Barriers and success factors for business digital innovation

Innovation has always played a key role in the life of businesses. It creates competitive advantage by making work more efficient and production more productive. But today, we cannot talk about innovation without talking about digitalisation in the organisation. It is only through digital innovation that companies can keep pace with their competitors. This is the only way to ensure progress and to serve the market at a high level. However, enterprise digitalisation is not as simple as buying a 4K smart TV with a giant screen for your home cinema experience. There are many barriers and success factors to enterprise digitalisation.

Obstacles and success factors for digitalisation in enterprises

The Digimeter Spring 2023 report highlights perfectly that very often, the barriers to enterprise digitisation and the factors contributing to its success are one and the same. In many cases, the reason that drives digitalisation is also the reason for the failure of digital transformation. I will discuss this in more detail in the article. But for now, for a quick overview, let’s look at the factors that can affect the delivery of digital innovation both negatively and positively.

Table of contents

• CEO/Management
• Employees
• Environment
• Lack of professionals
• Employability
• Technological and language skills
• Technology trial costs
• Expecting a fast ROI
• Grey economy
• Lack of process thinking

1. Manager/Management

The success of corporate digital innovation cannot be separated from the leaders and the rest of the board. The more senior company leaders are committed to digital transformation, the more they will support digital innovation at lower levels and by physical workers.

For example

If management is aware of the business benefits of aligning employees with the corporate strategy through a digital internal communication channel, such as CHEQ , they are more likely to support its implementation. After all, what business leader wouldn’t want to increase their productivity, which in turn has a positive impact on the company’s revenue and profit?

However, if management does not see the business value in digital transformation, or is not savvy and open to learning more about it, digital innovation will fail. If management does not actively use the new system, and even sticks to the old ways of doing things, then lower-level employees will not use the innovations that are introduced. This is the lack of leadership by example.

Another scenario

It is also the case that decision-makers rely on the opinion of their subordinate managers and say no to digitisation on the basis of that opinion. Why does this happen? The reasons may include

• digitalisation is outside their comfort zone and reassures them that they are not alone;
• does not want to demotivate subordinates who are reluctant to take on extra work because it is a challenge for him as a manager or because he fears losing loyalty;
• does not take on the conflict of making a decision against their will.

Most high-level decisions are made by top management in the interests of the company. They are in a position to have the factors and information that affect and significantly influence the company’s strategy. It can be a serious loss if these decisions are changed – or not made – without careful consideration and reasoning, based on the opinion of a middle management team that claims to be ‘professional’ but in many cases is more likely to be disinterested due to temporary inertia or fearful of change.

That is why company directors and management, whatever their level, must set a good example to other employees and take the necessary decisions. This is key for corporate digitalisation and innovation.

2. Employees

According to a survey conducted between February and March 2023, adult Americans 65%-a fear losing their jobs due to AI. However, research shows that digital transformation does not necessarily mean job loss and higher unemployment rates. In fact, quite the opposite. In some countries it can even lead to a reduction in unemployment, by automating routine tasks or outsourcing them to robots, while bringing new skills to life.

Fear of innovation

At the same time, it has to be admitted that the majority of employees are afraid of innovation, because in most cases, corporate digitalisation forces them to step out of their comfort zone. Not to mention that many of us are often afraid of not being able to catch up and meet the new expectations, which again increases the fear of losing a job.

Fear of losing your job

Given all this, it is perhaps not so surprising that some workers are reluctant to embrace digitalisation and actively use digital tools. They are also reluctant to help train AI and robots. At least they are not being taught everything. This is because they want to prove to management that they are still better at their jobs and more useful to the company than AI tools.

This is why it is critical for the company’s digital innovation that management can effectively manage employee resistance and address them as partners. This is the only way to accelerate, strengthen and improve the transformation, which will then be reflected positively in business numbers.

3. Environment

We have already discussed above that both management and employees have an important role to play in whether the digitalisation of the enterprise will succeed or fail. However, in addition to the internal environment of the company, external environmental influences can also hinder or stimulate digital innovation.

