Lack of digital skills jeopardising digital transformations

The success of digital transformations depends on how fast certain industries can ready their workforce for the cloud, 5G, AI/ML and IoT, says a new report

A lack of digital skills is jeopardising industries’ digital transformation initiatives, according to newly-released research.

Findings from a 451 Research report commissioned by Hitachi Vantara reveal more than half of companies said they lacked sufficient skills in key areas.

The report “Industry 4.0: Maturity of Adoption and Its Impact on Sustainability and ESG” surveyed more than 600 IT and OT leaders engaged in Industry 4.0 initiatives across the manufacturing, transportation, and energy and utilities sectors.

While all companies surveyed are engaging in, or planning, digital transformation projects for their operations or supply chains, more than half of companies said they lacked sufficient skills in key areas. The most critical gaps cited are in data science (42%) defined as artificial intelligence, machine learning and analytics; Internet of Things (IoT) deployment and development (48%), or robotics deployment and operations (60%).

Given the technology skills gap, at least 37% of respondents indicated that they had no plans to implement IoT-led initiatives.

Once viewed as a potential barrier to Industry 4.0 and digital transformation initiatives, IT/OT convergence is happening with 95% of respondents saying the two departments collaborate adequately or better for IoT projects.

Digital transformation drivers reveal competing priorities

The survey also revealed that companies are facing a plethora of competing digital priorities from business optimisation to employee retention to ESG (environmental, social and governance). The top driver for digital transformation continues to be optimisation of business processes and operations, followed closely by reducing risks, innovation/new revenue streams and increasing revenue/cutting costs.

“Digital transformation and its potential to create value for society, environment and economies will depend on how fast certain industries can adopt and ready their workforce for the cloud, cybersecurity, 5G, AI/ML and IoT. Companies must be selective about their business’ most critical outcomes and appropriately align it with the necessary investments in software, automation and services,” said Sid Sharma, IoT Practice Leader at Hitachi Vantara.

Despite ESG finishing eighth as a company driver, more than 80% of respondents see ESG regulatory requirements as having at least a medium impact on their organisation and expect the impact to increase significantly in the next two years.

“While regulation will have some impact, companies indicated that the primary drivers to meet ESG goals are coming from other market and social pressures,” wrote Ian Hughes, Senior Research Analyst for Internet of Things at 451 Research. “Increased efficiency and sustainability are competitive factors for enterprises. Digital transformation helps make these efficiency improvements, and many of the ESG requirements achieved are almost a bonus.”

Confidence in cybersecurity increases

The August 2022 report also reveals that more than three-quarters of respondents are confident in their company’s skills for IT and OT security, operations, and application development. However, that degree of confidence may be overestimated given the findings of a recent cybersecurity study that suggested nearly four of five IT respondents reported a ransomware attack at their company within the last year and that nearly three quarters (73%) were financially or operationally impacted by these attacks.

“Faced with too many priorities and too few people, companies need a focused, sustained approach that derives outcomes as quickly as possible,” added Sharma.

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