There’s no denying that the digital era has arrived. From small to large corporations, digital transformation has become critical for all businesses. We ask: What are the key challenges of digital transformation on businesses and their pricing strategies?


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The development and the formation of technologies have dictated the stride of society. Technology has changed our habits, relationships, routines, behaviour and expectations of businesses.  Most especially how we consume products and buy services.  What we value and view as a good price is not static. How much we are willing to pay for products is changing. Yet, despite all these major changes, how businesses continue to set customer prices and manage their revenues remains static and firmly in the past.


But disregarding change has a price. Disruption has put heavy pressure on executives and boards to find answers to difficult problems. Many of these digital transformation problems are pricing and revenue management related. Denying price improvements is a death sentence for even the best business model.


In the past two decades, for example, pricing pressure has intensified as a result of new entrants, aggressive competition and platform businesses offering creative, low-risk pricing revenue models to their customers. Many traditional businesses simply have no pricing answer to digitally savvy businesses – let alone a good IT infrastructure. In many ways, businesses’ response to societal and digital change has been too slow.


A report from Riverbed says that out of 1,000 business decision-makers, 98% agree the delivery of digital services and apps is critical to a successful company. Still, 95% of executives admitted that they encountered significant challenges when trying to transition to digit; with a large proportion of these cited challenges being down to pricing and/or revenue model issues.


At Taylor Wells Advisory, we think that the failure of digital strategies is largely due to massively inadequate systems and not putting the right people in the organisation to solve complex data, pricing and commercial problems.



In this article, we will tackle the key challenges of digital transformation on businesses and their pricing strategies. We will discuss why most businesses fail in the digital world. In addition, we will talk about real-world examples of companies that overcame the key challenges of digital transformation and became successful in the digital era.


We will argue that digital transformation shouldn’t be considered a hindrance or a disruption to business growth. We believe that businesses that equip themselves with: the right strategies, the right people, and the right organisation structures will survive and thrive in the digital world.


By the end of this article, you’ll learn how to build an organisation that can overcome the key challenges of digital transformation in the best way possible.


Top 10 Biggest Problems Businesses Face: What Steps to be Taken


What Is Digital Transformation?


Digital transformation or digitisation is defined as the use of digital technologies in a well thought out manner that simplifies and speeds up the company’s operations (from the business model to the in-house processes). Digitising a business will enable a company to enhance customer experience, gain a competitive advantage and increase revenue.



Key Challenges of Digital Transformation


It is a common yet brutal fact that the failure rate for business transformations stands at 70%. But did you know that a recent study shows that the situation is getting worse with only 16% of executives saying that their companies’ digital transformation successfully improved performance (or an 84% failure rate)?


Even digitally savvy industries, such as telecom, media, and high tech are struggling. The success rate for these industries does not exceed 26%. In brick-and-mortar industries, such as automotive, infrastructure, pharmaceuticals, oil and gas, digital transformations are tougher with success rates falling between 4-11%.


Furthermore, a lot of business revealed that their digital applications and services are failing several times a month. Thus, affecting user experience and productivity negatively, and reducing their pricing power.


What are the causal drivers for this brutal failure rate? A struggling or poorly implemented or conceived digital service can affect brand reputation. Not only that, but it can also decrease sales and revenue, impact customer’s loyalty to the company, or even delay project releases. Listed below are some of the key challenges of digital transformation that most executives experience and the drivers of failure:


  1. Employees’ resistance to change


People like a comfort zone. Routines make them comfortable. This means when you introduce a digital transformation it disrupts people’s routines. And when people feel their world is being disrupted they see the transformation as a threat.


How can you stop this fight or flight response and accelerate engagement? You need to prepare people for change in the best way possible. This could mean an overhaul of your organisational structure such as changing roles or changing departments. For example, digital transformation is a significant approach and providing structure in the midst of change via role and team definition gives people role clarity (i.e., they know how to contribute to business strategy) and in turn gain certainty about their new positions.


  1. Not having enough knowledge to lead digitisation initiatives and strategies


According to a recent survey, only 23% of manufacturers acknowledge having a company-wide strategy for their digital transformation. Without strategy and motive, you can survive but not for long. Digital transformation isn’t for one employee or department but it’s corporate-wide. Success is not likely when there is no strategic substance guiding new behaviours and IT implementations.


