Contrary to what most people believe, digital transformation is more about people than it is about technology. Granted, you cannot digitize your products, services, and business processes without access to the appropriate tools and software, but the fact of the matter is that it is the employees who mobilize strategies and turn plans into action.
The overarching goal of technology in any respect is to help us to do more with less. Yet, that combination is effective only if you pair technology with the right human skills. As a result, even if you pay millions of dollars to install the latest and greatest digital technologies into your company, one of the most significant bottlenecks you will be faced with is likely to be human-derived.
With that said, the counter to this notion is also true. With a company culture that fosters innovation and embraces the challenges brought about by the new digital world we live in, organizations can achieve surprisingly impressive results with few resources invested.
The digital dilemma
Even before the pandemic came along, companies were already embarking on digital transformation initiatives in an attempt to redefine how they create, deliver, and capture value. This meant transitioning from legacy-based systems to the cloud and embracing new technologies designed to automate manual processes and deliver data-based insights.
However, once Covid-19 arrived at our doorsteps, digital transformation quickly shifted from an optional luxury to an absolute necessity. Companies were forced to cease their brick and mortar operations overnight, prompting them to establish new digital channels of customer engagement. Survival was the primary concern for many businesses throughout the world.
According to McKinsey, Covid-19 has resulted in a seven-year increase (on average) in the rate at which companies are developing digital products and services. For that reason, digital transformation is currently at the top of nearly every CEO’s agenda.
It’s not just about the tech
As we previously alluded to, technology is not the be-all and end-all of digital transformation. The main challenge that companies tackle is figuring out ways to leverage human adaptability through the reskilling and upskilling of their workforce. The idea is not for tech to replace humans, nor is it for humans to micromanage the tech or to create unnecessary responsibility. The idea is to simultaneously augment humans and technology in an environment where they both complement one another in the view of completing a common objective.
The simple truth is that even the most brilliant piece of tech will be wasted if the employees in your company are not skilled enough to use it effectively. On the other hand, even the most brilliant minds in your workforce will not be as useful as they can be or provide nearly as much value as they can deliver if they do not have the technology behind them to make that a possibility.
When leaders think about digital transformation, other deliberating the right technological solutions, they should be considering how to:
- Close the gap between talent supply and demand
- Help current employees to develop next-gen skills
- Instill a company culture that embraces digital transformation and its challenges
Change must come from the top down
It’s very common for companies to take the bottom-up approach when it comes to facilitating change throughout the business. While this idea is logical in practice, it very rarely bears fruit. At least not in the way that the managers and decision-makers had planned. The reality is, change is much more likely to be successful if it comes from the top down, but why is this?
First of all, the c-suite must be engaged in the process of digital transformation, usually with the CEO taking the lead and paving the way for change. It’s also important for the management to decide why and how the flow of information should shift and who is to be responsible for what data.
As the CEO and other senior executives take the reins for digital transformation, their leading by example should set the tone for the company culture as a whole, instilling a holistic approach to the new initiative.
The importance of acting upon data-based insights
According to Forrester, 74% of firms say they want to be “data-driven,” but only 29% actually successfully connect analytics to action. Despite the massive advancements in technology such as artificial intelligence (AI), machine learning, natural language processing, and other types of computer intelligence, companies are still failing to find valuable insights through the usage of these tools.
Once again, it’s impossible to harness the value in this tech without having the necessary skills to translate that data into meaningful insights, and most importantly, having the ability to act upon them.
After all, this is the only way to get any kind of measurable value from digital transformation in the first place. The common denominator in all of these benefits is action, whether it’s increasing revenue via improved customer engagement, boosting productivity through enhanced internal communication, or reducing costs through streamlined business processes.
Data is meaningless without insights, and insights are meaningless without action. As a result, businesses must recognize that people, not technology, must drive digital transformation. This means finding ways to get the most out of your workforce by facilitating ways to reskill and upskill employees so that humans and technology can exist in an environment where they complement each other.
Of course, each digital transformation strategy will vary significantly between organizations. Still, it’s certainly worth considering how your workforce fits into your plans, as well as finding the appropriate technological solutions for your needs.