IDG’s 2018 State of Digital Business Transformation reports that 89 percent of enterprises have plans to adopt or have already adopted a digital-first business strategy. Their aim is to improve process efficiencies and meet and exceed customer expectations.
The sectors setting the pace include professional services (95 percent), financial services (93 percent) and healthcare (92 percent). However, despite these ambitious developments, McKinsey reports that three quarters of transformation initiatives will not reach their planned goals.
Respondents to IDG’s survey reported that major obstacles to successful transformation include insufficient budget, lack of staff with the right skill sets, the need to replace legacy systems, and cultural issues.
In fact, many IT leaders commented that “adapting the workforce to digital is slower than adapting the technology.” The report suggests that organizations are still in the process of determining roles and responsibilities while adapting the culture of the organization to the new digital-first environment.
Cultural issues are likely to be more prevalent in traditional industries, according to IDG’s survey, which found that 95 percent of start-ups have digital business plans compared to 87 percent of traditional enterprises founded 50 years ago or later. And, 55 percent of startups have already adopted a digital business strategy compared to 38 percent of traditional enterprises.
Closing the Business/IT Gap
Some commentators believe that the gap between IT and business perceptions of digital transformation is also holding back progress. In some cases, IT sees transformation as a series of technology projects, while business decision makers focus on the impact of digital transformation on the customer.
That can lead to a serious disconnect between business and technical objectives. Collaborative working, shared understanding and joint objectives can go a long way to closing the gap.
Even when business and IT are working together, the skills and attitudes of people can remain a barrier. On the IT side, teams may not have the right skills. Capgemini, for example, found that half of organizations surveyed reported a digital talent shortage. To overcome that, many rely on outside specialists to supplement their internal resources.
Business users may not find it easy to adjust to new ways of working. Leaders find that employees are not using the new digital tools that are available, or they may find that transformation is delivering the benefits they expected.
In some cases, expectations of immediate business value may be too high. Or, leaders have not paid attention to communicating the reasons and benefits of digital transformation to employees. Both scenarios can lead to frustration and transformation initiatives that are soon abandoned.
Step Back to Move Forward
Taking a step back may be an important first step in reversing the trend for poor results. Business and IT need to work more closely to ensure their needs and goals are in synch. Business leaders need to focus on education and awareness as a means of ensuring and accelerating adoption. And IT must either upskill their teams, particularly those from a legacy background, or work with digital specialists. In all cases, they must set realistic goals and expectations to move transformation forward.