As your business overcomes digital transformation challenges, make sure you have a tangible access plan to drive success.

Digital Transformation Challenges: Creating Your Action Plan

Nicholas PriceLast updated on February 22, 2023
6 min

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The pressure is on for businesses of every size to stay competitive, build resiliency, and provide a good customer experience. Small businesses face even greater challenges than large corporations as they have fewer resources—specifically, shortages of talent in digital skills, resistance to change, and insufficient budgets. The failure to overcome digital transformation challenges will have a strong impact on the future of work. Don’t despair if you haven’t made enough progress in digital transformation. With the right technology partners and expertise, your small business can overcome any challenge it faces, accelerate growth, and become more resilient now and in the future.

To that end, we’ll describe the issues that cause small businesses to struggle with digital transformation, offer tips for digital transformation, and look at the future of work.

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Why Do Businesses Struggle With the Digital Transformation

As your small business looks forward to developing its digital transformation framework, it’s essential to create an action plan, complete with an attainable timeframe. The transformation process means that you must assess where your business currently is concerning digital tools and processes, and view it in light of where you need to be to continue being competitive.

We can point to specific reasons many small businesses struggle with digital transformation. Some of the following reasons might sound familiar to you:

  • Digital transformation initiatives require big changes and it overwhelms leadership to even think about it.

  • Top business leaders are set in their current business processes and they’re averse to embracing new technology.

  • The leadership team doesn’t understand how focusing on the customer experience and pinpointing its gaps can give them a competitive edge.

  • Small businesses are often reactive and hyper-focused on creating efficiency within the current workflows.

  • Companies are still using manual processes and they don’t know where or how to begin with digital transformation efforts.

  • Some companies have worked on short-term digital transformation strategies, but lack vision and a plan for the future.

  • Many small businesses aren’t familiar with cloud technology and how it can lead to digital transformation success.

  • IT talent is available, but the company lacks a CIO, the right digital skills, and the right talent overall.

  • Companies rely heavily on reporting without the advantage of data and analytics that are so critical to establishing efficient, productive workflows.

In today’s marketplace, automation, digitization, and big data are your friends. Your new digital transformation strategy will be easy to implement when you create a roadmap for overcoming the top digital transformation challenges. It will lead you to greater operational efficiency and better decision-making.

Understanding the Top 10 Digital Transformation Challenges

Suppose you’ve been looking at different business models and you’re ready to take the plunge into the Internet of Things (IoT) by setting up a digital ecosystem. In that case, it’s prudent to take stock of the top digital transformation challenges that could be in your way.

10 obstacles for you to navigate:

  1. Internal resistance to get involved in the digital world. Long-time employees, corporate politics, and the fear of uncharted risks all get in the way of considering new business models. A cultural change is a difficult obstacle for startups and small businesses to overcome.

  2. Taking a holistic approach to your overall business strategy rather than a siloed approach and considering the future impact of your transformation journey.

  3. Failing to include a timeframe along with your roadmap to executing your digital transformation strategy. It doesn’t pay to put things off.

  4. Not tapping into the power of automation and artificial intelligence within your workflows.

  5. Not changing your metrics to fit your new processes and workflows so you have useful data moving forward.

  6. Failing to modify your workflows after implementing new digital tools and monitoring their impact on your company’s profitability.

  7. Lacking of understanding the type of talent your company needs including digital technology experts, human resources staff, and call center staff. Your business also needs a strategy to train employees in using digital technology, and you need a process for evaluating their performance.

  8. Setting up a digital infrastructure that has an inflexible tech stack. Siloed programs and manual dialing create inefficiencies. Software integrations and a cloud phone system combine to create a single source of data.

  9. Failing to respond quickly to market changes and adapting workflows to align with the customer journey.

  10. Failing to allocate a sufficient amount in the budget to align with and support your digital transformation plans.

On a positive note, your small business can overcome each one of these obstacles. Along those lines, we’ll look at how to develop a better digital transformation strategy.

