Why Organisations Struggle to Evolve: Key Challenges to Address

1.0 Introduction

Digital Transformation is both a goal and a journey for modern organisations, promising increased efficiency, better decision-making, and enhanced customer experiences. Yet, despite its potential, many organisations struggle to achieve or benefit from it. What makes Digital Transformation so challenging?

This article examines the key barriers, from the overwhelming abundance of technology options to the cultural and operational hurdles faced by organisations of all sizes.

2.0 Why Do Organisations Struggle to Evolve?

Organisations face a many Digital Transformation barriers that hinder their ability to successfully evolve. These challenges often stem from technology saturation, internal resistance, and operational hurdles. Below are some of the most common issues:

• Lack of Knowledge and Awareness
• Too Much Choice
• High Expectations
• Impact on Operations and Stakeholders
• The “If It’s Not Broke” Mentality
• Business scale
  • Large Businesses
  • Small and Medium-Sized Businesses
• Legacy Systems and Data
• Reliance on “Champions”
• Politics
• General Business Performance

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2.1 Lack of Knowledge and Awareness

Digital Transformation is often discussed as a buzzword, yet there is a surprising lack of formal education or training on the topic. It is not commonly taught in schools, colleges, or universities, nor are there widely available courses or comprehensive online resources dedicated to its best practices and methodologies.

This gap in knowledge leaves many organisations struggling to navigate their Digital Transformation journey. Making the right decisions and implementing the correct technologies requires expertise – not just in technology, but also in understanding its impact on organisational culture, processes, systems, and data. Furthermore, if an organisation wants Digital Transformation best practices knowledge generally this is consulted from software vendors – there is an inherit bias here as vendors are more likely to focus and provide knowledge on their own product features rather than best practices and opportunities from a highest-level ‘Enterprise Solution Architecture’ – meaning, how people, processes, and systems all work together to drive the organisation forwards.

This is where organisations like EKODA aim to bridge the gap, raising awareness and providing support to businesses embarking on their Digital Transformation journey. By offering guidance and expertise, EKODA helps organisations build the knowledge they need to make informed decisions and achieve successful outcomes.

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2.2 Too Much Choice

When it comes to Operational Digital Transformation, the challenge isn’t a lack of available technology; in fact, it’s the opposite. The software and systems markets are saturated with countless options, each promising features that most organisations could never fully utilise. Choosing the right softwares and systems, integrating and implementing them correctly is what gives a business a competitive edge over it’s competitors – it’s important.

However, adoption is hindered by various barriers: high licensing fees, steep learning curves, significant implementation costs, and extensive resource demands. As a result, selecting the right tool becomes a daunting task, fraught with uncertainty and risk, with the added concern that a poor choice could be costly and difficult to reverse.

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2.3 High Expectations

Organisations often approach software vendors with high expectations, drawn in by impressive features, flashy user-interfaces, and idealised demonstrations of perfectly structured data. There can be a lack of transparency as the vendors bias on selling their own systems and softwares.

Implementing all these features typically leads to steep licensing costs due to modular paywalls, and additionally, data migration often requires extensive cleansing and transformation, adding hidden costs and creating significant adoption barriers. As the costs add up, Digital Transformation slows down.

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2.4 Impact on Operations and Stakeholders

Digital Transformation affects more than just technology implementation; it requires a comprehensive organisational shift, impacting 3 key areas:

• Culture: Resistance to change, training challenges, and disagreements among stakeholders often create roadblocks.
• Processes: Integrating new software into an existing ecosystem can disrupt or require the overhaul of current processes, which is often complex and time-consuming.
• Data: Transforming, converting, migrating, and integrating data is a significant hurdle requiring careful planning and execution.

“There’s never a good time”

Active Digital Transformation projects can impact efficiency or productivity of an organisation; there may need to be some system downtime, staff may need to take time out from their usual work to attend training for new or improved systems and processes, there may be periods of temporary increased spending affecting the company bottom-line. Large-scale implementations can take months or even years, requiring either dedicated internal resources or contracted external expertise.

