Why is digitalisation so bumpy for many companies?
The idea of digital transformation is a widely used buzzword but what does this mean particularly for organizations? And how do businesses navigate the digital future with success?
Through this article, you will be able to get an overview of the topic of digitalisation and understand better how businesses like yours can effectively shape digital transformation to your advantage.
What exactly is digitalisation?
Digitalisation or digital transformation defines the process of continuous transition to digital processes, based on a complex IT infrastructure, digital applications, and optimally networked data and systems. The current business model is mapped digitally, and/or new digital products are introduced. Information, communications, processes and services are networked via digital platforms.
Digital transformation contributes to the convergence of online and offline, disruptive technologies and the radical shift of whole industries. Automation, optimisation, process control as well as greater versatility and differentiation of goods and services are just some of the benefits and opportunities of digitalisation. Innovative business models and digital products are often the outcome of the process. The most prevalent drivers of growth are rising expectations of the consumers and market rivalry.
Common issues faced during adoption of digitalisation plans
A new research has shown that it is always the very culture of the organisation which stands in the way of digitalisation. Often, lack of employee communication, engagement and alignment with the new goals are the main reasons for such a high failure rate.
Digitalisation efforts within organisations can develop emotions of uncertainty and fear. This may cause employees take their frustrations out on each other. Here, internal communicators and managers have the responsibility to overcome the difficulties and resolve conflicts. A research shows that only 38% of people like to leave their comfort zone. The other 62%, however, are not comfortable with changes.
In addition, many employees think that digital transformation projects may eliminate the need for their skills and expertise. This mainly happens during digital transformation efforts where people are convinced that new technology will replace them.
However, according to research, 67.8% of companies report that technology disruption has had a neutral-to-positive impact on job creation. 37.3% report a net increase in job creation because of it.
Therefore, with the proper employee communication strategy, employers need to ensure that their employees feel safe. This demonstrates how critical cultural change is: any business that wants to emerge from the transition successfully must integrate digitalisation into its corporate DNA.
Digital Transformation Key Success Factors
Research points to a set of factors which will improve the chances of a successful transformation1. Such variables fall under five categories:
- Have the right, digital-savvy leaders
- Capacity building for workforce of the future
- Empowering people to new ways of working
- Giving an upgrade to everyday digital tools
- Communicating frequently via traditional and digital methods
Having the right, digital-savvy leaders
During a digital transformation, change takes place at all levels particularly when it comes to talent and capabilities. Nearly 70% of all respondents say the top teams in their companies transformed during the transformation — most notably when the management team was joined by new leaders familiar with emerging technologies. Adding such a leader is among the keys to successful transformation. So is the engagement of transformation-specific roles — namely, leaders of individual initiative and program-management or transformation office leaders who are dedicated to the change effort in full time.
Another key to success is leadership commitment. When people in key positions (both the organization’s senior leaders and those in transformation-specific roles) are more engaged in a digital transformation than they were in previous attempts for transformation, the success of a transformation is higher.
Capacity building for workforce of the future
The findings of the study indicate that the advancement of talent and expertise around the organisation critical action for conventional transformations — one of the most significant success factors in a digital transformation initiative.
Success is also more likely when organisations scale up their workforce planning and talent development (Exhibit 1). For example, 27% of respondents report successful transformations when their companies set cross-functional or enterprise-wide hiring goals based on specific skill needs—nearly twice the share of respondents whose organisations do not.
Empowering people to new ways of working
Digital transformations require cultural and behavioral changes such as calculated risk-taking, increased collaboration, and customer centricity2. Results suggest two key approaches in which companies with successful transformations are empowering employees to embrace such changes.
The first approach is reinforcing new behaviors and ways of operating through structured processes, long known to be a technique that promotes organisational change. One related key to effective transformation is the development of new forms of working practices. Organisations that have established at least one new way of working, such as continuous learning or open work environments, are more likely to experience successful transformations as part of their change efforts than others.
A second approach to empowering workers is ensuring that individuals in critical positions play parts in facilitating progress. Success depends on both senior leaders as well as those involved during the transformation3.
Giving an upgrade to everyday digital tools
For organisations to empower employees to work in new ways, survey findings show how success can be supported and measured by digitising tools and processes. Respondents were asked about seven structural changes made by their organizations since the transformations started (Exhibit 2). Each of which includes incorporating the use of digital technologies into a new corporate norm — emerged as key success factor.
Communicating frequently via traditional and digital methods
Effective communication is crucial during a digital transformation, as we have seen in conventional efforts at transformation. More specifically, one key to success is to convey a story of change that helps employees understand where the organisation is heading, why it is changing, and why the changes are significant. A digital transformation is three times more likely to be successful at organisations which adopt this approach.
The elements with the greatest influence on success are clear targets for organizations’ key performance indicators and clear communication of the transformation’s timeline (Exhibit 3).
How Konica Minolta’s Suite Of Solutions Is Here To Help
While study suggests that many digital transformations fall short in improving performance and equipping companies to sustain changes, lessons can be learned from those who report success.
It is now time to reimagine your workplace and upgrade your organisation’s “hard-wiring.” As digital requires new ways of working as well as changes to the organization’s overall culture, employees must be empowered to work differently and keep up with the faster pace of business. The implementation of digital tools and upgrading of processes, along with the development of a nimbler operating model—that is, the hard wiring of the organisation will support these changes.
Globally, Konica Minolta is working with companies from a variety of industries and providing solutions such as comprehensive print technologies, Industry 4.0 technologies, automating commercial printers’ customer orders, invoicing and billing.
As you and your business pursue the path to digital transformation, Konica Minolta looks forward to partnering with you and offer practical but innovative solutions to assist in your digitalisation journey.
1 Define a successful transformation as one that, according to respondents, was very or completely successful at both improving performance and equipping the organization to sustain improvements over time. In our 2016 survey, the rate of success was 20 percent; in 2014, 26 percent; and in 2012, 20 percent, McKinsey.com.
2 Culture for a digital age, McKingsey Quarterly, July 2017, McKinsey.com.
3 Jacques Bughin, Laura LaBerge, and Anette Mellbye, “The case for digital reinvention,” McKinsey Quarterly, February 2017, McKinsey.com.