What are the Biggest Barriers to Digital Transformation?
Digital transformation is a moving target. And for many companies, it is slipping farther from reach.
While the influx of technology accelerates, recent research suggests that transformation efforts are actually losing speed as a result of barriers to digital transformation. PwC’s Digital IQ Report compared answers from industry leaders today to those from ten years prior to figure out why.
To draw conclusions about the effectiveness of digital strategy, PwC employed a metric they call the digital IQ. Digital IQ measures organizations’ ability to harness and profit from technology.
The study found that over the past decade, digital IQ has regressed. This is partially due to the fact that digital isn’t measured against a static scale but instead tracks organizational preparedness in relation to current digital landscape.
PwC found several key barriers to digital transformation and offered actionable solutions for businesses going forward.
The Main Barriers to Digital Transformation
Failure to Address the Human Experience is Lowering Digital IQ
According to the research done by PwC, the primary reason for the waning digital IQ is a lack of emphasis on the people involved. Technology is only as valuable as the benefits it yields those who use it, a principle that is relevant to both employees and customers.
The human experience has long been overlooked in favor of spreadsheets and strategy. Business leaders are only now beginning to understand that in order to bolster their organization’s digital IQ and in turn retain a competitive digital edge — they must embrace a holistic approach to tech and the humans using it.
Leaders’ perceptions of why they’re adopting technology versus the way it is actually being used might also be at fault here. 70% of executives claim to focus on ways new technologies will affect human experiences. However, in reality, research shows they are more likely to spend their time involved defining strategy and investment than leading customer-facing solutions.
Disconnect Between IT and Business
Based on data and surveys from 2,216 companies, PwC concluded high digital IQ correlates with revenue growth and increased profit margin. This trend has elevated the position of the CIO, who is usually responsible for building digital strategy within companies.
Today more organizations recognize the potential of technology adoption to drive the bottom line. However, most are not acting fast enough to keep pace with digital innovations. Technology adoption still takes on a passive role — as defense rather than offense. Meanwhile, the target keeps moving.
The digital leader must understand where resources are being invested and how they tie back to the digital roadmap. Without fitting all the pieces together — digital, human resources and the customer experience — it will be difficult for businesses to tackle the upcoming challenges from the next phase of transformation.
Employee Skill Sets Do Not Match the Digital Demands
A gap exists between the role employees are prepared for and the reality they are encountering on the job. This mismatch of abilities and expectations is jeopardizing transformational efforts.
Customer-centric organizations understand that creating a competitive user and customer experience demands specialized skills. These range across many areas, among them: cybersecurity, development of new technologies, UX, and human-centered design.
Even companies that employ individuals with the relevant skills often find it challenging to maximize their potential. One-quarter (25%) of PwC’s respondents said they use external resources even when they have skilled workers in-house. The reason for this is because it is often too difficult or too slow to work with internal teams.
Addressing this problem starts with leadership. Executives who have established themselves as digital leaders have adopted a learning mindset. Within the landscape of digital transformation, changes occur too fast for any staff member to get comfortable with their skill set. Businesses must step up their educational game and equip their staff with the tools to succeed.