Article

Battle of the sectors: How are different industries tackling transformation?

by Sarah Chatterton

Not all digital transformation projects are created equal, and they’re certainly not equally successful in achieving their aims. As Smartsheet discovered in recent research, certain sectors are almost twice as likely to describe themselves as highly successful at digital transformation than others: 50% of professional service organizations fit into this bracket, compared to just 28% of construction businesses.

Which raises the question: What’s causing some sectors to thrive and others to struggle? And which sectors are in the best position to succeed?

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Barriers to better transformation

When it comes to challenges, certain issues are more prevalent in some industries than in others. Here are the top five:

  1. Resources: Across the board, four in 10 businesses feel that a lack of investment in transformation is a main barrier for change in their business. However, only a third of those in retail and hospitality or healthcare and pharmaceutical businesses see this as an issue, suggesting that they’re well aware of the need to invest properly in change – and have budgeted accordingly.
  2. Talent: While healthcare and pharmaceutical businesses seem to have more investment, they’re struggling with finding skilled people to drive change projects through to completion. Almost six in 10 (57%) perceive this as a main barrier, in comparison to just a third in the public sector.
  3. Culture: Over half of public sector and healthcare businesses say it’s difficult to convince everyone in the organization to embrace change. But only a quarter of manufacturing and engineering businesses feel the same – perhaps because these sectors tend to be driven by innovation, so appetite for change is already in their company DNA.
  4. Siloed communications: Our research found that clear communication across the organization is a key success factor for digital transformation projects, but 62% of wholesale and logistics businesses say different departments aren’t working well together to get the job done. Construction is the most effective sector here, with only 31% citing this as an issue.
  5. Leadership: Finally, 37% of businesses overall feel that a lack of strong leadership for their digital efforts is an issue, with construction (45%) struggling the most. Government and public sector seem to be showing the most efficient leadership; just a quarter describe this as a main barrier.
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Evidently, “people challenges” – like staffing, culture, and communication – have a big impact on a business’ ability to transform successfully. Yet these aren’t the only issues at play. As our research also discovered, having the right tools in place is critically important, too.

The tools for transformation

Change might be driven by people, but it’s powered by tech. Our research found that those using a single project management platform were more likely to have their project be both successful and running to schedule.

So, to put themselves in pole position for success, businesses need to embrace project management technology. But as it stands, only half of the organizations we surveyed feel extremely confident they have the best tools to make that happen. And some sectors are more confident than others that they have what they need to secure the outcomes they want. (See our digital transformation secrets of success infographic for more.)

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The most confident respondents are those working in the technology sector. Almost six in 10 (59%) from this group are extremely confident about having the tools needed to run digital transformation successfully – which makes sense, since such companies are most likely to have IT-savvy employees with the agility and understanding to research and adopt new platforms.

Professional services, logistics, construction, retail, hospitality, and manufacturers all hover around the 50% mark when it comes to feeling extremely confident in their tools. But for healthcare and pharmaceutical companies, this drops to 43%.

And only 35% of those in government or public sector roles report feeling extremely confident. This is a worryingly low percentage for a sector which is very much under pressure to deliver strong outcomes for a large number of people. The reasons behind this are unclear, but it could be a result of budget cuts over the last decade. Or it could be a cultural factor, as the public sector often has slow and unwieldy procurement processes, making it difficult to adopt the best tools as needed.

What’s next for successful transformation?

Whatever the answer, something has to change – organizations need to find ways to make their change programs work harder for them. At a time when so much is being invested into digital transformation, the public sector – and indeed, all organizations – need to ensure their time and resources are spent effectively.

Fortunately, our research also revealed a clear roadmap to better transformation. If you’d like to learn more about what effective digital transformation looks like, download your copy of our research, “Success vs. Achievement: Understanding the Effectiveness of Digital Transformation,” today.