Digital transformation is becoming an increasingly pressing concern for businesses. It has the potential to dramatically change how companies operate and become more efficient, flexible, and lucrative.
To take full advantage of its potential, however, companies must form a holistic strategy and put forth concerted effort in order to make sure all aspects of the organisation are on board. In this blog post, we will discuss the challenges digital transformation may pose in 2023, as well as share suggestions for how to effectively navigate them so businesses can get the most out of their transformation projects.
What is digital transformation?
Digital transformation is frequently discussed in business circles that it can seem like something of a buzzword. As matter of fact, the majority of business information is now digitised in the form of files, databases, emails, and so on, as digital computers have been a mainstay of most businesses for decades. The term ‘digital’ has become more generalised in recent years, referring to technology-enabled business activities, particularly those conducted online.
Digital information can consist of numbers, text or even multimedia. The data can then be stored and manipulated electronically by computers and other technologies – creating a multitude of possibilities.
Digital transformation can be a daunting task for any organisation, it has a multitude of advantages. It is possible to increase profitability and growth by improving customer experience, increasing operational efficiency, and finding new revenue sources by taking advantage of digital capabilities.
Digital transformation challenges in 2023
In 2023, businesses undergoing digital transformation will face the following challenges as digital transformation becomes the norm:
- Lack of organisation-wide commitment can hinder digital transformation efforts. A digital transformation consultancy can help gain commitment and buy-in from across the organisation, starting with C-level executives.
- Treating technology as a foreign object can make digital transformation difficult, especially in traditional organisations with low employee turnover. A digital transformation consultancy can help drive cultural change and work with technology-friendly teams to create successful examples of change.
- Lack of stakeholder consensus can impact a broad range of organisational roles and functions. A digital transformation consultancy can help understand stakeholder motivations, prioritise stakeholders, and involve them early on in the process to gain their buy-in.
- Cutting corners on the journey, such as offshore outsourcing or minimising software testing, can lead to low-quality software and increased costs. A digital transformation consultancy can help avoid these shortcuts and prioritise the quality and success of the project.
The biggest barriers to digital transformation: Allocating the right Budget
Securing enough funding to ensure the success of digital transformation in your organisation is a common challenge. Traditional funding models, which focus on achieving a specific business case with assumptions about the return on investment (ROI), do not work well in digital transformation projects.
These projects are often multi-year and have many unknowns, making it difficult to predict the ROI. Another problem is that most organisations plan their budgets for technology investments up to a year in advance, making it hard to fund an agile and adaptive transformation program. An organisation-wide transformation also requires collaboration, integration, and budget reallocation across business and functional units, which often face objections from those wanting to resist change.
A digital transformation consultancy agency can help you find an agile and iterative approach to your funding strategy. This can include starting small, with a phased approach to target quick-win transformation projects that prove their value to your organisation’s leadership.
This approach allows you to demonstrate the potential benefits of the transformation program and secure additional funding. This approach allows you to leverage the resources of multiple business units and overcome resistance to change.
Case study: Digital transformation at Capitalflow
Digital transformation is no easy feat. It’s a journey that requires careful planning, execution, and measurement. But it can be done!
Capitalflow is one of Ireland’s fastest-growing alternative lenders for SMEs, serving more than 2000 businesses.
In the lending process, the company relied on phone calls, emails, Word files, paper documents, PDFs, and spreadsheets. Receiving a customer loan application, assessing it, making a decision, and transferring capital could take weeks.
To reach Capitalflow’s growth goals, Elsewhen reviewed the company’s current processes and technology.
Capitalflow worked closely with Elsewhen to create a new technical architecture to meet its ambitious goals.
As a result, the business was able to overcome several challenges, including:
- Acceleration: 50% potential time saved on commercial real estate lending applications.
- Simplification: 95% average fewer steps in asset finance customer journey.
- Efficiency: 80% shared processes across lending products.
As a result of their efforts, Capitalflow has seen significant improvements in its business operations and bottom line.
Final thoughts
Digital transformation is an ever-evolving process that can be both exciting and daunting. Organisations should remain aware of the challenges they may face, such as navigating data privacy regulations, ensuring secure infrastructure, finding the right talent to drive innovation, and understanding technology trends.
With careful planning and effective management strategies in place, organisations can overcome these hurdles and leverage digital transformation to their advantage in 2023.