Kronos Group

How to overcome digital transformation challenges by prioritising customer experience?


The concept of digital transformation has emerged as a crucial force reshaping industries worldwide. The significance of digital transformation lies in striving to remain competitive and relevant in an increasingly digital world; therefore, digital transformation becomes strategically imperative. However, this journey is fraught with digital transformation challenges, including resistance to change, legacy systems integration, a lack of skilled talent, budget constraints, and data privacy concerns. These challenges directly impact customer experience and satisfaction, leading to inconsistencies, poor quality, missed opportunities, and limited innovation.

However, prioritising customer experience can help organisations overcome these challenges and drive business growth, improve brand loyalty, and differentiate themselves in competitive markets. By understanding customer needs, enhancing satisfaction, building long-term relationships, differentiating from competitors, and driving innovation, a customer-centric approach becomes essential for sustained success and profitability in today’s digital landscape.

Digital transformation has become a defining force that will change the global industrial landscape. Digital transformation is the integration of digital technologies into all aspects of business operations, which fundamentally changes how organisations operate and deliver value to their clients.

For organisations that are trying to compete and be at the forefront of technology, digital transformation is a strategic necessity. Digital transformation is essential for the competitiveness of businesses, their efficiency, stakeholder experience, and innovation potential at a time when technologies are constantly becoming more sophisticated and consumers’ expectations continuously evolve.

What is the significance of digital transformation for organisations today? 

  1. Staying competitive: Organisations that fail to adapt to digital trends risk being left behind by more agile and innovative competitors. Digital transformation enables companies to stay ahead of the curve and respond swiftly to market changes.
  2. Enhancing efficiency: By automating manual processes, streamlining workflows, and leveraging data analytics, digital transformation drives operational efficiency and productivity gains across the organisation.
  3. Improving customer experience: Digital technologies offer unprecedented opportunities to engage with customers on multiple channels, personalise interactions, and deliver seamless experiences. In today’s hyper-connected world, customer experience has become a key differentiator for businesses.
  4. Enabling innovation: Digital transformation fosters a culture of innovation by empowering employees to experiment, iterate, and develop new products, services, and business models.

The journey of digital transformation faces many challenges, despite its immense business potential.

What are the digital transformation challenges? 

Resistance to change: One of the most common challenges organisations encounter is resistance to change from employees accustomed to traditional ways of working. 70% of digital transformation initiatives fail because of the resistance to change from internal stakeholders such as employees, managers, and management. This is why overcoming this resistance and fostering a culture of innovation is critical for successful digital transformation.

Legacy systems integration: 70% of decision-makers cite integrating new technologies with legacy systems as a significant challenge during digital transformation. Many firms grapple with the complexity of integrating new digital technologies with legacy systems, leading to compatibility issues and delays in the implementation of transformation initiatives.

Lack of skilled talent: To drive digital transformation initiatives in competition, the demand for digital skills is outstripping supply and organisations are having difficulty finding and retaining talented people with appropriate expertise. To support their digital transformation efforts, 54% of organisations are finding it difficult to find the right talent with the required digital competencies.

Budget constraints: According to the data, 34% of companies cite budget constraints as a major challenge in their transformation journey; digital transformation is still a new and emerging business topic, making it a strategic cost and a business investment. Lack of financial means may make it difficult to invest in technology infrastructure, training and change management initiatives, thereby hindering the development of digital transformation efforts.

Data privacy and security concerns: The main barriers to digital transformation are identified by 46% of organisations as data privacy and security concerns. With the increasing reliance on digital technologies, organisations must navigate complex data privacy and security regulations to protect customer data and mitigate cybersecurity risks.

How do digital transformation challenges affect customer experience? 

Digital transformation revolves around the simplification of process structure and business functions, which directly correlates to service provision. 

The experience and satisfaction of customers can be negatively affected by resistance to change within the company. Delays in the delivery of services, customer interactions, and overall inconsistent experience with customers can be caused by employees who are reluctant to adopt new technologies or processes. Resistance to change may result in a lack of innovation and the absence of new technologies or strategies that could improve customer experiences for organisations.

Inconsistency can arise within organisations undergoing digital transformation due to resistance to change and reliance on legacy systems. These factors contribute to inconsistencies across customer touchpoints, creating a disjointed and frustrating experience for customers who expect seamless interactions regardless of the channel they use. For instance, if employees resist adopting new digital tools or processes, it can lead to delays or errors in service delivery, causing frustration among customers who encounter discrepancies in their interactions.

Legacy systems pose significant challenges to organisations undergoing digital transformation, particularly in terms of integrating new technologies and delivering seamless customer experiences. Outdated systems may lack the capabilities needed to support modern customer engagement channels such as mobile apps or media platforms. 

In addition, the quality of customer experience may be negatively affected by legacy systems coupled with a lack of qualified staff. Systems that are out of date may be prone to technical problems, errors, or delays in delivering services, which could reduce the overall quality of customer experiences. In the face of these challenges, customers may feel frustrated and lose confidence in an organisation due to today’s digital age expectations for reliability and effective service.