It takes two to tango, as they say. Combine strategy, talent and technology through your digital transformation journey to achieve both immediate and ongoing increases in profitability.


  1. Budget constraint


Digital transformation requires new and sometimes considerable investments, people and customers. It’s not a marathon. Use your budget as a reality check in establishing digital transformation strategy to see how much your company can handle. Don’t jeopardise your company over financial issues.


Notice that the first two reasons listed above are all about people. Meaning, having the right people will remove the barriers to the road to digital transformation. In other words, it’s all about people when you want to see success in transformations. From creating and communicating a goal, to designing and adjusting a plan, and to working meticulously on the details.


5 Advantages of Digital Transformation


If there are challenges with digital transformation, there are also huge benefits that businesses can gain from it. For example, digital transformation will better prepare a business for other unexpected challenges. Below listed are some of the biggest advantages of digital transformation:


  1. It improves efficiency


Manual data entry slows down a business and often delays efficiencies. For example, in many companies, reporting still goes through the IT department which creates delays. But with digital transformation, it eliminates most of these bottlenecks.

  1. Better decision making


A business often has access to large data, and data volumes are only increasing. But only a few companies really capitalise on this data. Most of them lack the necessary tools and processes to convert it into meaningful management information.


The digitally-driven businesses have the upper hand. By utilising modern business intelligence tools, businesses can take this flow of data and immediately gain insights. Thus, allowing the company to react faster and of course, more accurately compared to businesses that lack these capabilities.


  1. It enhances agility


The pandemic gave the business world a startling agility test. Many companies struggled because they didn’t have the required tools and or processes available to adapt right away. However, for some companies, the shift to remote work was rather smooth. They already had the necessary digital tools and processes to work from anywhere.


  1. It boosts customer satisfaction


Customer expectations have changed with the growth of mobile and technology advancements. Customers nowadays expect simplicity and if a business can’t provide it, most likely they’ll move on.


One of the big goals of digital transformation is improving the customer experience. And when done properly, expect improvements in the following areas:


  • Improves the customer experience – Providing digital tools to customers will make their lives easier. Thus, making the business more relevant and appealing to future customers. On the other hand, businesses that provide outdated experience will have difficulties competing with companies that stay up to date with modern technology.
  • Provides more customer insight – Ever notice how some companies create products in a way that it seems like they know what you need? It’s not magic but analytics. These businesses make use of digital technologies to understand their prospects and customers better. They collect insights from customer interactions and utilise that information to improve constantly.


  1. It increases profitability


If a company works more efficiently, makes better decisions, enhances agility, and boosts customer’s satisfaction — how will these affect the bottom line of the business?


Definitely, digital transformation will transform the whole business. And when done the right way, it will improve the overall profitability remarkably.

digital transformations

Case Studies on Digital Transformation from Leading Companies


Brick-and-mortar companies are famous for their innate difficulties in changing, embracing and adapting business models and processes. At the same time, more agile players are coming in every sector. The automotive industry is being shaken up by Uber. The way we communicate has changed with WhatsApp, Viber or other chat apps and Amazon the way we shop. These businesses are fast enough to react to changing market conditions and have become powerful players in their industries.


To exemplify the significance of digital transformation, let’s take a look at a few case studies from successful companies that overcame the key challenges of digital transformation:


Audi: (Member of the Volkswagen Group). The car manufacturer created Audi City, an all-digital showroom that enables residents and visitors to conveniently view and explore all the models of their vehicles for sale and options available. The stores also provide samples of the materials (such as for seating). Audi observed the importance of digitisation in their pricing strategy citing their London location made a 60% sales increase.


McCormick: Famous for its seasoning products for cooking and baking. The company wanted more than just aisle interactions with customers. As a result, McCormick launched FlavorPrint that quizzes users and provides personalised recipe recommendations. FlavorPrint is like Netflix but for the food industry. Netflix uses algorithms for movie-picking to decide what the user will watch next, however, FlavorPrint uses algorithms based on the consumer’s unique flavour “fingerprint” to help the customer decide what to cook next. The success of FlavorPrint surpassed McCormick’s expectations. It led to the start of Vivanda, a tech company that serves as another source of income.


