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Six barriers to digital transformation; CIO strategies to conquer them
CIOs are under pressure to help companies find their digital mojo, but challenges abound. Learn about the top six barriers to digital transformation -- and how to vanquish them.
As a global management and consulting firm that counsels clients about digital transformation, Accenture had to...
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show its own mettle in remaking itself.
That led to an aggressive pace of change over the past few years, said Merim Becirovic, Accenture's managing director of core infrastructure and business operations.
Consider, for instance, this measure of success: Three years ago, Accenture had only 10% of its infrastructure and compute needs in the cloud, but now it has 90% in the cloud.
Such gains didn't come without challenges, Becirovic said. Accenture leaders discovered a number of potential barriers to digital transformation, ranging from new skill requirements to security to just how fast the organization can keep changing.
Accenture is far from alone in its quest for transformation.
The 2017 report "Skills for Digital Transformation," done by the Technical University of Munich in conjunction with software company SAP and the Initiative for Digital Transformation, found that 90% of the 116 executives from 18 countries surveyed regard digital transformation as important for their company's overall business strategy.
Meanwhile, research firm Gartner found that 42% of CEOs have already started digital business transformation, while nearly half of the 388 surveyed CEOs said their boards are pressuring them to make progress on this front.
Steve Semelsbergerpresident, SYPartners
However, like Accenture, those organizations are finding barriers to digital transformation, with CIOs and other executives listing numerous concerns.
One study, the Logicalis Global CIO Survey 2017-2018, found that organizational culture, cost and legacy infrastructure are the top three barriers to digital transformation. Skills, security and lack of interest in transformation are other reasons listed.
Meanwhile, a report from Harvard Business Review listed an inability to experiment quickly, legacy systems and an inability to work across silos as the three biggest challenges to digital transformation, followed by inadequate collaboration between IT and the business, a risk-adverse culture and limited change management capabilities.
Here's a closer look at the top six barriers to digital transformation identified by leading IT execs and consultants, along with the strategies they recommend CIOs use to overcome them.
1. The wrong infrastructure
The global management consulting firm Bain & Co., in its "Six IT Design Rules for Digital Transformation," identified cloud as a key component, stating that an "adaptable technology infrastructure that manages the complexities of a multicloud environment, embedded security and compliance policies, and deep business alignment" is essential for companies today.
Bain argued that IT also must move beyond limited analytics capabilities and cumbersome manual processes and implement robotics process automation (RPA), machine learning, AI and other emerging technologies that enable a nimble workforce that can utilize data for fast decision-making.
Ross Mason, founder and vice president of product strategy at MuleSoft, a SaaS provider, agreed that cloud and advanced analytics are keys to providing the technology agility companies need to compete today. "CIOs looking to modernize their organizations won't find success if they don't have the right infrastructure in place to build software to scale for the next 10 years," said Mason, who works with CIOs on digital transformation.
According to Mason, CIOs who are able to invest in these new technologies that enable transformation, such as IoT, machine learning and AI, are those who get buy-in from their CEOs by aligning IT with business initiatives and by developing metrics that show the value of those IT investments.
2. The wrong skills
As Accenture underwent its transformation, Becirovic found that his own technology team had to change as well by acquiring the skills needed to work within the new environment being created. "There's a learning process, and teams need to be disrupted as well," he said.
Studies show there's a lot of learning that needs to happen.
The Skills for Digital Transformation study found that only 15% of the surveyed executives felt they had the skills needed for digital transformation. The study lists more than a dozen key skills required for a digital organization, with skills in AI, blockchain, IoT, digital security and cloud computing among them.
Meanwhile, software company IFS surveyed 750 corporate decision-makers on barriers to digital transformation and found that more than a third "feels either slightly or totally unprepared to deal with digital transformation due to talent deficiency." Those voicing concerns said they're facing skills deficits in a number of areas, specifically business intelligence, cybersecurity, AI and robotics, big data/analytics and cloud.