Economic policy provisions

For example, public authorities’ regulations and state subsidies promote the digital transformation of companies. Just think of electronic invoicing. To comply with National Tax and Customs Administration, businesses issue invoices electronically, even if they are printed out at the customer’s request. But there are also the EU funds that offer financial support for the digitalisation of companies, reducing the financial burden that a digital solution can impose on companies.

However, the use of grants can also be counterproductive if the digitisation project does not receive critical management attention and control as a result of the grant funding. The expectation of a return on investment is low due to “external funding” which also affects the expected effectiveness.

Market players

The market environment should not be forgotten either. The needs of partners and the digitalisation of competitors also influence every company. It may be that the only way to meet the needs of a business partner is to use certain digital tools. Furthermore, the only way to stay competitive is not to lag behind your competitors in digitisation. (Of course, not everything has to be digitised. But more on that later.)

4. Lack of professionals

It is not uncommon for companies to be forced to open up to digital innovation due to a lack of skilled workers. Many companies are hoping that robots and AI will help them overcome their lack of skilled human resources. However, it is often the lack of skilled workers that prevents digital transformation. It is not enough for companies to invest in machines and buy innovative digital solutions. If no one in the company can manage and use it effectively, it’s all a waste of money. Not only does it not contribute to increasing productivity and performance, it hinders it.

Assess the skills and abilities of your employees

Before the company goes digital, it is worth assessing who among the employees could take on the specialist role that is essential to get the new technology up and running and to teach other employees to use it, at least at a skill level. The top-priority worker should also be supported through training, as this will enable him or her to apply the new technology at a higher level.

If you can’t find the right person for the role

If there is no employee within the company who can be promoted and asked to take on the role of a specialist, the digital transformation should take into account:

1. Is it necessary to hire a specialist?
2. Is it necessary to involve external experts, consultants, trainers?
3. Does the digital solution you want to implement come with a support service (CHEQ’s organisational development and technology team will be with you from the start, guiding you through the implementation and deployment. It provides training and ongoing support to help companies make the most of the tool’s features.)

5. Employability

It is not enough if only 1-2 people can use innovative digital solutions. On the one hand, this would mean that companies’ operations would depend on a handful of professionals who could use the tools they put in place. When they leave, the knowledge leaves with them. This is not acceptable. On the other hand, depending on the type of digitalisation, it is essential that all employees can use and benefit from the tool. Otherwise, the digital transformation will fail.

For example

The CHEQ solution is obviously being implemented by companies to communicate with all employees in a measurable way, directly and regardless of time and place. This includes manual workers, who often do not even have a company email address. Thanks to this digital solution, everyone can receive company information simultaneously and accurately via their smartphone. This means that all employees have a clear understanding of the company’s strategic and operational goals. They know what results are to be achieved and how they can contribute to them.

Of course, this alone would not make it important for workers to have user skills. After all, they could certainly read messages without any problems.

However, CHEQ is more than just an internal corporate communication channel!

• deals with administrative matters,
• trains employees,
• tests employee knowledge upon completing trainings,
• allows recommendation of a colleague,
• digitally sign documents,
• handles encrypted documents,
• helps organising and running corporate events,
• allows personal data updates,
• supports employer surveys

and many other tasks. (If you want to learn more about what CHEQ can do for you, request a free demo.)

However, in order to be able to use these functions, it is essential that employees have the skills to use the tool. Fortunately, CHEQ is designed so that even a 6-year-old child can use it easily. Its user interface is extremely intuitive and easy to understand, so anyone can use it quickly without any prior or extensive training.

6. Lack of technological and language skills

When new technologies are introduced, there is often the problem that the tool is only available in certain languages. This makes it very difficult for organisations to digitise. Especially for a company with a predominantly physical workforce, where you immediately run into two obstacles:

1. workers have little or no knowledge of foreign languages
2. learning to use technology can be a huge challenge, even when using their own mother tongue

No language barriers at CHEQ

At CHEQ, we understand that language barriers can be a challenge when introducing and using a digital innovation. That is why we provide a solution to this issue. Not only do we provide a simple application interface that allows even less digitally savvy employees to use it easily, but can be used by everyone in their own language.

