Common Challenges in Business Digitization and How to Overcome Them

In today's fast-paced world, digital technology has taken center stage, paving the way for businesses to transform their traditional practices and adopt digital ones. The term "digitization" refers to the process of converting analogue information into digital form, enabling businesses to streamline their operations, improve efficiency, and better serve their customers.

The digitization of businesses in India has been on the rise in recent years. According to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI), the digital economy in India is expected to reach $1 trillion by 2025. 

Digitization is not just a trend; it's a necessity for businesses to thrive in a constantly evolving market. The benefits of digitization are many: it helps businesses reduce costs, increase productivity, enhance customer engagement, and stay ahead of the competition. Let’s look at the common challenges businesses face when digitizing their business and offer solutions on how to overcome them.

Challenges businesses face when digitizing their business

Digitization is not without its challenges. As businesses embark on this journey, they face numerous obstacles that can impede their progress. These challenges include a lack of digital literacy and skills among employees, resistance to change, cybersecurity threats, integration of new technology with existing systems, cost, lack of local language support, addressing legal and regulatory issues, and incorporating freelancers into the digitization process.

To succeed in digitizing their business, businesses must understand these challenges and devise strategies to overcome them. Let’s have a look at a few common challenges several businesses report.

Digital literacy

One of the primary challenges businesses face when digitizing their operations is a lack of technical knowledge. Many business owners and managers are not tech-savvy and don't know how to navigate the digital landscape. This can be particularly challenging when it comes to implementing complex software systems or creating a website.

To overcome this challenge, businesses can consider hiring a freelance IT consultant or an agency that specializes in digital transformation. These professionals can provide the technical expertise and guidance needed to successfully digitize the business.

Resistance to change among employees

Change can be challenging, and employees may resist the process of digitization. Some may feel threatened by the introduction of new technologies, while others may lack the necessary skills to adapt to the new digital landscape.

To overcome resistance to change, businesses should involve employees in the digitization process from the beginning. A KPMG study on Online Education in India indicates that there is still a large gap in employee literacy and the availability of eligible trainers, which leads to some resistance. So, businesses can provide training and support to help employees develop the skills they need to succeed in the new digital environment. Additionally, businesses can incentivize employees to embrace the change by offering bonuses or promotions for those who successfully adapt to the new system.

Cybersecurity threats

As businesses store and transmit more data online, digitization can also increase the risk of cybersecurity threats, such as hacking and data breaches. With more sensitive information being handled digitally, businesses must be extra vigilant to protect their data.

To mitigate the risk of cybersecurity threats, businesses should invest in robust security systems and protocols. They can also hire cybersecurity experts to conduct regular audits and ensure that their systems are secure.

Technical Compatibility

Another challenge businesses face when digitizing their operations is ensuring compatibility between different software systems. Businesses may have multiple systems that need to work together, such as a CRM system, an inventory management system, and a billing system. Ensuring that these systems are compatible can be challenging, especially if they are developed by different vendors.

To ensure compatibility, businesses can hire a consultant who specializes in systems integration. These professionals can help businesses identify the right solutions and ensure that they work together seamlessly.

Cost of digitization

Another significant challenge businesses face when digitizing their operations is the high costs associated with the process. For small businesses with limited budgets, the cost of implementing new software systems, creating a website, and training employees can quickly add up.

To minimize costs, businesses can consider using open-source software or cloud-based solutions. In India, there are also several schemes under Digital India that offer incubation programmes to businesses in certain categories. They can also outsource certain tasks to freelancers who can provide cost-effective services.

Lack of Local Language Support

In India, many businesses struggle with digitization due to a lack of local language support. Most digital platforms are designed in English, which can be a barrier for businesses that primarily serve non-English speaking customers.

To overcome this challenge, businesses can hire freelancers who specialize in localization and translation or develop an internal team to overcome this. By making digital content accessible in local languages, businesses can effectively engage with their target audience and expand their customer base.

Incorporating Freelancers into the Digitization Process

Freelancers can be valuable assets for businesses looking to digitize their operations. They can provide specialized expertise and support, often at a lower cost than hiring full-time employees. Lately, more and more businesses in India have been employing freelancers to help with their business as well as their internal processes. Here are a few ways businesses can incorporate freelancers into their digitization process:

  1. IT Consultants: Freelance IT consultants can provide businesses with technical expertise and guidance throughout the digitization process.
  2. Web Developers: Freelance web developers can help businesses create a professional website that aligns with their brand and engages their target audience.
  3. Cybersecurity Experts: Freelance Cybersecurity experts can help identify and fix any potential security issues or help you manage your data more securely.

Optimizing Costs

Digitization can be a costly affair, but there are ways businesses can optimize their costs. The first step is to identify the areas that require digitization and prioritize them based on their importance. Also, consider what processes can actually benefit from digitization. According to a report by Deloitte India, the adoption of digital technologies can lead to a 20-30% increase in revenue for Indian businesses; this can be used to offset the cost of adoption even in other departments.

Businesses can consider using open-source software or cloud-based solutions, which can be more cost-effective than building custom solutions from scratch. They can also outsource certain tasks to freelancers, who can provide cost-effective services. 

Addressing Legal and Regulatory Issues

Digitization can also raise legal and regulatory issues, especially when it comes to data privacy and security. Businesses need to ensure that they comply with local laws and regulations and protect their customers' data.

To address legal and regulatory issues, businesses can hire a freelance legal consultant who specializes in data privacy and security. These professionals can help businesses navigate the legal landscape and ensure that they comply with local laws and regulations.

Identifying the right digital solutions

In today's fast-paced digital landscape, identifying the right digital solutions is crucial for businesses to stay competitive. With so many technological advancements and digital tools available, it can be overwhelming for organizations to select the best solution for their specific needs.

One effective approach to identifying the right digital solutions is to begin by defining your goals and objectives. This will help you identify the functionalities and features that are most important to your business. For instance, if you aim to improve customer engagement, you may want to consider digital marketing solutions such as social media marketing or email marketing.

By following a structured approach and taking the time to evaluate your options, you can identify the digital solutions that best fit your organization's needs and help you achieve your desired outcomes.

Measuring the impact of digitization

In today's digital world, businesses need to measure the impact of their digitization efforts to understand how they are performing and identify areas for improvement. Measuring the impact of digitization can help organizations determine whether they are achieving their objectives and whether their investments in digital tools and technologies are paying off.

One essential aspect of measuring the impact of digitization is setting clear, measurable goals and objectives. This enables businesses to track progress and determine whether their efforts are resulting in the desired outcomes. Additionally, it is crucial to define the metrics and KPIs that you will use to measure the impact of your digitization efforts.

It is essential to ensure that the data you collect is accurate, reliable, and relevant. You can use a variety of tools and techniques to collect and analyze data, such as web analytics tools and customer feedback surveys. By analyzing data, you can gain insights into customer behavior, identify areas for improvement, and make data-driven decisions.


Digitization is a critical process for businesses that want to remain competitive in today's digital landscape. While it can be challenging, businesses can overcome these challenges by leveraging the expertise of freelancers. Freelancers can provide technical expertise, help businesses optimize their costs, ensure compatibility between systems, address legal and regulatory issues, and provide language support. By addressing these challenges and leveraging the expertise of freelancers, businesses can successfully digitize their operations and achieve their goals.

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