Top 3 Challenges of Digital Transformation: How Can You Overcome Them?

Once viewed as a buzzword, digital transformation is now a non-negotiable element of business continuity. The International Data Corporation predicts that digital investments will make up more than 50% of ICT investments by 2024 and will be a large part of 2022’s global economy.  

The digital transformation journey does not come without challenges. According to Gartner, the shift to digital is taking organizations “at least twice as long and costing twice as much as they originally anticipated.” In this article, we explore three of the biggest challenges of digital transformation and effective ways to solve them.  

Challenge: Change-resistant culture and mindset

In the process of digitizing tools and processes, culture and mindset tend to be overlooked. In fact, change management and digital transformation are greatly intertwined. However, implementing change in an organization is difficult, with 70% of change management initiatives left unachieved. The main reasons behind this are failure to explain the purpose of change to employees, poor understanding of stakeholders and not voicing uncertainties. In addition to legacy issues and inadequate resources, poor change management may hinder any progress in the digital transformation journey.  

Solution: Build a digital transformation leadership team

As the Chief Digital Officer (CDO) of FLSmidth, Mikko Tepponen says that he is expected to be a catalyst for change as well as a technology leader. Organizations amid digital transformation should expand their C-suite to include a CDO role to ensure business goals are aligned with digital transformation initiatives. Tepponen also mentions that “it becomes a challenge if there is no clear focus on harmonizing your processes”, especially in large companies where there are different ways of working. Therefore, it is imperative that employees and stakeholders are involved in the digital transformation model from the start.  

Challenge: Talent shortage

The constant development of digital technologies has resulted in a lack of professionals to realize digital transformation strategies. Finding the right talent has become a common digital transformation challenge. In our trend report, Digital Transformation Investments 2022 and Beyond, 66% of respondents highlighted difficulties in hiring the right talent to fill the digital skill gap. The latest research by Ranstad also supports this finding, with 50% of surveyed employees unsure of the skills needed in a rapidly evolving workplace.  

Solution: Train and retain existing employees 

C-suites must rewire their efforts into reskilling and upskilling programs. Leaders can do an analysis of available digital talent and deploy those with tech skills to essential key roles while training them to further advance their competencies. Furthermore, organizations must always anticipate shifts in technology and be aware of emerging topics to be included in employee training sessions. Petra Ålund, Head of Technology at SEB, shares that the company often collaborates with educational institutions to inspire employees and develop their skills. “We offer mentor programs, volunteer programs, job-shadowing and internal gigs where employees can work in different parts of the bank for short periods of time,” Ålund adds.  

Challenge: Security worries  

While data is an organization’s biggest asset in an increasingly digital environment, it is also their biggest liability. Today’s businesses are more vulnerable to cyber risks; and cyber criminals are carrying out more complex attacks. Unsurprisingly, cyber threats were named the biggest external challenge in the transition towards digitalization, according to 58% of our surveyed digital leaders. 

Solution: Foster a security culture  

It is not enough to have cybersecurity systems in place to prevent hacks and data breaches. The path to maximum security starts with building a strong security culture in the workplace. According to Magnus Solberg, VP & Head of Security Governance at Storebrand, “a secure employee is a low-risk employee.” Solberg began working on the company’s security culture program six years ago, and now have “various security tools that help create more individually tailored training programs.”  

As cloud computing platforms play a big role in data storage, organizations should choose a cloud provider carefully. Daniel Melin, Strategist at Skatteverket, advises: “When evaluating security, the customer needs to take the whole spectrum of security into account; physical, IT, information, legal and political. Security is like a chain and every link has to be evaluated.” 

Facing the challenges of digital transformation is an ongoing but worthwhile process. Digital-first companies earn improved customer experience, richer data; and increased innovation — three ingredients for a sustainable and successful business.