Digitization requires more than just technical skills.

Digitization and digital competence are critical to the competitiveness and sustainability of organizations of the future. However, many seem to be taking the wrong measures because they do not understand what kind of competence is actually required.

A new study on change management by NTNU and KPMG reveals that the challenges of digitization are largely organizational. However, there are different training measures for the technical skills that are prioritized when implementing digitization processes.

Don't be afraid of digitization

In a preliminary survey, 170 Norwegian managers at various levels and across industries were asked about their relationship to organizational change, digitalization and digital competence. The survey shows that managers are clearly optimistic about technological change: 4 out of 5 (79 percent strongly or somewhat agree) believe that AI will significantly change their industry, without appearing to be particularly concerned. Only 8 percent are concerned about their work situation due to AI, while 80 percent are confident that they can master the upcoming technological changes. Furthermore, 72 percent feel that managers inspire the organization to see the opportunities in digital technology.

Despite the optimism, more than half believe employees lack the skills to exploit the potential of digitalization.

Inaccurate term

As part of their master’s thesis in industrial economics and technology management at NTNU, Anna Huse and Espen Hegstad Krüger conducted in-depth interviews with 16 managers about digitalization and the development of digital competence in order to uncover where the shoe is really pressing. What perception do managers have of digital competence, and what actions are being taken to increase this competence? The results show that digital competence is a loose term with an enormous scope in practice. Digital competence can therefore encompass everything from user competence in Office 365 to attitudes towards digitalization, depending on who you ask.

In interviews, managers indicated that the biggest challenges facing digitalization are related to the non-technical aspects of digital competence, such as change management, attitudes and how to make good choices about purchasing and using digital tools. This indicates that managers’ experiences and ideas are in good agreement with international research in this area. However, there are reports of training offerings with clear shortcomings, mainly consisting of IT departments holding “click courses” on Office and Teams.

It is not done with keystrokes.

History has given us many examples of digitalization initiatives failing, often because projects are presented as technical changes and critical cultural and organizational conditions are neglected. Large investments may be made with the promise of financial or socially beneficial gains, but this requires major changes in services, staffing or strategic focus – something that cannot be solved with a few keystrokes. However, system development and training initiatives cost a lot of money.

Not only do click-through trainings incur costs in the form of lost productivity and training expenses. Both managers and employees suffer from a sense of meaninglessness and lack of motivation if organizational and human conditions are not addressed in change processes. This can lead to underutilization of digital tools or resistance from employees to change. You risk being left with unpleasant accounts and frustrated people.

outside computer rooms

One possible reason for the failure of competency-building measures is that the concept of digital competency is too broad and vague, creating confusion about what measures are actually necessary. In addition, non-technical skills are often less tangible and measurable than technical skills and involve complex interpersonal relationships.

Technically, a unified digital tool works the same way across all organizations, but how it is used and integrated depends on the unique characteristics and challenges of each individual organization.

It is tempting to implement concrete and proven uniform delivery measures, but there is also a high probability of missing the real development potential of the organization and the individual cognitive needs of employees. Organizational tailoring immediately involves a more demanding design and involves other parts of the organization than purely technical.

Common understanding is essential.

We shouldn’t leave digitization to technologists alone. To succeed in digital transformation, organizations must recognize the importance of non-technical digital competence and a shared understanding of how digital tools can improve the organization. This involves investing in competency-building measures that develop good analytical skills, organizational understanding, and critical thinking around digitization together.

The potential for significant gains lies in larger strategic processes, changes in product portfolios, value chains, and forms of collaboration. This cannot be arranged in a clever application, but requires internal and external processes with a high degree of collaborative processes and courageous decisions by confident and competent managers at all levels.

Digitalization is not just about technology, it is about people and how they adapt and integrate new tools into their daily work. By focusing on comprehensive measures to increase efficiency, Norwegian organizations can ensure that they benefit more from the many digital changes ahead.