Digital transformation is indeed a cornerstone of business strategy today, as 89% of enterprises see digital businessas core to their growth, according to Gartner\u2019s Board of Directors 2023 Survey. Equally telling is another statistic from that research: Just 35% of these enterprises have achieved their digital goals or are on track to do so.\n\n\u201cThis underlines the need for organizations to embrace change and adopt a more agile and forward-thinking approach to digital transformation skills in order to overcome challenges and achieve digital transformation,\u201d says Monika Sinha, research vice president in Gartner\u2019s CIO Research group.\n\nIt\u2019s no secret that having the right capabilities is essential to digital success, but given the dynamic nature of digital business, these capabilities go beyond technical know-how.\n\n\u201cForward-thinking companies are increasingly clear that they need to be hiring not for skills but for aptitudes,\u201d says Sanjay Srivastava, chief digital strategist at Genpact. \u201cPeople that succeed will have a simple philosophy of curiosity \u2014 they will think about their progression as \u2018learn, unlearn, relearn.\u2019\u201d\n\nThe 2023 State of the CIO survey recently polled 837 IT leaders and 201 line of business executives about the skills they believe are most necessary to support digital transformation. Technical skills topped the list but also crucial are key leadership and culture capabilities such as change management, strategy building, and business relationship management, as well as critical business skills such as cost, product, and vendor management, as shown in the graphic below.\n\nRebecca Fox, group CIO for UK-based information assurance firm NCC Group, notes that the mix of skills that drive digital success have a common theme: \u201cThey are centered around delivery into the business and making sure the business gets value from the investment made,\u201d she says.\n\nAnd that is the rub. \u201cThe market is tight, but we are not short of people with technical skills; people who can develop, build infrastructure, and understand the cloud,\u201d says Fox. \u201cHowever, now the technical team and business need to align to drive process innovation and automation into the business, using technology to drive down cost and improve delivery times for customers. These are different types of talent \u2014 where relationships, understanding commercial arrangement, and of course a deep understanding of the business are all critical, as is understanding at some level the complexity and technical requirements.\u201d\n\nHere\u2019s how IT leaders, analysts, and other experts view the skills critical to digital success and how they factor into ongoing digital progress.\n\nBuilding future-ready foundations\n\nFor Charley Betzig, managing director at IT executive recruiting firm Heller Search Associates, skills critical to digital success depend largely on where companies are in their journeys. During the initial foundational phase, when IT is focused on integrating data and systems, and on building digital platforms, technology skills factor in heavily.\n\nCloud architecture skills in particular provide \u201cthe backbone for scalable, cost-effective, and agile IT infrastructure that supports digital transformation,\u201d says Gartner\u2019s Sinha.\n\nData skills are also vital, says NCC Group\u2019s Fox. \u201cGetting the design correct at the start is crucial \u2014 from selecting the right technologies, understanding how things will scale and providing resilience, but also how data will move through to the solution,\u201d she says. \u201cI can\u2019t stress enough focus on data \u2014 and how it will be used \u2014 as most digital transformation programs will be a tapestry of systems.\u201d\n\nIndeed, integration has become a highly valued skill given how digital strategies have evolved, says Todd Musgrove, associate principal in the technology transformation practice at The Hackett Group.\n\n\u201cIn the earlier phases, digital transformation centered on exploring and investing in novel technologies,\u201d Musgrove says. \u201cNow, the emphasis lies in the consolidation, refinement, and expansion of these digital initiatives. Businesses are concentrating on incorporating digital solutions into their core operations, service offerings, and products while establishing seamless integration across various business units and functions.\u201d\n\nAt Merchants Fleet, building out a modern data and analytics infrastructure to support the fleet management solutions provider\u2019s growth and ensure the delivery of a superior client experience has been a top priority. That involved enabling a 360-degree view of the client and visibility into the end-to-end client cycle \u2014 from vehicle onboarding, to monitoring driver safety, to asset utilization and total cost of ownership.\n\nLaying that groundwork opens possibilities for the future. \u201cThe analytics foundation and infrastructure our tech team has created is setting the company up for success over the next five to ten years as fleet managers and municipalities move towards managing driverless networks,\u201d says Jeanine L. Charlton, Merchant Fleet\u2019s senior vice president and chief technology and digital officer, who has a team of data scientists in Chicago developing new operational capabilities. \u201cWe are in a great position to define the tech operations required to move to the next phase of the market when full driverless networks begin to come online.\u201d\n\nLeading change\n\nBut the foundation isn\u2019t everything. As Betzig frames it, the next phase involves the business application of that foundation. Here, one of the biggest sticking points is the failure to achieve the level of adoption necessary for success, says Hackett\u2019s Musgrove.\n\n\u201cSome initiatives have completely stalled and are points of frustration for the executive sponsors and key business stakeholders,\u201d he says, noting that companies are now realizing that adopting new digital technologies requires significant organizational change. \u201cEffective change management enables businesses to overcome resistance, streamline processes, and minimize negative impacts during the transition.\u201d\n\nBut change management is often misunderstood as an item to tick off a project to-do list, says NCC\u2019s Fox. \u201cThe key here is to get into the detail and remove the blockers through a deep understanding of business and customer challenges, and over communicate,\u201d she advises. \u201cNobody should have the excuse as to why they didn\u2019t know what was coming or what their role is.\u201d\n\nIn fact, says Betzig, change management skills are only the half of it; what\u2019s needed is change leadership. \u201cChange management has the connotation of being reactive: managing something that has to be done,\u201d Betzig says. \u201cChange leadership is more about proactively influencing the business to grow. It\u2019s large-scale thinking.