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Common Roadblocks to Digital Transformation and How to Hurdle Them

September 20, 2022 |
By Input 1

Insurance companies increasingly feel the pressure to launch digital transformation initiatives to maintain competitiveness in today’s insurance industry. However, insurers often must contend with the painstaking challenge of unifying a variety of often segmented digitization efforts (some of which still use legacy software and components) and identifying and integrating said technologies in ways that are sustainable, and which will accomplish their digital transformation goals.

Established insurance companies, by and large, are not able to simply flip a technology switch that will rapidly transform the entire operation at one time. Established operations are typically complex and interdependent. What roadblocks impede the progress of a faster digital transformation, and how do you overcome them?

The roadblocks to faster digital transformation

Understanding the needs of customers, employees and others with a vested interest is where digital transformation begins, along with making knowledgeable investments into technology. It takes extensive preparation and analysis of facets like understanding the goals of the transformation and having the required skills on your team. So, what stands between your vision of digital transformation and its successful execution? Here are common roadblocks and some thoughts on how you might deal with them:

1. Talent Gap

A shortage of qualified, skilled IT talent is the biggest roadblock to digital transformation. Currently, only 17% of companies have sufficient current employees with the right skills to see them through a smooth digital transformation1. That’s because the new reality is this – tech skills are no longer centered in IT. In fact, 40% of employees say they frequently complete tasks outside of their job description, exhibiting the need for soft skills to be coupled with the technical skills, creating skill clusters, not singular silos2.

For the talent gap situation, it’s advisable to create a “comprehensive strategic workforce plan” to win the talent war and execute on a strong hiring strategy to land the best talent. And it’s not always about technical skills. Usually, proficiency in strategic thinking and analytics are what businesses are searching for, on top of an ability to manage others and possessing an acuity for business.

Cross-functional knowledge is important for digital transformation. It fosters collaboration through breaking down silos to promote diverse teams to work together rather than against one another. In the same study, 88% of those who responded said they’re feeling the presence of major gaps across departments even though “extensive business-related knowledge on the IT side is crucial for developing a digital transformation strategy.” 58% say their IT executives have the right knowledge for digital transformation, while only 27% mentioned their business executives shared an equal level degree of technical knowledge. The IT- and business-side leaders must coalesce to come up with a single plan guided by business goals that provides comprehensive direction the whole company can support.

Constructing a strategy is a great initial step to take. As part of the overall plan, check into other things that can be done to gain the necessary skills – are there existing members on the team who could receive the additional training needed to realize those abilities? If so, this would be considered a win/win for all parties involved – the trained-up team members and the organization itself.

Strong project management is a critical first step because it’s important to note that those skills needed are now likely to go beyond the IT department. A key to success will be having the right team members, and their project managers positioned properly. Next, find different avenues to maintain the stability of service delivery and critical actions without interruption, especially for those services you provide that can be categorized as complex or delicate during a changeover in systems.

2. Legacy Systems

In some cases, one of the biggest roadblocks is the legacy system itself. An estimated 80% of enterprise data in the world are still housed in mainframe systems3, technology that has now passed the 50-year age mark. Refocusing operations to leave behind the relics of a bygone technology era to a virtualization-driven view is essential. The old mainframes need to be replaced or migrated to virtual cloud servers as soon as possible.

This usually means during the transformation journey, systems will be running together for a while. It may be necessary to run a legacy system side-by-side to then phase it out over a period. Complete a “gap analysis” – taking a look at the gaps between the legacy system and the new solution when it comes to each critical function. This will help to ensure a smooth transition.

Refocusing operations to leave behind the relics of a bygone technology era to a virtualization-drive view is essential.

Leading with the needs of your customer is the crucial component of digital transformation. Have a full understanding of how and why digital transformation will meet those needs and take a calculated approach for the reason the technology is receiving your investment.

At its conclusion, you will win if your transformation registers with customer-facing technologies. The aim of the game is to deliver value. Make technology decisions that are customer value-based, but don’t forget to lend support to those who have difficulty with it, too.


  1. https://www.cs.cit.tum.de/bpm/fileadmin/w00btn/www/IDT_Skill_Report_2015.pdf
  2. https://www.gartner.com/smarterwithgartner/workforce-planning-for-competitive-advantage-post-covid-19
  3. https://community.ibm.com/community/user/legacy?lang=en&ce=ISM0484&ct=SWG&cmp=IBMSocial&cm=h&cr=Security&ccy=US