A shockingly high percentage of digital transformation projects fail. According to McKinsey, the figure actually sits at around 70%. Not only that, but less than a third of digital transformations manage to improve organisational performance and sustain those improvements for any length of time.
Nevertheless, digital transformation has become a ubiquitous endeavour. Organisations in every industry in every market are engaging in some kind of technology transformation effort. This could mean adopting a new ERP platform, digitising paperwork, migrating to the cloud, or any number of other efforts to use technology to improve efficiency, solve pain points, and create value.
However, across such a broad range of applications, companies, and markets, digital transformations keep failing at roughly the same rate. One reason for this could be that, wherever digital transformation goes, people are waiting for it.
Humans are the problem with technology, according to Google VP
At Google’s Cloud Next event held in Las Vegas in early April, Phil Davis, Google Cloud’s VP of Global GTM for Applications, SaaS and SMB, suggested that people and process are the biggest hurdle to successful digital transformations.
“I think the biggest hurdle is the people and the process change that goes with it [digital transformation]. It’s not the technology,” he said in an interview at the event. Davis believes that the problem with many digital transformation efforts is that they replicate existing problems using new technology. Processes that don’t benefit the business on premesis also won’t work in the cloud. Fundamentally, nothing’s changed. Moving an inefficient process into the cloud doesn’t change the fact the process is inefficient.
“The biggest thing is how do you train people to do things differently,” he said. “We see this even with Workspace. People may be used to doing things in a very suboptimal, clunky way and this is a very different, more efficient way to do it.”
The ubiquitous cloud skills gap and digital transformation
According to a report by SoftwareOne, the vast majority of digital transformations struggle due to lacking cloud and IT skills.
The report found that 95% of businesses around the world are dealing with a cloud and IT skills gap. As a result, technology transformation projects are falling behind by an average of five months. Not only this, but one-third of businesses believe their finances will suffer as a result.
“For companies who want to accelerate their digital transformation, closing the cloud skills gap is critical,” said Craig Thomson, an SVP at SoftwareOne.
For businesses looking to prevent their transformation efforts from being delayed, derailed, or ineffectual, closing the skills gap is paramount. As such, it’s not a huge surprise that the top three places where businesses plan to spend money in 2023 are in hiring and wages (29%); retention, “upskilling” and engagement (22%); and digital transformation including cloud, security and automation (20%), according to a report by SPG Global.
- Digital Strategy
- People & Culture
