Keywords

1 Introduction

Due to the advancement of technology and the urgent need in addressing the challenges of businesses in fulfilling their operations, digital transformation has become a fundamental requirement in business organizations [1,2,3,4,5]. According to [6] cultural phenomenon and a creation of a business model for organizations had been the concern in defining the digital transformation. Henriette et al. [6, p. 3] have defined digital transformation as “a disruptive or incremental change process. It starts with the adoption and use of digital technologies, then evolving into an implicit holistic transformation of an organization or deliberate to pursue value creation”. However, barriers in digital transformation is not only about the technological aspect but also concerning the cultural traditions such as; employee’s resistant to change, lack of sufficient resources, lack of required knowledge and practices, that are affecting negatively the digital transformation [2, 4]. According to [7] around 85% of digital transformation does not reach at a success and being successfully has been a consistent challenge in the implementation of digital transformation [8, 9]. With regard to the Sri-Lankan digital transformation failures, the attention has been focused mainly on financial sector [10] and transportation sector [11]. During colonialism, public sector organizations were more bureaucratic and hierarchical. Therefore, the employees thought that the head of the organization could only give solutions to their problems [11]. Moreover according to [11] digital transformation fails in public organizations due to cultural barriers; negative mind-set among employees, power distance (respecting people with power), resistant to change and absence of team culture. Furthermore, [11] also noted that a sense of superiority, and pride within the top management has created a strong power distance between the top and the junior management. Several researches on the barriers in digital transformation have been conducted [4, 6], [12,13,14], but a few studies have been carried out on the cultural barriers in digital transformation in developing countries [10, 11]. According to [15] public sector organizations should consider the central change challenges and barriers, prior the implementation of digital transformation process. Previous research studies conducted on digital transformation in organizations have given less attention to its cultural barriers and it still lacks a clear definition of them [16]. As noted by [17] less attention has been given to the research on digital transformation in developing countries that are different from that in the developed countries because of the cultural differences. According to [18] the growth of digital transformation in Sri-Lanka is far behind compared with countries like India, China and other developed countries. The prevailing culture in most of the public organizations in Sri-Lanka has become an obstacle for the implementation of digital transformation [18]. Compared with the private sector organizations, digital transformation in the public sector organizations is far behind [19]. Having considered the above factors, the problem addressed in this research is to identify the cultural barriers in digital transformation in a public organization in Sri-Lanka. To address this lack of knowledge the following research question was formulated; “What are the cultural barriers in achieving digital transformation in a public organization in Sri-Lanka?”. The next sections of the paper include the research background, research methodology, results and discussion, and conclusions.

2 Research Background

2.1 Culture and Barriers in Digital Transformation

According to [20, p.625] “business transformation is about bringing radical changes in organizational culture in terms of structure, processes and above all, people’s attitudes, beliefs and behaviours”. Therefore, in the process of successful digital transformation, cultural change becomes a mandatory element [20, 21]. Promoting the sharing of skills, knowledge, resources, development and learning are critical factors required for a strong organizational culture [22]. In encouraging the employees of an organization to absorb those critical factors [14] the role played by culture is rather significant in the process of digital transformation. Culture is including values, beliefs, life practices, language and behaviour of members of a society. It comprises of the behaviour, characteristics and values of citizens [23]. Therefore, there should be a thorough concern on the organizational culture within the organizational transformation [14]. Due to power distance, the employee’s negative mind-set and the non-availability of team culture, digital transformation in public organizations in developing countries finds it rather difficult to prevail [11]. As per [24], culture is considered as the greatest challenge in the digital transformation and therefore the identification of cultural barriers in digital transformation is very important. Moreover, when there are cultural problems in an organization, it would even lead to the collapse of the best designed digital strategy, therefore organizational culture should be considered as a mandatory aspect in reaching a successful digital transformation [25]. Furthermore, for a successful digital transformation there is a need to start with a cultural transformation [26]. According to [27] the maturity of the digital transformation in organizations is acquired in four dimensions of the Forrester digital maturity model: culture, technology, organizations and insights. However, the main barriers in digital transformation are not technology, but the human factors such as; cultural traditions, lack of relevant knowledge and good practices, lack of motivation, risk taking, the effect of IT capability on digital transformation and employees’ resistance to change [2], [28,29,30]. In opinion of [17] the adoption of digital transformation in an organization is influenced by the cultural barriers and the four dimensions of culture (uncertainty avoidance, power distance, individualism and masculinity). In Sri-Lanka as a developing country, public sector organizations are rather bureaucratic. In this country, [11] have noted that there is a power distance between the junior staff and the senior management. Furthermore, the senior management does not entertain the ideas of the junior staffers in the initiation of a digital transformation [11].

