• Uttam Mishra, Camille Lecoeuche

Digital skills gap and lack of strategic external resourcing



Lack of in-house skills and the inappropriate use of external suppliers is one of the key factors which contribute to companies failing to transform.

The benefits of both human and technological ability are enhanced by human-technological collaboration which requires trained talent. Whatever the technology invested in, the ability to benefit and remain competitive in an increasingly digital environment requires gaining the talent needed to close the skills gap. Without this ability to adapt, companies may struggle to reach their goals. This is crucial, considering the onset of the Covid-19 pandemic, which has caused dramatic skills transformation according to 58% of workforces (15).

Oliver Vernon-Harcourt, partner at Deloitte, commented: “Companies across the UK are investing significantly in digital technologies in order to transform their businesses. The simple truth is that without ensuring that teams have the right experience, knowledge and abilities to make the most of these technologies, these investments will prove worthless.” (13)


Skills gap:

Employees who have become accustomed to working alongside old systems will need to be trained before they can help implement a new technological strategy (9), however only 22% of respondents from companies in the early stages of digital adoption say that their employees have the knowledge to undertake digital transformation compared to 71% from digitally mature companies (12), and 65% of executives even felt that training from their organisation would not support digital transformation (13). Lack of investment in employees will result in transformations not achieving all intended goals (14); in particular, in light of the pandemic, leaders will have to adapt their talent strategy for the current climate and changing skills requirements (15).

Engaging an external workforce:

It can be valuable for businesses to employ external experts to help implement new technology when skills are lacking in-house; they can provide technical expertise and increase workforce capacity rapidly (7).

Businesses in the early stages of digital adoption often depend on external contractors and consultants to support digital transformation (12), and companies who do this can benefit greatly if they are able to create a strategy whereby they can extract the most value from the use of external resources.

A paper by Carnegie Mellon Software Engineering Institute listed inappropriate use of external consultants and contractors and inadequately trained in-house employees as 2 of the 10 reasons companies fail to transform (7). With the right plan of action in place, however, an externally sourced workforce can help businesses to transform whilst training internal employees to manage the digital transformation successfully to smoothly return efforts in-house.

Solution:

Businesses should seek to harness the potential of their workforce through improved training initiatives; this can be done in tandem with appropriate employment of external expertise.

In our experience, we have found that a 3-step strategy can effectively improve digital transformation outcomes:

  1. Appropriate and timely on-boarding of external contractors and vendors

  2. Establishment of blended teams

  3. Knowledge transfer of skills to in-house team with help and support from external resources

On-boarding of external staff:

At this stage, businesses lacking the internal skills to implement their digital strategy can assess the optimal time to bring in external talent before proceeding to do so in a timely fashion, ensuring they have the expertise to set off on a strong footing.

Blended teams:

At this stage, the internal and external workforce are collected into a blended team. This allows digital transformation to proceed under the care and expertise of external contractors, whilst providing the business’ internal employees the opportunity to gain the skills and insight of the external staff. This integrated training strategy ensures that employees learn relevant skills from field experts.

Knowledge transfer to In-house team:

After the initial training period, businesses should move into a phase of transition, where in-house employees, now equipped with the necessary skills, should take control of the digital transformation project. At this stage, external contractors are still available for support and advice as internal employees learn to manage a successful transformation.

Through this strategy, internal staff gain technologically relevant skills to remain competitive in the current digital environment and businesses can ensure a smooth transition to in-house operations, increasing the financial viability of transformation. Furthermore, studies have found that employees are looking for technologically relevant businesses, so digital transformation and up-skilling programmes may catalyse increases in talent through recruitment programmes (16).


Next Steps


Schedule a call with one of our consultants to discuss how we can help your business implement a successful external resourcing strategy and deliver transformations with guaranteed ROI .

If you are planning to undertake a transformation or actively engaged in a transformation journey, have a look at our readiness assessment tool here to evaluate your current state and the transformation success blueprint for a step by step guide to ensure success.

References:

1 - https://www.gartner.com/smarterwithgartner/lack-of-skills-threatens-digital-transformation/

2 - https://pwc.blogs.com/business_transformation/2020/08/how-will-the-power-of-your-people-drive-your-digital-transformation.html

3 - https://www.bcg.com/en-gb/publications/2020/increasing-odds-of-success-in-digital-transformation

4 - (https://hbr.org/2019/03/digital-transformation-is-not-about-technology)

5 - https://corasystems.com/wp-content/uploads/2019/07/Digital-Transformation-The-Why-is-Easy_The-How-is-Difficult.pdf

6 - http://www.enterprisesolutions.tsg.com/sites/default/files/Deloitte%20-%20Aligning%20the%20Organization%20for%20Its%20Digital%20Future.pdf

7 - https://www.cs.cmu.edu/~aldrich/courses/654-sp05/readings/Bergey99.pdf

8- https://hbr.org/2020/05/digital-transformation-is-about-talent-not-technology

9 - https://www.altexsoft.com/whitepapers/legacy-system-modernization-how-to-transform-the-enterprise-for-digital-future/

10 - http://www.enterprisesolutions.tsg.com/sites/default/files/Deloitte%20-%20Aligning%20the%20Organization%20for%20Its%20Digital%20Future.pdf

11 - https://corasystems.com/wp-content/uploads/2019/07/Digital-Transformation-The-Why-is-Easy_The-How-is-Difficult.pdf

12 - http://www.enterprisesolutions.tsg.com/sites/default/files/Deloitte%20-%20Aligning%20the%20Organization%20for%20Its%20Digital%20Future.pdf

13- https://www2.deloitte.com/uk/en/pages/press-releases/articles/digital-skills-gap-narrows-but-still-persists-from-classroom-to-boardroom.html

14- https://pwc.blogs.com/business_transformation/2020/08/how-will-the-power-of-your-people-drive-your-digital-transformation.html

15 - https://www.gartner.com/smarterwithgartner/lack-of-skills-threatens-digital-transformation/

16 - https://www2.deloitte.com/content/dam/Deloitte/fr/Documents/strategy/dup_strategy-not-technology-drives-digital-transformation.pdf

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