Digital transformation disrupts the way companies create value that improves the customer, employee or partner experience. But it involves a multiyear journey and changing a company’s operating model, which is painful and difficult. Building executive and organizational conviction on the vision for what the transformation is and sustaining it over a three-to-five-year journey requires thinking differently about business transformation and its challenges. Let’s look at the “moments that matter” in how your company must handle challenges on that journey and sustain the conviction that the pain is worth it.
The “Just-in-time” methodology focuses on achieving an outcome through defined structured processes that also build organizational capabilities. “Somehow-in-time” focuses on somehow achieving an outcome, irrespective of the impact it has on the broader enterprise.
Most enterprises reward leaders who embrace “get it done” approaches. Unfortunately, the ideology is becoming part and parcel of more enterprises’ digital transformation initiatives. And while “get it done” may seem like a glamorous virtue, it is detrimental when it comes to digital.
Get Digital Done Doesn’t Build Organizational Capabilities
Everest Group research suggests that 69 percent of enterprises consider the operating model a huge hindrance to digital transformation. Leaders are in such a hurry to achieve the intended outcomes that they neglect building a solid operating model foundation that can enable the outcomes on a consistent basis across the enterprise. This leaves each digital initiative scampering to somehow find resources, somehow find budgets, and somehow find technologies to get it done. And because no new organization capability – think digital vision, talent, or leadership – is developed – these initiatives do not help build sustainable businesses.
Get Digital Done Rewards the Wrong Behavior and People
Much like enterprises’ fascination with “outcome at all costs” creates poor leaders, digital transformation initiatives are plagued with the wrong incentives for the wrong people. Our research suggests that 73 percent of enterprises are failing to get the intended value from their digital initiatives. The key reason is while the leaders are expected to “somehow” complete them, there is no broader strategic agenda for them to scale it beyond their own fiefdoms. Our research also indicates that while enterprises want to drive digital transformation, 60 percent of them lack a meaningful digital vision. They’re obsessed with showing outcomes, and cut corners to achieve them. They take the easier way out to get quick ROI, instead of getting their hands dirty and addressing their big hairy problems.
Get Digital Done Does not Align People towards Common Goals
To succeed in their digital transformation journeys, enterprises must put their “get it done” obsession away in a locked drawer and focus on three critical areas:
Build a digital foundation: Although easier said than done, this requires a revamp of internal communication, people incentives, and a shared vision of intended goals. Each business unit should have a digital charter that aligns with the corporate mandate of leading in the tech-disrupted world. And it requires strategic, yet nimbler, choices on technology platforms, market channels, brand positioning, and digital vision.
Have realistic timelines: Expectation of quick ROI is understandable. However, a crunched timeline can backfire. Enterprises must work towards a pragmatic timeline, and incentivize their leaders to meet it without bypassing any fundamental processes.
Involve different stakeholders: Our research shows that a shocking 82 percent of enterprises believe they lack the culture of collaboration needed to drive digital transformation. That means the initiatives become the responsibility of just one leader or team. And that simply won’t work. Instead of driving everything independently, the leader or team should be an orchestrator of the organization’s capabilities. This is the key reason more enterprises are appointing a Chief Digital Officer, as one of that role’s key responsibilities is serving as the orchestrator. Additionally, the team needs to leverage the organization’s current capabilities, and enhance them for the future. It should build a charter for its digital transformation initiative that includes impact on fundamental organizational capabilities such as talent, business functions, compliance, branding, and people engagement.
In their race to “get it done” and appease their end customers, enterprises have forgotten the art of building organizational capabilities that will sustain them in the future and create meaningful competitive advantage. And they can’t succeed unless they change their approach and ideology.
Does your organization have a “get it done” culture, or has it built the right organizational capabilities to achieve true transformation with digital? Please share with me at [email protected].
Over the last year, it seemed that CIOs faced an existential threat. This threat was coming from new roles – Chief Digital Officer, Chief Security Officer, Chief Data Officer – as well as the business becoming more and more involved in digital transformation, and looking to inject its influence into IT.
