Digital transformation is indeed a cornerstone of business strategy today, as 89% of enterprises see digital businessas core to their growth, according to Gartner’s Board of Directors 2023 Survey. Equally telling is another statistic from that research: Just 35% of these enterprises have achieved their digital goals or are on track to do so.
“This underlines the need for organizations to embrace change and adopt a more agile and forward-thinking approach to digital transformation skills in order to overcome challenges and achieve digital transformation,” says Monika Sinha, research vice president in Gartner’s CIO Research group.
It’s no secret that having the right capabilities is essential to digital success, but given the dynamic nature of digital business, these capabilities go beyond technical know-how.
“Forward-thinking companies are increasingly clear that they need to be hiring not for skills but for aptitudes,” says Sanjay Srivastava, chief digital strategist at Genpact. “People that succeed will have a simple philosophy of curiosity — they will think about their progression as ‘learn, unlearn, relearn.’”
The 2023 State of the CIO survey recently polled 837 IT leaders and 201 line of business executives about the skills they believe are most necessary to support digital transformation. Technical skills topped the list but also crucial are key leadership and culture capabilities such as change management, strategy building, and business relationship management, as well as critical business skills such as cost, product, and vendor management, as shown in the graphic below.
State of the CIO / Foundry
Rebecca Fox, group CIO for UK-based information assurance firm NCC Group, notes that the mix of skills that drive digital success have a common theme: “They are centered around delivery into the business and making sure the business gets value from the investment made,” she says.
And that is the rub. “The market is tight, but we are not short of people with technical skills; people who can develop, build infrastructure, and understand the cloud,” says Fox. “However, now the technical team and business need to align to drive process innovation and automation into the business, using technology to drive down cost and improve delivery times for customers. These are different types of talent — where relationships, understanding commercial arrangement, and of course a deep understanding of the business are all critical, as is understanding at some level the complexity and technical requirements.”
Here’s how IT leaders, analysts, and other experts view the skills critical to digital success and how they factor into ongoing digital progress.
Building future-ready foundations
For Charley Betzig, managing director at IT executive recruiting firm Heller Search Associates, skills critical to digital success depend largely on where companies are in their journeys. During the initial foundational phase, when IT is focused on integrating data and systems, and on building digital platforms, technology skills factor in heavily.
Cloud architecture skills in particular provide “the backbone for scalable, cost-effective, and agile IT infrastructure that supports digital transformation,” says Gartner’s Sinha.
Data skills are also vital, says NCC Group’s Fox. “Getting the design correct at the start is crucial — from selecting the right technologies, understanding how things will scale and providing resilience, but also how data will move through to the solution,” she says. “I can’t stress enough focus on data — and how it will be used — as most digital transformation programs will be a tapestry of systems.”
Indeed, integration has become a highly valued skill given how digital strategies have evolved, says Todd Musgrove, associate principal in the technology transformation practice at The Hackett Group.
“In the earlier phases, digital transformation centered on exploring and investing in novel technologies,” Musgrove says. “Now, the emphasis lies in the consolidation, refinement, and expansion of these digital initiatives. Businesses are concentrating on incorporating digital solutions into their core operations, service offerings, and products while establishing seamless integration across various business units and functions.”
At Merchants Fleet, buildingout a modern data and analytics infrastructure to support the fleet management solutions provider’s growth and ensure the delivery of a superior client experience has been a top priority. That involved enabling a 360-degree view of the client and visibility into the end-to-end client cycle — from vehicle onboarding, to monitoring driver safety, to asset utilization and total cost of ownership.
Laying that groundwork opens possibilities for the future. “The analytics foundation and infrastructure our tech team has created is setting the company up for success over the next five to ten years as fleet managers and municipalities move towards managing driverless networks,” says Jeanine L. Charlton, Merchant Fleet’s senior vice president and chief technology and digital officer, who has a team of data scientists in Chicago developing new operational capabilities. “We are in a great position to define the tech operations required to move to the next phase of the market when full driverless networks begin to come online.”
But the foundation isn’t everything. As Betzig frames it, the next phase involves the business application of that foundation. Here, one of the biggest sticking points is the failure to achieve the level of adoption necessary for success, says Hackett’s Musgrove.
“Some initiatives have completely stalled and are points of frustration for the executive sponsors and key business stakeholders,” he says, noting that companies are now realizing that adopting new digital technologies requires significant organizational change. “Effective change management enables businesses to overcome resistance, streamline processes, and minimize negative impacts during the transition.”
But change management is often misunderstood as an item to tick off a project to-do list, says NCC’s Fox. “The key here is to get into the detail and remove the blockers through a deep understanding of business and customer challenges, and over communicate,” she advises. “Nobody should have the excuse as to why they didn’t know what was coming or what their role is.”
In fact, says Betzig, change management skills are only the half of it; what’s needed is change leadership. “Change management has the connotation of being reactive: managing something that has to be done,” Betzig says. “Change leadership is more about proactively influencing the business to grow. It’s large-scale thinking.”
