3 Digital Transformation Challenges In 2021

No two companies have experienced COVID-19’s market effects the same way. But here’s one commonality: six out of 10 business leaders said the pandemic accelerated digital transformation at their organizations.

The steps most companies took to survive the pandemic—like retooling networks to support a remote workforce or expanding e-commerce capabilities—were already scheduled stops along their digital transformation roadmap. But they expected to reach those milestones in three to five years, not three to five months (or in some cases, weeks).

Did those rushed timelines irrevocably alter the course of companies’ digital transformation plans? As they come out of warp speed on some of their projects, companies should assess whether they’ve deviated, in some respects, from their long-term plans, and whether that changes how they should proceed through digital transformation.

Here are three new challenges we see the short-term scramble presenting to companies’ digital transformations.



If there’s one factor business leaders point to that’s driving their tech investments right now, it’s cash. Some projects were shelved if they weren’t already far enough along, or if they required too much capital or time-to-value as businesses pinch pennies in the COVID fallout.

What this means is, if a company is launching a new tech solution that isn’t essential for its immediate survival, it’s getting scrutinized. The company’s original digital transformation plan might have allowed three years for an AI project to pay for itself. That’s a wait that company leadership might find unacceptable now.

So we’re seeing companies reprioritize how they roll out new solutions. They’re implementing the quick ROI, “low-hanging fruit” applications first to prove their value and fund the next applications. One example is launching a conversational AI platform to deflect customer calls to contact centers now, then using it to aggregate voice-of-the-customer data down the road.

All this is to say that the COVID cash crunch has companies tackling their digitization projects in a different order than originally planned. But even as frugality dictates what advances they make now as opposed to later, companies will need to think about whether putting off a project might put them behind competitors.



Companies lacked the time to thoroughly vet and test new solutions they needed to keep their businesses running during COVID. In some cases, they bought solutions they might not have otherwise because they were easier to implement or less expensive, like enterprise collaboration apps that lack the full range of functions or security measures they need. Many of those new pieces will have a place in the company’s long-term tech stack. Some won’t.

One example is companies “lifting and shifting” their legacy systems to the cloud instead of migrating to cloud-native systems. The lift-and-shift approach means companies will still be tied to physical servers, so when network volume peaks subside, companies will be stuck with unused capacity. The more thorough “digital” step of going cloud-native allows companies to quickly scale capacity up and down as needed.

On the customer engagement front, companies deployed chatbots to help customers self-serve so they could weather the COVID-related surge in contact center volumes. But many companies, pressed for time and capital, rolled out quick-fix chatbots that aren’t truly AI-driven and function more like voice-activated FAQs. Not only do these chatbots frustrate customers with their limited functionality, they don’t integrate with the rest of the company’s customer engagement stack like conversational AI does.

Companies will be taking stock of their rushed rollouts and point solutions to see how they fit with the long-term tech stack and if they’ve created any new pain points. Whether companies will eventually need to toss or replace these limited-scope solutions depends on what their digital transformation will ultimately look like.

If their goal is to achieve an open architecture where these pieces can be more easily rearranged and integrated, their fit in the enterprise may become a non-issue. But until then, point solutions can create waste, data silos, customer friction and other pain points companies didn’t anticipate.



Whether they’re reordering their digital transformation to-do list or reassessing their quick-fix solutions, the challenge for companies is to shift their focus to the bigger picture.

The question business leaders need to ask themselves at this point is, “How do we abandon the short-term, ‘survival mode’ thinking that’s guided our decisions through the pandemic, and return to long-term planning to evolve the business?”

For example, a communications service provider with a streaming service may not have invested heavily in its video platform, yet saw it take off in popularity as subscribers were homebound. Long-term planning could include investments in the video platform to scale to more users, as well as improving the user experience and bundling the service alongside voice and data services.

To help, companies can take advantage of consultants who provide a holistic view of where companies are and how they can evolve their business models post-COVID.

COVID-19 has created several challenges in how companies approach digital transformation. But now that short-term solutions have been rolled out, it’s time to take a step back and strategically plan for long-term success.