People or Technology first?
EXECUTIVE SUMMARY
The digital race is living in a turbulent time with continuous and disruptive changes which are impacting not only our personal and work life, but also our long-held views and practices. At the same time companies have no alternative and must invest in it to stay relevant and realize the benefit - but they must do it right.
According to KPMG´s latest 2022 CEO Outlook survey released in January 2023, 72% of the 1,325 CEOs across 11 markets have an “aggressive digital investment strategy, intended to secure first-mover or fast-follower status.” In 2023, IDC predicts that 53% of all investments in information and communication technology will be in digital transformation.
But driving this change in any company without the right ingredients is a recipe for disaster. According to the Harvard Business Review the rate of digital transformations that are failing to meet their original objectives up to 70% today. Further the Harvard Business Review highlights why businesses succeed at transformation that “the single most important step in digital transformation is assembling the right team who can work together and a strong leader who can bring about change.”
Olorem´s research shows in the 2023 LinkedIn Poll with 1.722 project experts that the three biggest people challenges in project management are
Project resource availability (43%) with a trend that more agile organizations have more challenges to prioritize the right resources to the right time.
Change expectation by people (35%) is an interplay between to understand the future stakeholder´s expectations, but also it needs to be in sync with the digital strategy to meet the overall targets of the company.
Project team spirit (19%) with a clear message that management needs to take more a responsibility to manage expectations, communicate to ensure attention and willingness to contribute throughout the whole digital journey.
In other words, companies must never underestimate the importance of the people factor in the digital transformation. They must develop a well thought through and interlinked people-centric digital strategy for a successful journey to realize the benefits.
What is a people-centric digital approach? How to drive a successful digital transformation?
To help companies to transform more successful, this white paper:
1. Explores the main mistakes of the digital transformation.
2. Assesses the principles of the people factor in the digital transformation.
3. Propose a people-centric approach that can help companies achieve a higher success rate in their digital transformation.
4. How to embrace tools that effectively support better collaboration, communication, improve performance to drive better digital transformation.
DIGITAL TRANSFORMATION BASICS
Digital transformation changes the way a company operates and deliver products and services. It is the process of using new technologies to either create new or radically modify existing business processes, culture, improving the green food print and/or customer experiences to meet changing business and market requirements. This affects all levels of an organization and changes the way people uses technology to work more effectively.
By taking advantage of new technology, such as artificial intelligence (AI), machine learning (ML) and other emerging technologies, companies can connect the dots together to increase the possibility for people to focus on more value-adding and creative work in a way that was not possible before.
In this way, digital transformation is critical to the success of all modern companies, and they cannot afford to lose out on the following key benefits:
· Increase Customer Satisfaction
· Increase Product and Service Quality
· Increase Operational Efficiency
· Faster time to market
· Drives Data-based Insights and increase transparency.
A successful digital transformation requires a radical change in people´s mindset, to meet the ever-changing market requirements. It is essential to engage and prioritize employee needs, understand customer needs, anticipate trends – and harness those insights to create meaningful products and services that attract customer, drive revenue.
DIGITAL TRANSFORMATION MISTAKES AND KEYS TO SUCCESS
No one claims that digital transformation is simple because is is multifaceted, complex, and filled with challenges that can make the head spin of even the most experienced digital leaders, but some of the most known mistakes can be mitigated in an early stage:
Important is to understand the own digital maturity, that means the ability for companies to clearly define and precise the problem, how to create value-adding solution and quickly respond to developments and shifting technology trends. This key measurement helps digital leaders understand where the organization stands, where it intends to go and how long will it take to reach that destination. It also indicates companies where to adopt and align resources, automate processes, scale up its technology platforms, and hire more talents with new competencies.
Digital transformation is a journey. Since the 80s companies started to digitalize the way of work with digitalization of simple work processes, followed by email communication, internet market places, social media marketing and new innovations like artificial intelligence (AI), which companies must adopt continuously to stay relevant. This shows Digital transformation is an ongoing journey that never ends, and a project is only a building block that is initiated by a specific problem that is beneficial to solve to enable the digital transformation strategy.
Digital transformation is cross-functional. All the mentioned IT innovations have heavily impacted us in the last decades. But digital transformation is more complex, since Companies are made up by people, processes, and technologies. If the focus is only on technology, the risk increases either to fail, or to slow down for a crucial period as reluctant and potentially worried employees and customers are not buying-in the changes. In other words, digital transformation must include a people component to increase the success rate dramatically. People needs to be on board, involved and trained in the new way.
