WHAT IS DIGITAL TRANSFORMATION?
Most academic definitions of digital transformation focus on ‘business activities, processes, competencies and models’ . However, a people-centric insurgency is gaining strength among digital innovators, with organisations like IBM ‘rethinking what customers value most’ and futurists like Brian Solis, a principal analyst at Altimeter Group, arguing that “unless digital transformation takes a technology-second and a customer/employee-first approach, investments will be unaligned with market evolution and, more importantly, human behaviours, preferences and expectations”.
KEY ‘PEOPLE-BASED’ FACTORS
Nils Solvang, Managing Partner of CloudCIO and formerly CIO of Immarsat, and an expert in managing large-scale transformation projects, explains the vital importance of managing the people and cultural components of digital change. To best understand the human aspects of digital transformation, Solvang divides the ‘people’ into three distinct groups: existing process operators, end users, and the initiators or managers.
For the people doing the job, Solvang asserts that the key to successfully engaging process operators is through sympathetic communication. “Learn exactly how the processes work from the people who know them best,” states Solvang. “Developing the ability to listen will allay a lot of the worry and fear about the impact of digital transformation on a process that already exists.” For end users, listening isn’t enough. The project must be able to react to their feedback. “This can be problematic if you have fixed constraints around project deliverables and timelines,” says Solvang. “But why continue digital transformation if it’s
not working for the end user? A project may need to shift and re-route in order to deliver success.” For initiators and managers, a new way of thinking is required. “There needs to be clear ownership and insight about what they want to achieve,” says Solvang. “A decade ago the majority of technology transformation projects were well defined, had known associated costs and fixed timescales. These days successful digitisation is more likely to incorporate changes along the way and in all likelihood will present the business with an ongoing cost rather than one that can be written off at a predetermined conclusion.”
SMALL BUT MIGHTY – A MORE RESPONSIVE DIGITAL CHANGE ENVIRONMENT
In addition to managing effectively the people involved in digital transformation, Solvang feels that there are two radical technology influences that must be considered. The first is a shift away from larger and defined technology programmes (i.e. the waterfall approach) where ‘big bang’ innovations often lead to big failures. This approach is increasingly being replaced with more ‘agile’, manageable projects in which change leaders are constantly learning, refining and improving processes. The availability of lean and rapid development environments allows for “more change to happen in a smaller timeframe,” states Solvang.
Secondly, while technology innovations allow today’s project to be infinitely more responsive to external changes, it is the manager who needs to ensure that they are sufficiently agile in thinking and planning to keep the project flexible: “Cloud technologies are a huge enabler of the ‘start small, prove yourself then grow’ model,” Solvang continues. “They minimise many of the constraints and huge investments required for large-scale digitisation.”
WHY DO DIGITAL TRANSFORMATION PROJECTS FAIL?
Most often, failure is a result of poor management of the people involved. Solvang explains how a telecoms provisioning portal had attempted to transform its business through a big bang approach. “The project failed for two major reasons – firstly, the company attempted to write detailed project requirements and then, when there were sudden major changes to the organisation’s circumstances, the project wasn’t flexible enough to cope and meet the new requirements of the business.
Secondly, there was a lack of management ownership, which meant there were conflicting ideas about what was achievable in the project and no single person had a clear insight and ownership of the project.”
PRIORITISE PEOPLE FOR SUCCESSFUL DIGITAL TRANSFORMATION
As the information economy becomes centrally important to competitiveness for many organisations, the weight of effort that will be invested into digital elements like social, mobile, analytics and cloud will undoubtedly grow. However, as we have seen, more resources will not necessarily lead to successful digital transformation outcomes, especially if the focus of that effort is misappropriated towards technology/systems change rather than personal/cultural behavioural change.
Solvang concludes with an example of a successful digital transformation that used a people-centric approach. “A major telecoms provider delivered digital transformation within a fraud management project. The existing process involved lots of manual sift through data in order to identify fraudulent transactions,” says Solvang. By talking extensively with the client, Solvang and his team were able to provide an automated solution that took away the pain – but, instead of taking away the operator’s job, he was placed at the centre of the transformation process and provided with tools that not only solved the initial problem but could also find other previously invisible sources of fraud. It essentially made the operator’s role more expansive and delivered greater job satisfaction and pride. “This project delivered on the three levels,” says Solvang. “It supported the business, supported the operator and delivered the required result to
the end user.”