Woodrow Wilson once said, “If you want to make enemies, try to change something.” While we aren’t talking politics in this article, the truth remains that change in any form or capacity comes with challenges.
When it comes to the disadvantages of digital transformation, you’ll find that most of them are psychological. We get comfortable with what we know. We doubt that the struggle to progress will be worth it. We get nervous at stumbling blocks. Despite all of this, change can bring positives as long as you persevere.
In the world of manufacturing, one of the biggest changes an enterprise can make is digital transformation. It requires you to restructure and rethink your business approach, and that can be very challenging, not to mention a consumption of time and money.
6 Disadvantages of Digital Transformation
While digital transformation can bring roadblocks like the ones listed below, each one can be overcome. Let’s talk about how.
Who doesn’t fear the unknown? Because digital transformation affects almost every aspect of your business, it can be hard to know where to start.
To keep your transformation on track, you must create a list of specific goals and a plan of action to help you reach them. Before any work begins, do this:
- Name 3-5 specific goals (e.g. prevent equipment failure by adding IIoT devices)
- Create a roadmap to address each goal (e.g. ask an ERP consultant what IIoT devices facilitate predictive maintenance)
- Define technology and resource needs (e.g. connect with your finance department to determine your budget and compare costs)
- Assemble a digital transformation leadership team with members that include someone from each department
Having goals and a plan to meet them will help you to see the benefits of your digital transformation as you go. During the transformation, it’s important to collect actionable data and analyze feedback. This way you can evaluate areas of success and opportunities for improvement.
2. Lack of Buy-In
It can be difficult to engage employees during ERP implementation. However, for a digital transformation to be successful, your team and executives must be behind it. This doesn’t just mean supporting the project with money and resources. Excitement about the project must come from the top if it’s expected to trickle down.
How can you make this happen? It’s important that the project priorities are agreed upon by leadership. To make this a reality, frequent communication is key.
Next, you’ll want to research and analyze what the company needs. What are your biggest pain points? Where is your company losing the most money?
Your team should decide upon anticipated KPIs and goals, too. While people will have their own ideas, at the end of the day, having data to back decisions is the best way to make decisions.
3. Employee Opposition
A huge disadvantage of digital transformation is employee opposition. Upgrading or reconfiguring your current ERP processes can change everything about the workplace, and it can make employees fear becoming obsolete.
Your digital transformation can be as big or as small as needed by your enterprise. Perhaps it will become apparent that a legacy system needs to be retired, and as you reflect on what other changes to processes and systems need to be made, employees will realize how much of their day-to-day will change. This may bring some resistance.
Having a solid plan for organizational change management (OCM) can help minimize this resistance. OCM includes things like actively listening to employee concerns, communicating project updates regularly, and explaining the benefits that the technology will bring to each team member.
4. An IT Skill Deficiency
You may quickly realize that your current IT department isn’t equipped to implement a new ERP system. An error some companies make is assuming that digital transformation is a job for the IT department. However, while IT professionals should oversee the technical side of the project, digital transformation requires input and effort throughout the organization.
Some of the areas IT professionals will need to prioritize include cybersecurity, advanced data analytics, and technical architecture. In order for your IT department to be able to handle these additional duties, you will more than likely need to expand the department. Another option would be to outsource some of your in-house efforts to software consultants or subject matter experts (SMEs).
5. Timing and Budget Inaccuracies
With any project, even the best-laid plans can get a little off track, especially in regard to time and money. This might happen because of scope creep, otherwise known as the changes, additions, or revisions to the original scope of work. Re-work can be both costly and time-consuming.
Poor planning in general is another reason budgets go over their anticipated amount. Plan with precision, overestimating in order to make sure you won’t have to ask for approvals later down the line.
6. Delayed Returns
Unfortunately, results don’t happen overnight. Sometimes, long-term change takes its time, and while it’s frustrating, that is to be expected.
As your team becomes more acquainted with your new technologies like CRM and ERP, you will see greater returns. Training is not an area that can be deprived because your team being comfortable with the technology is imperative for seeing results.
The Disadvantages of Digital Transformation Are Temporary!
Digital transformation will help your organization be more efficient, productive, and competitive. It will allow your team more time for innovation and customer service.
But all change comes with challenges. Knowing what to expect beforehand will allow you to overcome each roadblock. Having the support of a consultant will also help you find success. The experts at Godlan have the knowledge and experience to do this for your enterprise. Contact us today to learn how we can help you grow.