A few years ago, research on enterprise digital transformation published by Deloitte revealed the striking statistics—70% of transformation efforts fail. Employee pushback, gaps in digital skills, executive reliance on legacy systems, or a lack of a holistic digital strategy—all of these factors are likely to make the undesired corrections to the digital transformation enterprise agenda.
Enterprise transformation makes a huge part of our expertise here, at Trinetix. As practitioners, we can confirm that no transformation comes without a challenge. But solutions to these challenges often lie in the plane of user experience, as the impact of each transformation is measured by the value it brings to end users.
In this blog post, we’ll look at five common challenges of digital transformation for enterprise and discover the ways to approach them using experience design best practices.
What is enterprise transformation?
Enterprise transformation refers to a comprehensive, strategic change in an organization's operations, structure, and culture to improve performance, adapt to market changes, and achieve long-term goals. This is usually a major shift that involves integrating new technologies, processes, and business models to enhance efficiency, foster innovation, and boost competitiveness.
Enterprise transformation can encompass various aspects such as digital transformation and enterprise architecture, organizational restructuring, process optimization, and cultural shifts, aiming to align the organization with its strategic vision and market demands.
Organizational restructuring
Organizational restructuring entails revising the company’s hierarchy, roles, and responsibilities to improve efficiency and better align with strategic goals. This enterprise digital transformation type might include flattening the organizational structure, redefining job roles, and enhancing communication channels. Effective restructuring can lead to increased agility, improved collaboration, and a more responsive organizational culture.
Process optimization
Process optimization focuses on refining and streamlining business processes to enhance productivity and reduce costs. This can involve adopting lean methodologies, automating repetitive tasks, and improving workflow management. By optimizing processes, organizations can eliminate inefficiencies, improve service delivery, and achieve faster time-to-market for their products and services.
Data transformation
Data transformation focuses on converting and optimizing the organization's data to drive better decision-making and operational efficiency. This includes data migration, cleansing, integration, and the implementation of advanced analytics tools to extract valuable insights. By optimizing their data structures, businesses can gain a deeper understanding of their operations, improve forecasting and planning, and uncover new opportunities for growth and innovation.
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Solution transformation
Solution transformation is a type of an enterprise digital transformation that involves rethinking and redesigning the technological solutions and systems that an organization uses. This process includes migrating to cloud-based platforms, modernizing legacy systems, and integrating new software solutions to improve efficiency and support business objectives. By updating their technology stack, organizations can enhance productivity, reduce costs, and better meet the needs of their customers and stakeholders.
Enterprise digital transformation: what is special about it?
Digital transformation takes time. This is especially true for enterprises, where each decision needs to go through a long corridor of validations and approvals from C-levels, line managers, and stakeholders.
The scale of enterprise companies often runs counter to the speed of today’s dynamic business landscape and makes digital transformation initiatives unsuccessful. Trying to keep up with the pace of the market, business executives are tempted by the desire to immediately bring innovation and adopt the changes within a reasonable time.
At the same time, overlooking fundamental user experience research and neglecting feedback-gathering culture may result in enterprise transformation bringing no expected results. So, the principal challenge of enterprise digital transformation is aligning organizations’ complex structures with the desire to accelerate innovation adoption. Let’s uncover what it means in detail.
Design challenges in enterprise transformation
Years of digital partnerships allowed us to explore the barriers enterprises face on their way to digital enterprise transformation and define the key challenges that prevent them from getting desired results.
- Siloed organizational structures
- Internal reliance on legacy systems and workflows
- Lack of innovation-first company culture
- An inconsistent approach to growth and innovation
- Financial constraints slowing down the transformation process
Let’s break them down into meaningful details and find solutions that lay in the plain of transformation design.
Siloed organizational structures
With enterprises having complex organizational structures, digital transformation is often characterized by biases and inconsistency of top managers’ and stakeholders’ opinions.
Our experience shows that enterprise executives tend to focus on speeding up the transformation processes to gain a competitive edge. As a result, they skip gathering requirements from different business units and neglect to do UX and market research, considering them a waste of time in the long run.
