3 Common Blockers to Digital Transformation in Midsize OrgsMarch 29, 2018
When it comes to digital transformation, CIOs of midsize enterprises (which we define here as having 250 to 1,000 people) face some unique challenges. These orgs are usually established in their field, with processes and tools in place that have served them well for years. Plus, they’ve often hired much of their workforce before digital transformation was a thing. They might even have been founded before the birth of the Internet itself.
So it can be harder for them (than, say, a digital-native startup) to get into the right mindset and make sweeping changes to their tools and culture. Per a May 2017 survey by Gartner, here are the three biggest challenges that midsize enterprise CIOs face with digital transformation—and what you can do about them.
Challenge #1: Vague or unclear digital ambitions
Digital transformation is a broad umbrella term that can mean different things to different people. Some say it’s anything driven by technology. To others, it might mean connecting with customers across all the devices they use. Other people think of it as merely having a web presence.
So the first step in digital transformation is to put together a clear, specific plan for what it looks like in your organization. Will you use digital solutions to come up with brand-new ways of doing things? Or will you take a more cautious approach and look for incremental digital solutions that can quickly affect your bottom line? When you’ve narrowed it down, you then need to socialize these ideas with as many people as possible. That way, everyone gets on the same page (or screen, as it were).
To get there, Gartner suggests you take several steps:
- Clearly define your vision for digital and what’s in scope for your org
- Tell specific stories about how your org can benefit
- Evaluate new ideas through the eyes of an entrepreneur
- Lead a virtual digital team who designs and socializes digital across the org
Challenge #2: Unstructured process
Digital transformation often touches every part of your organization: every application, every process, and every person. The good news for mid-sized orgs is that you’re small enough to make faster decisions than larger counterparts. There’s often a closer relationship between your executive team. But you still won’t be able to tackle everything at once.
Instead, you need to take a step-wise approach to change. Take a look across your organization and prioritize areas where digital can make the most impact. Create a pace-layered application map of which applications you’ll transform when.
Then, for each area, follow Gartner’s recommended 5-step approach:
- Plan: Put together a clear plan and pinpoint solutions to get there
- Design: Experiment with new products or services you identified in the first stage
- Deliver: Roll out and test a minimum viable product
- Scale: If the pilot is a success, rally and launch the product or service across more business functions
- Revise: Keep optimizing the technology based on how it works in your business
To avoid boiling the ocean, start with a few high-value opportunities that are also lower risk. Look for ways to future-proof your key business systems and remove any legacy applications that are holding you back from a true digital transformation.
Challenge #3: Resource and skill constraints
Digital talent hasn’t yet scaled to meet the demand. Companies of all sizes are having trouble attracting and keeping people who know digital inside and out. So it’s no surprise that midsize CIOs also consider a lack of digital talent to be one of the biggest barriers.
But there are many things companies can do instead of hiring more full-time staff. Examples:
- Retrain existing staff
- Crowdsource other resources like freelancers
- Partner with third parties like boutique consultant firms
The Harvard Business Review shared an interesting case study about AT&T, who’s going through a company-wide effort to overhaul their talent base. They estimate that 140,000 of their employees are actively engaged in acquiring skills for new digital roles like cloud computers, coders, and data scientists. Since 2013, the company has spent $250 million on employee education programs and another $30 million each year on tuition help.
While midsize orgs might not be able to dedicate this level of financial investment, they should at least encourage their employees to keep learning. They can offer as many opportunities as possible to retrain employees on new digital skills.
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Source: Gartner. How Midsize Enterprise CIOs Can Overcome Three Obstacles to Digital Transformation. October 2017.