What are the digital transformation challenges faced by employers

digital transformation challenges faced by employers

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The expected current life span of a Fortune 500 company is 15 years. And it may steadily decrease further down the line owing to the rising challenge of not being able to adapt to today’s increasingly sophisticated digital environment. Thus, for employers, the main digital transformation challenges are going to be:

Faster onset of disruptive technology innovation

Most of the disruptive technological innovations such as Artificial Intelligence, Machine Learning, Internet of Things (IoT) and a couple others are reaching their maturity stage. That is, these technologies are becoming more accessible and affordable.


Dramatic increase in expectations of customers as well as the marketplace

The entire ecosystem is undergoing a massive change due to digital technologies. Which has further been instrumental in the changing expectations of both customers and the marketplace. Customers are now more informed and hence they know exactly what they want, how they want it, where they want it and when do they want it. The marketplace too is digital so the buying and selling practices of old no longer apply to them.

Rising gap between technologically/digitally savvy performers and the laggards

There has always been a gap between the high performers and the laggards in the organization. But with technologically advanced performers, the output of their productivity has increased dramatically. The management has had to take tough calls to ensure the laggards do not affect their overall productivity.

Evolving business models stretching industry boundaries

There are countless examples where newer business models are blurring the industry boundaries. Manufacturers have moved from selling wholesale to selling directly to the end consumer, enabling a more personalized experience. Think 3D printing here. It does not have to be mass manufactured. On the contrary, it can be highly personalized to suit one’s needs. These blurring industry boundaries have resulted in reduction of frictional, transactional costs as more companies are soon going to realize this and reap the benefits

Challenges of a digital transformation leader:

First and foremost: Not having a clear digital transformation strategy

Yes, there are various studies that show how digital transformation is the need of the hour. But that does not mean leaders should rush into it without planning the short term and long term impact of it all.

Not having sufficient time and budget

When there’s no clear strategy in place, it is difficult to determine the amount of time and budget that the entire endeavor will require. While the start may be enthusiastic and brimming with positivity, just a few months in may make the leaders realize the futility of this exercise.

“In 2022, organizations are projected to spend nearly $2 trillion on digital transformation, according to the International Data Corporation.”

Source: Wall Street Journal

And most importantly: Employee pushback or partial buy-in

Getting complacent is human nature. So any initiative that is going to bring them out of their comfort zone and push them to their limits, is bound to face pushback. Even if a certain percentage of employees does have an initial partial buy-in, eventually they may have doubts. As DT won’t happen overnight. It’s going to take time and effort. Will these employees have the patience to go through with it? Maybe not.

leaders need to do in the digital age

What leaders need to do in the digital age: new tasks

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It is the leader’s responsibility to ensure these challenges are handled effectively and in a timely manner. Even their core job description may need to be completely revamped and aligned with these new challenges. So here are the new tasks of a leader in the digital age:

Create a robust digital transformation strategy and give a concrete direction:

For any initiative to succeed, there should be a clear start and end point. Leaders need to clearly define the set of activities that are going to be implemented. Explain the intent behind them. And lastly, show employees how their efforts are going to create an impact in the near future.

Get buy-in of employees across all the departments:

Explaining the vision is only half the battle won. The initiative won’t be successful unless a vast majority of the employees don’t see the value and benefits that they can derive from its execution. Once the early-adopters and followers buy-in, the laggards will follow as well.

Focus on developing a company culture that supports change:

Leaders need to foster a culture that encourages the adoption of technology. Any workplace that encourages innovation and regularly empowers employees to learn something new, has the potential to reduce employee pushback. With such a work culture in place, leaders have to spend less time on getting employee buy-in for any disruptive change.

Empower and educate employees to enable digital transformation:

With all said and done, unless employees don’t have the right knowledge, digital transformation (DX) in the workplace will often be a distant dream for the business. Employees need to be taught the right skills to make sure they can work on next-gen concepts like AI and ML, Big Data and others.

All of these new-age tasks or better yet, digital leadership competencies cannot possibly be learnt through a course or certification alone. It takes years of experience and efforts in the right direction. As a leader they need to carefully plan out when to take up each of these tasks. It’s not wise to ‘go all-in at once’. That’s a recipe for disaster. Exactly why very few have been able to effectively handle and lead DT initiatives in the organization.