Overcoming Roadblocks to Digital Transformation

We live in a world that is becoming increasingly dependent on technology, from the way we do our weekly grocery shopping to how we handle our finances, a large portion of our lives are enabled and enhanced by digital technology. Many companies now face an unavoidable necessity to update their processes, technologies and skills to keep pace with the digitizing market that exists. The generally accepted consensus is that failure to do so will have drastic consequences for a business1.

The term digital transformation refers to rapidly transforming business processes, activities and models that seek to harness the full potentials of new digital technology and consequently reap the imminent strategic and financial benefits of these adaptations.1 Successful digital transformation demands that a business undergoes innovative development to become adaptable, client-focused, seamless and efficient, as well as the ability to accept cultural change and move swiftly with the times.

The catalytic drivers for these business adaptations include increased expectations from the customer, both in terms of productivity and financial gain, operational flexibility, as well as the rapidly emerging digital technologies that are flooding the market.

Formulating Comprehensive Strategies

A global study conducted in 2015 by IDT, in collaboration with SAP2, states that 80 percent of businesses deem digital transformation to be of significant importance and although the majority of businesses specified their desire for technological progression, a mere 35 percent claimed they actually had a well-drafted strategy2. A detailed study conducted by The Hackett Group3 claims that for mid sized companies and larger, the hiring process, which includes acquiring a team with a technical aptitude and the appropriate skill set, may be the number one obstruction to development. Scott Holland, the Global Advisory Practice Leader goes on to state:

“Without the right skills in IT and other business units, companies will not understand the possibilities of what can be accomplished through digital transformation and they won’t define a digital transformation strategy.”3 Statistics show that the chances of implementing a digital transformation without any shortcoming are slim. Rates of failure are high, ranging from 66 percent4 to 84 percent5. However, given the extreme difficulties that accompany the execution of the process, it is not unexpected. Naturally, these approximations have done little to dissuade other businesses from embarking on technological innovation. In a sink or swim industry, no other viable alternative presents itself. A new digital age is bringing about a new mode of thought and as a result cultural, societal and business changes are occurring.

Harry Osle, global HR advisory leader at the Global Business Services and Strategic Consultancy Group2, states that this is a process that cannot be rushed. Digital transformation should be implemented on a trial and error basis. Successful experiments should be followed by further implementations. However, to stay afloat in an aggressively competitive market, companies need to make sure these transformations take place.

Sourcing Talent

A study conducted by the Technical University of Munich in collaboration with SAP2 has found that a major roadblock to digital transformation is finding employees that have the required IT skillset. Dr. Krcmar, a professor at the university, points out the need for professional IT staff. He has observed that although many companies are aware of their out-dated business model, they still have not made the necessary investments regarding IT skill development and as a result, are in real danger of being superseded by more technologically savvy companies2.

Of course, the decision to embark on the voyage of digital transformation usually comes from an order issued by executive members of a company. However, it takes an amalgamation of business executives and tech-gurus to formulate a well thought-out stratagem2. The study has shown the need for companies to have executives that simultaneously possess in depth knowledge from both the business and IT world, with 88 percent of management personnel agreeing that a cross-functional intelligence is key with regards to successfully implementing a digital technology strategy2. Finding people with the necessary skills is becoming an increasingly important factor for a smooth digital shift.

When looking at the hiring process, finances must be taken into account. Hiring top talent can become extremely costly. A way of avoiding these potentially unnecessary expenses is to assess whether any in-house employees could be trained. Other possibilities include bringing in a third-party. Of course, this option will come with its own financial liabilities, however, it will allow a professional and detailed understanding of the skills needed for a company to digitally transform, which then in turn, allows the precise employment of talent suited to a businesses individual needs.

Commit To The Transformation

The process of digital transformation requires more than just a technical makeover. Complete cooperation and commitment from companies’ employees is a necessity. As Nic Grange, CTO of Retriever Communications6 says:

“While there is a lot of talk about the technical aspects of a digital transformation and these are important, the hardest hurdle is usually the organizational change required to make it happen.”6

If employees resist the transformation process, then the chances of success will be dramatically reduced. Naturally, massive changes will shock employees, especially if they have been operating the same system for many years.

Educating your team on the importance of the change and the rewards that such modifications will bring the company should be stressed. Grange goes on to state how the necessity “to understand why the change is happening and how it will affect them. How hard the transition is will often depend on the company culture and how much it embraces change.”6

An End Goal Of Enhanced Optimization

Digital transformation is not a simple or straightforward journey. A large part of the transformation includes a calculated configuration of a company’s objective. Communication and understanding between the business executives and the IT aficionados must exist is harmony for a strategy to be effectively implemented. It is a multifaceted and interconnected process that involves numerous transitional goals, which all are directed towards a common goal – that of an enhanced optimization throughout the processes, sectors and people of a business.