It even got to the point early on last year, where there were questions as to whether or not the CIO’s role would continue, or would it dissolve or devolve into these different roles.
During the course of the year, we investigated this, and have come up with a strong point of view that in fact, the CIO has survived this challenge, redrawn its charter, and has emerged as a very powerful and sustaining executive role in the organization.
You know, in this new charter, what we find is there is no other executive in the organization that has the breadth of vision across all the different operating parts of the organization or the depth of resources to be able to deliver on digital transformation and support the new digital operating models that are emerging – leaving the CIO as the natural place for this responsibility to stay in.
And the new breed of CIO, therefore, is redrawing their charter to support this new vision. Now, redrawing this charter is not easy, and it requires substantial changes in organization, IT organization, as well as a substantial commitment to deepen the relationship with both the business and the board so that the CIO in the organization can play this transformative role.
I look forward to hearing from you this year on how your progress toward this new charter and your experiences as you build this very important role in your organization.
When your company undertakes digital transformation, undoubtedly a primary activity will be building a digital platform. As digital transforms companies, their digital platform becomes a differentiator. Building your platform is a crucial activity, as it will enable your company to change to a new digital operating model, and that model is how your company will create new value and new competitive positioning. But digital operations and technologies are still new and evolving quickly, and the business world lacks 10-20 years of experience and benchmarking data that could help your company determine the effectiveness of your platform’s performance. This is one of the reasons so many initiatives fail. To avoid that risk, let’s look at how to understand whether your digital platform will deliver your intended outcome.
Read more in my blog on Forbes
Digital transformation gives companies new opportunities to change their competitive position. Typically, the objective for using powerful digital technologies is to create new value that changes the customer experience, the employee experience or the ecosystem partner experience. However, executives become frustrated when they need to communicate to their boards or peers on how quickly they can deliver on the promises of digital transformation. We live in a world of instant gratification, agile methodologies and sprints. This leads to an impression that a company can quickly achieve a new competitive position in the marketplace or quickly get meaningful benefit from the investments. Inconveniently, this impression is not the truth.
Read more in my blog on Forbes
HR has certainly come a long way in being perceived as a strategic function with significant impact on business outcome. Yet, despite workforce and technology investments, multiple challenges – including the growing talent deficit, problems with skilling and retaining niche talent, and the increasing flexibility and better experience demands of Millennials and Generation Z – are inhibiting HR departments from attaining their full strategic potential on behalf of the enterprises they serve.
The solution is moving to a next-generation HR model with digital transformation at the core.
The inefficiencies of the traditional model – siloed HR systems, a large number of touchpoints, and a disjointed employee experience – are clearly exposed by the challenges cited above. The next-generation HR model addresses these issues with a cloud-based platform at the center, augmented by technologies such as advanced analytics and automation. This results in an intuitive and integrated model that has the ability to provide an enhanced employee experience.
To successfully adopt the next-generation HR model, enterprises should take a structured approach that considers several important factors.
Employee Experience Should be the Focal Point
While the importance of operational cost reduction and process standardization can’t be disparaged, enterprises should prioritize the employee experience when they plan for a digital HR transformation. Be it HR service delivery or technology modernization, the end goal should be to provide an integrated, intuitive, and seamless employee experience to better attract, engage, and retain talent.
In our recently published report, “The Key Ingredients for a Digital-First HR Transformation,” we identified two critical components of the best employee experience:
Empowerment: HR should offer employees integrated, accessible, and disintermediated workflows and systems that empower them to serve themselves. Methods include employee self-service tools, omnichannel experiences, chatbots, and analytical tools, all of which enable employees to have more control over the decisions they make.
Engagement: Millennials and subsequent generations exhibit different behavioral patterns, are digital natives, and expect seamless employee experiences. Enterprises should adopt solutions that enable HR to engage and retain this ever-evolving talent. Solutions that are integrated, user-friendly, and provide consistent experiences across sub-processes / third-party portals with optimized response times and accuracy should be the key focus areas.