StubHub: A leading ticket retailer. StubHub processes a sizeable number of transactions per day. It introduced cloud technology to make the customer experience even better at the same time reaping the financial benefits of a digital transformation. It partnered with Akamai, VMware and Oracle to provide a smooth experience for mobile users and combine their services through Facebook.


These companies made use of the benefits of digital transformation by considering customer behaviour and demand and available technology.



Discussion: Digitalisation and Pricing


Pricing is a key element of digital transformation yet it’s also a strategic pillar that is often neglected by senior leaders, consultants and transformation managers. At Taylor Wells Advisory, we believe that digitalisation should be a priority for leaders because ‘going digital’ leads to remarkable changes in the way companies regulate and set their prices.


For example, technological advancement such as the availability of the Internet, product innovations, and digitisation of production chiefly impact the business environment because the basis for pricing can now be improved. Companies can easily collect and analyse more pertinent information because of the technological breakthrough and therefore optimise their prices.


Another key impact of digitisation on pricing is more price intelligence and more data. Now, more than ever, businesses have the opportunity to speed up their responses to competitive reactions and avoid deadly price wars that destroy value and margin.


Likewise, digitalisation enables businesses to understand consumer responses to different price points and offers in more detail.  Customer-focused pricing is crucial to digital transformation because it enables a business to unlock their true pricing power; understanding patterns in price response behaviour that were previously unknown without analytics. They can also see when price structures are outdated as there’ll be more visibility of margin loss or gains across their product portfolio.




  • Innovation is one of the major disruptors of corporate giants which can have a great impact if they don’t adapt to the changing market. Businesses should look to innovate and get ahead of the game and identify what customers want.


  • Many companies have sizeable technical debt and old-fashioned systems that are hard to change. With the right people who possess technological depth and breadth, and the capability to work together with the business, these issues can be resolved.


  • Transformation means rethinking of ways to meet customer needs, smooth and continuous connection of work activities and the capacity to manage across different silos moving forward.


  • To be truly transformative, these elements should be present: teamwork, leadership, emotional intelligence and courage. It is vital to note that anyone responsible for digital transformation must be knowledgeable about it.



Tips: How to overcome the key challenges of digital transformation and become successful in the business


Below are the factors that will improve the chances of transformation success – in pricing and for digital:


  1. Have insightful and digital-savvy leaders

Having such leaders in the business that understand the necessity and significance of transformation is one of the keys to success. They should be dedicated full time to the change effort and leadership commitment is present.


  1. Develop talent and skills in the workforce

One of the most important factors for success in a digital change effort is developing talent and skills within the organisation. Redefine employees’ roles and responsibilities aligning them with a transformation’s goals. By doing so, it can help clarify the roles, responsibilities and capabilities the organisation needs. Success is attained when companies scale up their workforce planning and talent development.


  1. Have futuristic goals and empower employees to work in new ways

Reinforce new behaviours and ways of working. Establish practices related to working in new ways. This is also the key to transformation success. One way of doing this is continuous learning or open work environments. Also, consider giving employees a say on where digitisation could and should be adopted. When employees share their own ideas about where digitisation might support the company, success is more likely to happen.


  1. Provide everyday tools with a digital upgrade and make transformation a continuous process

Make the use of digital tools a new organisational norm and then implement digital self-serve technology for business partners and employees to use. Modify standard operating procedures to include new technologies. Increase the use of data-based decision making and interactive tools. This can also double the likelihood of a transformation’s success.


  1. Frequent communication through traditional and digital methods

Clear communication is important during a digital transformation. Communicate an effective change story. Let the employees understand where the business is headed, why it is changing, and why they are important. Also, consider using remote and digital communications to send the transformation’s vision. It does a much better job of creating success than in person or traditional channels.


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The future of business is digital. Whether it is operations, marketing, research, security, airlines, transportation, retail, all aspects of running a business are highly benefited with digital transformation. However, implementing such complex changes in the business is also complicated. To make sure that the digital transformation journey is seamless, be sure that the implementation is carried out with the right people and strategy.


Bottom line is, digital transformation requires talent. Building the right team with a strong leader that can bring about change is the most significant move that a company can make if they are considering digital transformation.


For a comprehensive view and marketing research on integrating a high-performing capability team in your company,

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