The Top Five Challenges to Digital Transformation
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- Feb 12, 2020 10:41 pm GMT
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Technology today offers utilities more opportunities to revamp their operation than perhaps ever before. The Internet of Things, cloud computing, mobile systems, and artificial intelligence and machine learning have the potential to transform traditional, cumbersome, often manual processes into a few quick swipes. Yet many organizations have difficulty taking advantage of this opportunity: 81% of respondents to a Couchbase study reported that their digital transformation projects fizzled rather than popped. Why?
The Vision is Too Broad
Historically, technology impacted select parts of an organization, for instance an Enterprise Resource Planning (ERP) streamlined invoice processing. New digital technologies are horizontal; they can be deployed in any department and can transform as much or as little of existing business processes as desired. When they begin, utilities must make sure that their digital strategy focuses on one major problem at a time. They should start small with a clearly defined problem and solution, say making it easier for mobile workforce to enter changes and later work themselves toward larger, more complex goals. They do not want to try and boil the ocean because in those cases, the company often drowns.
Siloed Business Processes
Historically, utilities divided work up into departments in order to establish areas of expertise and segment work. Digital technologies disrupt that traditional model; they work best when information flows throughout the company in a freeform fashion. For instance, customer information is needed by the financial department, customer service, demand planning groups, and others. Energy companies need to identify those areas within the organization where handoffs get stuck, and try to retool them, so everyone in the firm views data from a similar vantage point.
Incompatible Technology Stacks
Utilities invested lots of money and manpower into legacy systems, which support the business. Digital technologies often are based on new, more modern designs. When embarking on such projects, energy producers need to take a close look at what they now have in place, what they want to adopt, and how much work is needed to tie the two together. The work often is extensive and under estimated. Be cautious. During development, utilities want to spend their time changing business processes rather than clearing unexpected technical barriers.
Employees often feel threatened by organizational change. They focus on how it may affect their jobs. When managing such a project, executives need to communicate consistently and solicit feedback from the beginning to the end of the process. They need to assuage concerns and doubts, so employees embrace their roles as the transformation takes place.
Top Management Buy In
Digital transformations can be an uncertain time for employees and business leaders alike. Top management needs to provide support not only in terms of financing the project but also in terms of advocating the change and being open to listening to concerns. This is a time where employees take their cue from their managers.
Transforming a business is never easy. Today’s technology offers utilities opportunities to revamp their operations in new and exciting ways. However, implementing change is never easy and becomes more difficult when one faces the sweeping overhauls that digital technology potential offers.