/ Insights / Digital Transformation How-To Guide #2: Challenges Insights Digital Transformation How-To Guide #2: Challenges October 4, 2016 Concurrency, Inc.Author’s note: This post is the second in Concurrency’s “How-To Guide” series about Digital Transformation. Click here to read the first post, “What Is Digital Transformation?”Digital Transformation is one of the largest and most complex challenges facing companies today. A company’s transformation from non-Digital/partially Digital to fully Digital is a journey that will affect all aspects of an organization. This journey will not only alter your technology systems, platforms and applications but also your business strategy. That’s because technology changes alone will not realize a Digital Transformation. Real transformation requires business leaders at all levels in the company to be onboard with the journey and what it means to all segments of the business. Digital Transformation will impact how you engage and interact with your partners, how you collaborate and sell to your customers, and how you recruit, train and manage your employees.ONGOING EVOLUTIONOne of the major challenges of Digital Transformation is the fact that it requires perpetual adaptation.Compared to what ERP (Enterprise Resource Planning) did for companies 20 years ago, Digital Transformation will have a similar reach—but no end state. With ERP, most companies knew that its implementation had a beginning, middle and end. There was an adoption–you brought in the applications, stabilized them and operated them for a long period of time. In most instances few new changes were introduced after the core functionality was deployed. Even if the deployment was five years, there was always an end state.This is different. There is no end state yet identified in a Digital Transformation. Most experts predict that over the next decade, companies will be in perpetual transformation adopting new technologies, changing business models and defining new products and offerings. The speed at which technology is evolving is the main driver of this perpetual change, but it is not the only driver. As companies switch from human labor model to the digital labor model, entirely new challenges will affect the global economy, and these changes will have an even larger impact on one’s Digital Transformation. This circular dynamic will create waves of Digital Transformations with each wave accelerating.If you think about the technologies that companies have had to embrace in the last five years and the speed in which they have impacted the marketplace, you’ll have a small glimpse of the perpetually changing environment that is coming. Mobile, social, cloud, big data, most recently IoT are just a few examples of technologies that have changed the way organizations do business. These technologies have impacted not only IT but business strategies and core business models. Digital Transformation is not just a single occurrence; it is an ongoing evaluation, testing, implementation, integration and refinement of new technologies and the business model changes they enable.THE DATA REVOLUTIONIt’s no surprise that Digital Transformation is poised to be perpetually evolving, since it’s not just a single disruptive technology that is causing this. It’s an ongoing wave of new technologies, new bundles of technologies, new capabilities and the unprecedented pace at which these technologies are coming at us.If you review one area as an example, we can see why this is true. Data has emerged as the new business currency in the past five years. We are generating, combining, recreating and consuming data at never before seen levels. Data has gone from 1) traditional transactional information that for most purposes lived in data centers, to 2) mixed structured and unstructured warehouses where business transactions, documents and web content is combined, to 3) internal and third-party data combinations, to 4) extremely large data sets combining information from sensor, Bots and internet traffic. This progression has taken place at most companies in the past five years. When you add in Machine Learning, Predictive Analytics and AI you get a sense as to just how much has changed around Data alone.SCOPE OF IMPACTAnother large challenge in the digital transformation arena is that it affects everybody. Digital Transformation will have an impact on your internal operations, external sales team, manufacturing environments, customers, suppliers and employees. NO ONE will be spared—it literally will impact everybody.Given the speed of evolution and scope of impact, companies must face the question, “How far should our Digital Transformation take us?” CEO of GE – Jeff immelt on Digital Transformation on VimeoThere are obvious limits to how much time and money a company should invest in any aspect of a business, but before this can be answered, one needs fully understand the opportunities to be gained and lost, the existing competitors in the market place, future distributive competitors and clients expectations.From Henry Ford to Steve Jobs, leaders have fearlessly created new products that customers never asked for. Had Henry Ford asked people what advancement they wanted in transportation they would have answered “faster horses.” Had Steve Jobs asked customer what they wanted in portable music, “five-hour cassette tapes” might have been the response. Unfortunately, in most cases customers don’t know what they want until they see it.While understanding the needs of an industry, market or product differs for all companies, what is clear is that never before has doing nothing been a riskier play. Sitting on the sidelines and not responding to market conditions and threats is the quickest way to extinction.UP NEXT: MARKET OUTLOOKIn the next post in this series, I’ll touch on the impacts of technology advances on businesses and other organizations. These advances are exciting but also sobering in some ways, because the world is changing fast and there will be winners and losers among businesses, employees, and even governments.