Tech, people and process
The key to a successful digital transformation programme.
The evolving tech world we live in today is both a threat and an opportunity for business, writes Roland Emmans, HSBC UK head of technology.
There are three types of businesses - those that are tech, those that are tech-enabled and those that are going to struggle to survive in the future as the world changes around them.
We are living through the ‘fourth industrial revolution’, where data is becoming the new oil. It may be in a formative stage but unless companies of all shapes and sizes react today, they will face difficulties tomorrow.
Positively, I see many companies of all sizes starting to embrace this exciting phase through the introduction of digital transformation programmes. Although I work all over the UK, I live in the south and meet businesses across the Thames Valley and South Coast regions, and I’m encouraged by what I see from businesses operating in this region.
There are many companies implementing elements of Industry 4.0 into their business to deliver tangible results, either by simplification or automation, or through driving performance improvement and better insights through the use of technologies such as data analytics.
However, too often I see digital transformation programmes not achieve their intended results and companies failing to achieve the meaningful change they desire on the back of such projects.
Global research from McKinsey found that while 80% of businesses have undertaken such projects in the past five years, only three in 10 companies succeed in improving business performance and sustaining those gains.
Poor execution often means that new technologies aren’t adopted or aren’t utilised to their full potential, or at all, leading to disappointing performance and questions being asked of project managers or IT directors at a board level.
A stark fact, and one often overlooked by businesses, is that technology cannot succeed without considering the human and cultural elements of a company. This is not simply failing to effectively train people on new technology, but winning employees’ hearts and minds over why they should adopt a different way of working and how the transformation programme will make their life easier or job better, ultimately leading to improved productivity.
There are three essential components of a successful digital transformation programme – technology, process and people – and they all need to work in unison, hand in hand.
Selecting the best technology is the simple part; without evolving processes around that technology or failing to engage with people effectively, the programme will be stunted or fail totally. Technology implementation cannot be achieved in isolation. Doing so alienates the end-users so they find ways around it, resent it or simply do not use it. Imposing new technologies without effectively considering the broader human and cultural landscape, and the processes people follow, leads to failure. Digital transformation projects are not simply the domain of the IT department – successful projects engage communications, HR, legal, strategy and plenty of other functional departments.
Companies need to consider whether they have the right talent in the organisation and how individuals’ roles and responsibilities should be redefined to align with a transformation’s goals. Creating a change culture is important, one where employees are encouraged to learn, to collaborate, to engage and to challenge.
According to the McKinsey report, common factors identified by companies successfully executing transformation projects include the management team establishing a clear change story for the transformation and communicating it effectively, as well as standard operating procedures being modified to include the new technology.
Other factors cited included senior managers fostering a sense of urgency for making transformation changes, effective collaboration between business units and employees being encouraged to challenge old ways of working.
Overlaying this, and tying these factors together, should be a strong digital strategy, aligned to the overall business strategy. A piecemeal approach to digital transformation tends to result in peripheral individual operational wins, but won’t transform the business.
HSBC UK counts many fantastic technology companies as clients, as well as funding digital transformation projects across the country for companies across a broad range of sectors. Getting it wrong won’t necessarily be terminal for a business, but it won’t enable that business to fully realise its ambitions.
Getting it right will produce a more productive, profitable organisation, as well as a better engaged workforce, benefiting multiple stakeholders across a company.