As a result, customers may encounter issues when trying to interact with the organisation online, leading to frustration and dissatisfaction. Moreover, legacy systems often require manual workarounds or patchwork solutions, which can introduce errors and inconsistencies in the customer experience.

A lack of skilled talent in digital technologies can have a direct impact on the organisation’s ability to deliver a seamless and personalised customer experience. Without employees who are proficient in data analytics, artificial intelligence, or user experience design, organisations may struggle to leverage customer data effectively, optimise digital channels, or innovate new customer-facing solutions. 

Organisations’ ability to meet evolving customer expectations and differentiate themselves from competitors is hampered by the lack of innovation and adoption of new technologies. Organisations risk stagnation and customer dissatisfaction without innovation capacity if they fail to meet their customers’ expectations for new solutions and experiences. This limitation, in turn, prevents the organisation from keeping pace with industry trends and disruptors that are having an impact on customer satisfaction and loyalty.

Organisations are not able to exploit the opportunities for personalised interactions, anticipate customer needs, or proactively address problems because of inefficient processes and outdated systems. This results in the absence of opportunities for customers to be pleased and build loyalty, as organisations are struggling to deliver tailored and relevant experiences. Failure to take advantage of these opportunities could lead to the loss of good customer relations and competitiveness with competitors.

How can a customer-centric approach drive business growth, improve brand loyalty, and differentiate organisations in competitive markets? 

A customer-centric approach is essential for driving business growth, improving brand loyalty, and differentiating organisations in competitive markets. Here’s how:

Understanding customer needs: By prioritising the needs and preferences of customers, organisations can tailor their products, services, and experiences to meet specific customer requirements. This deep understanding enables businesses to develop innovative solutions that address pain points and deliver value, ultimately driving growth by attracting and retaining customers.

Enhancing customer satisfaction: Focusing on the customer experience ensures that interactions with the brand are seamless, convenient, and enjoyable. When customers consistently receive positive experiences, they are more likely to be satisfied with the brand, leading to increased loyalty and repeat business. Satisfied customers also tend to become brand advocates, promoting the organisation through word-of-mouth referrals and positive reviews.

Building long-term relationships: A customer-centric approach fosters trust and loyalty among customers, encouraging them to engage with the brand on an ongoing basis. By prioritising customer retention over acquisition, organisations can build long-term relationships that drive sustainable growth and revenue. Additionally, loyal customers are more likely to forgive occasional mistakes or issues, providing organisations with opportunities to rectify errors and strengthen customer relationships.

Differentiating from competitors: In competitive markets where products and services may be similar, customer experience becomes a crucial differentiator. Organisations that prioritise customer-centricity stand out from competitors by delivering exceptional experiences that resonate with customers. Whether through personalised interactions, proactive support, or seamless omnichannel experiences, businesses can differentiate themselves based on the quality of their customer relationships.

Driving innovation: A customer-centric approach encourages organisations to continuously innovate and evolve to meet changing customer needs and preferences. By soliciting feedback, analysing customer data, and monitoring market trends, businesses can identify opportunities for improvement and innovation. This proactive approach to innovation not only enhances the customer experience but also positions organisations as industry leaders, driving growth and market differentiation.

A customer-centric approach is essential for driving business growth, improving brand loyalty, and differentiating organisations in competitive markets. By prioritising the needs and preferences of customers, organisations can enhance satisfaction, build long-term relationships, differentiate from competitors, and drive innovation, ultimately leading to sustained success and profitability.

Adopt digital transformation processes for better customer experience and satisfaction 

Prioritising customer experience is not just a key strategy for overcoming digital transformation challenges; it is the cornerstone of success in today’s rapidly evolving business landscape. By placing the customer at the centre of digital transformation initiatives, organisations can address resistance to change, modernise legacy systems, and leverage skilled talent to create seamless, personalised experiences that drive growth and differentiation. 

Organisations encounter numerous challenges that hinder their efficiency and cost-effectiveness. Outdated systems, intricate regulations, a scarcity of skilled professionals, and the necessity to navigate unpredictable market conditions are among the common pain points faced by businesses.

However, raising the maturity of operations has evolved from being a mere option to becoming a strategic imperative for organisations aspiring to gain a competitive edge. By embarking on a comprehensive transformation journey, companies can unlock significant advantages such as improved operational efficiency, enhanced cost control, reduced risks, and increased visibility into their activities.

By embracing a customer-centric approach, businesses can navigate the complexities of digital transformation with agility and resilience, ultimately achieving their strategic objectives while delighting customers and building lasting relationships that fuel long-term success.

Julie Brand

A part of Kronos Group’s team since 2018, Julie is a leader who has honed her specialisation in business transformation and utilised her expansive financial expertise to power business strategy and add value to what we do. She has amassed experience (Pfizer, Sony, AXA, SMEC, Tradelink) all over the world in strategy, project management, analysis, and supply chain.