Operational efficiency and performance improvements are the focal points of businesses transitioning toward digital transformation. And yet, it’s not uncommon to undergo challenges down the road. Understanding the reasons behind those challenges is crucial to overcome them and move forward.

First, we’ll look at the hurdles businesses face according to their company size. After that, we’ll discuss the general reasons behind the struggle and how to tackle them.

Understanding Why Companies Fail to Transform Digitally According to Size

With technology made available far and wide, it’s unsurprising that access to technology isn’t the main struggle during a company’s transformative journey. Instead, several internal factors contribute to the problems.

Challenges Faced by Businesses with Less than 100 Employees

Lack of technical expertise

Limited budget

Disorganized company structure

Challenges Faced by Businesses with up to 1,000 Employees

Employee pushback

Lack of strategy

Limited access to technology

Challenges Faced by Businesses with More than 1,000 Employees

Rigid organizational structure

Lack of expertise to lead digitization initiatives

Limited support by partners

Reasons Companies Struggle with Digital Transformation

Lack of Technical Expertise

Talent and technical expertise go hand in hand. Therefore, you cannot cut it without one or the other. Unfortunately, that’s one of the biggest reasons companies struggle while adapting. Since the existing technical department doesn’t necessarily have the relevant skillset, the entire transformation process becomes more about hit-and-trial.

What you can do:

Train your employees about digital literacy.

Hire the right technical team or outsource.

Fear of User Resistance

Customers are the core of every business. And since users are accustomed to seeing their preferred companies in a certain way, businesses feel hesitant when changing their processes. For example, your end-user loves the simple design and app interface. However, you must adapt to the latest tech stack and change the entire structure.

Succumbing to the resistance can get you nowhere. This is what happened with Nokia and Kodak, both of which stuck with their initial designs and became overpowered by other giants in the industry.

What you can do:

Educate your users about the benefits of innovative practices.

Implement the changes gradually.

Employee Pushback

This relates to user resistance since human nature is to settle in comfort. That’s why most employees may feel threatened while their company undergoes a huge transformational change.

This is where a business owner may struggle. However, the key is realizing that not transforming digitally is far riskier than vice versa.

What you can do:

Engage your employees in the process.

Designate tasks according to capabilities and skillset.

Rigid Organizational Structure

Any organizational structure should be such that it adapts to the digital transformation strategy and not the other way around. But often, companies at the enterprise level struggle with strategy implementation as it affects the structure.

It’s essential to understand certain roles and reporting methods don’t have to remain that way. In reality, assigning new roles to your technical team gives new life to the initiative and can get you closer to your goals.

What you can do:

Make sure your organizational structure is fluid and accepting of the influx of new technology.

Limited Support by Partners

You have the right strategy, resources, and budget to reach your digital transformation goals. And yet, not having the right support by your side can be the greatest hurdle. It’s what businesses with a small number of employees or those in their initial years face.

Since partners or stakeholders have invested in the company, they might not be as flexible to the change.

What you can do:

Demonstrate what digital transformation can do for your partners.

Include them in the plan by having an open communication channel.

Poor Collaboration & Communication

One of the most common barriers to digital transformation is a lack of collaboration and communication among departments. This often happens when the IT department is treated as a separate entity. However, it’s crucial to remember progress happens when people work together. Especially in times when you want to integrate new processes within workflows, all hands must be on deck.

What you can do:

Get feedback from your employees about inter-department communication.

Outdated Tech & Systems

Most businesses find moving away from legacy systems and tech support challenging. But that can quickly transition into a tricky situation.

Why?

Because adapting to innovative digital ideas seldom happens when you’re stuck with old methods, like using spreadsheets for data. Therefore, it’s vital to adopt modern platforms for processes like communication, data saving, and more.

What you can do:

Perform an audit across all departments to evaluate the systems you can replace.

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