Digital Transformation Requirements/Talents
Digital transformation strategies often come from a business-centric perspective. These strategies often have their prime focus on the transformation of products, processes, and various organizational aspects. The digital transformation's necessary scope includes digital activities at the interface with or entirely on the customer's side, such as digital technologies as a part of the end-user. This constitutes of process automation and optimization, since the digital transformation strategies often go beyond the process, and include changes and implications for products, services, and business models.
Success in a digital transformation requires a major effort, far more effort than most business leaders anticipate. Thus, many such efforts often referred to as "transformation programs", fail. Poor execution in any of the below 4 interrelated domains (technology, data, organizational change capability, process) can make an otherwise well-created transformation fail. The important stuff, right from building and communicating a critical vision to hand-crafting a plan and adjusting to it and making it through the details, is all about the people involved
! Because digital transformation requires talent. Thus, assembling the best team of technology, data, change and process people who tend to work together - with a great transformational leader
who is capable of bringing about a change - may be the most important step that a company can take, when it is contemplating digital transformation. There is still always a possibility that the best talent might not succeed, but the lack of it does almost guarantee failure. What is the talent that is needed in each of these four domains of digital transformation?
- TECHNOLOGY CAPABILITY: From the Internet of Things to data lakes to blockchain, the potential of emerging technologies is staggering. Though many of these are relatively easy to use and understand, the difficult part is to understand how a particular technology contributes to transformational opportunity. Adopting a particular technology to meet the exact needs of the business and merging it with the existing systems is an extremely complex feat to achieve. Also, complicating the process even further is the technical debt that the company carries, i.e., the embedded legacy of technologies that are difficult to change. The way to resolve these issues is by having people who have the necessary depth and breadth, coupled with the ability to work hand-in-hand with the business. Another issue is that many companies have lost their faith in the internal IT department as their primary function is "keeping the lights on." But digital transformation requires institutional IT, thus rebuilding trust is essential. This means that the technologists must have and demonstrate business value with every technological innovation. All in all, the leaders involved in the transformation must possess the strategic sense to make the necessary technological choices that balance innovation and deal with technical debt.
- DATA CAPABILITY: An unfortunate reality is that many companies do not have basic data standards while a fruitful transition requires a very good quality of both data and analytics. Transformation requires understanding various types of unstructured data (e.g., a damaged car picture supplied by the customer as a complaint to a car company), massive quantities of external data, proprietary data, and integrating everything. It also involves avoiding enormous quantities of data that were never used or will never be used. Thus, the gigantic task of transformation might fall on the IT department and the leaders to convince the organization's front line to take on new responsibilities as data customers and data creators. This means thinking through and communicating the data that the company will need now and after the transformation.
- PROCESS CAPABILITY: Transformation needs an end-to-end mindset, a different way to meet customer needs, an easy connection of work activities, and the ability to manage across silos going ahead. Having a process orientation fits naturally here. But many have found that process management - horizontally, focused on customers and across silos - is difficult to match with the traditional hierarchical thinking. This leads to poor adaptation and small incremental steps, which are important and helpful, but not truly transformative. Transformation requires aligning silos in the direction of the customer to have a new and improved process, along with the ability to have a strategic sense to know when an incremental improvement process is sufficient and when a radical process reengineering is needed.
- ORGANIZATIONAL CHANGE CAPABILITY: This domain includes managing leadership, teamwork, emotional intelligence, courage etc. Many people who gravitate towards new technology, process, and data are in practice somewhat less likely to embrace the human side of the change. It is important to find those with excellent people skills, "purple people", those who can work from both sides, for the transformation team.
The 4 elements mentioned above cannot function separately; they must function in tandem with one another as a larger whole. Technology is the engine, Data is the fuel, the Process is the guidance system, and the Organizational change capability is the landing gear of the digital transformation process. Digital transformation should be focused on the problems of the greatest need for the company. More importantly, true talent possesses all the mentioned 4 types of expertise and can have success in creating and implementing any technology-driven transformation.
⇒ What else beyond the 4 capabilities mentioned do you think will help companies in digital transformation?
Matt, C., Hess, T., & Benlian, A. (2015). "Digital Transformation Strategies". Business & Information Systems Engineering, 57(5), 339–343.
D.H. Thomas, R.C. Thomas, "Digital Transformation Comes Down to Talent in 4 Key Areas", May 2020, Harvard Business Review