Developing a Better Digital Transformation Strategy

If you’ve done any research on the business value that comes from digital transformation, you know that it’s the key to improving the way you conduct your business and more importantly, meet customer’s expectations. If you’ve learned how to stabilize your business after the upset and disruption created by the recent pandemic, you should be ready to build on that stability by introducing new products and services. To be successful in that endeavor, you’ll need to implement the right digital tools and strategies to improve your operating model.

Developing a better digital transformation strategy is more than just adding a few digital tools to your current CRM. It’s about creating an entire digital ecosystem where all your digital tools work in sync with each other.

A recent report by Cisco will give you some clues of the priorities that other small businesses are focusing on as they move toward digital transformation.

Steps to Prioritize Your Digital Transformation Strategy:

  • Improving operations and service delivery

  • Expanding and growing the market

  • Providing better customer experiences

  • Improving new products and services

  • Ensuring financial viability and predictability

  • Focusing on sales and marketing activities

  • Sourcing talent and retaining it

  • Leveraging a remote workforce

All of these initiatives point to establishing a fully-equipped call center environment that leverages a VoIP phone system and software integrations. It’s important to find the right digital tools for your small business. We recently put together this list to help businesses like yours.

The Impact of Not Adjusting for the Future of Work

To not cave to one of the top digital transformation challenges, think about the future of work. What will be the subsequent impact of not adjusting to it? Not knowing this answer is troubling. However, you’re not alone. The reality is that there’s a major shift toward digitalization in every industry.

According to Cisco, a third of small businesses anticipate that 31%-50% of their businesses will incorporate digital processes. 12% of those businesses will utilize digitalization even more. Small businesses are trending toward digital transformation, and if your company isn’t, you risk lagging behind the competition.

By not adjusting to the future of work, these factors could negatively impact your profitability:

  • You’ll lose revenue.

  • You’ll be delivering a lackluster customer experience compared to your competition.

  • You won’t be able to leverage digital transformation to expand your small business nationally and internationally.

  • Your business will be less agile and adaptable, which could be your demise in the event of a future pandemic.

  • You’ll miss out on some of the best talent.

According to McKinsey, 86% of small businesses strongly agree that “technology is changing the industry.” Digitalization is no longer a nice thing to have, it’s become essential.

The Digital Transformation & the Future of Work

The unpredictability of the pandemic affected every country and their economies. It gave new meaning to the words “economic disruption,” and it’s been devastating in too many ways to count. What the future holds is virtually on everyone’s minds, as it should be.

What does the future of work look like? McKinsey research gives us a few cues as to what we can expect:

  • Some jobs will be phased out and workers will transition to newer, higher-paying careers.

  • Jobs with the highest physical proximity will be the most disrupted (medical, salons, entertainment, schools, building trades, etc.).

  • ECommerce has already grown two to five times faster than before the onset of the pandemic.

  • Jobs in transportation and warehousing will increase due to eCommerce growth.

  • Healthcare occupations will likely rise due to a renewed focus on health and well-being.

  • There will be an increased demand for workers that can create, deploy, and support new technologies.

  • Small businesses will function better by retraining workers and placing a greater emphasis on retention.

  • Businesses will place a greater emphasis on workers’ skills and less emphasis on academic degrees.

  • Small businesses will rely more heavily on remote teams and distributed teams. This allows them to leverage top talent from different geographical locations.

  • Companies will need to institute virtual or remote capabilities in some fashion to ensure resiliency.

At Aircall, we know the stakes of not moving toward digital transformation, and they couldn’t be higher. As it stands, small businesses contribute almost half of the world’s GDP. They also employ about two-thirds of the global workforce (Cisco). There’s no doubt about the vital role that small businesses play within the global economy. Overall, digital transformation is a necessary construct for improving job growth and small business growth, thus enhancing the global economy.

Published on May 17, 2021.

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