CIOs aren't just struggling with getting the right technical expertise, said Larry Wolff, president and COO of Ouellette & Associates Consulting Inc. He said IT leaders continue to have trouble finding employees with the business acumen, as well as the communication and collaboration skills, that are essential in a digital enterprise where DevOps and business alignment rule.
Wolff said the CIOs who are most successful in overcoming this obstacle are the ones who have developed a strong partnership with their company's human resources team and collaborate with their HR colleagues to devise a strategy to train and hire the right talent.
"We don't see a successful IT transformation without a strong HR partnership," he said.
3. Resistance to change
Beyond acquiring new skills, IT teams, as well as their business unit colleagues, must be willing to work differently, according to Becirovic. "They have to have the willingness to move forward," he said.
The IFS report found that 42% of respondents listed "aversion to change" as a barrier to transformation, making it the No. 1 barrier in its research.
Strong executive support for digital transformation can help the enterprise embrace change and feel motivated to learn new ways of working and thinking, Becirovic said. Executives, however, also need to be sensitive to workers' concerns about transformation and find ways to sell them on the positives that will come with transformation.
Becirovic said leaders at Accenture used several typical forums (i.e., open discussions, training, brown-bag sessions) to help people throughout the organization talk about what was happening.
"[Executives should be] listening to workers and then challenge them to talk about the art of what's possible," Becirovic added. "If you give them the chance to be heard, but also challenge them to go out and try, you get a more balanced reaction."
4. The rapid pace of change
Leading executives say overcoming barriers to digital transformation is as much about building an organization that's equipped to keep changing as it is about change itself.
Yet, Becirovic said organizations that aren't thoughtful about how fast they want to go could quickly find themselves overwhelmed -- a scenario that could tank their efforts to transform into successful digital companies.
Cloud providers innovate at a much faster clip than enterprise IT ever had, which means that both IT and users throughout an organization could find themselves bombarded with constant change -- change that takes up valuable resources as workers perpetually must adjust to the new capabilities, Becirovic said.
"The amount of change that's going to be available to enterprises is only going to increase, so the IT organization has to decide how quickly it can take on all these new capabilities. This is where the CIO has to step back and say, 'I have to have some control, strategy and methodology on how to accomplish this; otherwise, I'll be pushing massive amounts of change constantly to my business,'" he said, adding that Accenture focuses on being N minus one, with N being the newest.
5. Lack of alignment with business goals
Steve Semelsberger, president at the consulting firm SYPartners, said one of the most significant barriers to digital transformation he sees is a lack of connection between IT transformation and business objectives.
"While CIOs are often well-equipped to explain and deliver technology shifts, they sometimes struggle to present their strategic plans in an emotionally moving way. A plan can be technically sound, but it doesn't resonate with business leaders' hearts and minds," he wrote in an emailed response to questions about obstacles to transformation.
"Without a great digital transformation story that galvanizes business and technology teams, efforts can be slow to gain traction. They sometimes fail to connect to core business drivers. And they might not receive the funding and resources they deserve."
He said successful CIOs know how to connect the dots -- and sell others on the vision.
"They build, practice and convey a compelling narrative. They define a clear purpose and vision for their digital transformation. They simplify what they're doing into a set of memorable 'bold moves.' They tie the transformation into key growth objectives for the company. And they articulate and activate the new mindsets, behaviors, skills and teaming models that their people will adopt," Semelsberger added.
6. Security concerns
According to the IFS survey, 39% of responding corporate decision-makers listed security threats and concerns as a barrier to transformation, making it the second top obstacle after aversion to change.
Becirovic, too, listed security concerns as a challenge to Accenture's transformation, explaining that the firm quickly recognized that it would have higher levels of threats as it moved more into the cloud.
To contend with this challenge, and to keep it from derailing Accenture's aggressive timeline for digital transformation, Becirovic said IT and the CISO organizations first developed a stronger partnership and then implemented a certification process to ensure that incoming technologies met the firm's security needs. He said Accenture uses its certification process to "give us reasonable assurance that the platform we want to consume doesn't expose us to any greater risk than we're comfortable with."