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Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.
Because digital transformation will look different for every company, it can be hard to pinpoint a definition that applies to all. However, in general terms, we define digital transformation as the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers. Beyond that, it's a cultural change that requires organizations to continually challenge the status quo, experiment often, and get comfortable with failure. This sometimes means walking away from long-standing business processes that companies were built upon in favor of relatively new practices that are still being defined.
Digital workplace strategy: 10 steps to greater agility, productivity
Upgrading IT systems, overhauling business processes and stacking talent benches are crucial undertakings of any Digital Transformation.
But many CIOs have realized that if employees are going to improve the way they serve customers, they must provide employees with a high-quality digital workplace.
In fact, by 2020 the greatest source of competitive advantage for 30 percent of organizations will come from the workforce's ability to creatively exploit digital technologies, according to Gartner.
"The idea of the digital workplace is to bring that same simplicity and intuitiveness to employees when they're doing their mission-critical work," Rozwell says.
Here is a digital workplace transformation plan worth considering, as informed by Rozwell and practitioners.
Your digital workplace plan should align with business and digital transformation goals — and clearly answer why you want to overhaul your work environment. Remember, your goal is to increase employee engagement and productivity. Work closely with stakeholders, including business, HR and facilities managers, to shape the plan and execute changes, bearing in mind the workplace demographics and potential impact those changes will have. How will these efforts change business processes? Don't execute on technology platform decisions until you achieve clarity and agreement on the digital workplace's purpose and objectives. This will consume significant budget, so remember to get buy-in from the rest of the C-suite and board of directors.
Once a dirty phrase for CIOs, shadow IT has thrust emerging technologies into the limelight, as employees voted loud and clear about their software and user experience preferences by using apps they are comfortable with to do their work. Your digital workplace should enable employees to have a greater voice in technology decision-making.
You must establish a roadmap and blueprint for coordinating digital workplace initiatives across R&D, marketing, sales, customer support, manufacturing, HR and IT. Questions to ask this multi-disciplinary collective: How will you exploit various technologies to raise employee engagement levels and support your company’s digital initiatives? How can you create workspaces that increase employee creativity and enable ad hoc and formal opportunities for collaboration? Be sure to do your homework, as this requires a clear understanding of how people work and what improvements are envisioned.
But remember: Consumerization of IT is your friend, so embrace it to help reduce employees' anxiety about new technology.
Employee personas are a critical component of any digital workplace initiative, helping enterprises establish baselines for staff workstreams. To wit: What tech tools does an HR head require versus a sales lead?
As part of a major digital workplace effort, BNY Mellon a few years ago established a persona model that defined users as sharers, knowledge seekers and inside experts, according to Gartner research. The personas included attributes such as technology adoption and mobile use, content creation, consumption and sharing, as well as organizational knowledge. Tracking technology consumption for each persona is critical to help gauge organizational value.
Use analytics to calculate IT, HR and business metrics and create a digital scorecard. For example, you can gauge user engagement to tracking daily active users and time spent in collaboration software such as Slack. Try to quantify positive impacts on workforce effectiveness, employee agility and employee satisfaction and retention, information you can use later to assess change management and refine your approach. Digital business metrics are among the hardest to calculate but they are essential to gauging the value of your investments. “These metrics help process owners to articulate the potential return on investment to senior management, and prevent technology investments from being perceived as just an expense with no upside,” Rozwell says.
5. Employee experience
Improving customer service is the end goal of a digital workplace but you have to bolster the employee experience first. Rally your IT troops and work with real estate and facilities managers to create smart workspaces that enhance collaborative work activities, and provide space for individual concentration. Create an online portal where managers can recognize employee contributions and success and incorporate it into a shared IT/HR metric to monitor employee engagement.
The Boston Red Sox implemented an intranet, called Home Plate, to help improve communications to and from its employees, which include around 350 full-timers and more than 1,000 seasonal workers to helm security and other roles during the baseball season. The intranet, Akumina Digital Workplace, runs atop Microsoft Azure and integrates with Active Directory, says BoSox CIO Brian Shield, who ran the project.
Shield says the content, refreshed regularly, includes gameday photos and videos, as well as how-to articles. BoSox also integrated a chatbot to help employees learn about benefits and answer other questions. Keeping your employees in the loop, even with something as basic as a modern intranet, is essential for engagement.
“Employees will be more willing to collaborate, take on challenging roles and provide coaching if they are excited by their work and see the opportunity for growth in the changes being requested of them,” Rozwell says, adding that an engaged workforce often outperforms the competition.
6. Organizational change
Digital workplace initiatives typically require considerable change to internal processes, departmental structures, incentives, skills, culture and behaviors. Assess the new skills and competencies required for the digital workplace.
You’ll want to identify change management leaders who can anticipate and mitigate obstacles before they become problems. Integrate digital workplace technologies into workflows and set rules, such as technology standards, usage guidelines, information governance and best practices. Work with senior executives to get them to listen to and engage with employees.