The right people are vital to digital success, but most digital transformation initiatives fail because of the lack of PEOPLE with the right competency, capacity, and motivation. While digital leaders tend to focus on planning, evaluation, partnerships, and technology, they often overlook the people bandwidth and motivation inside the organization required to implement and take advantage of new processes and technology. However, in most cases, business and IT already have their hands full with day-to-day workload and are unable to spend enough time to focus on parallel new initiatives. But with low cross functional involvement, the projects will struggle to reach the targets and acceptance of the results. Therefore, the digital leaders must ensure that the right projects are prioritized under consideration of the availability of the right people and competent and motivated resources are involved from the start and participation is prioritized.
PEOPLE IS THE KEY SUCCESS FACTOR IN DIGITAL TRANSFORMATION
Digital leaders must ensure that their digital transformation strategy is best understood and supported by people whether its customers, employees, vendors, or any other stakeholder. In this way Digital Transformation is a people discipline and must ensure to implement a people centric approach and consider the following questions:
How are people going to react to the change?
How will the change impact people’s daily work?
How can we utilize technology to keep up the evolving people expectations?
People lay the foundation for a successful digital transformation and rather than diving head-first directly into a digital transformation project, it is important to take a step back, consider the following five steps to create a seamless people-centered experience throughout the process:
Illustration 1 – When key factors are in. place, companies are up to 3,5 timer more likely to report successful digital transformation Clear and frequent communication
The digital leadership needs to establish and communicate a clear, trustful, and transparent story with frequently status updates of the goals to the people throughout the whole journey to understand where the organization is headed, why it is changing, a why the changes are important, what the impact is for the people and how the new way of work will be. People are not only your employees, but they are also your customers and other stakeholders.
Understand and involve people
People are often resisting when new changes are introduced. This can lead to pushback, when changes suggest that a new way of work may be more efficient than current way. The main root cause is because people fear for their jobs and that the change requires new skillset that they do not possess. According to Issac Sacolick, you can distinguish four different types of people how they are responding to changes:
Early adopters embrace the transformational change and seek leadership roles even in areas they may not have experience.
Opportunists will go along for the ride and will only stretch themselves when leadership clarifies what's in it for them.
Resistants will ride with the program, but they detest the added pressure to execute and sometimes quietly look for new jobs.
Detractors prefer the status quo and doubt the new vision. Some detractors will vocalize their challenges and resentments and find creative ways to commandeer meetings to spread competing gospels or seed doubts.
All four types pose different challenges in the different phases of the digital transformation, but digital leader needs to deal with all types of people. Often Detractors are as seen the biggest issue because they can disrupt, derail, and slow down the digital journey. But constructive detractors are positive for the transformation, particularly when they ask the why, challenge the status quo, help to evaluate ideas, and identify new opportunities. On the other side an aggressive early adaptor who pursues the latest technologies may drag teams off the strategic course and customer priorities.
Strong team mentality drives engagement
Digital leader must ensure a strong team mentality with a strong relationship and interaction between management as sponsors, the people who are building the new capabilities and the people that adapting the organization and using the results. This is going together with a clear and frequent communication and involvement of the right people. The basis for a strong team mentality and engagement are:
Illustration 2– Strong team mentality drives engagement
Building competencies and enable organizational learning.
One of the most difficult but also most important factor in a digital change effort is building up new required competencies throughout the organization.
First key is the redefining of the way of work including individuals´ roles and responsibilities so they are aligned with the transformation goals, which can help to clarify the needed future competencies.
Second key is to implement two roles: (1) the integrators that work on the interface between business and technology. They translate and integrate new digital methods and processes into the exciting way of work. (2) The Technology-Innovator have specialized technical skills and lead the work from a technical perspective.
Third key is early to start the organizational learning process with the new capabilities and that people and technology work together but also learn from each other with the target to empower people to work in the new way. This cycle of learning makes people and technology capabilities smarter, more relevant, and more effective. Getting this organizational learning right do significant benefits become likely.
Having the right tools and leverage data
For companies to empower people to enable digital transformation and work in new ways, it is major important to equip people with the right tools to support all other four key success factors for digital transformation. But the reality looks different, the majority are still managed with a high degree of paper or stand-alone tools with the focus to support one group of stakeholders. Based on Qlorem research, today, 31% of all companies using simple spreadsheets to managing projects and only 26% of companies have a dedicated Project Management Tool but that is often not connected to the actual work and not utilizing data across many teams.
