Digital transformation can be tough, but being aware of the challenges is a necessary first step
When I’m speaking with CEOs and mid-market business owners a number of common themes emerge about digital transformation.
Everything from having to grow around “patchwork IT” to limited budgets for digital development are causes for concern. Here are five of the most significant challenges Australian mid-market companies face when it comes to digital transformation, and a few words on how to overcome them.
- Lower range of supplier and partner options. Many leading software vendors and consultancies focus on enterprise clients, with bigger budgets and longer procurement cycles. They are often deaf to mid-market customers seeking answers and therefore getting the best suppliers rests more on the buyer.
- IT landscape complexity. Mid-market companies, though smaller than enterprises, often have similar supply chain, customer and HR considerations to take care of. This is especially so with factors like pricing, funding, legislation, and compliance. But they have limited options and some can have risky legacy platforms that don’t integrate well or deliver the outcomes.
- In-house skills and innovation capability. As mid-market companies generally don’t have the budget for top-flight CIO salaries – or provide the same high-profile projects for leading C-level IT executives to put on their resume – they cannot always attract the best talent. Attracting good transformative and digital resources is always a challenge and within mid-market companies the skill levels can be variable, or not modern.
- Resistance to change. If the mid-market company is a long-running “family owned” business, there may be resistance to change or trying something new. If the founders are set in their ways the business often doesn’t react to market competition pressures until it’s too late.
- Digital transformation not seen as ‘hot enough’. For many mid-market companies, their top-three issues centre around legislation and compliance; the HR landscape; and existential risks which are being caused by disruption and competition in their market. Digital transformation is rarely seen as the answer to these, but this is starting to change.
Getting digital transformation into gear
Amid the challenges, mid-market business leaders have many avenues to set a clear course to transformation and ultimately innovation. To avoid a dearth of innovation culture, which in turn challenges digital transformation investments and activities, start by working at the strategic level.
Ensure the CEO, executive team and board are across both the opportunities (strategic through existential) that digital transformation can provide, and the risk landscape. And beware of the many snake-oilers out there!
Do the little things to get going and don’t wait for a killer all-in strategy, otherwise you’ll never get there. This approach will help you be agile, as the landscape and technology will change as you progress. Be ready to change tack, providers, technologies or strategies if you need to.
Embrace innovation and allow “failure” to happen. If something doesn’t work as expected, call it out and learn from it fast. Think “out and up”, not “down”. This means focusing on growth, revenue, new markets and services, rather than cost-out, cheaper people, off-shoring and battening down the hatches.
Anthony Woodward is founder and Chief Executive Officer of Accelera