The biggest challenges to digital transformation
The past year has seen unprecedented growth in the number of our interims being involved in digital transformation projects. According to our latest International Survey, the total has grown from just 4% of assignments to 28%.
Our interims have lent support to digital initiatives in many ways: as strategic advisors (34% ), as programme managers (32%), as specialists (11%) and as HR consultants (4%). This means that they are well placed to identify some of the trends in digital change.
An interesting area within the survey concerns the challenges in delivering digital transformation. Only 15 per cent of respondents stated that there were no major obstacles in delivering the programme – which suggests that in 85 per cent of projects there are significant challenges.
The most common challenges cited by our interims are as follows:
1. Lack of expertise and competency (46%)
This is an unsurprising challenge in the area of digital transformation. The sheer demand for digital change is putting enormous pressure on resource – particularly in areas where many companies are vying to gain a foothold. Major areas of focus are data science, artificial intelligence, Blockchain and the Internet of Things. These skills are not commonly found in any abundance in the average company. This is a factor in the growth in interim appointments for digital projects.
2. Cultural barriers (37%)
Organisations must never underestimate the level of cultural influence required in driving successful change – whether or not there is a focus on digital. Aligning strategy, leadership and people is critical to breaking down cultural barriers. Everyone in the organisation needs to understand the change, the rationale behind it and, crucially, to believe in it. If people don’t recognise the need for change, they will resist it and the initiative will fail.
3. Insufficient top-level involvement (30%)
Most digital transformation initiatives are major projects with a hefty price tag. As such, they should absolutely be driven from the top. There should be an executive level sponsor for any substantial change – not least to give the programme credibility and demonstrate its importance. In many organisations, too, it takes a senior executive to drive the necessary behaviour to achieve the required results, especially where the project team encounters new risks, unexpected developments and problems that need to be addressed.
4. Insufficient funding (22%)
22% of our interim’s projects met with challenges due to insufficient funding: a surprisingly high number. The first step of any strategic initiative should be to develop the business case, with detailed financial projections and a significant contingency budget. A project with insufficient funding can never be expected to achieve its goals.
We also asked our interims about the single biggest requirement for successful change. Their response was that a clear purpose and objective for the transformation was essential. This is the starting point for digital transformation: everything else should follow. Taking time for thorough strategic planning is the key to avoiding these common transformational challenges.