Top 6 barriers to digital business transformation

barriers to digital business transformation

An increasing number of organizations are embracing modern technologies to digitally transform their business. However, only a small proportion of them have successfully scaled their digital initiatives.

According to Gartner, the enterprises are realizing that digital business transformation is not about just buying the latest technology, but also adapting to the changes in culture and systems.

The analyst firm said that digital business requires different skills, working practices, organization models and cultures. It is not easy to transform from a structured, ordered and process-oriented organization to an organization with ecosystems, learning, adaptation and experimentation.

Some organizations navigate the change, while others that can’t change become outdated and get replaced. Gartner has researched and identified the top barriers to digital business transformation that every CIO must overcome to transform their organizations.

Barriers to becoming a digital business

1. Culture of change-resistant silos and hierarchies

“Culture is organizational ‘dark matter’,” said Marcus Blosch, research vice president at Gartner.

“The challenge is that many organizations have developed a culture of hierarchy and clear boundaries between areas of responsibilities. Digital innovation requires the opposite: collaborative cross-functional and self-directed teams that are not afraid of uncertain outcomes.”

For becoming a digital business, organizations need a culture of collaboration, where people can work across boundaries and explore new ideas. However, the organizations are stuck in a change resisting culture.

The organizations need to define a digital mindset, assemble a digital innovation team, and develop a new culture. This will enable a connection between digital innovation and core teams, which can be used to embrace new ideas and culture.

2. Lack of willingness to share and collaborate

Gartner identified that people in organizations are not willing to share their knowledge and collaborate with teams because of the issues related to ownership and control of processes.

Mr. Blosch said that organizations should try to find ideas where interests overlap. It is not essential to have everyone on board in initial stages. Create a starting point, build a first version, test the idea and gain the momentum needed for next step.

3. Lack of skills and resources

When CIOs and CDOs try to initiate the process of digital business transformation, they find that their organization lack required skills and resources.

“CIOs should address the digital readiness of the organization to get an understanding of both business and IT readiness,” Mr. Blosch advised. “Then, focus on the early adopters with the willingness and openness to change and leverage digital. But keep in mind that digital may just not be relevant to certain parts of the organization.”

4. Organizations following traditional pattern

It becomes difficult for organizations to become a digital business when they keep following a traditional business pattern. The traditional pattern is organizing business into functions like IT, sales, and supply chain, with focus on operations.

Organizations need to seek a different approach for digital innovation. Gartner said that people, processes and technology blend to create new business models and services. Enterprises need skills which focus on innovation, change, creativity, as well as modern technologies like artificial intelligence (AI) and internet of things (IoT).

Mr. Blosch suggested that small or innovative enterprises should redefine the roles of individuals to include more skills, while other enterprises should create a separate group for handling innovation with requisite skill set.

5. Lack of right practices to complement talent

Some organizations have the right talent, but they lack the right practices. The right practices help the talent work effectively. Gartner said that there are no tried and tested practices available for implementation. Every organization needs to find the practices that complements them best.

6. Change requires time, resources and money

It costs money, time and resources to develop platforms, change organizational culture and create an ecosystem of partners.

Organizations need to build platform-based strategy that can support continuous change and design principles. Such strategies will make it easier for organizations to adapt new services.

Suggested reading: Top 10 habits of customer-centric organizations


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