In this case, the entire digital enterprise transformation process is built on narrow business objectives or needs of a particular business unit and, as a result, brings no measurable outcomes. Having an incomplete picture of a company's operations becomes a serious roadblock to digital transformation’s success.
Addressing the challenge
In reality, collaboration is the main fuel of enterprise digital transformation, as it helps to break down silos and achieve consensus on the next steps. Leveraging a consistent approach to solution design and harnessing an open feedback-gathering culture can help enterprises subordinate digital transformation to their specific business challenges and focus on impact rather than chase innovation per se.
Experience design best practices allow enterprises to pay attention to a company's genuine needs and foresee the results of the changes. Design workshops, collective brainstorms, observations, and feedback sessions uncover deeper insights into users' behavior, thus helping C-suites look at the digital enterprise transformation from a different angle.
Internal reliance on legacy systems and workflows
Sometimes, enterprise digital transformation is blocked on the technology side, and that’s completely justified. Developing a universal solution that would be used by a huge group of people on a regular basis is not just a time-consuming but not-so-easily feasible endeavor. And of course, there are a number of constraints to take into account.
Why should we invest millions of dollars into destroying something that luckily keeps on working?”– this is the not lacking humor question we occasionally hear from enterprises that remain reluctant to change.
This is another concern dictated by the failures organizations might have experienced approaching enterprise-scale changes in the past. According to the ABBYY Digital Transformation Survey, 36% of senior executives consider replacing legacy systems to be the main challenge in digital enterprise transformation.
Addressing the challenge
Often, being bound to legacy software systems is dictated by the fear that a transformation will make employees learn to use new cumbersome systems, resulting in operational slowdowns and digital friction.
Design helps to reduce the complexity of innovations and boost the enterprise's adoption of new tools and technologies. Implementing intuitive user flows and enabling a seamless connection between multiple components of an enterprise system allows to create a holistic solution and helps organizations transform natively and smoothly.
Lack of innovation-first company culture
Employee pushback is often called a major barrier to enterprise digital transformation. A report by KPMG revealed that 19% of employees lack the technical skills required to implement or fully take advantage of new enterprise systems.
But what is important to recognize is that resistance to changes often comes from the top. According to the above-mentioned survey, 23% of global respondents experience difficulties getting buy-in from their senior management.
At the same time, by harnessing a proactive digital-first culture and seeding innovation into an organization's DNA, enterprises are bound to achieve better enterprise transformation results. By developing employee digital dexterity and understanding the real value of the transformation, companies can embed innovation and digital literacy into their corporate culture, thus unlocking new growth opportunities and creating a long-term competitive advantage.
Addressing the challenge
Organizations often remain hesitant about innovation when their understanding of its value is incomplete. Design helps humanize enterprise transformation by prioritizing the end users of digital solutions.
Comprehensive user experience underlies modern digital workplaces and allows companies to remain productive throughout the enterprise digital transformation processes. Once recognizing the difference brought by value-centered innovation, enterprises embrace changes as an irreplaceable part of a company's growth strategy to preserve agility and open-mindedness and stay ahead of the competition.
An inconsistent approach to growth and innovation
Getting started with enterprise digital transformation, organizations are often challenged by the need to create a sustainable system, capable of embracing future changes in a native and consistent way. In other words, they need not just to give the transformation a go but make it scalable at an enterprise level.
Let’s say a company uses a corporate space for online collaboration. When it comes to increasing process complexity, launching a new product line, or onboarding more employees, it’s always about the time needed to put things on track and make the system functional. At the same time, spending too much time may cost enterprises part of their revenues and result in reputational losses.
Addressing the challenge
Investing in a scalable design system can help enterprises natively adopt innovation and become future-ready. Using a set of reusable components helps companies grow the functionality of complex systems and adjust workflows to help teams remain productive throughout the digital transformation enterprise process.
A scalable design system allows to speed up the growth and adoption of new features that make part of digital solutions by providing end users with a consistent and intuitive experience.