\u201d\n\nCharlton and other leaders at Merchants Fleet have created processes for training, incentivizing, and empowering every employee to innovate and contribute to the company\u2019s growth. Today, Merchants Fleet has more than 45 innovation coaches working with hundreds of team members across the company to identify ways to apply digital technologies and analytics to improve key business outcomes: cycle times, cost of ownership, driver safety, and the client experience. New solutions have begun flowing in, from finding ways to attract more talent in a tight job market to condensing the client onboarding process by more than 80%.\n\nStrategizing for new opportunities\n\nMany of the most important capabilities for driving continued digital innovation are decidedly nontechnical.\n\n\u201cOrganizations need to foster and develop skills in leadership, strategic planning, communication, and creativity across levels and roles to navigate the complexities of digital transformation,\u201d says Gartner\u2019s Sinha. \u201cBy fostering a culture of innovation, collaboration, and resilience, these skills drive lasting success in an increasingly digital landscape.\u201d\n\nFor example, strategy building skills enable IT teams to unlock new business opportunities. \u201cForward-thinking analytics teams are looking for talent with a strategic mindset, the ability to ask questions the business does not know how to ask, and the skills to apply digital technology to specific business use cases,\u201d says Genpact\u2019s Srivastava.\n\nBetzig sees this in legacy industries like healthcare or manufacturing that are harnessing digital technologies to evolve beyond their core businesses. Betzig is currently recruiting for a tech leader for a Midwestern healthcare company developing its own software platform. \u201cThey\u2019re transforming their whole business model,\u201d he says.\n\nIn such cases, strategy formulation and product managementskillstake center stage. Srivastava likewise points to healthcare companies moving from batch manufacturing of products to personalized, precision medicine built on a backbone of data, IoT, and analytics.\n\n\u201cTo drive this digital pivot, the skills of product management are key \u2014 the ability to understand all the unmet needs and demands, prioritize which questions to focus on first, be able to size the opportunity, and then execute,\u201d he says.\n\nBuilding relationships, elevating experiences\n\nAnother challenging skill to recruit for is business relationship management. And it is essential to onboard, as the relationship between the business and the technology function will determine the success of any digital transformation \u2014 full stop, says NCC\u2019s Fox.\n\n\u201cBusiness relationship management ensures that IT is aligned with business objectives and that stakeholders from business units and functions understand and support the digital transformation efforts,\u201d Hackett\u2019s Musgrove explains. Yet \u201cmany senior executives have struggled to establish key business relationship management roles such as business process owners and IT business partners. They struggle to recruit the right leaders with the right skills to be successful in these roles.\u201d \n\n\u201cAn underrated capability is the ability to influence behaviors of people you don\u2019t control,\u201d says Kim Seals, senior partner in the people and productivity group at West Monroe, who recently did a search for business relationship management skills in top IT roles from March 2022 to March 2023 using the Lightcast talent market research tool and came up with 6,400 hits. \u201cIf you looked at IT job posting three to five years ago, you would not have seen as much of a clear emphasis on these skills,\u201d she says.\n\nThe same goes for customer experience management (CXM), another key capability that can be a challenge to find and define.\n\n\u201cUnderstanding the customer\u2019s needs and expectations has become more critical than ever in the more advanced phases of digital transformation,\u201d says Hackett\u2019s Musgrove. \u201cIf you want to maximize adoption and value generation, customer experience is key.\u201d\n\nAnd CXM must become more proactive, Srivastava argues. \u201cCompanies traditionally used NPS as the way to measure the success of customer experience \u2014 this was a backward-looking score. Now using AI, we can analyze the entire script from a customer conversation, get results instantly, and use the information to change the conversation,\u201d he says. \u201cThis ability to understand customer feedback beyond periodic surveys is going to be a critical skill going forward.\u201d\n\nPutting it together\n\nStill, digital success ultimately depends on establishing an array of capabilities that is greater than the sum of their parts. \u201cLoading up on skills is not going to get you there by itself,\u201d says Gartner\u2019s Sinha. \u201cCIOs must promote organizational structures that leverage these key skills effectively in order to accelerate the pace of cross-collaboration and innovation that digital transformation demands.\u201d\n\nNCC\u2019s Fox agrees: \u201cThese skills are really important to any digital transformation program, but they have to be brought together as a team.\u201d\n\nIT leaders should begin by charting out the broad phases of work to be done and then determining where skills gaps exist and how they can be filled. Unfortunately, not all will be found in pre-existing talent marketplaces, especially as demand for digital skills continues to grow faster than supply.\n\nBut there are some innovative approaches to sourcing that can help, Sinha says, such as separating work from roles, leveraging adjacent skills, and pursuing borderless talent. \n\nLooking for candidates with diverse backgrounds \u2014 particularly those with experience in other industries or roles \u2014 is also valuable, says Hackett\u2019s Musgrove. \u201cThey may bring valuable insights and unique perspectives to change management, business relationship management, and customer experience management.\u201d\n\nBecause effective digital transformation hinges on deep domain knowledge and business empathy, the best candidates may already be onboard. \u201cNever overlook the talent you might already have in the organization,\u201d Fox advises. \u201cYou can skill-up existing team members if they don\u2019t have the right technical experience, but attitude is everything.\u201d\n\nInvesting in continuous learning with resources, workshops, and training opportunities can also help, Musgrove says. As can internal marketplaces, which enable IT leaders to find internal candidates beyond IT who may have transferable skills.\n\n\u201cOrganizations pursuing digital transformation need to build a knowledge network to facilitate the sharing and exchange of knowledge and expertise among individuals, domains, and external parties,\u201d adds Sinha. These can take the form of informal social networks and online communities to more formal associations. Such knowledge networks enable individuals to connect, collaborate, share knowledge, and build expertise.\n\n\u201cThey can be powerful tools to support digital transformation initiatives and close DT skill gaps,\u201d she says.