Digital Transformation and the HR Function

Summary: In an era of technological invasiveness, organisations are undergoing a holistic change. Various functions, infrastructure and interactions are now being digitised. And when such a wave of transformation hits, even the hitherto untouched HR function tends to undergo a digital makeover.           

So, you say, ‘OK Google! Search for information about Digital Transformation’. And poof! Just like that, your phone picks the command, displays a page full of relevant information. That right there, is a way in which technology has transformed our lives; by being available at our fingertips, alleviating our load, improving efficiency, and aiding productivity.

But, digital transformation in businesses goes much beyond. By definition, it is the change associated with the application of digital technology in all aspects of human society. According to i-SCOOP, “Digital transformation is the profound transformation of business and organisational activities, processes, competencies and models to fully leverage the changes and opportunities of a mix of digital technologies and their accelerating impact across society in a strategic and prioritised way, with present and future shifts in mind.”

Have organisations accepted this change? According to Progress’- Are Businesses Really Digitally Transforming or Living in Digital Denial Report, “86% of respondents say they have two years to make inroads with digital transformation (55% say a year or less) before they begin to suffer from financial or competitive threats. Placing even more urgency on the situation, 59% of respondents are worried they may be too late already”.  Goes without saying that Digital Transformation at an organisational level involves all the functions, even ones that require a human/personal touch i.e. the Human Resource (HR).

Different Models/ Frameworks of Digital Transformation

How do organisations adapt to this shift? How do they handle it cost efficiently, leveraging the latest information technologies within all physical operations, HR function etc.? The answer lies within the models of digital transformation or the frameworks. These models are nothing but the process of or the path towards transformation depicted on the basis of different parameters.

• The IMD and Cisco Model - A simple transformation model, it works well for HR transformation too. Based on 7 high-level categories, which are then combined with a set of 28 questions to evaluate the depth of transformation required, this model of transformation begins with asking 3 simple questions - Why to transform, What to transform, and How to transform? The answers to these form the starting point for the dialogue before leading into the defined 7 categories, guided by the set of questions. The model also helps business and HR leaders to identify various key stakeholders in the process, while forcing HR leaders to focus on the whole value chain.
• The INSEAD Model - This model underlines the need for concurrent transformation in 3 different areas: Intelligence, Integration and Impact, in 3 phases. Which are: Initiation (focused on discovering new possibilities), Ritualization (focused on looking at ways to interact with the digital ecosystem), and Internalization (focused on prioritizing the digital solutions). These 3 phases combined with the 3 areas provides business and HR leaders a solid framework to assess current and future state of their digital efforts.
• Deloitte Digital Workplace Framework - The framework works holistically by sectioning the transformation into 4 layers. The inner core covers 3 aspects of the digital workplace and an employee's ability to do them productively, namely Connection, Collaboration and Communication. The 2^nd layer is the Technology level, which includes all tech-tools that function in a digital workplace and make the transformation possible. The 3^rd layer focuses on Governance, Risk and Compliance, which suggests that the effective use of technology is underpinned by appropriate controls and compliance with organizational policies and industry regulations. While the 4^th focuses on the measurable Business Value, highlighting the need for the digital initiative to be driven by business requirements and ability to deliver the necessary benefits.

Current State of Digital Transformation

But before going neck-deep into Digital Transformation, it is imperative to understand its current state.

From a research standpoint, Digital Transformation is gaining momentum. Doesn’t come as a surprise that, 76% of respondents who participated in Progress’ survey have a defined strategy. However, this has so far impacted only a few people within the organisation and hence remains isolated. As the report puts it, “For every thought leader that understands the need to be digital, there is a subset that live in varying states of denial.” This gap widens with growing resistance within the organisation and the lack of required technological infrastructure.

But there's light at the end of the tunnel. Despite the hurdles, Digital Transformation has gained impetus. The Digital HR draws inspiration from the innovations, experimenting constantly to meet employee expectations.

The Digital HR

With the gradual digitisation of interviews, induction, on-boarding, etc., HR too has been progressively shifting to a more dynamic digitised form. Thought leaders at Accenture state that, "HR departments are seizing ownership of IT systems to achieve business outcomes and drive organisational change."

HR transformation is driven by the advances in digital technology, introduction of Software as a Service (SaaS) based applications for Human Capital Management (HCM), etc. With integrated mobile technology and its applications, HR stands a chance to revolutionise the way it functions. As Deloitte puts it ,"Imagine integrated apps that can manage time and attendance automatically; pinpoint every appointment and meeting location; deliver on-demand video learning to participants in a new project; send messages to a team when someone is running late for a meeting; monitor stress levels and recommend when it is time to take a break; and even review 401(k) plans and offer intelligent recommendations. This is the new vision for digital HR-integrating SMAC technologies to redefine the employee experience and make work easier, real-time, more productive, and more rewarding-while, we hope, improving work-life balance."

With the HR function also multitasking as the Learning and Development (L&D) function, it is imperative for it to move on to learning apps and full-featured Learning Management Systems (LMSs). And, in some cases, going beyond it too to build a learning ecosystem by integrating all HR and learning systems into one integrated portal to increase productivity.

Achieving Digital Transformation 

In any organisation, the key driver of Digital Transformation is often a single individual or a group of visionaries who take it upon themselves to inculcate the change. However, achieving that goal often needs a clear-cut strategy, an unclogged ambitious vision which paves the way towards the real process of transformation, rather than just cumulative changes. Ambition is crucial to bring in the requisite investments at every level in the organisation. What comes next is the delegation of the task within a trusted team for bringing in digital transformation and coordinating all the digital initiatives. Coordination is critical at this stage.

With time, the organisation can reach its full digital maturity (both digital capabilities and leadership capabilities) and completely overhaul its operational processes through automation.

Conclusion

In essence, the digital strategy today focuses on customer experience and engagement, to improve efficiency and increase organisational excellence, which in turn depends on how digital technologies are leveraged within different facets of businesses, and within Digital HR for a holistic Digital Transformation.