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Study Finds Little Progress on Digital Skills Gap Despite Growing Awareness

Feature Article | July 13, 2017 by Bernd Welz Hot Story

Digital transformation may be a hot topic for strategy discussions in the boardroom, but not enough is being done in the classroom to acquire the necessary skills to make digital strategy into reality.

That’s according to the latest research by Technical University of Munich (TUM). Published in June of this year, TUM’s study “Skills for Digital Transformation” reveals that awareness of the importance of digital skills is greater than ever. However, a systematic approach to close the skills gap remains an exception at many companies. In fact, digital talent is threatening to become the major bottleneck of digitization in the industry. The deficit in digital skills is still among the top barriers to digital transformation.

The deficit in digital skills is still among the top barriers to digital transformation.

The survey, conducted in cooperation with SAP among SAP User Groups worldwide, followed up on research from 2015 with the objective of measuring progress on digital skills development and helping organizations identify priority skills for digital transformation (Read about the results of the 2015 survey at Study: Employees Lack Skills for Digital Transformation). The primary target audience for the results of this study are information technology executives and human resource executives.

Businesses Mired in Orientation Phase of Digital Transformation

An overwhelming 90 percent of the study respondents perceive digital transformation as being important for their company’s overall business strategy, and half of them have established a vision for the digital future of their company accordingly.

Although digital transformation impacts all industries and nearly all areas of a business – from the design of technology-enabled business models to efficient, highly automated operations –  most companies are still lacking a clearly defined Digital Transformation strategy: only 37 percent of respondents claim to have a strategy and 26 percent of respondents claim to have a clearly defined execution plan.

Recruitment and Training Programs Not Keeping Up

Perhaps the most striking finding of the study is that despite the growing awareness and enthusiasm for digital transformation, companies may actually be losing ground in the war for skilled talent. In 2015, 53 percent of the respondents claimed that their company does not have the personnel with the skills necessary for digital transformation. In 2017, this number even increased to 64 percent.

The respondents in the survey articulated a clear perception of which skills they need to be able to shape the digital future of their companies. The top runners among the 14 key skills are digital security, mobile technologies, business change management, and big data analytics. Respondents considered most of these required skills for successful digital transformation to be even more important now than two years ago. The respondents however reported a substantial skill gap in all skill domains. Despite this awareness, only a fraction (16%) of the companies in this study however invests into dedicated recruitment or training programs to build up the skill base needed for its digital future.

The study concludes that the digital skills gap has not been closed yet and that the lack of digital skills is still among the top barriers to digital transformation. Possible explanations are the increasing speed of technological innovation and the perceived importance of digital transformation.

As of today, companies experience a substantial lack in personnel with the skills necessary for digital transformation.

Further Research Offers Skill Development Plan

In collaboration with the European Research Center for Information Systems (ERCIS), SAP SE is currently identifying best practices as part of a maturity model for how companies can develop the skills for digital transformation. Key is a systematic recruiting and skill development plan to up-skill existing roles and train for new job roles based on a learning needs analysis. It also includes activities to change the learning culture within companies towards self-directed, collaborative, and continuous learning enabled by an integrated learning management system. Details on this maturity model and identified best practices will be available later this year.

As of today, companies experience a substantial lack in personnel with the skills necessary for digital transformation.

More information about the two studies will be shared in a Webinar on Sept. 14, 2017. To read the complete IDT study and learn more about its findings, visit the Technical University of Munich website.

Dr. Bernd Welz is executive vice president and chief knowledge officer for Products and Innovation at SAP

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