2.2 The Importance of Digital Transformation in Public Organizations

In the digital transformation of public sector organizations, the contribution given by web 2.0, social media and networks is considerable [31]. In a study done by [32] the authors have commented on three levels of maturity: people, processes and preparedness in connection with the digital transformation in the public sector organizations. In fact, public sector organizations should maintain ambidexterity with changes and strategies to have a successful digital transformation [13]. Digital transformation in a public organization needs an agile leadership, remedied cultural obstacles and changing government processes [31]. As found out by [19], digital transformation in public organizations is far behind as compared with the private organizations. However, digital transformation has already become a mandatory requirement in the public sector organizations since there is a growing need for development of information systems in the public departments while citizens are looking for agile and innovative services [33].

2.3 Factors Affecting Digital Transformation Identified in Research Literature

In a review of the research literature, we have identified a number of factors affecting digital transformation in organizations mapped into five main cultural dimensions and shown in Table 1. The five main cultural dimensions shown in Table 1 are those relevant to the factors that are affecting digital transformation, and are discussed below.

Table 1. Factors affecting the digital transformation found in research literature mapped into cultural dimensions
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“Knowledge Gaps” is one of the cultural dimensions that negatively affect digital transformation. The lack of knowledge and the issues in the correct dissemination of knowledge stand as a barrier for the digital transformation. According to [2, 28, 30, 34, 35] lack of relevant knowledge, lack of qualified personnel and training, missing skills and lack of awareness and skills are the knowledge gaps which hinder the digital transformation. Depending on each other of the organization during the process of digital transformation is also a barrier.

“Dependencies” is one of the cultural dimensions that have a negative impact on the digital transformation process. As per [17, 25, 34] individualism, individual barriers and lack of competencies prevail within the constituent of dependencies. Previous researchers have also identified “Bureaucracy” as another cultural dimension that is one of the most significant in public sector organizational culture in the developing countries [11]. This phenomenon negatively affects with the digital transformation process. Bureaucratic culture gives power to the hierarchies. Bureaucracy considers that some people are very important; so that they should be respected [11]. “Miscommunication” is one of the cultural dimensions in the digital transformation because miscommunication with the employees, stakeholders and the citizens is a barrier for the digital transformation process. For example, resistant to change, lack of partnership and collaboration, and inescapable leadership, are in opinion of [11, 25, 28] involved with negative communication which create issues within the digital transformation process. In the dimension of “Accomplishments” that is another cultural dimension, it is highlighted that the digital transformation is successfully extinguished by mitigating all those barriers, discussed above. The previous research studies have identified also strategies, common elements, models, frameworks and benefits that can be used in accomplishing the digital transformation process [36,37,38,39,40]. Accomplishments stand as a barrier, because when the organizations did not embrace digitalization from the commencement, a successful implementation of digital transformation will not be attained. Moreover, when the organization did not support digital transformation, there cannot be a successful implementation of digital transformation, hence whatever strategies, aims and goals in place, digital transformation cannot be attained.

3 Research Methodology

The study has focused on identifying the cultural barriers in digital transformation in a public organization in Sri-Lanka. The public organization selected in this research was The Inland Revenue Department (IRD) that is under the purview of the Ministry of Finance (MoF) of Sri-Lanka. The reason of selecting IRD was because Revenue Administration and Management Information System (RAMIS) assists IRD in simplifying its tax administration and tax compliance with the taxpayers and is on-going through a digital transformation, therefore, this was an important factor for the selection of this particular public organization. The research strategy is a plan of action designed in a layout to reach and achieve a specific goal of the study [41]. In this study, a case study research strategy was chosen to identify the cultural barriers in digital transformation at IRD. In acquiring meaningful data for the research, a non-probability sampling method was used to select the interview participants [41]. The selected participants in this study are those having the relevant experience with the ongoing RAMIS system, and involved in the process of digital transformation. They are from the top management, middle management and junior management of IRD. The interview questions were formulated using the factors affecting digital transformation shown in Table 1, and grouped into five dimensions (Knowledge Gaps, Dependencies, Bureaucracy, Communication and Accomplishments). The data collection was done through semi-structured interviews conducted with the selected participants at the head office in Colombo, Sri-Lanka. In order to achieve triangulation, the researchers have used multiple sources of information such as internal documents, annual performance reports and government publications [42]. The participants, their generic positions (for anonymity) in IRD, duration and date of interviews, are presented in Table 2.

