Success with digital transformation requires different skills, workplace practices, organizational models and even cultures. Here are the six top barriers, according to Gartner.
6 top challenges to becoming a digital organization
As organizations continue to embrace digital transformation, they are finding that digital business is not as simple as buying the latest technology — it requires significant changes to both culture and systems. Indeed, a recent Gartner, Inc. survey found that only a small number of organizations have been able to successfully scale their digital initiatives beyond the experimentation and piloting stages. Marcus Blosch, research vice president at Gartner, reviews the six barriers that CIOs must overcome to transform their organization into a digital business.
Challenge No. 1: A Change-Resisting Culture
"Culture is organizational 'dark matter' — you can't see it, but its effects are obvious," says Blosch. "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. CIOs aiming to establish a digital culture should start small: Define a digital mindset, assemble a digital innovation team, and shield it from the rest of the organization to let the new culture develop. Connections between the digital innovation and core teams can then be used to scale new ideas and spread the culture.”
Challenge No. 2: Limited Sharing and Collaboration
“The lack of willingness to share and collaborate is a challenge not only at the ecosystem level but also inside the organization,” Blosch says. “Issues of ownership and control of processes, information and systems make people reluctant to share their knowledge. Digital innovation with its collaborative cross-functional teams is often very different from what employees are used to with regards to functions and hierarchies — resistance is inevitable. It's not necessary to have everyone on board in the early stages. Try to find areas where interests overlap, and create a starting point. Build a first version, test the idea and use the success story to gain the momentum needed for the next step."
Challenge No. 3: The Business Isn't Ready
“Many business leaders are caught up in the hype around digital business. But when the CIO or CDO wants to start the transformation process, it turns out that the business doesn't have the skills or resources needed,” Blosch says. "CIOs should address the digital readiness of the organization to get an understanding of both business and IT readiness. 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."
Challenge No. 4: The Talent Gap
"There are two approaches to breach the talent gap — upskill and bimodal," says Blosch. "In smaller or more innovative organizations, it is possible to redefine individuals' roles to include more skills and competencies needed to support digital. In other organizations, using a bimodal approach makes sense by creating a separate group to handle innovation with the requisite skill set."
Challenge No. 5: The Current Practices Don't Support the Talent
“Highly structured and slow traditional processes don't work for digital. There are no tried and tested models to implement, but every organization has to find the practices that suits it best,” Blosch says. “Some organizations may shift to a product management-based approach for digital innovations because it allows for multiple iterations. Operational innovations can follow the usual approaches until the digital team is skilled and experienced enough to extend its reach and share the learned practices with the organization."
Challenge No. 6: Change Isn't Easy
“It's often technically challenging and expensive to make digital work. Developing platforms, changing the organizational structure, creating an ecosystem of partners — all of this costs time, resources and money,” Blosch says. “Over the long term, enterprises should build the organizational capabilities that make change simpler and faster. To do that, they should develop a platform-based strategy that supports continuous change and design principles and then innovate on top of that platform, allowing new services to draw from the platform and its core services.”