The HR digital transformation isn’t optional

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Written by Oliver Krebs on 4 December 2019 in Opinion
Opinion

Oliver Krebs reveals how digital transformation can break down silo-mentality.

Reading time: 4 minutes 30 seconds

CIOs and their newer, cooler cousins, the CDO (chief digital officer), are having to react quickly to navigate their way through the challenges associated with driving digital transformation. 

While CIOs and CDOs often have overlapping roles – putting together business and technology in a way that helps the business take a leap forward – the fact that CDO has now become a recognised job title would seem to suggest that digital transformation is now a mainstream, and not a peripheral, activity.

A 2017 PwC survey of 2,500 leading companies found that 19% had recently appointed a CDO, up 300% from the year before, a dramatic shift that shows that digital transformation has become a priority.

As the survey itself put it: “In the early days of a business, different business units and corporate functions conduct scattershot experiments and pilot programmes in the hope of kick-starting their digital efforts.

“But once a company decides to design a coherent, comprehensive strategy to capture the benefits of digitisation, that decentralised approach will no longer suffice.”

Cultural change

Digital transformation is the use of new and fast evolving digital technology to solve business problems.

It requires a cultural change throughout the organisation that forces managers to continually challenge the status quo and reinvent ways of doing business; while at the same time carry employees along with them – persuading them to fully engage with the process, even when the experience may occasionally put them outside of their comfort zone.

The best digital changes are not those based on individual siloed efforts, but on multi-functional ones

Taking the team along with you is a crucial part of any digital transformation’s success because, in many ways, human behaviour is far more of a barrier than the new technology itself.

The reason is that at the heart of digital transformation is a commitment to integrate processes across departments and to break down the silo mentality where employees are reluctant to share information or resources. This change can be unsettling for some people.

A silo mentality often only exists because senior managers allow it to, and do not think that it is their responsibility, or possibly in their interests, to coordinate their activities with their counterparts.

Alongside this, employees may be reluctant because any kind of organisational change to people's job description, compensation, managers, and the type of work they do is difficult.

But the best digital changes are not those based on individual siloed efforts, but on multi-functional ones.

Integration

Recent research by Lawless research commissioned by Cherwell (The New CIO Imperative: Work Process Integration) has shown that for most companies, meaningful integration of their cross-functional processes has a long way to go however.

Many might not even be aware that the lack of integration is a serious issue, let alone one whose solution has substantial benefits.

These challenges to integration are real, which is perhaps why only 34% of businesses have actual transformation programmes in place despite the obvious gains that can be achieved. 

Another 34% of businesses have started their journey and 31% of organisations intend to launch a programme within the next 12 months, but progress is still patchy. 

There’s a wide-open opportunity for companies to achieve process integration – and gain significant competitive advantages by doing so

For example, when survey respondents were asked, “How integrated are the applications you use in your job?” just 27% said that their apps were highly or completely integrated.

And presented with nine common cross-functional work processes – such as conducting performance reviews, requesting help from IT support or gathering information across multiple internal data sources – respondents were asked to say whether the processes were highly, moderately, or not/slightly integrated.

No single process was deemed highly integrated by even half of respondents, and even the most highly integrated process – complying with security programmes – was named by just 48% of respondents; and no more than one-third of respondents rated the other processes as highly integrated either.

Competitive advantages

At first glance, the lack of integration within companies could be discouraging. It means that most companies are far behind when it comes to collaborating across businesses and getting the most out of the technologies they’re deploying.

However, such bad news is also good news because it suggests that there’s a wide-open opportunity for companies to achieve process integration – and gain significant competitive advantages by doing so.

The survey also goes on to reveal that those companies that do have highly integrated cross functional processes are reaping big benefits in the form of organisational productivity, process improvement, cross-functional cohesion, and progress toward digital transformation.

In addition, these companies have significantly higher workforce satisfaction and engagement.

Workers in companies with highly integrated processes are far more likely to say their apps and software considerably or greatly increase productivity (61%).

The corresponding percentages for companies with medium and low levels of integration were dramatically lower at 35% and 26%, respectively.

Among respondents from highly integrated companies, 60% rated their apps and software either good or excellent in terms of facilitating collaboration with co-workers.

 



 

Just 36% of respondents from companies with medium-level integration and 23% from low-integration companies answered similarly

So, digital transformation may have a way to go, but think of it as being like an ascent to the top of Mount Everest: it takes months (if not years) of planning, intensive training and acclimatisation, and you will need to bring together the right team with the right capabilities and culture fit.

A good team will have members of varying skills and abilities, but the most important thing is that everyone should be willing to give 100% to the journey that they are about to embark on.

 

About the author

Oliver Krebs is vice president of EMEA at Cherwell Software.

 

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