Digital Transformation CXO

The top 10 barriers to digital transformation

Inability to experiment quickly and legacy systems top the list of challenges enterprises face in digital transformation efforts, according to a recent report from the Harvard Business Review.

Video: The most cited reasons for digital transformation roadblocks

Though digital transformation efforts are underway in a majority of organizations, enterprises still struggle with a number of common issues, according to a recent report from the Harvard Business Review, sponsored by procurement software company Scout RFP.

Topping the list are an inability to experiment quickly, legacy systems, and difficulties working across silos, the report found.

"Businesses tend to struggle with flexibility, which creates a real barrier for immediacy and ultimately impedes digital transformation," Alex Yakubovich, CEO of Scout RFP, told TechRepublic.

Because enterprises tend be siloed, they often leverage existing legacy systems that were once transformational but now, just work, Yakubovich said. "Silos, in turn, make it difficult to work with IT in order to implement the right technology quickly," he added. "Without the expertise of IT, change becomes a mammoth task when implementing an innovative idea or a new solution."

This leads most enterprises to maintain status quo, and rely on the sales arm to drive shareholder value, Yakubovich said.

For those who are able to move past the barriers, digital transformation efforts are paying off: 56% of CEOs said that their digital improvements have already increased profits, according to a recent Gartner study.

SEE: Ebook--Digital transformation: A CXO's guide (TechRepublic)

Here are the top 10 barriers companies face when undergoing digital transformation projects, according to the Harvard Business Review and Scout RFP, and the percentage of senior executives surveyed that identified each as a challenge.

1. Inability to experiment quickly (53%)

2. Legacy systems (52%)

3. Inability to work across silos (51%)

4. Inadequate collaboration between IT and lines of business (49%)

5. Risk-averse culture (47%)

6. Change management capabilities (46%)

7. Lack of a corporate vision for digital (39%)

8. Lack of talent/skills required (38%)

9. Insufficient budget (37%)

10. Cybersecurity (34%)

The first step for any company starting a digital transformation journey is to leverage effective technology that people will actually want to use, Yakubovich said. Mobile consumerization of software has forever changed how people interact with technology and driven high expectations around ease-of-use, and users expect products that help them drive value from day one of use.

SEE: Ebook--IT leader's guide to achieving digital transformation (Tech Pro Research)

When it comes to choosing vendor partners, Yakubovich recommends starting with your business problems and requirements. Any solution you choose should ideally offer a client-first approach, agility, competitive pricing, innovation, and a heavy focus on collaboration, he said.

"What it really comes down to is, the right technology can have a transformative effect that extends way beyond your specific department," Yakubovich said. "If it provides visibility, enables collaboration between teams and stakeholders, and breaks down siloes, the results that follow can drive all the way down to the bottom line."

Image: iStockphoto/chombosan

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