When something new comes out, many people have the tendency to take a step back for a while before trying to understand it. Instead of accepting what is new, some refuse to accept it, choosing instead to focus on what they have gotten used to. This is why there is a need to challenge people to open their minds and allow themselves to change their thinking process.
We live in the digital age, which falls in the “new” concept category. Not a lot of people understand or are comfortable with the word “digital”. For them, it is like a subject matter that is off limits to anyone who has no IT degree. This kind of attitude is what makes digital disruption a major issue for a lot of organizations.
What is Digital Disruption?
When Uber started becoming the preferred choice of people looking for a cab to take them to their destination, it disrupted traditional taxi businesses. Here was a company that allowed commuters to simply tap a few buttons on their smartphones in order to take a ride home. Uber basically changed the concept of the taxi industry. That is what digital disruption is all about.
Simply put, digital disruption is a threat to certain goals, business or otherwise, with the aid of digital technology like your smartphone or a mobile application. While it is often confused with disruptive technology, it is not similar to or related to it. Digital disruption affects only a particular sector or area of business. Disruptive technology, on the other hand, pertains to revolutionary tech that affects an entire nation and causes society to change the way it thinks, acts or behaves.
The best example of disruptive technology is the personal computer, which caused a lot of people to change the way they worked, studied and even the way they played. Disruptive technology is not something that you can experience today and then do away with tomorrow.
Digital disruption, however, can be countered by instituting significant changes in the business process or in the way things are managed. This is why many of today’s enterprises are embracing digital transformation.
There are several factors involved when a company decides to switch to digitization. Foremost among these is the economic aspect. Because of the many financial tragedies that the world has experienced, companies are more careful now in their investments. Every single financial step that they make is evaluated several times.
Factor number two is the way people have diverted their attention to one-of-a-kind experiences while taking for granted products that are mass-produced.
The third factor, of course, is technology, which is constantly evolving and improving, not just in one industry, but also in the entire business world.
These are all essential factors that business leaders need to address in the best way possible. And these are the factors that push them to cater to digital transformation. However, there are major challenges that stop the advantages of digitization from taking shape.
In a research on digital transformation facilitated by Arthur D. Little, it was revealed that only around 17% of enterprises actually have a set of strategies for digital transformation. Additionally, 50% of the companies included in the study know only very little about digital knowledge.
Some organizations have already gone digital and have gotten so good in such technology. However, there are quite a few that are not yet digitally mature and, therefore, hesitate to make something good out of their digital initiatives.
These may be simple things to the ordinary person, but for someone who understands the value of digital transformation, these are challenges that need to be addressed in order to push businesses towards the digital path they should take.
The Other Challenges
Here are other challenges that might make the digitization process quite complicated:
- Challenge number one is the ability to understand the customer. As technology changes, so do the way people think, act and do pretty much everything. Nowadays, instead of brands expecting customers to share their needs and wants, it is the customers who make the demand, as they are confident that brands are better able to understand them now. Therefore, companies need to have people who are willing to research and learn significant information about customers. Moreover, digital programs should be provided an input – focusing on what will satisfy the customers.
- Challenge number two is the concept of a 24/7 business. Gone are the days when enterprises would open only on weekdays. Today, majority of organizations operate 24 hours a day, seven days a week. In other words, business is always on. In relation to this, once a brand is digitized, customers will expect more from it. They will be expecting quality products and services anytime and anywhere they want them.
- Challenge number three involves the proper adoption and implementation of the digital process. Before anything else, companies need to draw up strategies and create plans. This will help pinpoint the most essential purposes for digital transformation. A good example of a digital management model is one used to study customer preferences so that a resolution will be reached, thereby offering them satisfaction like no other.
- Challenge number four is all about the way companies use data. There has to be a certain process for IT and management leaders to talk about data and then to carefully analyze it. It is important, however, to first identify which ones are of greater value, especially to customers.
- The final challenge is one of the biggest barriers of digital transformation: limited knowledge about the whole digitization concept. Sure, businesses know that digital is better and can deliver faster results. What they do not understand is how valuable it is to companies that want to leverage success by ensuring efficiency, productivity, customer satisfaction and steady profit.
Many company leaders – and employees – also need to be given a 101 on digital transformation for them to be fully aware of its value.
Other important challenges that should be considered are technology, company culture and leadership initiative. Companies need to adapt to the regular developments in technology. Company leaders, meanwhile, need to follow and embrace the best business practices to encourage effective and innovative leadership. Finally, leaders should have the initiative and the passion to lead, because only then will an enterprise be fully able to embrace digital transformation.
In order to effect digital transformation, organizations need only to have the right digital tools. They should also be able to apply techniques into practice. Because, in reality, what really challenges companies from completely embracing digital transformation is not technology or anything of its class. Rather, it is the willingness and capacity of leaders to embrace change.
If you want to better understand digital transformation and all the factors that come with it, check out FourCornerstone and ask for a FREE consultation now!
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