Table 2. List of participants, their positions in IRD, duration and dates of the interviews
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In the consent form, we have agreed with the interviewees at IRD to keep their anonymity, and their names and positions in the public organization to not be disclosed. However, the Human Resource department of IRD gave its approval to use the name of their organization. The data collected was analyzed thematically and followed the step-by-step guidelines provided by [43] in conducting thematic analysis. By using the thematic analysis, in the transcribed interviews, were identified the patterns which reflect meanings and interest in the dataset and defined them into codes, sub-themes and themes. The thematic map generated through the above facts is shown in Fig. 1.

Fig. 1.
figure 1

The thematic map illustrating the cultural barriers in digital transformation in a public organization in Sri-Lanka

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4 Results and Discussion

This study has looked to identify the cultural barriers in achieving the digital transformation in a public organization in Sri-Lanka. The identified cultural barriers are shown as sub-themes under five main themes (knowledge gap, dependencies, miscommunication, bureaucracy and accomplishments), are presented in thematic map in Fig. 1.

In Fig. 1, are shown twenty-one cultural barriers in digital transformation in a public organization in Sri-Lanka classified under five main themes. From these twenty-one cultural barriers, we have nine cultural barriers, identified through research literature (that they will not be discussed in this paper) and twelve new cultural barriers that were identified in a public organization (IRD) in Sri-Lanka and shown in the light grey color in Fig. 1. The twelve new cultural barriers in digital transformation identified in IRD, Sri-Lanka, are presented below under the five main themes.

“Attitudes towards informal knowledge sharing” is a new barrier, categorized under the theme of Knowledge gaps. As stated by most of the respondents, there are employees at IRD who have extra qualifications on IT, apart from that of the same in tax related matters. But as noted by R3, IRD never gets their service for any type of digital initiation.

“[……] frankly if the knowledge is shared, we can give an absolutely better service. It’s in vain when we have to pay a great deal of money to a foreign company even when we have competent employees within the organization” (R3).

R5 noted that there are some officers who have a considerable knowledge on the functions of the RAMIS system. But, when an officer who does not have the same level of knowledge asks for the assistance of those officers, they refuse to assist.

“You know it’s very funny to see that even when knowledge is already available some staffers are not willing to share it among the others who don’t have it. I think that’s something wrong in their cultural mind-set.” (R5).

In order to address this barrier, knowledge on digital initiation should be shared among the employees.

“Dependence on hierarchy” is a new barrier under the theme of Dependencies and as noted by R3 a junior staff, despite the urgency of their workload, they have to remain silent until the senior officers of the top management give their consent on any matter related to digital transformation.

“[……] if there is a fault in the digital initiation, we are helpless, because the taxpayer has to wait for a long time until the boss himself rectifies the matters. You know sometimes those faults are very minor things. But you got to wait for a long time since you need the approval of the boss.” (R3).

According to R7, if there are matters which cannot be remedied by the IT unit, it is notified to the Singaporean company. Generally, it is complained that it takes such a long time if the matters end up with the foreign company.

“[……] we inform the IT unit and at times it’s so tired of waiting for long time until our matters are rectified. Sometimes even if we wait for a long time, the IT unit asks us to contact the Singaporean company.” (R7).

In order to address this barrier, there is a need of an ad-hoc officer that should be appointed until the officer relevant returns. Moreover, there is a need for training like workshops concerning personality development that can be organized in order to avoid dependency on each other.

“Influence of internal trade union” is another new barrier under the theme of Dependencies. Whenever there is a digital transformation, some employees who dislike such a move often tend to complain to the trade union within IRD. R7 noted that by informing the trade union, the staffers try to take an upper hand on the suggested changes in the digital transformation.

“[……] whenever a word of digital transformation is heard they get panic and report it to the trade union. Trade union of course are in favour of the staffers and they make a big issue over the suggested digital transformation” (R7).

