Digital transformation in organisations and people functions
What is digital transformation and why should it matter to people professionals?
What is digital transformation and why should it matter to people professionals?
Digital transformation is a hot topic that is being widely discussed in many different contexts. Indeed, it was one of the critical themes people professionals identified as impacting the current and future world of work, according to the CIPD People Profession 2030 report. But what exactly is digital transformation? Why does it matter? How can employers and people professionals prepare themselves, and their organisations, to embrace it and to derive maximum advantage from it? This and the following series of articles will explore these questions, combining the practical implications drawn from in-depth research and study, with the insight and experience of people professionals who have taken crucial steps in digital transformation. |
Before digital transformation became a buzzword, enterprise or business transformation was commonly used to describe a radically new way of running an organisation. As technology increasingly disrupted the status quo, people began using digital transformation to describe enterprise transformation in response to evolving digital technologies. Somehow in the process, ‘enterprise’ was dropped from the terminology. Other flavours of digital transformation developed, focusing on radical changes within organisational functions like finance and marketing. In this series, we delve into digital transformation in organisations as well as people functions.
In essence, digital transformation is about an organisation and their people’s ability to adapt to rapid changes caused by evolving digital technologies. The transformation here is not an end state but a milestone in a continuous journey of adaptation as digital technologies evolve. Digital transformation is about becoming more digitally mature as an organisation.
In Technology Fallacy, Kane et al. defines digital maturity as follows:
‘aligning an organisation’s people, culture, structure, and tasks to compete effectively by taking advantage of opportunities enabled by technological infrastructure, both inside and outside the organisation.’
This definition builds on an established organisational theory by Nadler and Tushman (1980) by considering the opportunities created by evolving technologies.
People, culture, structure, tasks and technology must be tightly aligned for an organisation to achieve powerful results. As Kane et al. stated, ‘for example, a conservative and hierarchical organisation that recruits energetic entrepreneurs won’t be able to harness their drive and energy.’
People professionals who contributed to the CIPD People Profession 2030 report recognised that the profession has a significant role to play in digital transformation. For example, in shaping the culture, engaging the workforce throughout the change and dealing with anxiety or resistance. They debated the ongoing relationship between the people function and IT. While some had a good business partnership with IT, others felt they were working in siloes. In the latter case it meant that people issues might not be considered. There was also discussion on ‘closing the skills gap around technology and analytics’ in the workforce and within the people function. Having the technology and analytics alone is not enough. It’s important to know how to use it.
Kane et al. outlined four steps to effective digital transformation and becoming a more digitally mature organisation:
To help create an organisation that can operate effectively in a changing future of work, they suggest focusing on initiatives such as:
Interestingly, digitally mature organisations share a single set of cultural characteristics. Organisations looking to mature digitally should aim to adopt these:
To become future-ready, an organisation needs to be skilful at both significantly improving its customer experience and reducing cost through simplification. Many of the organisations identified in Kane et al.’s research achieved good performance mainly through the heroics of their people, who overcame complexities to create great customer experiences.
Stephanie Woerner identified four pathways to digital transformation that organisations can choose from:
One organisation that chose the fourth pathway was Axiom Telecom in the UAE. It went through a transformation from a traditional bricks-and-mortar to a predominantly online retailer. In the next chapter of this series, its Group People Director Dominic Keogh-Peters discusses his experience and the role the people function played on that journey.
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Hayfa joined us in 2020. Hayfa has degrees in computer science and human resources from University of York and University of Warwick respectively.
She started her career in the private sector working in IT and then HR and has been writing for the HR community since 2012. Previously she worked for another membership organisation (UCEA) where she expanded the range of pay and workforce benchmarking data available to the higher education HR community.
She is interested in how the people profession can contribute to good work through technology and has written several publications on our behalf, as well as judging our people management awards, speaking at conferences and exhibitions and providing commentary to the media on the subjects of people and technology.
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