FREEDOM AND SAFETY
Today’s evolving business landscape puts organizations under constant pressure to innovate. This has made digital transformation a top priority for businesses. For some, digital transformation efforts are yielding positive results. However, many companies are struggling to reap the benefits of digital transformation, as becoming a digital enterprise is no small undertaking. It requires comprehensive, systemic change.
True digital transformation requires a lot more than implementing a new website or mobile strategy. It entails executing across a broad programme of digital initiatives, or “digital pivots”: adopting flexible, secure IT infrastructure; mastering the use of data; cultivating and engaging with an ecosystem of technology partners; implementing intelligent, automated workflows; training programmes to focus on digital competencies and making judicious use of flexible, contingent talent models to rapidly access in-demand skills; delivering a seamless customer experience; and expanding the organizations’ array of business models and revenue streams.
A recent Deloitte study on digital transformation documented the power of the digital pivot approach and found that companies that execute a broad set of digital pivots were more likely to achieve positive financial returns from their efforts.
The digital pivots require savvy investment in technology. But just as importantly, they require investment in people. And a broad and ambitious digital transformation programme is much more likely to be successful if guided by strong leadership from the C-suite.
Here are a few observations on the role that technology, people and leadership play in digital transformation.
One of the digital pivots listed above – implementing intelligent, automated workflows – is getting a lot of attention because of the growing power of artificial intelligence (AI) technologies. Today, a wide range of companies are experimenting with AI, and the early results are promising. In fact, 82% of early adopters report a positive return on AI investments, according to Deloitte’s 2018 State of AI in the Enterprise survey.
Investments in AI are improving competitiveness, with 63% of surveyed executives saying AI initiatives are needed to help them catch up with their competitors or even open a narrow lead.
Despite the rapid evolution of AI technologies themselves, and the positive results some early adopters have achieved, we are still in the early days of AI-supported transformation. Companies need to grapple with a range of issues to take advantage of AI, from understanding which applications can bring the greatest value to laying the technology and data foundations necessary to build AI applications, to managing the risks associated with implementing AI – ranging from new potential cyber vulnerabilities to privacy and ethics concerns. In addition to all of this, companies need to reckon with human implications of AI and automation technology.
According to Deloitte’s Global Human Capital Trends survey, 41% of respondents are already investing in automation extensively, across multiple functions. AI is playing a role here. AI-powered automation can eliminate the need for humans to perform routine work tasks, and can empower workers to create more value by enabling them to produce better results and focus on higher-value tasks. It is up to businesses to recognize and harness the power of humans and machines working together. Despite all the talk of artificial intelligence eliminating jobs, we believe the greatest value of AI will be realized by using it not to eliminate work but rather to transform work.
One way this is happening is through the rise of what we call “superjobs”. These are jobs that combine technical skills with soft skills such as communication, service and collaboration. And they often bring together work and responsibilities from multiple traditional jobs, using technology to both augment and broaden the scope of the work performed. For instance, imagine an entirely new human resources role that might be called “employee experience architect”. The person holding such a superjob would take advantage of technology to automate answering routine questions, while focusing primarily on the outcome of delivering an effective workforce experience. In this job, the work encompasses more possibilities, greater productivity and, ultimately, a more meaningful experience for workers.
To maximize the value of their technology and people assets in the process of digital transformation, companies must focus on creating these superjobs. This will require training to ensure that talent has the right skills to implement and work with AI effectively. Retooling training programmes will be important to help talent focus on building digital competencies. The access to flexible talent models will be important for businesses to tap into in-demand skillsets based on need.
We have found that strong leadership from the C-suite is critical for overcoming challenges associated with digital transformation. Digital transformation requires executive sponsorship and engagement, both to convey the message that digital transformation is a priority and to facilitate collaboration throughout the organization.
C-suite leaders can also help achieve their digital aspirations by cultivating a “digital mindset” in themselves and their organizations, encouraging the practice of looking at old problems and processes through new eyes and approaching them in new ways. Supporting experimentation and enabling and encouraging people throughout the organization to challenge and improve upon best practice is important for success. According to the digital transformation study mentioned above, higher digital-maturity organizations are nearly four times more likely than low-maturity companies to strongly agree that their organization and incentives encourage smart risk-taking to innovate and grow.
It is a cliché to say that we are living in a time of unprecedented change. What is less often noted is the role that business leaders must play in helping their organizations navigate these turbulent times. Savvy investment in technology has never been more important. But the challenges of the digital era, or the era of Industry 4.0, requires much more than new tech. It requires organizations to embrace comprehensive change. And this must include bringing people along on our digital transformation journey – a journey in which we must continually reinvent ourselves and our organizations.