To make digital transformation more successful based on McKinsey´s article Unlocking success in digital transformation it is important to have the right tools and leverage data will double the likelihood of the digital transformation success. The selected tools should focus to
· make information more accessible across the organization
· enable self-serve technologies for stakeholders
· modify standard operating procedures to include new digital technology
· include new behavior to enable better collaboration
The target here is to use tools that do not require heavy technical experience to empower even non-technical people to experiment to accelerate digital transformation effort at a lower cost. These tools are a good starting point to improve the success of the digital transformation but require the same actions as described above with clear and frequent communication that people understand the purpose and build the competencies to use the tools and leverage the benefits for the rest of the digital transformation.
CONCLUSION
Implementing new technologies on the premises that it will digitalize the organization and deliver the described digital transformation benefit, is not only fundamentally misleading, but also a recipe for disaster, given the cost and the reputation damages towards employees and customers.
Digital transformation leaders should never underestimate the importance of the people factor because the digital journey is driven and enabled by people. The transition from the existing silo-oriented business and IT organization to an agile digitalized cross-functional organization with end-to-end accountability requires special competencies from the leadership team to communicate goals, engage to work cross-functional to build new competencies and learn how to interact with new technology.
It is major important to understand why and care about people that are resistant or detractive against the change and not make them to outsiders in the digital transformation. Often, they are well experienced in the existing processes and tools and can help to evaluate ideas and identify new opportunities better than anyone else.
Support all this key success factors with high valuable tools that make information more accessible, streamline planning, prioritization along the whole digital journey, use data to support your decision-making and increase cross-functional collaboration.
Companies that follow all this five people key success factors in their digital transformation will recognize up to three times higher likelihood for digital transformation success (based on McKinsey).
QLOREM´S PROJECT INTELLIGENCE PLATFORM
Qlorem is built on many years of leading digital transformation, a cloud-based platform which supports a people-centric project management.
Assembling the right team with sufficient competency and capacity, and the organizational learning are the most important component of an effective and successful people-centric digital transformation strategy.
Qlorem is a virtual assistant for digital leaders and teams to enable digital transformation and project management to improve the project management results and resource management across multiple projects through a holistic approach supported by Dynamic Digital Twin and artificial intelligence to take administration pressures off and help to:
Drive engagement through cross- functional solution scoping and information sharing
Understand people demands from a holistic perspective and empowering people to work in new ways.
Leverage data to make better decisions. Simulate and prioritize your project to ensure your digital transformation project deliver a value-adding change.
Enabling Organizational Learning through visualizing and sharing future solutions on an early stage
Either as a project management extension or standalone, the Qlorem technology platform helps to protect the digital transformation success – from the definition to the benefit realization across multiple projects.
Qlorem offers the most powerful Transformation Engine.
Plan your future company.
Most digital transformation initiatives require a change in the existing business, process, or organization to increase agility and operational efficiency.
Qlorem offers an intuitive organization and process planning functionality from the design of your future company to the required changes and competencies support by processes and technologies.
Build your competencies.
A successful transformation is requiring a new set of competencies to support future capabilities, like processes and technologies, to enable organizational learning and start to work in the new way as early as possible.
Qlorem supports the interface between business and technology to identify required new competencies, updated way of work, initiate organizational learning actions and measuring the success of the implementation.
Take the right decision at the right time.
Digital transformation is an ongoing journey and organizations need to take fast and right decisions and understand the consequences.
Qlorem´s Navigation Cockpit and Risk Management enables digital managers to take the right data-driven decisions to the right time and understand the consequences towards the impacted capabilities and parallel initiatives across the organization.
LEAN MORE
Qlorem has launched next generationProject Intelligence Platform which provides an instant, insightful, collaborative way of scoping, planning, and executing your projects, so companies can take pro-active actions and averting problems before they even occur.
The Project Intelligence Platform connects project management processes to the actual change, by using a Dynamic Digital Twin of an Organization, integrations to your Eco-system, 60+ Key Performance Indicators, Machine Learning and Artificial Intelligence.
· More Information: www.qlorem.com
· Follow us: https://www.linkedin.com/company/qlorem
· Engage – Contact us to schedule a demo and POC opportunities at info@qlorem.com
· More Information: www.qlorem.com
· Follow us: https://www.linkedin.com/company/qlorem
· Engage – Contact us to schedule a demo and POC opportunities at info@qlorem.com