Cracking the Code: Digital Transformation Challenges and Conquests

INTERVIEW WITH MR. Srikanth Appana,
CTO, Bajaj Auto Consumer Finance Ltd.

Despite the digital proficiency of industries like high tech, media, and telecom, the success rate remains constrained, not exceeding 26 percent. Conversely, in traditional sectors such as oil and gas, automotive, infrastructure, and pharmaceuticals, the hurdles intensify, with success rates ranging from 4 to 11 percent. What could be the factors affecting the progression?

What is digital transformation?

Digital transformation is the basic yet systematic rewiring of any establishment with recent technology. This paradigm shift is mandatory for the imperative growth and competitive positioning of organizations. Digital transformation is therefore not only the necessity of the hour for businesses to survive but also to provide operational excellence. The effectiveness of this change is mostly proportional to professional capacity and management on a well-defined scale. The likelihood of success is weakened in the absence of such coherence and alignment.

Why is Digital Transformation the Need of the Hour?

Distinguishing digital transformations from conventional business transformations lies in both subtle and substantial nuances. Traditional business transformations typically conclude upon the attainment of a newly desired behavioral state. In stark contrast, digital transformations manifest as protracted endeavors, wherein the fundamental fabric of an organization undergoes continuous refinement and adaptation. An illustrative exemplification of this perpetual evolution resides in the growing prominence of Artificial Intelligence (AI) in the realms of business intelligence and decision-making processes. Consequently, any digital transformation undertaking must invariably encompass an AI transformation. The strategic incorporation of AI is not only a contemporary imperative but a forward-looking strategy, acknowledging the escalating relevance of AI in the generation of business insights and the facilitation of decision-making logic.

Research spanning multiple years underscores a persistent challenge in the realm of transformations, with a success rate consistently below 30 percent. Notably, the landscape becomes even more formidable for digital transformations, where only 16 percent of respondents affirm that their organizations have achieved success in both enhancing performance and sustaining long-term changes. An additional 7 percent acknowledge performance improvement, though these gains are not sustained.

Making Digital Transformation Work: Overcoming Challenges with Solutions

• Challenges in Digital Transformation

Digital transformation is a challenging process. It may seem insurmountable. It makes no difference if you’re creating a digital and advanced analytics (DnA) start-up within the organization or digitalizing the entire establishment. These changes usually stall out along the way, and leaders often find it difficult to hold onto their gains over the long haul.

To bring such change calls for a great deal of change management. This emphasises on supporting teams to accept and adjust to changes. Obviously, it’s a difficult undertaking which often confronts opposition, fear, and misunderstandings. Likewise, a thorough grasp of the potential obstacles in the face of these complexities can assist firms in creating a more effective and productive path toward digital transformation.

Few most common obstacles to digital transformation are:

• Lack of management strategy
• Difficulty in implementing software and technology
• Adoption of new tools and procedures
• Constant change in client needs
• Absence of a well-coordinated plan for digital transition
• Lack of IT expertise,
• Security concerns
• Financial limitations,
• Cultural mindsets,
• Compartmentalized organizational structure, and
• Return on investment (ROI) measurement

• Solutions to Concur the Hurdles

While bringing about this transformation, establishments need to focus on five prime aspects: talent, strategy, technology, training, and growth. Therefore, from planning and hiring to managing and developing, every aspect plays a crucial role in digitalization. We can therefore take proactive steps to manage them and help businesses make the transition smoothly.

• A Thoughtful Implementation of Plan:

Picture your digital future and build a robust plan to bring that vision to life. Let this plan be your guiding light, harmonizing with a savvy business IT strategy. Make sure it covers everything from business architecture and cybersecurity to cloud services and analytics. The goal needs to be a seamless adoption that stands the test of time. Next crucial step is to maintain it. It is easy to start a rewiring approach, but it is difficult to sustain them and generate more. Businesses frequently choose to fund several, assign personnel, or even establish distinct units. Executives mistakenly believe there is no urgency because the market is not ready for change when efforts fail to gain traction and business practices remain mostly unchanged.

• Align Objectives to Tangible Business Results:

Think broadly and connect your digital initiatives to your company’s objectives. Give the projects with the greatest potential for impact top priority. When determining where to allocate your resources, use precise criteria. It’s similar to providing your company with a single, cohesive vision that reflects its top priorities.

• Acknowledge Change as an Opportunity for Growth:

Most changes are essential and it’s a necessary component of technical advancement. Rather of concentrating solely on your organization’s culture, begin this change by altering attitudes elsewhere. First, find out if cultural hurdles are preventing technology from advancing and then implement a top-down change in management strategy. Never forget how important it is to have everyone on board.

• Promote Honest and Open Communication:

In any business, effective communication is essential to success. It is important to stay in contact with everyone in a world where choices are more complex than ever. A two-way communication along with regular dialogues with all stakeholders can bridge the gap. This breaks down data silos and ensures that everyone is in accord when it comes to making crucial business decisions.

• Cyber Security:

The modern digital network is extremely volatile. It can be advantageous to be on surveillance for any potential issues and to take precautions before things get out of hand. Even though the digital industry has experienced unparalleled expansion, there have also been a ton of new opportunities created, particularly in the field of cybersecurity. With a holistic approach to cybersecurity, organisations can effectively navigate the complications. This entails viewing cybersecurity as a strategic business matter that needs support at all organizational levels, rather than merely a technical one. It also entails keeping abreast of the most recent developments in cybersecurity, including trends and threats, and routinely evaluating and upgrading security protocols to guarantee their continued efficacy.

Companies can also gain from collaborating with cybersecurity specialists or introducing the latest security measures.

• Overcome the Knowledge Gaps:

The workforce is the cornerstone of any business; therefore it’s imperative to keep them equipped with the abilities they need to thrive. As with any transition, the success of the digital transformation depends on the new culture and skill sets being ingrained. Establishments must invest in their education and training for the digital transformation. Therefore, collective and role-specific learning experiences must be implemented throughout the organization. Every member of the company, including the C-suite, data engineers, translators, and operators of the products under development, must understand both online course components and in-person instances in order to attain a balance between basics and interactive learning. Closing the knowledge gaps will make the team more capable and perform better overall.

Digital transformation is not rocket science. It is an ongoing process of learning and adapting to the changing IT spectrum. Along the journey, there will be hurdles to cross and milestones to reach. Early prototypes would aid in data and technology, decision-making, and enhancing IT strategy. This is the time to go with the flow.

Conclusion

Wrapping up, digital transformations entail a strategic purpose for establishments. This rewiring requires persistent dedication, transparent communication, a concrete plan, and strategic leadership. Trade-offs are essential for implementing a balance between sustainability, rapidity, and degree of innovation. It goes without saying that any business aiming to thrive needs to quickly adapt, learn from its mistakes, and move forward in this spectrum. Additionally, the incorporation of AI further highlights the need for businesses to actively leverage technological innovations. It is necessary to passively adapt to advancements in order to achieve sustained success.