In an era where digital transformation is a key driver of growth, industries are increasingly looking to integrate new digital technologies to enhance productivity, efficiency, and competitiveness. However, the adoption of technology is not always seamless, and organisations typically face significant challenges that hinder successful implementation. Organisations must address their internal challenges if they are to take advantage of the benefits that digital technologies can provide. In this article, we explore the most common challenges and how organisations overcome those.
Upfront CAPEX Investment
Digitalisation requires upfront CAPEX investment in the purchase of hardware, software tools, training, etc. Many businesses, especially SMEs, struggle with the upfront costs of new technology, and this acts as a hindrance to technology adoption.
Solution: Many of the solution providers have come up with a pay-as-you-go model whereby instead of an upfront CAPEX investment, they charge monthly rental. Also, instead of collecting and storing data on premises, they take that in the cloud. As a result, the CAPEX model is converted to the OPEX model, making it relatively easier for organisations to proceed with adoption. Depending upon the benefits observed, they can decide on further continuation. SME players looking for such solutions can work with players like Nasscom CoE to identify the right solution partners and proceed with digital adoption.
Change Resistance
In many cases, the shop-floor employees and mid management resist adopting new technology due to lack of understanding, comfort with traditional methods, fear of job loss, or in some cases, the detailed insight that technology can create. A rigid organisational culture can slow down digital transformation.
Solution: Change management is a complex but critical requirement when organisation decides to go ahead with technology adoption. This requires clear communication about the benefits of new technology, adequate training, and most critically, turning employees and management into partners. A purely top-driven approach will never work as people downstream will find ways to obstruct the deployment impact. They need to understand that adoption is not to take away their jobs but to help them in doing them better and becoming more efficient in their output. Only then will they be willing to move ahead with adoption.
Lack of Skilled Workforce
The shortage of skilled professionals to implement and manage new technologies is a major challenge. Many industries struggle to find employees proficient in emerging technologies such as AI, blockchain, and IoT – not just in development but in managing the adoption.
Solution: Upskilling existing employees and exploring collaborating with educational institutions to bridge the skill gap is the only way for organisations to build a capable workforce. An added advantage is that it will provide additional motivations to employee for their career path.
Unclear ROI and mapping to the Business Case
In many cases, it is difficult to justify the return on investment (ROI) when adopting new technologies. Many of the benefits (e.g., precise production data, daily automated report, better prediction of day’s output) are difficult to put a figure on. Due to this, decision-makers are reluctant to proceed, especially in the SME segment.
Solution: While large organisations can do pilot programs and data-driven assessments to demonstrate tangible benefits, SME players can work with entities like Nasscom CoE to identify the measurable benefits of digital adoption. Setting key performance indicators (KPIs) to measure success can also help in tracking ROI.
Integration with Legacy Systems and Rapid Technology Changes
Many industries, especially SME players, operate on outdated infrastructure that is incompatible with modern technology. Retrofitting new solutions into legacy systems can be a challenging task. In addition, many times, management is concerned with technology obsolescence due to rapid changes.
Solution: There are many solution providers, especially startups, which have developed solutions that can be integrated with legacy IT systems, and organisations can especially look for players with such capabilities. While technology changes our way of life, the key impact here is a reduction in cloud cost / higher internet speed, etc. Hardware components have a long shelf life, and organisations need not worry about their obsolescence.
Data Privacy and Security Concerns
With increasing cyber threats and stringent data protection regulations, organisations are often hesitant to adopt new technologies due to security risks. Solution: Using cloud-based services obviates to a significant extent the cyber security challenge for organisations as the cloud service providers handle the security aspect and, to a large extent, the data protection regulation compliance.
While these challenges will remain in the future, organisations need to find ways to move ahead with adoption and benefit from it.
While digital technology adoption comes with its challenges, strategic planning, employee engagement, and investment in training can help organisations overcome these obstacles. Nasscom CoE has built up expertise in helping organisations of different sizes in addressing any specific challenges and used these capabilities to help large numbers of players in different segments with digital adoption.
