Let’s get a handle on ‘digital transformation’

Deloitte's change management strategy leader refreshes our view on digital transformation— and why it's no longer a choice.
7 December 2018 | 675 Shares

Is your team done with the phrase? Source: Shutterstock

The broad concept of ‘digital transformation’ is waved around so much today that, for many businesses, the phrase is more likely to evoke a sense of white noise than excitement.

Assigning such labels is necessary to both identify and empower revolutionary industrial movements. At the same time, it’s a surefire way to guarantee a swift degradation into buzzword status. It’s at such points that it’s worth stepping back and reevaluating the substance behind the nomenclature.

With that in mind, TechHQ caught up with an expert on the subject, Mike Bentley, US managing director Deloitte Consultancy and head of its change strategy and analytics practice, to assist in resetting our digital transformation perspective and to advise on how businesses can revitalize their approach.

Technology & culture are shifting

“The future of work as we know it is changing,” says Bentley; The business world is now flooded by data, and companies across all industries are beginning to realize the competitive opportunities of increasingly advanced automation technologies.

“In addition to these disruptors, we’re witnessing fundamental changes in our talent with the nature of an explosion in the contingent workforce and a diversity and generational change in who makes up the workforce today.”

In the face of these fundamental and “unprecedented” technological and cultural changes, organizations have little option but to adapt if they are going to enjoy long-term success and own their space as a leader in the world, says Bentley.

Not doing so will put organizations on the back foot competitively, but they will also risk losing top talent, as employees increasingly opt to work for businesses willing to support their changing values in today’s digital world.

What does digital transformation entail?

The phrase digital transformation means a lot of things to different people. For some, it can mean throwing legacy IT away in place of cloud-based infrastructure and Chromebooks— for others, it can mean more of a change in mentality.

“Digital Transformation goes beyond just replacing your legacy IT platforms with new digital solutions; it’s much more than that,” says Bentley.

“A true digital transformation combines an organization’s technology, data and software into a compelling user experience that supports the business strategy, but it also involves the application of a new mindset that enables you to leverage new technologies to their fullest potential.”

For Deloitte, while it can take a number of different forms, the execution of a digital strategy boils down to two factors; organizational ability and organizational willingness. The former can be thought of as making sure the workforce understands what to do, and how to do it. The latter, meanwhile, requires building an understanding of why the workforce needs to do something in a new way.

“For change initiatives to succeed, organizations must understand what is their desired outcome of the change,” says Bentley. “It’s important for organizations to be realistic on the type of transformation they are undertaking and match their change management efforts accordingly.”

While there is certainly no one-size-fits-all approach, research from Deloitte has found there are four common approaches that organizations are taking to digital transformation, each striking a different balance between technological and cultural change:

# 1 | The ‘Tech Slam’

Companies are replacing their existing IT systems or other enterprise technologies with a new technology and expect no process or organizational behavior change.

The success of this type of change hinges almost entirely on employees’ ability to learn how to use the new technology through the delivery of training and support resources.

# 2 | Process acceleration

Process acceleration involves adjusting an organization’s defined processes, with the goal of increasing efficiency and speeding up processes.

Process enhancement could drive some modifications to existing job roles and structures. Examples of this include outsourcing certain tasks or restructuring certain departments. As with a ‘tech slam’, the adoption of this type of change hinges more on employees’ ability to understand the new processes so that they are able to execute them effectively rather than on their willingness to do so.

# 3 | Modernization

When companies modernize, in addition to upgrading technology and accelerating certain processes they strive to fundamentally change the way aspects of the business operate.

Modernization requires focus on the workforce understanding why the change is taking place and driving alignment across the organization’s leaders and key influencers. Implementing customer self-service is an example of this type of organizational change. When changes become more fundamental to core operations, the willingness of employees to change becomes increasingly important.

# 4 | Transformation

Transformation sits at the other end of the spectrum from a tech slam, and represents the most disruptive type of organizational change. Businesses seldom transform without a good reason to do so, and common reasons include entering new markets, acquiring or merging with another company or facing off against a new competitor.

Is HR the driving force of change?

The route a business chooses to take— whether it’s an interpretation of any of the four approaches mentioned above, or otherwise— will depend entirely on the unique characteristics of the company and the nature of the industry it operates in.

There is one constant, though; the implementation of any strategy will require leadership, but clearly establishing where in the business the onus should lie remains one of the biggest challenges in a digital transformation.

For Deloitte, and Bentley, the human resources (HR) department at the heart of the business— and in the middle of “continuous disruptions”— must play a central role in getting a workforce ready and willing for the change.

“With business leaders grappling with unprecedented change, there is an opportunity for HR to take the lead and model how the rest of the organization can thrive,” says Bentley. “Getting the workforce ready involves redesigning interactions between leadership and employees.”

At present, just over one third (35 percent) of companies are involving HR teams in digital transformation, according to Deloitte. As such, organizations are facing difficulties in implementation. With an inherent understanding of workflows and assigned roles throughout the company; the ability to communicate the motivations behind change to every individual; as well as being in control of introducing of training and education programs, the value of HR in steering digital transformation efforts is being majorly overlooked.

“[…] the HR team should make sure they partner with leadership to truly understand what the organization is looking to achieve with their change,” says Bentley.

If the organization is looking to do more of a tech-slam or a process acceleration, HR will need to support the business in delivering a more traditional ‘training and communications’ approach that builds ability.”

“However, if the organization is looking for modernization, or more ambitiously a true digital transformation, then HR needs to work closely with leadership to identify the ‘moments that matter’, creating an approach that drives willingness through designing the desired behaviors, culture, and leadership.”

Buzzword or not…

If the phrase ‘digital transformation’ falls on deaf ears within your organization— or insights a groan of tedium as employees recall tired and half-cocked initiatives with scant little to show for them— perhaps it’s time you work with your HR team to  internally rebrand the concept, and start your journey afresh with clearly defined goals and clearly defined reasoning.

One thing’s for sure, technology and culture are changing business, and it won’t wait for you. Buzzword or not, digital transformation is no longer a choice.