The 6 Stages of Digital Transformation
Digital transformation. Unless you work for one of the VERY few firms that have kept up to date with modern technology and operating models, you probably hear this daily. But how many of us are doing anything about it?
In tech consulting back in the early 2010’s we used to joke about how everyone talks about Big Data, but no one does it. A decade later and we could be making the same jokes about digital transformation.
What is HR Digital Transformation?
It is the process of changing operational HR processes and practices, which are often manually initiated to become automated. This frees up capacity to use data and insights generated by these more advanced tools to solve higher level problems and deliver greater value to the organisation. Before embarking on a digital transformation, you must be clear what the objectives are.
The reason most transformations fail, is because there is pretty much no plan or end goal in mind. Far too many firms are capitulating to peer pressure and trying to do something digital, because it’s the buzzword of the day. They hear their competitors are doing something digital and they go off and just buy a piece of technology, because they think they are supposed to. It doesn’t serve any business purpose or bring any value to the organisation.
6 stages of transformation
Brian Solis has probably done the best research, in my opinion, in terms of outlining the various stages a company or business unit will go through on their transformation journey. His model is great to measure where your company is at, and how far they still must go. The stages are as follows:
- Business as usual – I don’t think too much has to be explained here. This is the very first step, you are just doing the same work, the same way it has always been done.
- Present and active – Increased competition means that a company starts to experiment. A few teams start to experiment with new ideas. Some digital champions emerge, and leadership begin to take note. Slowly digital creativity and education begin to be embraced.
- Formalised – The transformation begins. Some of the experimentation has led to some successful pilots and or additional data that has identified gaps. Change agents are given license by leadership to explore further and the first clear initiatives and ideas are signed off.
- Strategic – Senior managers give change agents a seat at the table. There is a more dynamic approach and investment is made in new people, processes and technology.
- Converged – Digital is now a key priority across the business. A formal transformation team is set up and digital transformation is being driven across all entities. The big piece items have been implemented and there is a shift away from the transforming process, to a focus on micro-moments. In an HR lens, this would be where employee experience comes to the forefront. For the customer, it would be customer experience, for IT user experience and so on.
- Innovative and adaptive – Digital is now part of the DNA of the company. Continuous improvement is the new business as usual. The organisation is flat and agile, with teams keeping up to date with new tech and innovations. Identifying gaps as they arise and piloting new solutions.
Where do you start?
OK, so far so good? It all sounds great in theory, but to get started, you need to act. So, what should you do first? Simply set yourself a clear objective. Start small, and find a simple problem, something that is painfully manual, that requires a lot of time to do, that stops you from doing more strategic work. Then you can literally google, how can you automate that process and I guarantee you about 20 different tech solutions come up!
Speak to those companies, explain your challenges and view some product demos. Once you have a couple of good options, begin to speak with your team and leadership and socialise the pain point and potential solution, along with what you will be able to do with the extra capacity you have freed up. If the solution and output generated with the additional capacity make business sense you will get the green light to try a small pilot. Measure the results, and if they deliver as expected, expand the solution. Then identify your next problem area and repeat. It is that simple to get started.
A final point is that there is a reason 50% of the Fortune 500 have disappeared in the past decade, they haven’t kept up. If you still want to be relevant at the end of this era of digital disruption, then going through digital transformation is non-negotiable. The reason so many businesses are being disrupted is that a lot of these tools are not new. But rather than keep up, companies have taken the easy route and doubled down on the way things have always been done. This is also why 97% of the current Fortune 500 have lost market share consistently over the past few years as well.
It’s simple evolution, and as Charles Darwin would say “Adapt or die”.