| 5 min read

10 Barriers to Digital Transformation

Francesca Greane
Written by Francesca Greane

In today’s digital landscape, everyone needs to adapt to succeed. Businesses who are unable to keep up with the ever-advancing digital capabilities risk getting left behind by their competitors, as innovations in mobile, social platforms, data science and cloud computing continually change how customers expect to engage with a company. Digital transformation is now more than a buzzword – it is a business imperative that is being felt in every industry, at every level.

But, of the 3,000 business leaders surveyed by SAP in 2017, whilst 96% maintained that digital transformation was a priority for them, only a paltry 3% had actually completed their initiatives. Clearly it is relatively easy for the boardroom to move digital transformation up its agenda, but actually delivering it is another matter. The impetus for a digital revolution is clearly there, so what is going on? 

We’ve identified the 10 most common barriers to the success of digital transformation projects in order to shed some light on the growing problem that is transformation failure. Do you recognise any of them in your business?

 

1. Inability to experiment quickly

One of the biggest barriers to digital transformation, as reported in a survey by the Harvard Business Review, is a businesses’ inability to experiment quickly, with 53% of senior executives surveyed maintaining that this was a key barrier to the success of their projects. This result hardly seems surprising considering the fact that digital innovation is now advancing at an unprecedented speed.

As a result, businesses now have to be able to react and adapt to this ever-changing landscape. For many businesses, the security of ‘sticking to what they know’ can seem favourable to trialling a new technology, but by the time they have come around to the idea of change, the likelihood is that that new innovation is already old news. For digital transformation to be a success, businesses have to be willing to try something new, and to try it quickly.

 

2. Legacy systems

Embracing digital transformation also means doing away with legacy IT systems. Indeed, even with the relevant business members on board the digital transformation journey, if the relevant digital systems are not in place, there is only so much that can be achieved. For a lot of businesses, therefore, digital transformation represents a major overhaul in the way their organisation works. However, failure to change out legacy systems for new technology will continue to act as a significant blocker to the success of their projects, as over half of the respondents in the Harvard Business Review survey noted.

 

3. Inability to work across silos 

In a siloed business, different teams compete for resources and funding, and communication is scarce.  And whilst this organisational structure may once have worked, these behaviours are not conducive to digital transformations, which require change across the entire end-to-end business.

Organisations need to ensure that teams are working together in their attempt to transform, because digital transformation does not exist in siloes – in just one location or in one team. It is a single strategy that spans the full breadth of an enterprise.

 

 4. Inadequate collaboration between IT and lines of business 

Today, technology and IT are an intrinsic part of any organisation. Every business process is driven or supported by technology, and this means the IT department must be connected with all other aspects of the business. Although it may sound simple, the Harvard Business Review found that 49% of respondents surveyed identified inadequate collaboration as a challenge on their path to digital transformation. Business leaders therefore need to ensure they are appropriately linking their business together if they are to succeed in their endeavours. 

 

5. Risk-aversive culture

In a survey by the Harvard Business Review, 47% of respondents indicated that a risk-aversive culture was a real blocker to their digital transformation attempts. Seeing as digital transformation – as its core – necessitates risk, and a business being willing to explore and experiment, organisations need to ensure they are facilitating these changes from the inside out.

Creating a culture where all members of a business have bought into the idea of moving forward into the digital age, and where innovation is not only welcomed but encouraged, is now imperative to transformation success.

 

6. Change management capabilities

As should be obvious from much of what has already been discussed, but digital transformation represents a change across the entirety of a business. Businesses therefore need to ensure they have the capabilities in place to facilitate these changes; whether it’s rolling out completely new technologies, or pushing for a digital first culture, change needs to be managed, and for just under half of the senior executives surveyed by the Harvard Business Review, and inability to do so presented a real challenge for their digital transformation initiatives.

 

7. Lack of a corporate vision for digital

Just because businesses know they should be making the move to digital doesn’t mean they know what to do, or how to do it. Ultimately, true digital transformation requires vision and planning, and organisations need to know what they want to achieve from their endeavours. Many businesses still believe that planning to protect their core business, rather than expanding into innovation and embracing the changing digital world, is the key to longevity. However, those who have a clear vision in mind will undoubtedly see more success in their digital transformation than those who see it as an ad-hoc need.

 

8. Lack of talent 

In a recent survey by Mulesoft, two-thirds of IT decision makers surveyed admitted that they were unable to deliver on digital projects as a result of an IT delivery gap. It shouldn’t need more evidence than this; without the right skills in a business, organisations will remain fundamentally unable to complete their digital transformation projects.

And, with the rate that digital transformation and technological innovations advance, businesses need to prioritise bringing in the right talent and plugging their skills gap if they have any hope of completing their initiatives. Read more about how a lack of skills is negatively impact businesses’ digital transformations – including how organisations are seeing a negative impact on their revenue as a result - here

 

9. Insufficient budget

The cold hard truth is that digital transformation costs and, to be innovators and set the benchmark for digital initiatives, businesses need to be willing to invest in the process. Indeed, spending on digital transformation is expected to reach $1.7 trillion by the end of 2019 (IDC). 

Sometimes the problem genuinely lies in a lack of funds, but other times it may be the unwillingness of senior management to re-invest budget into digital transformation initiatives. Businesses should consider if they are truly unable to fund digital projects, or if they are simply being too conservative with where they put their money. If the latter is the case, businesses need to adapt – because those who do not invest in innovation will find themselves quickly falling behind.

 

10. Cybersecurity

Cybersecurity risks now go hand in hand with digital transformation; businesses need to be able to protect themselves as more and more information is moved to the cloud, and as organisations become increasingly reliant on technology. It is no surprise, therefore, that cybersecurity is presenting a very tangible threat to the success of digital transformation projects. If businesses are to survive in the digital age, they need to ensure that their security measures advance alongside their digital transformation initiatives.