When KPMG asked CEOs how the COVID-19 pandemic impacted their digital transformation plans, 74 percent said it accelerated the digitization of operations and the creation of a next-generation operating model by months, if not years.
Yet for some organizations, the initial hustle to transform can get bogged down by obstacles throughout the company. What are the barriers to rapid digital transformation? Read on to learn.
7 Barriers to Rapid Digital Transformation
Outdated data
One of the biggest barriers to digital transformation is lack of quality information. In Planview’s global benchmark study – The State of Strategy Execution – only one-third of the 1,000 business professionals surveyed said their companies have access to timely, accurate data.
Inaccurate data makes it difficult to quickly make good decisions and enact change.
One issue is that information resides in silos across enterprises. Employees try to consolidate and analyze this data using methods that are time consuming and error prone.
Another consequence of outdated data is an inability to accurately measure progress on digital initiatives and the value delivered.
Strategy and execution aren’t connected
The work produced by teams and individuals doesn’t automatically align with strategic initiatives. Executives and managers often struggle to translate the strategy to employees’ daily work on an organization-wide, cross-functional scale. This barrier is especially troublesome when executive teams swiftly change strategies and priorities.
Without a central place to set direction and continuously link strategy to delivery, employees may not be executing to plan.
Executives also increase gaps between strategy and execution via strict adherence to annual strategic plans and budgets. This limits the flexibility required to drive change, foster innovation, and capitalize on opportunities.
Trouble working across silos
Lack of collaboration is another of the obstacles to digital transformation. The brainpower and expertise needed to innovate requires cross-functional teams. Organizations that typically work in silos may find it challenging to work across departments and functions.
For example, embedding digital into seemingly everything requires business and IT professionals to work closely together. Product teams must collaborate with the project management office (PMO), enterprise architects, developers, and others to plan, execute, and deliver value to the market quickly.
Failure to do so can lead to conflicting priorities, market delays, and even cause breakdowns in existing systems and technologies.
Inability to experiment quickly
In a Harvard Business Review survey, “inability to experiment quickly” was the number one digital transformation barrier. Forging new territory can be messy: It’s often an ambiguous, trial-and-error effort. Organizations that are risk averse may not embrace the experimentation required.
“Fail fast” is not just a slogan for Agile teams: It’s a mantra that guides an environment of risk taking and learning quickly from mistakes.
While it’s critical to foster a culture of experimentation, it’s not the only ingredient for accelerating the pace of innovation: Challenges also arise when companies manage innovations through extremely manual and slow processes that can prevent the right products, services, and ideas from getting to market at the right time.
Manual portfolio analysis
An inability to pivot portfolios quickly is another of the biggest barriers to digital transformation. Manual methods for evaluating new ideas and prioritizing initiatives – in context with the entire portfolio – are too slow. Executives don’t have the data and analytics to make fast, informed investment decisions across portfolios.
In addition, manual portfolio analysis cannot rapidly compare trade-offs between proposed decisions or determine how a particular option may impact current work and resources. Consequently, organizations may greenlight nearly every project, with limited insight into prioritization and potential ROI.
Legacy systems
Many obstacles to digital transformation stem from using outdated, inadequate technologies. Planview’s global benchmark study uncovered a surprising result: Most survey respondents said their companies use mainly internally developed tools or office productivity solutions to manage major businesses processes – from strategy to execution.
Reliance on solutions such as spreadsheets and presentation slides prevents the development of high-quality intelligence. These tools make it challenging or nearly impossible to understand the linkages between strategies, outcomes, work, financials, and resources – at least in a timely manner.
Internal culture
People represent one of the biggest barriers to digital transformation. “Our internal team is our most difficult client,” said a Planview customer recently in reference to their global transformation initiative.
Resistance to change is common, but too many organizations fail to plan for this.
Executive teams expect employees to deliver cutting-edge solutions, but employees often aren’t empowered to use the processes, tools, and methodologies best suited for the work. This autonomy is essential in today’s era of virtual, global, and connected work.
Rigid processes and bureaucracy get in the way of progress if not minimized and managed well. In addition, communication issues can derail digital initiatives, especially if top management does not convey the reasons for change.
Break Down the Barriers
These seven barriers are the usual suspects when a digital transformation flounders. Executive teams bear the bulk of responsibility for overcoming each one. Too many expect to cultivate speed and agility using legacy practices, processes, systems, and technologies.
How can your organization prevent these obstacles to digital transformation? Download the Digital Transformation at Speed eBook.