New technologies can add stress to your employees’ jobs. You can ease their transition with effective training. Plan to reskill and, if necessary, hire personnel to train them up.
When medical technology company Cerner was looking to upgrade from C++ and C# programming languages to HTML5 and other web-friendly languages it hired digital consultancy PluralSight, whose corporate learning content helps advise clients on new and emerging technologies, as well as agile and DevOps methodologies, says Eric Geis, Cerner’s vice president of intellectual property. Previous efforts to upskill 26,000-plus employees, who were spread across 10 U.S. location and 30 international offices, failed because they were too slow.
“We couldn’t train people fast enough and the content got old and stale quickly,” Geis says. PluralSight’s continuous learning approach has helped with employee retention, “motivating employees and giving people options to prove themselves in tech space.”
More likely than not you’ll find yourself re-engineering business processes. First take a close look at how employees currently work and what activities they spend the most time on. Use a customer journey-mapping playbook to mirror employee journey maps by collecting and analyzing data linked to employee activities and experiences. Consider emerging technologies, such as internet of things and artificial intelligence. For example, a sensor-rich smart building can track workspace usage patterns and adjust lighting and HVAC settings according to employees' preset preferences. Use AI to automate toilsome, routine tasks to make employees more productive.
Workers want software for searching, sharing and consuming information to be as "smart" and compelling as the ones they use in their personal lives. They want information and analytics to be contextualized and delivered in the moment of need. In that vein, you’ll want to implement a file-sharing system that enables easy mobile access and real-time synchronization. Consider virtual assistants that can provide contextualized content recommendations, decision support and advice. Weigh the value of roving robotic video conferencing systems and immersive, 360-degree video conferencing systems. A little sci-fi can go a long way with your digitally-empowered workforce.
Wait, didn’t we just delve into the tech side? Yes, but most of you aren’t doing this effectively. “Most organizations have a haphazard architecture that has largely been driven by their digital workplace vendors,” Rozwell says. You need to tie all of the digital platforms together in a seamless mesh of contextual awareness, mobility and real-time information delivery that enables employees to serve customers. Facilitate cloud-, mobile-first strategies. Create a "bring your own work style" culture, enabled by smart workspaces. It’s also important to reward technology innovation practices.
A business may take on digital transformation for several reasons. But by far, the most likely reason is that they have to: It's a survival issue for many.
Howard King, in a contributed article for The Guardian, puts it this way: “Businesses don't transform by choice because it is expensive and risky. Businesses go through transformation when they have failed to evolve.”
John Marcante, CIO of Vanguard, points this out, as well: “Just look at the S&P 500. In 1958, U.S. corporations remained on that index for an average of 61 years, according to the American Enterprise Foundation. By 2011, it was 18 years. Today, companies are being replaced on the S&P approximately every two weeks. Technology has driven this shift, and companies that want to succeed must understand how to merge technology with strategy.”
Enterprise leaders have largely gotten the message – and are prioritizing accordingly. IDC forecasts that worldwide spending on technologies and services that enable digital transformation will reach $1.97 trillion in 2022, per the (IDC) Worldwide Semiannual Digital Transformation Spending Guide. IDC predicts that digital transformation spending will grow steadily, achieving a five-year compound annual growth rate of 16.7 percent between 2017 and 2022.
“IDC predicts that, by 2020, 30 percent of G2000 companies will have allocated capital budget equal to at least 10 percent of revenue to fuel their digital strategies," said Shawn Fitzgerald, research director, Worldwide Digital Transformation Strategies. “This shift toward capital funding is an important one as business executives come to recognize digital transformation as a long-term investment. This commitment to funding DX will continue to drive spending well into the next decade."
As of 2018, advanced analytics is the number-one digital investment – with enterprises planning to increase related deployments by 75 percent during the next 12 to 18 months, according to research from The Hackett Group. This includes a particular emphasis on data visualization tools and machine learning.
Organizations are at different places in the digital transformation journey, of course. But speed has become a business imperative for all. IT leaders face pressure to show that digital initiatives continue to translate to increased agility and speed for the entire organization.
As Dion Hinchcliffe, VP and principal analyst at Constellation Research, writes: “The top IT executives in today's rapidly evolving organizations must match the pace of change, fall behind, or lead the pack. That's the existential issue at stake in today's digitally-infused times, where bold action must be actively supported by out-of-the-box experimentation and pathfinding. This must be done while managing the inexorable daily drumbeat of operational issues, service delivery, and the distracting vagaries of the unpredictable, such as a major cyberattack or information breach. The CIO this year must be both a supremely masterful priority juggler and an effective digital leader from the front.”
Improving customer experience has become a crucial goal – and thus a crucial part of digital transformation. Hinchcliffe calls seamless customer experience “the most important discriminating factor for how a business will perform.”
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