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Top-5 obstacles preventing digital transformation

Departmental silos within organizations, especially in HR (Human Resources or People and Culture departments), continue to create major barriers to enterprise-wide digital transformation.

These are findings highlighted by the survey “Leading Transformation: Shaping the C-Suite for Business 4.0 Innovation” by the Association of Executive Search and Leadership Consultants. Their report is based on a survey of +600 executive recruiters and leadership advisors from leading executive search firms.

HR and legal departments the least advanced in their digital transformations, while marketing and technology departments were ranked the most digitally advanced within organizations.

The findings do not vary significantly by geographic region, with HR and legal teams ranking at the bottom across all major geographies.

We see many organizations trying to digitally transform and speed up poor processes rather than step back and contemplate how they could use new tools to do things in a better, faster, more cost-effective way.

Actually, that is the main problem: Digitising, transforming old processes, adding to what doesn’t work already is not the way forward.

Let’s have a closer look at which are the main obstacles that we need to overcome to progress on any company’s digital transformation.

Top-5 barriers for digital transformation

The top-5 obstacles to prevent companies to reach their digital transformation strategies are:

  1. Legacy approaches: from following old success models to fence in digital transformation just to new areas and not to all functions of the company.
  2. Lack of the right talent: there is a huge mismatch, especially for executives and directors, on the so-called triangle of sought-after skills, which is data analytics, technological fluency and business acumen.
  3. Lack of investment: while leaders understand the need to digitally transform, many organizations fail to invest the time and resources into ensuring that there is a sound strategy in place to make it happen.
  4. Resistance to change: if innovation is not at the heart of the company culture it is not going to happen. And this means having support and training to ensure a uniform understanding of the process along with everyone in the organisation.
  5. Lack of clear definition of what this digital transformation means for the business. So there is no real substance or definition to their agenda

This shows the need for all of the C-suite roles to play a role in driving digital transformation, adding that the HR function has a dual challenge in terms of digital transformation:

  1. how to use technology to drive operational efficiency and,
  2. how to create a talent strategy for an organization that is transforming its core business model because of emerging technologies.

Finding and retaining talent, especially for the younger generation, requires an understanding of the changing needs and priorities of this digitally savvy younger generation of leaders.

If you believe HR should be transformed, digitised to make it more efficient, read more about the Labour Market Digital Revolution.

For your information, here you have the executive summary of the report mentioned above: