Lack of digital skills – still a big barrier towards digital transformation [5 Reading Tips]

Digital transformation, change management, and agile methods are words that naturally come to mind when thinking about how organisations should face the challenges arising from innovation and digitalisation. Executives seem to know how critical these words are for the future possibilities of their companies but they are still static or just about to start preparing for new business models in the best case. And, what is more worrying, they forget that people are the key to master digital transformation, while technology and data are only enablers.

Digital changeover starts with people

According to a study conducted by Technical University of Munich (TUM) and SAP, 80% of C-suite respondents view digital transformation as an important part of the overall business strategy. However, only 35% of them indicated to have a defined digital transformation strategy. Similarly, only 10% of respondents said that their Human Resources team has implemented a recruitment/training program to close the skill gap.

» “Digital transformation impacts a broad set of skills that have to be moved forward at once,”

pointed out Dr. Helmut Krcmar, a professor at the TUM. «

Precisely this is also one of the main conclusions founded by the latest IFH study “Shift happens – Wie die digitale Transformation die Anforderungen an das Personal verändert”, where 144 executives from the top German organisations were surveyed.

The majority of respondents agree on the need to improve the employees’ competency skills to close the gap between the current status of the employee’s competencies and the objective to be reached. As you can see in the graphic below, the top three skills (readiness to learn, willingness to change and critical thinking) have a bigger gap to close than the rest.

Related to this, the study also indicated that the majority of C-suites that are aware of the importance of training people are looking inside the organisation. Currently, 4/10 of respondents identify digital talents among existing employees so that the relevant digital know-how is present in every department and 29% rely on the exchange between departments (e.g. IT or e-commerce).

To this respect, the Director of the IFH Prof.Dr. Werner Reinartz indicated the following:

» „Even though training staff is sustainable, it takes relatively long. In the current climate, where speed counts, companies should rather rely on a balance: Pushing internal exchange and training as well as calling in digital know-how from outside, through new empolyees or cooperation with service providers.“ «

Taking action is a must

In one way or another, companies must take action and rely on well-trained staff if they don’t want to lag behind. A company can start to change its business model but if the employee working force is not ready to tackle those changes, the digital transition is going to fail.

For this reason, organisations should urgently redefine existing jobs and create new roles to respond to the challenges of digitalisation. One of these challenges is the increasingly changing work environment that is characteristic of the digital professional life. In order to be adaptable to this dynamic, it is fundamental to have digital skills.