Although most organizations today are undergoing processes of digitization and incorporation of new technologies, there are still many barriers to digital transformation that they must face. However, for those able to overcome these barriers, the efforts of this digital transformation are paying off: a Gartner study indicates that more than 50% of CEOs involved in digital transformation processes said that the changes introduced have increased their benefits.
The human factor in the digital transformation
Interestingly, the main barriers to digital transformation are not technological, but human. Beyond a clear roadmap and proper implementation of the right technology, leaders must think seriously about the human factor. An appropriate plan to manage the human barriers needs to be executed in parallel with the digital transformation program.
In fact, this transformation may be more difficult in traditional organizations with a history of success and low employee turnover, for several of the reasons we will see below, such as the existence of silos, inherited technology, lack of digital skills or resistance to change.
The digital transformation implies more of a change in the organization’s culture than in technology. Companies that are able to change the technology as well as the mentality of their employees will be the ones that benefit most from this process. As the scientist and researcher George Westerman says, “when the digital transformation is done well, it’s like a caterpillar turning into a butterfly, but when it’s done badly, the only thing you get is a faster caterpillar.”
7 barriers to digital transformation
There are many references as to the problems faced by companies tackling a digital transformation. We have compiled in this post those that seemed most relevant to us in our experience. They do not have a defined order, because in each company one or the other can occur in different intensity. However, it is important to know them in order to detect them as soon as possible and act in time to guarantee the success of the project.
Silos
Organizational and information silos are one of the most commonly identified problems in any organization, yet one of the most difficult to eliminate. One of the main advantages of new technologies is that they help organizations to break down information silos, and therefore, they can present many difficulties and internal resistance.
The digital transformation allows knowledge to be shared and collaboration to take place in a way that was previously unknown, eradicating the culture of obscurantism and individual ownership in the search for a greater good. To break through these silos, it is necessary for the entire organization to participate and get involved in the digital transformation, in a transparent way, and to be able to visualize and take advantage of its benefits as soon as possible.
Legacy systems
It is a bit paradoxical that technology (in this case the existing technology in the company) is one of the biggest barriers when it comes to carrying out the digital transformation of the company. All the efforts that the company made in its day to modernize now result in an enormous number of applications and systems that must be maintained forever and that must be taken into account before any innovation is carried out.
From conflicts with the organization’s IT area, to the problems arising from the cost of dismantling and migrating in many cases from old systems to new ones, or the various incompatibilities of data and infrastructure, legacy systems are definitely something to be taken into account from the first moment of the transformation project.
Security
One of the main advantages of the digital transformation is the ability to allow data to flow and be accessible anytime and anywhere by all employees in the organization. However, many companies are resistant to this change due to security concerns.
At this point in time it is important to keep in mind that with the level of current applications in the cloud, with users connected from every corner, the security perimeter is often more imaginary than real. Even in legacy systems the sense of security is also false, as hackers are constantly developing new methods of attack capable of defeating virtually any security system.
It’s time to separate security from the network and implement policies that apply where applications reside and users connect. If the applications go to the cloud, all we have to do is bring security there too.
Budget
The digital business transformation involves effort, resources and money. Especially large organizations with many dispersed assets are experiencing difficulties as their current systems become obsolete. The cost of replacement is often too high to be implemented across the organization, and isolated improvement projects arise that have no lasting impact and may present future maintenance problems. However, new competitors and smaller companies do not have this problem, which can cause them to move forward very quickly.
Delaying the digital transformation by not assuming the cost of the investment can mean for many companies the end of their chances of survival. Business leaders need to be demonstrated the business benefits of the digital transformation and the risks of inaction to ensure that the status quo of the company is maintained and its performance improved.
Lack of skills and talent
While companies are traditionally organized around different functions (sales, IT, supply chain, etc.), digital innovation requires a different approach, where people, processes and technology combine to create new business models and new services. In this environment, employees need new skills related to innovation and creativity, linked to technology, such as Big Data, the Internet of Things (IoT) or artificial intelligence (AI), among others.
Managing talent in the digital transformation requires a global approach, combining the possibilities of redefining individuals’ functions to include more skills and competencies, with the creation of expert groups or even the outsourcing of certain activities.
Leadership
For any kind of change to be successful, companies need the commitment and support of top management. Unfortunately, even in many organizations, real management support for digital transformation initiatives remains insufficient. It must be taken into account that often transformation initiatives arise in the middle of organizations and need the support and participation of executive areas in order to involve all employees and achieve success.
Linked to the previous section, we must take into account the difficulties often faced by companies that, despite having involved their leaders, find that they lack the necessary skills to manage teams, expectations and reticence within the organization around digital change. For this reason, companies must make an effort to identify, select and train skilled leaders who are capable of moving the entire organization towards the deep change that the digital transformation entails.
Risk aversion and resistance to change
Any process of change has risks and doubts associated with it. These thoughts are reasonable and to some extent positive, but they must also be accompanied by the conviction that standing still can lead to failure and even destruction of the organization itself.
It may be that in the face of these doubts, many employees adopt a distrustful stance and try to boycott the initiative convinced that it will fail, which irrevocably causes their prophecy to be fulfilled, precisely because the very people who are supposed to drive the transformation do not believe in it.
Resistance to change can be especially strong in successful companies, where many people may doubt the need for change if things go well. This is because most people are not aware that the business environment changes until it is too late.
This is also where the leadership of the company and those responsible for the project must overcome these doubts, perhaps by incorporating the transformation process gradually, working first with the groups of people most likely to take the initiative and incorporating the rest progressively, once these first groups show the benefits and the way forward.