For example, a Burmese employee sees the menu and communication panels in Burmese, while a Hungarian employee sees them in Hungarian. And if a Burmese employee sends a message to the Hungarian HR in Burmese, no problem. The Hungarian HR employee will receive it in Hungarian. And the reply can be written in Hungarian, which the Burmese colleague will receive in Burmese. And neither of them needs to be an IT genius to do that. All they have to do is press a few buttons, which they see in their mother tongue.

Thus, lack of language and technological skills can no longer be an excuse for a company to delay the introduction of digital innovation.

7. Costs of digitisation

Digitisation has costs. You have to buy

• the technology,
• the device,
• the knowledge needed for the application, etc.

This often hinders digital innovation in companies. It is not uncommon for companies to consider only the cost of digitalisation. Then they conclude that there is no money for it now. Often they don’t even look at whether they might be eligible for EU, state or capital fund support. But this could be an opportunity to finance a digitisation project.

Ignoring future costs

It is also common that the future costs of not digitising are often overlooked when calculating the cost of digitisation. There is also a cost for companies that fail to innovate and digitise. Sooner or later, they will fall behind their competitors, lose customers and find it harder to meet the production volume needed to satisfy supply. Not to mention that it may be slower to react to unexpected situations such as a pandemic. This could even jeopardise the sustainability and operation of the company.

Therefore, it is worth taking into account not only the actual implementation costs, but also any other costs that may result from not going digital. It may also turn out that the cost of implementation is still less than the future cost of not having achieved digital transformation. In that case, it may be worthwhile to reallocate the company’s budget to support digitisation.

8. Expecting a fast ROI

Whether it’s an SME or a large multinational. In most cases, everyone expects a quick ROI (within 3-4 months) from digital solutions. But this depends largely on

• what tool the company is introducing,
• how easy it is to use,
• how well they can exploit the potential of the solution,
• the level of support for digitisation from management, and
• how much resistance there is from workers.

Naturally

• the easier it is to use the tool,
• the more senior attention it gets,
• the quicker they abandon old and parallel practices,
• the more support receives from management to promote the use of the tool, and
• the more employees use it,

the faster the payback.

At CHEQ, we are proud that by using our digital solution, our clients’ investment really pays off within 3-4 months. And of course we actively contribute to this and provide ongoing support.

9. Grey economy and transparency

Digitalisation helps to eliminate the grey economy and makes processes transparent. But there are those who want to avoid this. This is why they are slowing down the process of digital innovation. However, if the state decides to “force” companies to be transparent, the grey economy becomes a driver for digitalisation. In this case, all market players would be forced to digitise the processes that are subject to state regulation. As part of this, many routine tasks would be automated, leaving more time for workers to perform other, more complex tasks.

10. Process thinking

Although it is the last point in the article, the more important factor is process thinking. Because is not really about digitising the company, but about digitising individual workflows. However, it is a huge problem that in many cases – even in large companies – the ability to think in terms of processes is missing. As Andrea Kökényesi-Nagy, an HR expert, consultant and trainer with a background in business informatics, says, companies often have a “business as usual” mentality. Nobody knows why a task has to be done the way it is, but it is “the way we do it” and we have to stick to it.

If management does not see how tasks are interlinked and form a coherent process, they will not be aware of how to improve them. However, digitalisation may then lead to more chaos and more work, rather than help. It is possible to digitise each task separately. However, it is easier and more transparent for everyone if the links between tasks are identified and the whole process itself is subject to digital innovation.

After all, the whole point of enterprise digitalisation is to make work easier, faster, more efficient and more aligned for better productivity and performance.

Concluding thoughts

Enterprise digital innovation is a never-ending process full of challenges. The technology and the market are constantly changing. But it is definitely worth paying attention. With the right strategies in place, obstacles can not only be overcome, they can also be put in place to support digitalisation. Moreover, if you use an easy-to-use tool such as CHEQ, you can get a return on your investment in as little as 3-4 months. In addition, you will see an improvement in your company’s performance, giving you a competitive advantage over your competitors. Find out more about how you can digitise your workflow with CHEQ. Request a free demo!