Dive Brief:

• The inability to experiment with technology, ties to legacy systems, and rigid organizational silos are the top three enterprise obstacles to digital transformation, according to a new report from Harvard Business Review sponsored by Scout.

• The lack of business flexibility is systemic, creating ripple effects across the enterprise, the study found. It can contribute to other digital transformation obstacles, including inadequate collaboration between IT and lines of business, a risk averse culture, and a lack of change management capabilities. 

• Overall, the report found outdated and overly complicated business workflows are preventing many companies from making progress on their digital transformation efforts.

Dive Insight:

Notably, "insufficient technical skills on the part of our technology staff" came in at the bottom of the list, though many IT leaders have expressed concern over the state of the workforce.  

A survey released by Gartner Inc. in April found technology talent is currently the biggest impediment to digital transformation. But no matter what the biggest obstacle, the bottom line is there are clearly obstacles to modernizing businesses.

Companies have to figure out how to navigate them in order to reap the rewards of digital transformation, which are increasingly documented. Nearly 60% of respondents Gartner survey said their digital platforms and ecosystems have already improved profits.

To truly transform, companies will have to rethink how they are using technology and investing in the right tools in an ever-expanding market. The International Data Corporation (IDC) recently predicted worldwide spending on digital transformation technologies is expected to reach $1.2 trillion in 2017, an 18% increase over 2016 spending. By 2020, IDC says digital transformation spending could reach $2 trillion. But in order to make those investments count, companies must first figure out how to overcome the challenges that stand in their way.