October 26, 2017

How can HR prepare for digital transformation?

Digital transformation. We all know we should be thinking, talking and working digitally but few of us are actually achieving it. That’s one of the main messages in ‘The 2017 State of Digital Transformation’, a report by research and consulting firm, Altimeter, part of the American company, Prophet.

The report found that most companies have a long way to go to meet the needs and expectations of digital customers and includes this comment in its opening executive summary: “Hundreds of millions of people worldwide use smartphones and other digital devices to communicate, buy and sell, learn, and be entertained, but many companies still have not made critical investments to be digitally competitive and consumer responsive as this global shift happens.”

Some of the key findings of the report include:

  • a lack of digital literacy within businesses is hindering innovation
  • digital transformation investments tends to focus on specific, short-term initiatives, rather than long-term investments
  • many company cultures are risk-averse, with leaders not recognizing the urgent need to do things differently
  • politics, egos and fear are the main obstacles to achieving the collaboration and solidarity needed within companies to make the changes digital consumers want

Why should these findings be of concern to HR professionals? Because they are all to do with HR. Who should be ensuring that individuals and organisations have the digital skills and experience required? Who should ensure the right culture is in place and be informing everyone – from the top team through to the most junior person – what the future of work looks like? Who should be addressing issues around politics, ego and fear? The answer is, of course, HR to all of these questions. HR cannot do it on its own – it needs the support of the top team, in particular. However, HR should be having those conversations with senior management, conversations about culture, skills, workforce planning and the future of work.

Many organisations are still at the early stages of digital transformation. The Altimeter report talks about The Six Stages of Digital Transformation. These are:

  • business as usual, when organisations continue to operate with legacy processes, business models and technology
  • present and active, when there are pockets of experimentation
  • formalized, when experimentation becomes intentional and initiatives become bolder
  • strategic, when individual groups recognise the strength of collaboration and new strategic roadmaps are formed
  • converged, when a dedicated digital transformation team forms to guide strategy and operations based on business and customer
  • centric goals
  • innovative and adaptive, when digital transformation becomes how business is done

True digital transformation can only happen when it is organisation-wide, encompassing all functions and all operations. It is not an IT strategy, but a company-wide strategy. Organisations have to have the right culture, processes and procedures in order to achieve to true, successful digital transformation. Focusing on customer needs and the customer experience is critical, but so is the employee experience.

HR and organisational leaders and managers need to make sure all employees have the right skills, yet only half of those participating in the report are investing in digital talent. As the report says ‘lack of digital literacy and expertise anchors digital transformation to the past’. HR really needs to engage with employees, get them thinking digitally and making sure they are equipped with the right skills and mindset to push digital forward.

Keep up to date with all the latest news from CIPD ACE over at the DPG community.