Many organizations face unique challenges when it comes to adopting a digital transformation strategy. For some, the biggest challenge is where to begin. It’s important to recognize these challenges so that the business can fully leverage the opportunities of digital technologies, such as IoT and blockchain.
In this blog roundup, we asked digital transformation thought leaders about which industries are the most advanced and which lag behind when it comes to adopting digital transformation practices. Here’s what they had to say:
What’s the biggest challenge facing companies when it comes to digitally transforming their business?
“The single most significant challenge faced by companies on their digital transformation journey is the cultural shift required to make the transformation. This shift requires a company to fundamentally change its business model, organizational structure, talent hiring and retention, and more — essentially, how it leverages technology. This transformation is a massive shift. Changes of this magnitude are challenging for any organization, but particularly for large, well-established ones.” – Abby Kearns, Executive Director, Cloud Foundry
“The number one challenge is finding the right talent to execute on it. Gartner has done research with CIOs asking them about what they see as their top challenges. Number one was lack of talent and resources. You need people with a clear vision to create new business models, who can change an organization, develop solutions using the latest technologies. Where the demand for talent is already about five times bigger and supply and demand is growing faster and faster, attracting this talent is a major challenge.” – Roald Kruit, Co-Founder, Mendix
“Probably the biggest challenge is having a real understanding of what it means to dangerously transform the business. Many people believe that digital transformation means making the forms that round the business available online, or making some transactions available on a website or on an iPhone.However, true digital transformation means rethinking the way you run your business from top to bottom. Try and emulate the operational efficiency of start-up companies without the legacy issues many large companies face from traditional technology, people and thinking.” – Rod Willmott, Chief Wzard, Wzard Innovation
“It is a challenge to delight customers and other stakeholders through digital technologies and user experience, while continually exceeding their expectations at speed to prevent them from wanting to go elsewhere. This involves continual innovation and delivery, agility and flexibility, along with a real understanding or what the customer wants and needs before they do! To do this, you need to become a digital enterprise (at the core). This involves many things, but certainly the right capability, to which the biggest challenge in digitally transforming the business is finding and keeping the right mix of skills and people.” – Ian Kingstone, Digital Transformation Advisor
“The biggest challenge is the speed at which digital transformation has happened. The second is legacy. The internet is 25 years old. Smartphones (well, real smartphones) are less than 10 years old. Clearly, there were wider macro-economic issues that caused significant slow down in the adoption of a digital-first mentality with both the Dotcom crash and 2008-2009 financial crisis. However, things have moved so fast that I actually feel we’re in a post-mobile world.” – Tim Smalley, CMO, Audiense
“The challenge is gathering the strategic information to know what to do first, what to do next, what to defer and what to avoid. The point is to maximize resources by creating the biggest gains first and to build upon those gains each time. Currently, corporations do not have the right information – this is what needs to change to enable transformation. Information needed must be developed for each organization and must serve the needs of each individual. This insight will help organizations guide transformation efficiently based on needs and opportunities.” – Charles Caldwell, CEO, GEM Analytics
“We see a lot of companies approaching digital transformation as a bolt-on to their existing business; Innovation labs and/or application development teams are being isolated from core operations. Digital transformation is hard, and it requires a pretty fundamental review of the business and the products and services that you want to bring to market.” – Ross McKegney, Director of Platform, Box
What industry is most advanced when it comes to digital transformation? Which industries lag behind?
“Obviously, start-ups that begin as cloud-native are the furthest along. But for those companies that did not begin as cloud-native, I would say, anecdotally, that financial services companies are leading the charge towards digital transformation. However, any company that is striving to become agile will be ahead of the game, as it will continue to evolve and adapt to the changing technology landscape.
Large organizations, across all industries, for which technology has not previously been strategic will have the most work to do on this shift. This is not to say these industries are not working diligently to accomplish digital transformation. In fact, many of them have adopted Cloud Foundry in their digital transformation journey and are well on their way. It’s important to remember that this is a long, arduous process with an enormous human component involved. It is not going to happen overnight.” – Abby Kearns, Executive Director, Cloud Foundry
“The technology industry is the most advanced when it comes to digital transformation, and it has laid the foundation for the transformation of every other industry. Mendix is one example of how a technology firm has adopted a platform model, which enables firms to develop apps without the constraints of pre-digital development methods.
A study by the Global Center for Digital Business Transformation (a Cisco and IMD initiative) revealed that the industry will experience the most digital disruption between 2015 and 2020 is Technology Products and Services. Next was media and entertainment, and then retail. Meanwhile, the pharmaceuticals industry is likely to experience the least amount of digital disruption, and therefore it is likely to see the least amount of digital transformation.” – Rob Llewellyn, Chief Executive, CXO Transform
“I think financial companies are lagging because they have a lot of old but high impacting legacy that is hard to replace. Furthermore, financial services lack digital capabilities because the industry has historically been risk averse and late adopters of new technologies. Many people prefer robustness more than innovation. So they can afford themselves to lag a bit.” – Roald Kruit, Co-Founder, Mendix
“The industry-leader in digital transformation, from my observations, is retail. Not only are they setting the expectation for interactions, but the operations behind retail online delivery is being rapidly modernized and automated. In financial services, the banks are starting to realize the pressure of both customer expectation and new pretenders. There is some evidence, at least on the customer interaction side, that they are stepping up. But in terms of the overall operational efficiency, I’m not so sure.” – Rod Willmott, Chief Wzard, Wzard Innovation
“The technology sector has, not surprisingly, moved fastest. A close second would be the entertainment industry after significant disruption to their business model – first in the early 2000s with the rise of online piracy, and then with the arrival of digital subscription services like Spotify and Netflix. Financial services have moved extremely quickly to adopt digital technologies as well – how many of us would have expected to be doing our banking online 20 years ago?
Sectors are struggling. Education is rife for digital disruption and, with the right model, it could literally be turned on its head. I really do believe that contact time in school should be spent on workshops to complete what we currently call homework, while classes should be delivered outside of school/online by the most qualified person to teach the subject in the country (or even the world).” – Tim Smalley, CMO, Audiense
“At this point, there are no winners or losers. Nobody has the right information (but they can get this insight). Insight needed gets developed one step at a time. It is used to develop strategy, roadmaps and action plans.” – Charles Caldwell, CEO, GEM Analytics
Executing a digital transformation strategy is more than simply buying a new technology. True digital transformation takes hold when businesses embrace the challenges with digital transformation and go after the solutions. What’s holding your organization back from digital transformation? Let us know in the comments.