R2 noted that in his experience he has found out that trade union have been detrimental on the smooth function of public organizations. “Trade unions are the biggest troublemakers in public organizations. As you work digitally, it is better if trade unions are not involved [……]” (R2).

To address this barrier, trade union should be well convinced of the importance of digital transformation in providing better services for the citizens.

“Preference to work with the legacy systems” is a new barrier under the theme of Dependencies. As noted by R3 some of the senior officers are addicted to work on the legacy system, but hardly are they bothered to get adapted with the RAMIS system.

“There are many employees who still prefer to work with the legacy system. Those days it was rather difficult to convince them about the new RAMIS system [……]” (R3).

R5 has identified that some employees still give destructive criticism on the RAMIS system. Changing their deeply rooted attitudes on the RAMIS system was an absolutely difficult task.

“We never expected that our employees would resist the RAMIS system as much as they actually did. We had to speak to most of our employees individually [……]” (R5).

To address this barrier, the legacy system should be discharged in a period of time and the employees should be motivated to work with the RAMIS system.

“Poor comprehension of IT unit to end user requests” is a new barrier under the theme of Miscommunication. R3 stated that when the RAMIS system is updated with any changes introduced by the acts, sometimes it is inaccurately updated, where it is found that there is a poor understanding with the dissemination of information.

“When there are several parties they differently understand the actual nature of the initial information. End of the day you don’t exactly get the true information. This is simply a miscommunication [……]” (R3).

According to R7, the end users generally face with difficulties in dealing with the taxpayers. Under these circumstances, the end user is well convinced of the issues, arise. However, though issues are asked to be remedied by the IT unit, the IT unit does not have a sound understanding on the issues.

“Even if the IT unit is informed of the issues that the end users face with, their understanding seems to be rather poor. And I believe their ignorance is due to the miscommunication” (R7).

To address this barrier, a communication officer should be appointed with the purpose to facilitate communication between the end user and the IT unit.

“Improvement of internal communication” is another new barrier under the theme of Miscommunication. As noted by R3, RAMIS system is having the interface in the English language. However, there are some senior officers whose English knowledge is not satisfactory and thus creates difficulties in understanding of working with the RAMIS system.

“There are some senior officers who have a poor understanding in English. But they are not willing to declare it. They keep it by themselves and that creates a nightmare [……]” (R3).

R2 stated that the Singaporean company is contacted for some upgrades in the RAMIS system. Sometimes it is found that the information, conveyed is not properly understood at the receiving end.

“When we speak to the Singapore company regarding the upgrades in RAMIS they take what we tell them differently [……]” (R2).

To address this barrier, the internal communication in the organization should be improved so all the employees can better understand each other’s.

“Lack of awareness of middle management concerning digital transformation” is a new barrier under the theme of Miscommunication. As per R7, the top management keeps a low profile with the junior staffers in the decision making concerning the digital transformation. Therefore, the middle management does not get a proper awareness on digital transformation.

“Our bosses all of a sudden take decisions and implement them even without informing us. How good if they can inform everyone and get their ideas as well before any implementation [……]” (R7).

R4 stated that the training on digital transformation is not given to the relevant and competent officers.

“Actually, in our office, giving foreign training is heavily influenced. Therefore, the most relevant and suitable officers do not get it” (R4).

In order to address this barrier, the middle managers should be made well aware of the accomplishments of digital transformation as noted by [13]. Moreover, there is a need for a better selection of the employees who will be going on training in digital transformation.

“Management and employees attitude towards digital initiatives” is a new barrier under the theme of Bureaucracy. R4 noted that some of the officers in the top management generally refuse any initiation of a digital project.

“[……] the decisions taken by such officers hinder digital transformation. We can’t influence them. They have a monopoly.” (R4).

R2 said that some of the officers are not convinced of their contribution given to digital transformation. They are pessimistic on digital initiation.

“Most of the people in our culture are pessimistic. [……] People generally do not like to develop innovative ideas.” (R2).

To address this barrier, the attitude of the employees and management should be changed for having a successful digital transformation [35].

“Resistance to use of the digital technologies by the top management” is a new barrier under the theme of Bureaucracy. As noted by most of the respondents, it is mandatory for IRD to be updated with digital transformation initiatives while being closely involved with new digital technologies. R4 noted that adding cloud computing into their digital transformation process would enhance the efficiency and effectiveness of the tax process.

