Top 4 barriers to digital transformation (and how HR can overcome them)

The top 4 barriers to HR & digital transformation

There are four common barriers to successful digital transformation within companies, and HR plays a critical role in addressing these challenges and driving overall digital transformation success.

A recent research report found that the fundamentals of digital transformation success will be based on HR transformation success, which is essential in overcoming four key people-related roadblocks to digital transformation.

The top four barriers to successful digital transformation are:

  1. Not having enough people with digital skills (24 per cent);
  2. A lack of sufficient understanding of what digital transformation is and who can assist with the process (22 per cent);
  3. Financial incentives or systems which do not incentivise individuals to take required risks to create digital businesses (21 per cent), and;
  4. The lack of a risk-taking innovation-driven organisational culture (21 per cent).

The research, which was conducted by IDC with SAP SuccessFactors, found that only by transforming the HR department, its people and its processes can an organisation transform its business

“The most dangerous way to approach the disruption caused by digital transformation is to apply the same processes and strategies that were relevant in the past,” said the research report, HR Must Deliver on Transformation.

“Placing your people at the centre of the transformation effort requires new tools, new architecture, and a clear vision of the new role HR needs to play.”

The transformation of the workforce, and the way it is utilised, managed and improved, is a central feature of this process and strategy, according to the report which also includes a scorecard for assessing and enabling effective digital and HR transformation.

“The most dangerous way to approach the disruption caused by digital transformation is to apply the same processes and strategies that were relevant in the past”

On top of everyday tasks and managing a team, many HR professionals will be tasked with keeping pace and delivering change.

This can only be achieved by HR helping to create an agile organisation that meets the demands of the business, but also one that helps employees and managers become and remain engaged, productive and focused.

At the same time, HR must maintain a development path and training goals and manage overall employee performance.

This encompasses both existing talent management as well as future talent acquisition, and to achieve this, HR professionals must adopt a four-step process:

  • Drive HR transformation through a highly engaged workforce;
  • Ensure HR becomes central to realising transformation and continuous change;
  • Create an agile, flexible, and reactive organisation, built on a collaborative culture;
  • Develop, retain, and attract the right talent into and within the business.

Four challenges for HR
The report explored the four key challenges facing HR in driving digital transformation.

The first and greatest challenge for HR is increasing talent scarcity, and this is not so much a lack of people, but a lack of skills.

“Creativity, complex problem solving, and lateral thought will define the required skillsets of the 2020 workforce, the report said.

The second challenge for HR lies in changing work practices, with increased reliance on contingent or project-based labour which is creating a new set of challenges for HR departments.

“To manage human capital is to also keep pace with change, making digital disruption work for the business, rather than against it”

“The ability to manage a mixed workforce that also values freedom of decision, flexibility, and self-service puts the HR departments and the business in a new spectrum of responsibility,” the report said.

Furthermore, organisations are changing in shape and structure, and HR departments need to adapt to this change, looking to new technologies to manage wider changes in employee behaviour.

A third and related challenge for HR is an inability to handle high employee expectations.

Companies want to get the maximum value from their human capital, and those that have fostered an engaged workforce and stay at the forefront of innovation and performance management do achieve this – but it requires constant retooling of HCM capabilities.

“To manage human capital is to also keep pace with change, making digital disruption work for the business, rather than against it,” the report said.

The last challenge for HR is an inability to deliver business outcomes and handle high employee expectations, such as flexibility, work/life balance, benefi­ts and development paths.

This is also compounded by the coexistence of different generations of workers within the business, and this creates an environment of different priorities, greater complexity and a more challenging environment for HR management.

“HR professionals need to break this vicious circle before it becomes a downward spiral,” said the report.

“New tools and processes are one way to drive improved employee (and management) engagement, as well as streamline HR functions to enable a more strategic focus.”

 

For more information download the full HR Must Deliver on Transformation research report. Conducted by IDC and SAP SuccessFactors, the report also includes a digital transformation scorecard for assessing and driving transformation across the areas of talent, culture, learning and planning, on functional, tactical and strategic levels