. It is ongoing.
You must adapt to change with change management strategies that will help you respond to crises quickly and effectively.
Frequently Asked Questions
What is the biggest blocker to digital transformation?
Organizational silos are the biggest blocker and enemy of digital transformation. It harms productivity and innovation and stalls the process of digital transformation. Organizations should focus on getting collective buy-in for the transformation initiative.
What are the three significant risks of going digital?
The three significant digital risks include cyber, operational, and value-related risks. Transferring data and processes to the cloud and other technological changes can make your organization vulnerable to attacks.
Why do organizations resist digital transformation?
The fear of losing their job and being replaced by machines and AI software can prompt employees to resist change. It is essential to help them realize that these processes will only improve their productivity and efficiency.
How Does Digital Transformation Impact ITIL Change Management Best Practices?
Digital transformation has significantly impacted ITIL change management practices. With the increased automation and integration of IT processes, organizations are re-evaluating their itil change management practices to ensure they align with the new digital landscape. This shift requires a more agile and flexible approach to change management.
Final Thoughts
Digital transformation is a continuous and long process that organizations need to commit to. Luckily, many companies have gone through this process before. We’re hopeful that the lessons they’ve learned from the experiences we’ve curated above will make your transformation easier and smoother.
It is important to recognise that change can be disruptive. This doesn’t mean it cannot happen; it means we must be thoughtful about how we implement it. We must make sure our strategies and plans are sound, and that we have an unwavering commitment to success.