Rather than establish an innovation department, Carlton and other leaders at Merchants Fleet have created processes for training, incentivizing, and empowering every employee to innovate and contribute to the company’s growth. Today, Merchants Fleet has more than 45 innovation coaches working with hundreds of team members across the company to identify ways to apply digital technologies and analytics to improve key business outcomes: cycle times, cost of ownership, driver safety, and the client experience. New solutions have begun flowing in, from finding ways to attract more talent in a tight job market to condensing the client onboarding process by more than 80%.
Strategizing for new opportunities
Many of the most important capabilities for driving continued digital innovation are decidedly nontechnical.
“Organizations need to foster and develop skills in leadership, strategic planning, communication, and creativity across levels and roles to navigate the complexities of digital transformation,” says Gartner’s Sinha. “By fostering a culture of innovation, collaboration, and resilience, these skills drive lasting success in an increasingly digital landscape.”
For example, strategy building skills enable IT teams to unlock new business opportunities. “Forward-thinking analytics teams are looking for talent with a strategic mindset, the ability to ask questions the business does not know how to ask, and the skills to apply digital technology to specific business use cases,” says Genpact’s Srivastava.
Betzig sees this in legacy industries like healthcare or manufacturing that are harnessing digital technologies to evolve beyond their core businesses. Betzig is currently recruiting for a tech leader for a Midwestern healthcare company developing its own software platform. “They’re transforming their whole business model,” he says.
In such cases, strategy formulation and product managementskillstake center stage. Srivastava likewise points to healthcare companies moving from batch manufacturing of products to personalized, precision medicine built on a backbone of data, IoT, and analytics.
“To drive this digital pivot, the skills of product management are key — the ability to understand all the unmet needs and demands, prioritize which questions to focus on first, be able to size the opportunity, and then execute,” he says.
Building relationships, elevating experiences
Another challenging skill to recruit for is business relationship management. And it is essential to onboard, as the relationship between the business and the technology function will determine the success of any digital transformation — full stop, says NCC’s Fox.
“Business relationship management ensures that IT is aligned with business objectives and that stakeholders from business units and functions understand and support the digital transformation efforts,” Hackett’s Musgrove explains. Yet “many senior executives have struggled to establish key business relationship management roles such as business process owners and IT business partners. They struggle to recruit the right leaders with the right skills to be successful in these roles.”
“An underrated capability is the ability to influence behaviors of people you don’t control,” says Kim Seals, senior partner in the people and productivity group at West Monroe, who recently did a search for business relationship management skills in top IT roles from March 2022 to March 2023 using the Lightcast talent market research tool and came up with 6,400 hits. “If you looked at IT job posting three to five years ago, you would not have seen as much of a clear emphasis on these skills,” she says.
The same goes for customer experience management (CXM), another key capability that can be a challenge to find and define.
“Understanding the customer’s needs and expectations has become more critical than ever in the more advanced phases of digital transformation,” says Hackett’s Musgrove. “If you want to maximize adoption and value generation, customer experience is key.”
And CXM must become more proactive, Srivastava argues. “Companies traditionally used NPS as the way to measure the success of customer experience — this was a backward-looking score. Now using AI, we can analyze the entire script from a customer conversation, get results instantly, and use the information to change the conversation,” he says. “This ability to understand customer feedback beyond periodic surveys is going to be a critical skill going forward.”
Putting it together
Still, digital success ultimately depends on establishing an array of capabilities that is greater than the sum of their parts. “Loading up on skills is not going to get you there by itself,” says Gartner’s Sinha. “CIOs must promote organizational structures that leverage these key skills effectively in order to accelerate the pace of cross-collaboration and innovation that digital transformation demands.”
NCC’s Fox agrees: “These skills are really important to any digital transformation program, but they have to be brought together as a team.”
IT leaders should begin by charting out the broad phases of work to be done and then determining where skills gaps exist and how they can be filled. Unfortunately, not all will be found in pre-existing talent marketplaces, especially as demand for digital skills continues to grow faster than supply.
But there are some innovative approaches to sourcing that can help, Sinha says, such as separating work from roles, leveraging adjacent skills, and pursuing borderless talent.
Looking for candidates with diverse backgrounds — particularly those with experience in other industries or roles — is also valuable, says Hackett’s Musgrove. “They may bring valuable insights and unique perspectives to change management, business relationship management, and customer experience management.”
Because effective digital transformation hinges on deep domain knowledge and business empathy, the best candidates may already be onboard. “Never overlook the talent you might already have in the organization,” Fox advises. “You can skill-up existing team members if they don’t have the right technical experience, but attitude is everything.”
Investing in continuous learning with resources, workshops, and training opportunities can also help, Musgrove says. As can internal marketplaces, which enable IT leaders to find internal candidates beyond IT who may have transferable skills.
“Organizations pursuing digital transformation need to build a knowledge network to facilitate the sharing and exchange of knowledge and expertise among individuals, domains, and external parties,” adds Sinha. These can take the form of informal social networks and online communities to more formal associations. Such knowledge networks enable individuals to connect, collaborate, share knowledge, and build expertise.
“They can be powerful tools to support digital transformation initiatives and close DT skill gaps,” she says.
Digital Transformation, IT Skills