Ensure Orchestration of Digital Technologies to Maximize Impact
Rather than implementing a handful of technologies haphazardly, enterprises must take an orchestrated approach to digital HR transformation that enables the technologies to feed off each other, find synergies, and maximize the impact.
The findings in our recently published report made it clear that while each individual technology lever (see chart below) is powerful, enterprises can realize the maximum transformative impact when all the levers are applied in cohesion.
Why is this? Although the impact of technologies such as Robotics Process Automation (RPA) and BPaaS are focused on enhancing the efficiency of various processes, predictive and prescriptive analytics are capable of deriving net new insights.
On the other hand, cognitive/AI technologies such as Natural Language Processing (NLP) and Machine Learning (ML) can be bundled with other digital levers to significantly improve the stakeholders’ experience, in addition to increasing efficiency and providing net new gains.
Engage Service Providers for Help
To help support buyers’ growing demands and needs, service providers are increasingly offering HR and technology consulting services. Capabilities they offer include:
How to understand and plan for the impact of digital adoption on the enterprise’s workforce
How to adopt and derive value out of digital investments (i.e., third-party cloud solutions such as Workday, SuccessFactors, and ServiceNow, automation, and analytics solutions)
How to optimize HR processes
With technology changing so rapidly, organizations need to make sure that they fully embrace digital transformation, and buckle up to face and be ready for the changes. Many organizations are already working in this direction.
To learn more about this topic, our recent report titled “The Key Ingredients for a Digital-First HR Transformation” identifies and deep dives into five key levers (automation, analytics, cloud, advisory, and employee experience) that will help enterprises successfully transform their HR function.
Is your enterprise planning to undergo a digital HR transformation? Have you completed it? We’d love to hear from you about your experiences, questions, and concerns. Please write to us at: [email protected] or [email protected]
I believe it’s now apparent that all companies will go through one of two different forms of digital journeys over the next 20 years. Why? These journeys are inevitable because of the irresistible forces of competitive advantage and lower cost as outcomes. It’s not a question of “if;” it’s a question of when and to what results. However, the result or potential outcome is an aspect of digital that executives sometimes misunderstand and, in doing so, they end up with failed initiatives. So, let’s clear up the possible misunderstandings and look at what digital journeys are about, the types of results that companies can achieve and how digital platforms fit into that picture.
Read more in my blog on Forbes
As IT organizations become more strategic, so too do their partnerships with IT outsourcing providers. Digital transformation, automation, cognitive capabilities, and the data revolution are not just shaking up how IT operates, they are greatly impacting the kind — and quality — of services under contract with IT outsourcing firms.
Here is a look at the technologies, strategies and shifting customer demands shaking up IT outsourcing right now and the once-hot developments that are beginning to cool. If you’re looking to leverage an IT outsourcing partnership, or want to make good on the market for IT outsourcing as a provider yourself, the following heat index of IT outsourcing trends should be your guide.
Read Yugal Joshi's thoughts on these trends in CIO
Fun fact: Many long-established insurance companies still rely on legacy mainframes computers running applications in an outdated programming language from the 1960s. That's not ideal, because today’s tech-savvy, smartphone-using customers are more mobile and expect real-time information whenever and wherever they are, without the assistance of an agent or a call center representative. Not good, because the modern agent requires new tools and applications to maintain productivity in a mobile environment, including instant policy quotes. And especially not good, because the “insurtechs” - new, innovative, and rapidly growing companies with social savvy marketing and modern technologies - are just waiting in the wings, ready to grab your market share.
You have to adapt and evolve in record time to create a seamless customer experience while improving employee productivity to remain competitive and increase customer retention. By implementing APIs and microservices, you can extend those insurance backend systems to mobile, web, and cloud rapidly, and cost-efficiently, all with low risk. By using the “art” of the API, you succeed where past transformation options failed.
According to an article in Forbes by Peter Bendor-Samuel, “The record of studies on digital transformation indicate a high failure rate, with a notable 2013 McKinsey study finding that 70% fail. That is a lot of wasted time, money and unmet expectations.”
Read more in Digital Insurance