Such a human-centered approach to business scaling pays off and prepares organizations for whatever changes, integrations, and curves the future holds.
Financial constraints questioning the transformation
Digital enterprise transformation is also a question of money. The stakes here become even higher when it comes to the transformation happening at scale. An average enterprise digital transformation requires a company to spend at least $27.5 million of its annual budget. This fact significantly slows down innovation adoption and complicates the transformation process.
As a rule, when there is a choice between providing value to the external consumer and introducing the changes that target employees, companies tend to choose the former—believing that developing new products and features will bring them higher ROI and help better address the needs of their target audience. In reality, they may simply approach enterprise digital transformation in the wrong way.
Addressing the challenge
Digital transformation design affects the financial aspects of enterprise digital initiatives in a few different ways.
- Human-centered, value-driven experiences streamline enterprise processes and workflows, thus boosting operational efficiency and increasing revenues.
- Making end users the center of enterprise digital transformation allows businesses to get better results and improves employee satisfaction. As a result, workers feel more engaged and remain productive doing their jobs.
- Once investing in developing a holistic digital transformation enterprise strategy, organizations contribute to creating a sustainable business future, can avoid situational budget spending, and become 360-degree ready for scaling.
How design enables the success of enterprise digital transformation
Design prevents costly mistakes and helps ensure that future transformational changes are aligned with what employees feel on the ground floor. Incorporating user feedback into the digital enterprise transformation process improves adoption of changes.
Design is a universal tool that provides end-to-end support of digital initiatives at an enterprise scale. In fact, it gives substance to any change that happens within an organization and underlies a company's understanding of digital enterprise transformation.
From helping to uncover deeper process dependencies to creating meaningful user experiences that revolutionize enterprise operations, design brings success to each level of transformation.
Examples of enterprise transformation
Transformations are a natural part of enterprise evolution, enabling companies to adapt, innovate, and thrive in dynamic markets. Many global companies have successfully navigated these changes, leveraging transformation to enhance their operations, technology, and culture. Below, we provide examples of how some of these companies have embarked on their enterprise digital transformation journeys, demonstrating the diverse approaches and impressive outcomes they have achieved.
General Electric: digital transformation
General Electric (GE) undertook a comprehensive enterprise digital transformation to evolve from a traditional industrial company to a digital industrial leader.
Vision and strategy
GE aimed to leverage the Industrial Internet of Things (IIoT) and advanced analytics to enhance operational efficiency and innovation.
Technology integration
The company developed Predix, an industrial IoT platform, to collect and analyze data from industrial machines, enabling predictive maintenance and optimization.
Cultural shift
GE invested in training and developing digital skills among its workforce, fostering a culture of continuous learning and innovation.
Outcome
This enterprise IT transformation enabled the company to offer new digital services and solutions, driving growth and enhancing its competitive edge in the industrial sector.
Netflix: business model transformation
Netflix transformed its business model from a DVD rental service to a global streaming platform, revolutionizing the entertainment industry.
Vision and strategy
Netflix envisioned becoming a leading content streaming service, focusing on original content creation and global expansion.
Process optimization
The company optimized its content delivery processes, leveraging advanced algorithms to recommend personalized content to users.
Technology integration
Netflix invested heavily in cloud infrastructure, big data analytics, and artificial intelligence to enhance user experience and operational efficiency.
Outcome
Business model enterprise transformation enabled the company to disrupt the traditional entertainment industry, achieve significant subscriber growth, and become a dominant player in the streaming market.
Microsoft: cultural and business transformation
Under CEO Satya Nadella's leadership, Microsoft underwent a major digital enterprise transformation, shifting its focus from traditional software products to cloud computing and AI.
Vision and strategy
Microsoft aimed to empower every person and organization on the planet to achieve more through digital transformation.
Cultural shift
Nadella emphasized a growth mindset, collaboration, and customer-centricity, transforming the company's culture.
Technology integration
The company invested in cloud computing (Azure), artificial intelligence, and subscription-based services like Office 365.
