Cultural Barriers to Digital Transformation and How to Overcome Them

Many organizations have a company culture that’s averse to the adoption of new technologies. These cultures revel in the status quo, hindering collaboration and stifling innovation. 

While digital transformation might seem like a pipe dream, you do have options. The key is identifying cultural barriers and developing strategies to overcome them. 

Today, we’re talking about how to overcome resistance to digital change and foster a culture that supports innovation.

The Role of Organizational Culture in Digital Transformation​

Organizational culture plays a vital role in shaping employees’ attitudes toward digital transformation. 

Aligning your organizational culture with your digital goals is essential for success. Here’s why:

• Strategic alignment ensures that employees are motivated and engaged in the transformation process. Without this alignment, digital initiatives may face resistance, resulting in delayed implementation and limited success. 
• In a culture that encourages risk-taking and experimentation, employees are more likely to adopt new tools and processes. Conversely, a culture that penalizes failure may foster stagnation.
• A culture that promotes open communication and collaboration can make it easier to implement a change management plan. This is a practice that utilizes communication strategies, training strategies, and more to help employees adapt to new ways of working.

Top Cultural Barriers to Digital Transformation​

Digital transformation involves integrating digital technology into all areas of an organization, fundamentally changing how the business operates. This can be challenging in itself, but it can seem impossible when you consider cultural issues. 

Here are some of the top cultural barriers our ERP implementation consultants have seen across industries:

1. Resistance to Change

A culture that is resistant to change can be a barrier to adopting new systems and processes. This is a culture where employees have a strong distaste for shifting routines and evolving roles. 

While distaste for change is natural, it’s not necessarily a barrier unless it’s deeply ingrained in the organizational culture.

To address this cultural barrier, we recommend regularly communicating the benefits of digital transformation and involving employees in project activities, such as software requirements gathering.

2. Siloed Thinking

In many organizations, departments operate in silos. This can hinder digital transformation efforts by preventing cross-functional collaboration and stifling innovation. 

To overcome this barrier, organizations should keep teams focused on shared objectives, while ensuring seamless integration between software systems. They should also implement communication platforms that enable employees to collaborate and share diverse perspectives.

3. Lack of Digital Literacy

When employees are unfamiliar with modern digital tools and technologies in general, they may struggle to use new software effectively. 

In addition to system-specific training, organizations must invest in digital literacy programs to equip employees with the necessary skills to navigate modern and emerging technologies, like artificial intelligence (AI) and machine learning.

(Learn about AI in ERP.)

4. Ingrained Hierarchies

Traditional hierarchical structures can impede digital transformation efforts by limiting the flow of ideas. In such organizations, decision-making is often centralized, making it difficult to implement agile and innovative solutions. 

To address this barrier, organizations should consider a hybrid approach where certain teams operate more independently. This is also an area where cross-functional teams become important.

5. Fear of Failure

Improving efficiency and securing a competitive edge requires unrestrained creativity. A culture that penalizes failure can discourage employees from “thinking outside the box” when problem solving. 

To overcome this barrier, organizations should focus on rewarding innovative thinking and providing training and resources for employees to develop new skills.

6. Lack of Customer-Centricity

Organizations that lack customer-centricity often fail to prioritize the customer experience in their digital transformation efforts. In these organizations, employees may be more focused on internal processes than on meeting customer needs.

To overcome this barrier, companies should cultivate a customer-centric culture by actively seeking customer feedback and incorporating these insights into decision-making. 

Additionally, training programs should emphasize the importance of customer satisfaction and encourage employees to consider the customer perspective in all initiatives.

What About Change Management? ​

At the intersection of organizational culture and digital transformation lies a comprehensive organizational change management plan. This is the key ingredient for overcoming cultural barriers to digital change. 

Here’s what our change management consultants recommend focusing on when executing a change management plan:

• Communicating the Vision: Leaders should communicate the vision for digital transformation and explain the benefits of new technologies. By providing a clear understanding of the goals and objectives of digital initiatives, organizations can increase employee buy-in and reduce resistance.
• Involving Employees: Seeking input from employees gives them a sense of ownership and accountability. We recommend involving employees in activities such as process mapping and attending software demos.
• Providing Training and Support: It’s important to organize hands-on training sessions focused on the specific technologies and processes relevant to each employee group. Providing ongoing support through mentorship programs and easily-accessible online resources will further help employees develop the skills they need. 
• Addressing Concerns and Fears: Leaders should listen to employees’ feedback and address any anxieties about digital change. We recommend fostering an environment of transparency and openness where employees feel comfortable sharing ideas. By providing channels for feedback and responding promptly, organizations can alleviate fears and build trust. 
• Leading by Example: Leadership plays a crucial role in driving cultural change and overcoming resistance to digital transformation. Executive engagement can set the tone for change and inspire employees to embrace digital initiatives.

Learn More About Organizational Culture and Digital Transformation

Digital transformation initiatives are essential in today’s rapidly evolving business landscape.

While cultural barriers to digital transformation can impede innovation, a strategic approach can help you achieve your digital goals. 

Contact our ERP selection consultants below to start driving culture transformation.