02-08-2018 Door: Willem van Enter

Top 5 Digital Transformation Challenges and How to Overcome Them

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In the past two decades, we've been witnessing an astonishing technological evolution that led us to what I like to call the golden age of digital business. You can recognize it as the era where companies have an incredibly vast technological stack that they can (and should) use to increase their efficiency and deliver better user experiences. But as the variety of opportunities increases so do customer expectations and digital transformation challenges.

Digital Transformation Is an Evolving Journey
For the past few years, I’ve been watching how our customers in Northern Europe have been adapting their digital agendas to ever-changing customer expectations and needs. If before the business focus was on enhancing operational efficiency, today that focus has moved to improving customer interactions and using new or updated digital core systems to unlock business models.

And that’s not the only change. In a recent survey about the state of digital in Europe, IDC showed that although the number of companies embracing a digital journey has increased from 17% in 2015 to 24% in 2017, about 55% of the enterprises still get stuck in the second phase of digital transformation.

This means that companies are able to launch individual digital projects and even become a digital player, but they’re not able to digitally transform their entire organization.


So, the question arises: Why are companies hitting this digital impasse? Or as IDC defines it, the digital deadlock? Well, that takes us back to the beginning of this post. As the business priorities change, a new set of challenges appears.

Meet the 5 New Digital Transformation Challenges
If you’re planning or have ever planned a digital transformation roadmap, you know there are few common challenges that every company face. Legacy systems, lack of resources, and limited budget are a just a few of them. But as your journey moves and evolves, new challenges surface and either block or slow down any digital strategy.

Here are the top 5 digital transformation challenges that can lead to a digital deadlock:

1. Outdated KPIs: Companies embrace digital agendas but continue to use traditional indicators to measure the new digital business instead of finding new KPIs that show the real digital performance.

2. Siloed organizational structures: Legacy hierarchical cultures and processes, like waterfall, continue to be one of the main factors that slow down the evolution of organizations from digital players to real digital disruptors.

3. Tactical plans: Most companies build initial digital transformation roadmaps focused on achieving short-term goals, which are not easy to translate into a constant evolution.

4. Silos of innovation: Usually, when a company starts planning its digitalization, the digital IT environment is born as a separate section of traditional IT. As a consequence, there isn’t a singular technology architecture, and silos are created.

5. Limited expertise: The lack of digital capabilities, that is, a mixture of technology, talent, governance, processes, and data significantly affects the value they bring to their customers.

Overcoming Digital Deadlock
I don’t need to tell you that, nowadays, innovation is a crucial part of winning in any competitive market. So, the ability to evolve from a player to a disruptor must be an essential part of your digital strategy. So, how can you break the anchor and surpass the digital deadlock?

You need to connect your silos and enable business agility.

Focus on the ability to scale digital initiatives
Companies should start their digital initiatives outside traditional IT with a single use case. And then, gradually increase the portfolio while aggressively modernizing the internal IT environment into an “intelligent core” in parallel.

At the same time, you should enable modern development to support the new way of running the business, processing data, reacting to changing market conditions, and engaging with customers.

Accelerate development cycle times and developer productivity
According to the IDC survey referred, accelerating development cycle times and productivity is one of the most significant app modernization challenges for European companies. To overcome this challenges, consider providing your existing teams with an enriched toolbox for solving business problems quickly.

Embrace a business-centric collaboration
When it comes to digital transformation, business and IT must be aligned. And DevOps can be key to connecting the silos across IT and business that inhibit change. With DevOps, you have the support to increase agility and business innovation, all while enhancing customer experiences.

Manage existing talent
In the same IDC research, it was proven that a third of European companies are struggling with acquiring development talent. So, talent management has become a key weapon. Companies need to focus on reskilling, cultivating, and retaining the existing workforce.

Closing the Digital Transformation Framework Loop
In the end, it all comes down to productivity, agility, communication, talent, and a scalable digital transformation roadmap. That way, you lay the foundation for excelling in continuous delivery and, thus, keeping the “digital machine” on the move.

It’s easier said than done. To break the digital deadlock, there’s one more piece to the puzzle, one that will glue all this together: you need the right tool to support your digital initiatives.

Willem van Enter

With over 25 years of experience in senior roles at companies like Oracle and Microsoft, Willem is a guru when it comes to helping businesses grow. As OutSystems Vice President, EMEA, Van Enter holds a critical role in the future growth of OutSystems success in the region.

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