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Barriers to Digital Transformation

Digital transformation is already challenging the established way of doing business. It challenges the management practices cemented within the structure of the organisation. Those about to undertake a programme of digital transformation will face significant barriers to change.

Institutional Barriers: Some of the most common institutional barriers to digital transformation include resistance from older generations sitting on the board who subscribe to the ‘if it’s not broken don’t fix it’ attitude to change. Senior management does not always understand the drivers and necessity for planned digital transformation. A resistance to change the status quo, compounded by the existence of older IT systems and the politics between IT and Marketing, continues to impede the adoption of new digital technologies. A lack of clarity within an organisation about the roles each party plays and the long-term benefits of working together inhibits and slows the adoption of digital transformation.

It is vital senior leadership within an organisation steps up to own the digital conversion. Senior managers need to bring people on the journey with them.  Incentives and rewards offered during the digital transformation project can motivate new thinking and change. These incentives can be in the form of bonuses, raise, promotions and performance recognition. These incentives work to help breakdown barriers that all companies will undoubtedly encounter because of this underlying resistance to change.

Lack of Vision: Even though some companies can remove institutional barriers that hinder digital transformation, they may fail to develop a clear vision. Digital transformation requires a clear and communicated vision from leadership. It is important for senior leaders in any business to recognise the urgency brought on by the digital economy and that they take a proactive approach to championing digital transformation within the organisation.

Lack of Digital Strategy: A lack of clear digital strategy is a major barrier to digital adoption for companies, especially in their early stages of digital transformation. Organisations of all sizes need to understand that a clear digital strategy is what drives successful digital transformation. A clear digital strategy separates digital leaders from the rest. Those undergoing digital transformation projects need to have a clear scope of strategic objectives, and must be able to communicate these goals to all employees. Leaders need to be able to turn traditional strategies on their head and find new ways of utilising enabling digital technology.

For example, McDonalds, the global fast food restaurant chain, is digitally revamping the way it works and is attempting to redefine its restaurant experience. It is not only one of the first companies to adopt Apple Pay mobile payments solution, but is also integrating digital technologies to transform itself from a traditional fast food company to one which is agile, experimental and collaborative. Recent changes such as design your burger, not only accommodates the varying needs of the customer but also provides an opportunity help discover what the consumer wants on the menu.

Talent Gaps: The skill gap is most prevalent in low-maturity enterprises. Talent gap becomes an issue in digital transformation when people are unable to conceptualise the importance of adopting digital technologies and the long-term impact it will have on the business. The inability to adapt to change will ultimately lead to a small skill base within an organisation. The simplest way to address this is to develop existing talent by offering training that fills the skill gap and enables people in a company to gain new knowledge and build on what they already do well.