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Skills shortages stymie digital transformation

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Big data, ERP and Internet of Things (IoT) are the top areas earmarked for digital transformation investment – but one in three companies aren’t ready to so because of talent deficiencies.
IFS reveals the findings of its Digital Change Survey that polled 750 decision makers in 16 countries to assess maturity of digital transformation in sectors such as manufacturing, oil and gas, aviation, construction and contracting, and service.
Nearly 90% of firms surveyed have ‘adequate’ or ‘advantageous’ funding for digital transformation, indicating a strong willingness to invest and an appetite to evolve their business in order to stay competitive and grow. When asked about prioritised investment areas, the top three choices were IoT, ERP and big data and analytics.
“It is apparent that companies today understand the urgency of focusing on digital transformation,” says Antony Bourne, executive vice-president: global industry solutions at IFS. “Technologies such as big data and analytics, enterprise resource planning and internet of things are paramount to transforming a business.
“Companies need to apply innovative technologies hand in hand with their relevant industry expertise to succeed and gain a competitive edge. It is this combination that makes digital transformation both meaningful and powerful.”
Alarmingly, more than a third of companies (34%) feel either slightly or totally unprepared to deal with digital transformation due to talent deficiency. When asked to name the areas that will experience the greatest deficit in talented staff, 40% cited “business intelligence” and 39% “cyber security”. Other areas of concern are “AI and robotics” (30%), “big data/analytics” (24%), and “cloud” (21%).
Bourne adds: “Although new technology is key to digital transformation, it is clear that change communications and access to the right talent are principal catalysts to succeed. It is alarming that more than one in three companies are not staffed to manage digital transformation.
“These organisations need to focus on concrete talent investment plans to make sure that they establish what roles are critical to success in their industries. After that the key is both to find and attract new talent as well as training and re-skilling existing staff.”
Ralph Rio, vice-president: enterprise software and ARC Advisory Group, adds: “Industrial IoT investments offer excellent ROI which is driving adoption. But talent is a constraint as the IFS survey shows. Hence, IoT users partner with companies like IFS that offer leadership IoT solutions.”
When asked about the digital transformation maturity level of their organisations, meaning actual progress, 31% of the respondents consider their business to be in the two highest levels of maturity on a five-graded scale.
“The aviation industry is the most progressive with 44% of respondents considering themselves advanced in their ability to leverage digital transformation. Runner up is the construction and contracting industry, 39% of whom identified themselves as mature. At the other end of the spectrum is the oil and gas sector, where only 19% of the respondents consider themselves able to benefit from digital transformation.
“The differences in digital maturity levels across industries are notable. The highly competitive nature of the aviation industry, together with its rapid adoption rate of new technologies such as predictive maintenance and 3D printing for spare part manufacturing, are key drivers of its successful digitalization,” says Bourne.
A solid 43% of respondents identified “internal process efficiency” as the number one driving force behind digital transformation. “Accelerating innovation” (29%) and “growth opportunity in new markets” (28%) were recognised as the second and third most significant drivers.
Despite the practical and technical complexities of digital transformation, the number one barrier to change is on the human side: “aversion to change” (42%). The second and third largest barriers are the more concrete “security threats/concerns” (39%) and “absence of the right organisational and governance model” (38%).
When asked what technologies will be the most disruptive, big data tops the list with a score of 7.2 out of 10. Second is Automation (7.0) and third is IoT (6.6).
Although big data is ranked the highest overall, there is a significant minority who feel that automation will have the most dramatic impact. Over 40% rated the level of disruption by Automation as 8 or more out of 10, while only 32% gave such high ratings to big data.
In the construction, aviation and manufacturing industries 48%, 48% and 50% respectively consider the automation disruption score >8/10, which makes it the highest rated technology for those industries.