The need for European enterprises to embrace digital transformation has been well established. While examples of digital transformation success continue to accumulate, more than half of European organisations still struggle to make digital transformation work — for many reasons.
Silos of innovation — where successful deployments in one division fail to cross to another — prevent effective integration across business units. Measuring the returns on pilots and projects can prove elusive, inhibiting additional investments. And a short-term focus often prevents companies from doing the long-term planning needed for lasting change. Underpinning all of these (and other) challenges are the people.
Digital talent and IT skills is another issue. Obtaining and retaining people with the right technology skills has become extremely challenging. While estimates from the European Commission (EC) and other polling agencies vary, it is safe to say that shortages in specialty IT areas can run as high as 40 to 45 per cent. Moreover, the EC estimates that 44 per cent of Europeans lack basic digital skills — even as nine in 10 jobs will soon require them.
This all translates into serious costs. IDC forecasts that by 2020, 90 per cent of all European organisations will suffer from the lack of IT skills, resulting in about $91 billion of lost revenue per year. Speciality areas associated with cloud, artificial intelligence (AI), the internet of things (IoT) and robotics will be in especially short supply.
Change is becoming a skill of its own
Tech skills and savvy paint only half the picture. The same technologies that enable rapid deployment of digital business models, optimisation initiatives or customer experience programs often require agile practices, failing-fast innovation models and new ways of communicating.
Yet time and again we see that even the most talented people — both tech and non-tech — struggle to adapt to these new ways of working. Take the speed of code production as an example. The most competitive and flexible firms push out code every few days. Big Tech firms and major industry players can push out code in a few hours if need be. Yet, according to IDC, only 15 per cent of European organisations push code into production weekly or more frequently.
And the need for speed is only going to increase. IDC surveys reveal that about 65 per cent of European chief executive officers are under considerable pressure to deliver a successful transformation strategy, a number that will surely grow. That means the pressure for organisations and their people to embrace change and the related skills and management practices will intensify.
A little help from digital friends
Fortunately, there are a number of steps you can take to stay in the digital race. In addition to offering competitive salaries and benefits, you should:
Map capabilities needed for digital transformation
Break them into two areas. The first should focus on capabilities needed for digital business, such as customer experience management, ecosystem and partnership management, social engagement, API management and AI deployment. (There will be overlap with core IT areas, such as system integration, infrastructure management and back-office operations.) The second should focus on skills such as critical thinking, complex communication, flexibility, agility and adaptability. Both lists will greatly facilitate recruitment, talent development and planning.
Prepare to change the organisational structure
A strong relationship exists between digital transformation success and the embedding of digital tools, processes and practices across the enterprise. Getting there usually starts with the creation of a digital special projects team that eventually turns into an office for digital transformation. Appointing a chief digital officer to lead the charge also helps. As you might expect, it is a complex undertaking that involves training, recruiting, governance, financial restructuring and so forth. But it is essential for permanently going digital.
Leverage the expertise of external partners
The complexities of digital transformation mean few organisations can tackle it alone. They need the expertise that comes from having worked with scores of enterprises on hundreds of projects. Such expertise can greatly enhance the efficiency of project development, the introduction and solidification of agile methodologies, and the training required to upskill talent. When selecting external providers, the long-term goal should be to create a lasting partnership, where the provider works closely with the talent in your organisation.
Digital transformation is not just about technology, it’s also about people. Read: “How to create your digital dream team” for tips on how to manage your teams for a successful digital transformation.
This article is part of the IDC series “Your pathway to digital success,” written to inspire business leaders to overcome common challenges along their organisations’ journeys.