“[……] it is absolutely good if we can have cloud computing in this process because we centrally deal with taxes, but since the top management is not concerned with new technologies still the matters remain in very primary level.” (R4).

R5 revealed that some officers in the top management are difficult to be convinced with the benefits of new technologies.

“[……] anybody understands that in this digitalised world you can never survive without new technologies. But our top management is yet to understand this bitter truth.” (R5).

To address this barrier, the benefits and value of using digital technologies for organization should be better explained by the IT unit to the top management.

“Political influence” is a new barrier under the theme of Bureaucracy. All the respondents noted that whenever a new government comes into power, the political hierarchy makes changes with the senior appointments in the departments and ministries.

“When a new minister comes in, the senior appointments in the ministry are changed [……]” (R3).

According to R2, the appointments made in the ministry are heavily politically influenced.

“If you were an ardent supporter of the elected political party, you have high possibilities of getting appointed as a top boss of a ministry or a department” (R2).

According to R4 as the government change, acts with regard to tax matters also get changed.

“When the government changes, we get burdened with many work. We got to entirely change our system of work according to the new acts introduced by the government.” (R4).

To address this barrier, the public organizations should be made free of the political interferences.

“Resistance to change concerning digital transformation” is a new barrier under the theme of Accomplishments. R3 noted that most of the employees are pessimistic on the digital transformation and they keep on resisting from the very beginning of the digital initiation.

“[……] some officers seem little frightened over digital transformation. If all the officers also had given their contribution, the RAMIS could have been a huge success” (R3).

R4 also noted that generally at IRD, some officers in the top management as well as some junior employees oppose resistance whenever something innovative ways of working are introduced into their working area.

“[……] as I think I have felt that the employees in our organization have a different mind-set. Of course it is quite peculiar.” (R4).

To address this barrier the employees should be well convinced of the importance and benefits of digital transformation as declared by [13] and the employees should be motivated to have thoughts on culture of innovation as noted by [36].

“Organization’s support for digital strategies” is a new barrier under the theme of Accomplishments. According to R1, as the RAMIS system was initiated, IRD was well aligned to support digital strategies. However, the organization support did not last for long due to the negligence of the top management.

“RAMIS was initially in a very good form. But gradually it became slightly ineffective. I think that is exactly due to the fault of some of the officers in the top management [……]” (R1).

R7 noted that some of the officers who were about to retire were not highly knowledgeable and convinced of the benefits of the digital strategies.

“There are some officers who are eagerly waiting for their retirement and at the office mostly their work is quite less [……]” (R7).

In order to address this barrier as noted by [39] digital strategies should get the support of the organization.

5 Conclusions

To have a successful digital transformation it is very important to identify and mitigate the cultural barriers. Several research studies on the barriers in digital transformation have been conducted in different organizations [4, 6, 12, 13, 14], but only a few studies have been done on the cultural barriers in digital transformation in public organizations in the developing countries [11]. In fact, according to Gartner research [44] “the right culture is one of the most important requirements to achieve digital transformation”. However, the public sector organizations in developing countries are facing a persistent challenge in reaching a successful implementation of digital transformation [11]. Therefore, in this study we have investigated “What are the cultural barriers in achieving digital transformation in a public organization in Sri-Lanka?”. The findings of this research study have identified twenty-one cultural barriers in digital transformation in a public organization in Sri-Lanka (IRD) that are important to be addressed for having a successful digital transformation implementation in this public organization. The new cultural barriers in digital transformation (in number of twelve) identified in this study are the followings: “Attitudes towards informal knowledge sharing”; “Dependence on hierarchy”; “Influence of internal trade union”; “Preference to work with the legacy systems”; “Poor comprehension of IT unit to end users requests”; “Improvement of internal communication”; “Lack of awareness of middle management on digital transformation”; “Management and employees attitude towards digital initiatives”; “Resistance to use of the digital technologies by the top management”; “Political influence”; “Resistance to change concerning digital transformation”; and “Organization’s support for digital strategies”. There are possibilities for a future research due to the fact that this study has limited to one public organization like for example, the replication of this study in other public organizations in Sri-Lanka, in order to be able to generalize the results. However, the results of this research are still important for both researchers in this area as well as the managers in public organizations to focus their efforts, mitigate the identified cultural barriers, and improve the digital transformation implementation in their organizations.