Digital Transformations and Why Businesses Fail to Implement Them Properly

digital transformations

If you’ve never heard the term digital transformations, then you’re in luck.

Today, we’ll discuss why you need digital transformations to automate your repetitive business processes to improve your efficiency, reduce strain on your staff, and avoid letting critical business functions fall through the cracks. And, don’t forget, your failure to deliver high-quality products on time for the right price means customers suffer and, many of them, will take their business to your competitors who did manage to optimize transactions such as those involved in the supply chain to ensure customer satisfaction

You often don’t get a second chance, even if you built a solid reputation. As technology changes, so do customer expectations. Meeting changing customer needs with yesterday’s technology is a recipe for failure. So, staying current, adopting new technologies, and encouraging your employees to use these new technologies is your key to success.

digital transformations
Image courtesy of Enterprisers Project

What are digital transformations?

First, let’s start with a definition to ensure we’re all on the same page. Digital transformations involve:

the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.

Businesses large and small require digital transformations to automate repetitive tasks if the firm wants to stay competitive in an increasingly digital world. As such, adopting any kind of digital solution is usually a good thing because it means you’re slowly heading towards a more efficient and cost-effective workflow.

Sadly, many business owners tend to misunderstand digital transformations, their value, how to adopt them effectively, and what these transformations really mean for their company. So in this post, we’ll discuss why companies fail in their efforts and what you can do to ensure your company is ready for a digital makeover.

The value of digital transformations

You don’t have to look much further than the upheaval caused by the global pandemic to see the value of automating processes to serve customers better. Supply chains broke down under the strain for products like toilet paper and hand sanitizer, causing massive shortages. Firms with the right technology, like Amazon, bounced back from these challenges quickly to keep customers happy while firms using legacy systems took months to deliver on customer expectations.

Technologies such as IoT (the internet of things) accelerated the pace of transformation to a digital solution. For instance, utility companies now monitor the performance of their equipment remotely using IoT devices. This technology means less expense for employees to monitor the devices (think of the famous country song about a “lineman for the county”). Remote monitoring also means companies don’t suffer nearly as many outages due to equipment failures (which makes customers happy), reduces the expense associated with repairing a broken piece of equipment (which, with proper monitoring, only required an adjustment), and reduces the liability associated with equipment failure (think the massive lawsuit against a California utility when an equipment failure resulted in massive forest fires, damage, and even deaths.

Now that you’re convinced (hopefully) of the value of digital transformation, let’s move on to discuss how to implement new technologies.

Implementing digital transformation

Digital transformations aren’t really about technology

One of the biggest things to understand when it comes to digital transformations is that it’s less about the technology and more about how you use it and how it’s adopted by your team.

Take document scanning as an example. This guide helps when it comes to understanding document scanning and why businesses should scan documents to the cloud or external storage to ensure the security of the documents and avoid costly loss when paper documents are accidentally destroyed, such as in a fire. You’ll notice that the guide goes into many different technical aspects of document scanning, such as the features of their software and how to prepare those documents for scanning.

Recognizing employee concerns

However, applying these technologies is more concerning than the technology itself. Recognize that transformations are a cultural shift for businesses and that implementing these new technologies takes time and planning. Maybe an example will help you understand how much is at stake in ensuring efficient implementation of new technology.

I once visited a company that recently adopted new technology to improve the efficiency of its supply chain. As I waited to speak to the executive, I observed employees taking orders with paper forms and I asked why they weren’t entering information into the computers they had pushed back on their desks to give them space for filling out paper forms. They told me they didn’t trust the computer system and only entered information into the computer once they had a paper order. The paper then made its way to the warehouse for fulfillment along with the computerized order. Not only did this redundancy add cost as employees now spent more time taking an order, but confusion when the warehouse received both a paper order and one from the computerized system.

Asking your team to suddenly stop using paper-based solutions and relaying that same commitment to your customers is far more work than just implementing paperless solutions. It fundamentally changes the way your staff works, which can be a huge problem if they’re accustomed to their old workflow and don’t trust the new system.

As you see from my example, failure to effectively implement the new technology ends up costing you a lot more money. In some cases, you may even lose customers and clients due to your inefficiencies.

Reducing employee resistance

The first step in reducing employee resistance is to recognize this potential and planning your implementation thoroughly. Here are some steps to consider before and during implementation:

  1. Involve affected employees in the process early — let them voice concerns they have and address those concerns
  2. Identify key employees to serve as champions for the innovation
  3. Train employees on the new system well before implementation
  4. Consider using both systems side by side for a short period of time to convince everyone that the new system works accurately

Understanding employee concerns regarding automation

One of the keys to growing your business is to rely on automation. Automating processes means that you have a more cost-effective solution to handle certain issues. This makes it much cheaper to run your business and also improves productivity to a certain degree. Unfortunately, this also creates employee concerns because they’re worried about being replaced by a machine.

If digital transformations are successful, it sometimes means that you’ll reduce the number of jobs you offer. As the transformation takes hold, you must evaluate which employees to keep and which to eliminate. This involves heartbreak for a small business where employees might feel like family after decades of working for the company. For instance, I once worked with a client who crafted stained glass. Employees used ancient patterns to cut the glass just as they had for decades. The client was forced to face the reality that they could either modernize or close since costs were out of control and the firm bleed red ink. We suggested a new CAD/CAM system as well as other innovative technologies, causing agony for the client who knew his existing workforce didn’t have the skills to master these new technologies and he would have to fire them.

Conclusion

As you can see, digital transformations completely change the way you run your business. This makes it extremely important for you to understand the effect transformation has on your staff and your customers. Don’t just consider the technological side of things–consider the other effects it has too.

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