Outcome
This cultural and business enterprise transformation led to the company’s renewed growth, increased market share in the cloud computing sector, and a significant rise in its stock value.
Walmart: Omni-channel retail transformation
Walmart transformed its operations to create a seamless shopping experience across physical stores and online platforms.
Vision and strategy
Walmart aimed to become a leader in omni-channel retailing, integrating its physical and digital assets.
Process optimization
The company optimized its supply chain and inventory management processes to support both in-store and online sales.
Technology integration
Walmart invested in e-commerce platforms, mobile apps, and data analytics to enhance customer experience and operational efficiency.
Outcome
Walmart's digital enterprise transformation improved customer convenience, increased online sales, and strengthened its position against e-commerce competitors like Amazon.
These examples illustrate how enterprises can successfully transform by adopting new technologies, optimizing processes, shifting cultural mindsets, and aligning their strategies with long-term goals.
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How to start enterprise transformation?
Moving on from principles and success stories to understanding how organizations can get measurable value from enterprise transformation, it's crucial to understand how to approach transformation in practice.
Enterprise transformation roadmap
In essence, enterprise transformation is like any other digital project, requiring a clear roadmap to guide the process and ensure success. Below, we outline the key steps in developing an effective digital transformation for enterprise roadmap.
Forming a strategic vision
Defining a clear vision and aligning it with the overall business strategy is the first step in enterprise transformation. This involves articulating the long-term goals and objectives of the transformation, understanding the desired end state, and ensuring these goals harmonize with the organization's strategic direction. Prioritizing initiatives that support these strategic goals helps maintain focus and drive meaningful progress.
Assessing current enterprise state
Evaluating the current state of the organization in terms of operations, processes, technology, and culture is essential. This assessment identifies strengths, weaknesses, opportunities, and threats (SWOT analysis) and allows to evaluate the overall corporate climate . Benchmarking the organization's performance against industry standards and best practices helps pinpoint gaps and areas for improvement, providing a solid foundation for planning the transformation.
Setting transformation priorities
Establishing clear priorities and specific, measurable objectives for the transformation is crucial. This includes defining key performance indicators (KPIs) to track progress. The digital transformation for enterprise should be broken down into manageable phases, each with specific milestones and deliverables. This phased approach helps manage complexity and ensures steady progress toward the overall vision.
Implementing changes
Selecting and integrating appropriate data, technology, infrastructure or other changes is a critical step of the transformation. This involves evaluating and choosing solutions for automation, data analytics, user experience enhancements, and more. Creating a detailed implementation plan that includes timelines, resources, and risk management strategies ensures that new solutions are effectively incorporated into the organization's operations.
Embracing change management and cultural transformation
Engaging key stakeholders, including employees, customers, and partners, is vital for gaining support and minimizing resistance. Effective communication and involvement of stakeholders throughout the process foster a sense of ownership and commitment.
Developing training programs equips employees with the necessary skills and knowledge to adapt to new processes and technologies. Promoting a culture of innovation, encouraging creativity, experimentation, and risk-taking helps the organization stay competitive in the market. Developing and empowering leaders who can drive and sustain the digital transformation enterprise efforts is also important.
Monitoring progress
Regularly monitoring the progress of enterprise digital transformation initiatives against defined KPIs and milestones is necessary to track performance. Using dashboards and reporting tools to provide transparent and consistent updates ensures all stakeholders are informed about progress, challenges, and successes.
Assessing the outcomes of the transformation initiatives helps determine their impact on the organization's goals and make informed decisions for future adjustments. Establishing a culture of continuous improvement, where processes are regularly reviewed and optimized based on feedback and performance data, helps sustain the transformation's benefits over time.
Wrapping up
Just like any future-forward business change, enterprise transformation has its own challenges to address. But operationalizing at scale, you always need to think proactively and have a broader view of your organization’s landscape.
For years of digital partnerships, we developed a number of successful digital enterprise transformation solutions. None of them, however, would be possible without a user-centered design approach. If you are up for a strategic change, let’s chat about sharing the responsibility with a team of digital enterprise transformation practitioners and see what we can achieve together!
