Six Digitisation Challenges and How to Overcome Them

PwC research has found that COVID-19 has fast-tracked the shift towards digital-first in Australia almost overnight. After all, employers didn't really have a choice, given the necessary increase in remote work during the pandemic. In fact, according to McKinsey, digitisation – i.e. converting analogue information into a digital format – progressed by several years in just a few months! 

Not surprisingly perhaps, the Australian Government is also focusing heavily on digitisation, meaning it is investing an extra $1.2 billion into the country’s digital transformation as part of its 2021 Digital Economy Strategy. Going digital is expected to benefit the Australian economy by as much as $315 billion over the next decade and potentially up to a quarter of a million new jobs by 2025.

Great news, you say? Absolutely! But prominent cyberattacks like the Optus security breach in September 2022 involving unauthorised access to current and former customers’ personal data may also have you wondering about the risks of digitisation.

Although a digital-first approach is expected to improve productivity and business continuity, and offer more opportunities to scale up quickly and tap into new markets, going digital is not without its challenges. Let’s take a look at the top six digitisation challenges companies face, and how to overcome them.

Top 6 digitisation challenges

1)             Lack of expertise

Digitisation strategies can be complex. Many organisations lack the necessary in-house expertise to create and successfully implement their digital-first strategies. Needless to say, such a skill gap can lead to issues and delays when switching systems and processes from analogue to digital.

The obvious solution is to hire external help. Invest in a third-party expert who can help you draw up a customised digital transformation strategy and, ideally, train your staff in the relevant processes.

The main areas in which companies may need external help are cybersecurity, cloud computing, user experience design, mobile app development and machine learning. Having an expert come in and advise you and your workforce in these areas will give you a solid foundation and a great stepping stone to build on going forward.

2)             Lack of a strategy

Managing a digital transformation requires an organised approach, but it can be difficult to know where to start. A lack of a proper strategy can have a negative impact on your company’s digital transformation and slow down your efforts. In fact, a lack of a sound strategy is one of the main reasons that causes companies to fail when trying to go digital.

Digitisation planning should come in under your organisational change management strategy. If it isn’t currently included there, add it as soon as possible. Outline your goals, desired milestones and a timeline to make sure you and your staff are all on the same page.

An effective change management strategy is vital for success and makes it more likely that a company will achieve its digital transformation objectives. It will also support strong relationships with your customers and stakeholders because they can see that you’re preparing for the future and have actionable steps in place for when problems arise.

 3)             Change-resistant mindset

Change is often met with resistance within organisations – and digitisation is no exception. This may be the reason why 87 per cent of Australian executives say going digital is a top priority, but only 40 per cent of companies have actually implemented digital initiatives. A Gartner report notes that, without a shared vision across the whole organisation, any digital transformation efforts are set to fail.

What this means is bringing your workforce on board is crucial. Communicate any change early and in detail, and offer training sessions to bring your managers and staff up to speed on any transformations you plan to implement. This will increase support among your workers and also boost your employer brand.

4)             Constantly changing customer needs

Customer needs can change and evolve quite rapidly. It pays to keep up to date on the latest processes and technologies and keep learning about new technologies in your customers’ industries to enhance their experience with your products and services.

In addition, customer buy-in is essential. To prevent slow adoption of new technologies among your customer base, keep their interests and needs at the centre of your efforts. Try to stay flexible and agile when responding to evolving customer requirements. After all, you want to improve their lives with your solutions.

5)             Security concerns

With prominent cyberattacks, like the one on Optus, on the rise, concerns about cybersecurity are no surprise. You don’t want to see any attacks on your digital systems and be faced with stolen customer data or trade secrets – especially with more and more employees working remotely at least some of the time, as reported by Indeed Hiring Lab’s Callam Pickering. The good news is that you can take measures to increase your cybersecurity and protect your data.

You may want to consult with a cybersecurity expert and put in place strong systems to eliminate any vulnerabilities. A sound risk management policy and dedicated employee training programs can also help reduce security risks. The Australian Government is even incentivising digital adoption in the form of a tax deduction for investments in cybersecurity systems, for example.

6)    Budget constraints

Digital transformations are rarely cheap. You may want to create a detailed roadmap for your current and planned digitisation investments. One thing is clear, though: there’s no way around spending on digitalisation efforts. In fact, a Gartner CIO Survey found that 54 per cent of Australian and New Zealand businesses increased their budgets for digital innovation during the COVID-19 period, and this is expected to increase even more going forward.

To avoid scope creep and unexpected expenses, make a detailed plan with your long-term goals and expected ROI. This will help you set a realistic budget and stick to it.

The digital future in Australia

The Department of Foreign Affairs and Trade has made it clear that to succeed in an increasingly online world means Australian businesses need to adopt digital technologies at a greater rate than ever before. In fact, the Digital Technology Taskforce, established by the Australian Government in 2019, has set itself the goal of making Australia a leading digital economy by 2030 and supports large and small businesses on the way there.

Being put off by the challenges that digitisation and digitalisation bring with them is, therefore, not an option. Australian business leaders must investigate and invest in digital-first approaches and transform their organisations to remain competitive in an increasingly connected and digitally enabled world. Hopefully, our tips can help you on your quest to build, or grow, a digital-first business.