7 Barriers to Digital Transformation

The unexpected nature of the pandemic in 2020 forced organisations to have to quickly migrate all their day-to-day activities onto digital platforms to enable remote working. As a result, many organisations were adapting new practices in an ad-hoc nature as people keenly waited until things could return to normal.

But lo and behold, more than two years later, the ‘new normal’ of remote working has not only remained unchanged but research from Ladders suggests that it is here to stay with projections that 25% of professional jobs in North America will be remote by the end of 2022.

With such projections, organisations are altering their plans toward building more strategic and long-term digital transformation initiatives that will take advantage of emerging markets and opportunities. While much of the pandemic was spent tightening wallets, research from Gartner suggests that organisations are willing to spend more in the coming year with IT spending growing by 5% to $4.5 billion from 2021’s figures.

While there is increased interest and necessity for quick and effective digital transformation, it does not mean it does not come with its fair share of challenges. In this blog, we discuss the seven key barriers organisations need to overcome when implementing their digital transformation initiatives.

What is Digital Transformation?

First things first. Just what is digital transformation?

Digital transformation refers to the process of implementing and integrating digital technologies into all areas of an organisation to achieve greater efficiency, accuracy and value for the organisation. 

Digital transformation involves more than simply bringing in new tools and processes, it often also entails critical cultural changes to ensure the right cultures are in place that is conducive to the digital platforms and spaces. Working digitally is a relatively new experience and many of our typical workplace cultures and practices cannot easily translate into the digital space.

Digital transformations look different for each and every organisation. From organisational size and culture to pre-existing tools and practices, many different factors can impact the digital transformation strategy and initiatives implemented. However, there are some common barriers that organisations may face while implementing their digital transformation initiatives.

Extended reading: Digital transformation and the evolving role of the PMO

1. Legacy Systems

One of the most obvious barriers to digital transformation is an organisation’s pre-existing legacy IT system. Many challenges to digital transformation come from outdated tools and inadequate processes that cannot accommodate the level of agility and flexibility necessary in our fast-paced markets. 

With the growing demand for Artificial Intelligence and Big Data tools, organisations sometimes need a complete overhaul of their pre-existing systems to effectively integrate these new technologies. For many, dismantling their legacy systems is not only difficult and costly but also involves extensive retraining and restructuring. 

2. Inconducive culture

As mentioned, a significant part of digital transformation is shifting culture. If an organisation has a risk-averse and change-resistant culture, implementing any new initiative, let alone a digital transformation strategy will face challenges. Resistance to change is a common human trait yet many organisations still fail to take it into account when planning their digital transformation.

When implementing a digital transformation initiative, building an open, empowering and collaborative culture is critical to ensuring greater levels of investment and adoption of the initiative. Building a culture that is flexible, adaptable and open is not only important for the digital initiative’s success but for the organisation’s longevity moving into the future. New technologies and practices will always emerge and it is those who can adapt that will be able the leverage the most out of them.

3. Lack of enterprise-wide collaboration

Many organisations have their departments functioning as their own individual siloes and lacked critical collaboration and communication between the different departments. Traditionally, IT-related problems and initiatives were handled by a singular IT department that often worked separately from other organisational departments. However, digital transformation initiatives encompass all aspects of a business and cannot be spearheaded by a singular department. 

A successful digital transformation should improve the experience and practices for all parties within an organisation. Rather than the traditional route of departments competing for sourcing and funding, digital transformation initiatives need to be embraced, championed, supported and built with the collaboration of the entire organisation to be truly successful.

4. Lack of Vision and Leadership

With any change, people need to know where they are going and how they are going to get there. Too often, digital transformations are taken on with much fervour but quickly blow out of proportion due to a lack of understanding, strategy and leadership.

Firstly, digital transformation teams or the digital transformation office need to have a clear understanding of what they need and why so they can create and communicate a clear vision for the entire organisation. The transformation office has the critical role of ensuring the right practices, cultures, tools and resources are available and implemented to ensure the transformation is as smooth as possible.

Additionally, having the support of key leadership figures is also critical to giving employees the confidence to truly invest in the transformation office’s activities. Without proper buy-in from leadership figures, employees may see the initiatives as a mere imposition rather than a strategically valuable move of the entire organisation.

5. Insufficient budget

While new innovations like cloud-based systems are making IT solutions cheaper than they have ever been, they are still costly endeavours. Surveys from Deloitte show that mid to large-scale organisations in the US spend up to $11.3 million on average on digital transformation initiatives. As an enterprise-wide initiative, it is hard to have a fully successful digital transformation program that merely operates with grassroots level budgets. Additionally, digital transformations cost more than just the tools themselves but have to consider training and other resources. 

However, it is important to note that delaying digital transformations may end up becoming costly for organisations as they can end up left behind and even lose their chance of survival in the increasingly fast-paced market.

6. Ineffective change management

Change is no new concept and businesses are always evolving as they grow. Whether it is introducing a new practice or implementing a new tool, having a clearly defined and effective change management practice can make a big difference in the success of an organisation’s digital transformation initiatives. However, many organisations find themselves lacking in this department with just under half of the respondents in a Harvard Business Review survey of senior executives citing the lack of effective change management as a real challenge to digital transformation initiatives.

7. Talent Gap

A survey by Mulesoft revealed that two-thirds of IT decisions makers were unable to deliver their digital projects due to an IT delivery skills gap. Not everyone has the skills, knowledge or experience to effectively lead a digital transformation strategy. With new tools and practices constantly emerging, digital transformation teams need to know what is happening, how it is valuable to their organisation and how to effectively implement it. 

While for some companies this may mean hiring a completely new digital transformation team with specific tech-focused skills, for others it may involve training current employees and implementing initiatives to promote a culture that is more digitally inclined. Organisations also have the ability to completely outsource their digital transformation needs to experts who have extensive experience and know-how in the field.

Overcome digital transformation barriers with pmo365

While these seven barriers are some of the most common challenges faced by organisations, every digital transformation is unique with its own set of barriers to overcome. So why not do your digital transformations right with the right team and the right tool by your side? 

Our pmo365 solution is ready to take on all your digital project and portfolio management need by consolidating all your activities and data onto a single, easy-to-use platform. If you want to find out more about how we can help, make sure to see our how it works page or book in a call with a PPM expert to see the solution in action!

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