Digital Transformation is an investment. It should have a Return On Investment (ROI) and allow the business to grow in the future.

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2.5 The “If It’s Not Broke” Mentality

Many organisations continue to rely on outdated methods, such as shared drives, spreadsheets, unsupported legacy systems, or even paper-based processes. While newer technologies offer clear benefits, the mindset of “If it’s not broke, don’t fix it” often prevails. Legacy systems that have functioned well for decades are expected to continue serving the organisation.

Justifying investment in new technologies that do not directly impact sales, production, or provide a quick return on investment is often difficult. This risk-averse mentality hampers progress, even when Digital Transformation could offer long-term gains and means that action is only ever taken when it is too late.

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2.6 Business scale

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2.7 Legacy Systems and Data

Legacy systems and data often act as a “ball and chain,” dragging down an organisation’s Digital Transformation journey. While new systems promise advanced features and improved efficiency, legacy systems can pose significant barriers, especially when legacy data is incompatible, unstructured, or requires costly cleansing and transformation. Organisations face limited options, each with its own risks and costs:

• Do Nothing: Continue using legacy systems until they stop working. This is a high-risk strategy, as competitors embracing Digital Transformation will gain a competitive edge. The business remains inefficient, with everyone aware that change is needed but perpetually delayed.
• Adopt a New System with Selective Data Use: Begin using a new system while recreating or importing legacy data on an as-needed basis. Although feasible, this approach limits the benefits of the new system and burdens users with additional manual work. Over time, inefficiencies can escalate, potentially costing more than a bulk migration. Additionally, the organisation may incur dual costs by running both legacy and new systems in parallel.
• Bulk Migrate Latest Data Only: Migrate only the most recent or relevant data into the new system. This balances cost and effort in the short term but risks losing valuable historical insights unless legacy systems remain accessible.
• Bulk Migrate All Data: Migrate all legacy data into the new system, ensuring full continuity. While this is the most comprehensive solution, it is also the most expensive and resource-intensive in the short term.

Each approach comes with trade-offs, and the chosen strategy must align with the organisation’s goals, budget, and capacity for change. Mismanaging this transition can undermine the benefits of Digital Transformation and leave the organisation struggling to realise its full potential.

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2.8 Reliance on “Champions”

Digital Transformation often hinges on key individuals, or ‘Champions’, to drive progress. When these individuals leave, they often take critical knowledge of systems and transformation efforts with them. Successors face inefficiencies as they get up to speed, potentially causing delays and setbacks. Furthermore, new leaders may have different approaches or priorities, which, while potentially valid, can shift the transformation’s direction, leading to additional costs and disruptions for the business

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2.9 Politics

A successful business thrives on diverse opinions, experiences, and skillsets working cohesively. However, Digital Transformation often sparks disagreements over system choices and changes to working practices. Process and system ‘owners’ may resist changes, leveraging their authority to protect their own domains. This resistance creates a siloed environment, where teams or departments prioritise their own methods and systems over the broader organisational vision. This division undermines collaboration and hinders the unified progress necessary for effective transformation.

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2.10 General Business Performance

Digital Transformation requires funding and resources, making it an easy target for cuts during financial downturns. Businesses often shift focus to immediate revenue-generating activities like sales and product development, sidelining long-term initiatives. This short-term focus can stall progress, leading to inefficiencies and higher costs when attempting to restart transformation efforts later.

3.0 Conclusion

Digital Transformation is inherently complex, demanding more than simply adopting new technology. It requires a fundamental shift in culture, processes, systems, and mindsets. Organisations must navigate overwhelming choices, resistance to change, and financial constraints. While large businesses grapple with bureaucratic slowdowns, smaller organisations face the challenges of limited resources.

Despite these obstacles, Digital Transformation remains essential for long-term success. By recognising and addressing these barriers, organisations can take informed, strategic steps to unlock the potential of technology, enhance efficiency, and secure a competitive edge in an increasingly digital world.