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3 Common Roadblocks to Digital Transformation

  • by Nicolas Costa
  • Posted May 21, 2018
  • DIGITAL TRANSFORMATION
What stands between your vision of digital transformation and its successful execution?While most companies are realizing that undertaking digital transformation is necessary to keep themselves competitive and growing, there are still many roadblocks that get in the way when it comes to achieving what they’d like.We’ve previously talked about potential resistance or fear of failure among teams – here are three more common roadblocks, and some thoughts on how you might deal with them:
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#1. The talent gap

The talent gap is real. In fact, CIO cites a shortage of qualified, skilled IT talent as being the biggest roadblock to digital transformation. In an IDT study cited in their article, only 17% of respondents had sufficient current employees with the right skills to see them through a smooth digital transformation.Successful transformation requires a solid set of modern skills, both in terms of technical, IT knowledge, and skills across other important functions. Many medium to large businesses are lacking in these skill sets:
“IDT reports that cross-functional knowledge is important for digital transformation. In the study, 88 percent of respondents said “extensive business-related knowledge on the IT side is crucial for developing a digital transformation strategy,” but they’re experiencing major gaps across departments. Fifty-eight percent say their IT executives have the right knowledge for digital transformation, while only 27 percent said their business executives had the same level of technical knowledge. “The business and IT leaders need to come together to create a single strategy driven by business goals that provides overall guidance which the entire organization can support.” (CIO)

Navigating the roadblock

First of all, consider this advice from the IDT study featured in the CIO article:
“Holland advices creating a “comprehensive strategic workforce plan” to win the talent war and executing on a strong hiring strategy to land the best talent. And it’s not always about technical skills, he says. Oftentimes businesses are looking for skills like analytics and strategic thinking, an ability to manage others and business acumen.”
Creating a plan is an excellent first step. While obviously, your company would love to bring the best possible skilled talent onboard, so would everyone else. Attracting that talent can be difficult and expensive (although obviously not impossible!).As part of a comprehensive plan, look at other things you can do to acquire the needed skills – do you have people within your current team who could be trained up to attain those skills? This may be a solution that provides a win/win to team members and the company.Further, remember that the requirement for those skills tends to go beyond the IT department now. For example, there are many jobs in marketing advertised where they’d like the role to have knowledge of HTML, Java or other traditionally IT skills. As the CIO article mentions:
“Skills that were once considered purely IT skills in the past — such as coding — are now being hired into business units. The line between what is IT and what is business is blurring. IT will need to hire or develop better coordination and soft skills to maintain alignment with business partners.”
Roadblocks to digital transformation

#2. Legacy systems

Sometimes the legacy system itself proves to be a huge roadblock. How much important data needs to be safely transferred from one system to another? What are the risks of anything going wrong? An IBM study estimated that more than 80% of the world’s enterprise data still resides on mainframe systems. This is a technology that is now over 50 years old.Most large companies have data that could be the ruin of them if compromised, but picture a company where there is an added layer of risk, for example, a bank. With account balances, loans and customer information existing on these legacy systems, there is a real risk that vital information goes up in smoke.ANZ New Zealand is an example of a bank that has gone through huge digital transformation initiatives in the last few years. Moving onto new systems was a massive project which involved taking great care that nothing was lost in the changeover. It was a move necessary to afford all customers the same level of service:
“Coupled with a modern integration technology, a modernised core banking platform enables legacy customer, loans and deposits applications to fully participate in a digitally enabled customer centric banking experience.”

Navigating the roadblock

Strong project management is a key first step. Having the right project managers and team members in place will be critical to success. Secondly, where the services you deliver are considered risky or complex during a system changeover, look for ways to keep service delivery stable and critical actions uninterrupted.This often means running systems together for a period during the transformation journey. Sometimes you may need to run a legacy system in parallel and slowly shut it down.One thing ANZ did well during their transformation was to deploy a large team of analysts who undertook “gap analysis” – looking at the gaps between the legacy system and the new one when it came to each critical function. This helped to ensure a smooth transition.

#3. Forgetting the customer

A critical mistake that many companies make is to be too technology-centric when it comes to digital transformation. Sometimes it’s a kind of “shiny object syndrome,” where executives see that some new technology looks amazing, but they haven’t thought through exactly why they should implement it and who would benefit.The thing with digital transformation is that it’s less about the actual technology, and more about meeting the needs and expectations of customers, partners, and employees.If you get too far ahead in implementing digital transformation, let’s say, diving into the latest in AI and Internet of Things, there’s a risk that you’ll spend a lot of money, only to find you’ve left your customers behind.

Navigating this roadblock

A key part of digital transformation is to lead with your customer’s needs. Take a strategic approach as to why you’re investing in technology and understand how and why it will meet those customer needs.In the end, if your transformation impacts customer-facing technologies, delivering value is the aim of the game. To take another banking example, when online banking capabilities were improved, some banks took the step of adding fees to in-branch transactions, stating some variation of “because you can do that online” as the reason. Did all of their customers even have access to online banking? No. Several elderly customers in particular complained. They didn’t use the internet at home, nor did they have any plans for getting it.The bottom line? Make customer value-based technology decisions, but make sure you’re looking out for those who might have difficulty with it too.Roadblocks to digital transformation
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Final thoughts

Ultimately, when a company is undertaking a digital transformation, it’s important to have strong leadership in place. Digital transformation begins with understanding the needs of customers, employees and other stakeholders, and making informed technology investments.Transformation requires considerable planning and investigation into aspects such as having the required skills on your team. It involves analysis of the gaps, between current skill levels and those that are needed, and between legacy systems and those you’d like to have.Most importantly, the digital transformation should deliver real value, both to the company and its customers.Koombea develops technologies to help companies through digital transformation. Talk to us about how we can help you today.
Nicolas Costa Director of Marketing & Sales

An expert in driving sales & marketing growth in the technology industry. He loves travelling and playing with his kids.