When it comes to Digital Transformation, there’s no denying it matters. For any business – no matter its size or the sector – it is the costs that are involved that can vary significantly. In addition to the size of the company there are other key factors that can play a significant role in the cost. These include the scope of the transformation and, of course, the technology that might be involved. In truth when it comes to digital transformation there really is no such thing as a one-size-fits-all price.
It can be a real challenge for any company to truly pinpoint the exact costs associated with digital transformation. This is why it is necessary to make sure that you understand all of the various elements of digital transformation that can contribute to any overall expenditure.
What factors can have an effect on the cost
There are a number of things that can affect the cost of your digital transformation. However, they may not all have the same impact on your cost.
- Size of company – those companies that are larger may need changes that are more extensive
- Scope – the extent of the transformation may have a significant impact on the cost
- Technologies – there are a range of different technologies that may need to be considered, and they will all have differing price tags
There are also a number of different ways in which you can implement that changes from a cost point of view:
- Incremental adoption – this is a cost strategy that is lower initially and has a lower to medium cost
- Big bang approach – this is an immediate transition strategy that has a cost range from medium to high
- Hybrid approach – this is a balanced cost and risk strategy that sits firmly in the middle costing range
The key to any successful transformation is to make sure that you are budgeting effectively. The cost of a project can range from as little as a few thousand pounds for a smaller scale project into the millions for a larger endeavour.
The process
There are various challenges along the way to a digital transformation; these include disruptions to your operations and high costs. It is important for there to be careful planning and risk mitigation, as well as making sure that you choose the best modernisation strategy are vital for success.
It can be daunting to navigate the complexities that are involved in digital transformation and it certainly isn’t made easy by the costs. During your transformation journey you need to make sure that you are keeping a close eye on your budget. You’ll need to be adept at adapting to those challenges that you meet along the way and understand the failure rates that may exist.
Around 70% of all digital transformations in fact fail. This can be as a result of planning that hasn’t been carefully thought through, or as a result of resistance to change. Because different industries work to different tolerances, this can make it even more complex.
Conclusion
Digital transformation is often perceived as expensive, and it certainly can be. However, this does not mean that it is a cost that should be avoided. There is the initial investment in any new technologies that are required, the training of employees to use the new technology and of course the potential process reengineering to your business. This can all, however, be a little misleading.
Yes, these costs can be higher than you might want but if you can look beyond them you will see the benefits that can be had from undergoing a digital transformation and they will make it more than worthwhile.