MARKET | Jun 15, 2017

What obstacles exist for Digital Transformation?

An IDC survey highlights what is holding companies back in the process of digital transformation

The switch to digital business models calls for radical changes in the internal organisational processes of businesses which are not always able to cope with. Complex changes, often hindered by cultural resistance to change, have been identified as the main limit to Digital Transformation (for 46% of Italian respondents) by a recent study on “The Company of the Future and Digital Transformation: Challenges and Opportunities for Releasing Talent“, conducted by IDC and commissioned by Cornerstone OnDemand. Other obstacles are lack of vision by leadership, inadequate financial resources, difficulty in retaining the best talent and lack of internal innovation.

That’s like saying: there is no innovation if there is no involvement and conviction of the people working in the businesses.

The survey, involving 1,469 corporate HR managers and line managers in companies with more than 500 employees operating in 14 European countries, reveals that 91% of Italian companies recognise digital transformation as a priority, but only 63% have really started the process. According to the study, the difficulties for Italy begin at the level of management buy-in, due to a shortage of strategic vision on digital transformation that results in a substantial weakness in the sponsorship and financial support needed for complex projects. This is compounded by the inability to find talent and skills (mentioned by 26%) and the difficulty of keeping them in the company (27%).

“Digital transformation is now a top priority for companies,” commented Bo Lykkegaard, Associate Vice President of IDC Software and European Enterprise Applications. “Successful transformation requires significant changes in management, training and development of the workforce.”

Browsing through the report, Italy figures slightly below the European average (39%) when it comes to long-term planning capacity (36%). Recalling that Italian companies show a certain lack of vision and leadership in addition to scarcity of financial resources, it is no surprise that long-term planning capacity ratings are below the European average and that many of the companies interviewed express a medium-low assessment of their capacities.

The lack of leadership capable of clearly communicating their vision and strategy, together with the limited availability of financial resources, compromises the ability to extend the planning process beyond a very limited time horizon.

So how can the obstacles to the digital transformation of businesses be overcome?

The research points to the important role played by the people who work in them and the managers who coordinate and have to identify the best talent in the company. In fact, in this regard, 27% of European companies interviewed state that they have difficulty retaining the people most prepared for supporting the process of digital transformation.

Tools that can adequately analyse the data available, with particular reference to those useful for workforce planning, can certainly encourage digitisation. 48% of the sample surveyed are unsatisfied with the tools of analysis that are currently available.

A point in favour of digital transformation is also the teleworking, which potentially enhances the quality of life of users and is now possible: 84% of respondents – 81% in Italy – claim to be able to access data and business applications, even remotely, and 65% – 61% in Italy – report that they can also perform all or part of their work through smartphones and tablets.

For Italy, in particular, the necessary actions that could positively impact on digital transformation are summarised as:

  • development of a shared and transparent strategic vision;
  • clear communication about the company’s digital agenda from leadership to the entire organisation;
  • retention of talent;
  • guarantee of financial support for digital transformation projects;
  • investment in Human Capital Managementsolutions which enable monitoring of the performance of some KPIs in the digital transformation process;
  • support for workers who have to open up to change through greater decision-making freedom useful for achieving business goals and improving management, development and work planning;
  • greater attention to increasingly transparent performance management.

Last but not least data themselves: in fact, companies will have to use those of Human Resources to measure digital transformation processes.