Digital transformation is all about disruption and evolution, making it a practical and useful way to plan for the future while managing unpredictable times. Events like the COVID-19 pandemic have accelerated the adoption of digital tools and processes, making it imperative for businesses to manage this transformation effectively.
We are in an era of digital transformation, and the future is now. How can companies navigate these changes, particularly when this era is unlike others before it, with greater unpredictability, a seemingly boundless scope and scale, and disruption occurring at an exponential rate? Success will require both technology and talent.
Unpredictability: From being harvested as cherries in Northern Kenya, to going through a processing plant, to becoming the much-needed hit of caffeine in your morning cup, a coffee bean’s journey can now be tracked to the exact hectare through Blockchain. Similarly, who would have thought we would use digital twins to repair machinery on the other side of the planet? These are rudimentary yet revolutionary applications of new technology that businesses have only just begun to explore, and that will continue to evolve in unpredictable ways in the future.
Scope and Scale: The digital economy operates in a world without borders. Physical boundaries have blurred to an extent where there are practically no limits for e-commerce, digital banking, sourcing ideas and talent (crowdsourcing), or even remotely running an enterprise (cloud infrastructure and applications). With these limitless possibilities come unprecedented changes, each of which will require expert management.
Disruption: Digital transformation can reduce barriers to entry, change customer preferences, and increase competition. These all significantly disrupt an industry’s landscape and change the ways in which its businesses operate. For example, the largest taxi provider in many countries (Uber) and the most valuable American car maker (Tesla) are both technology companies. Large banks around rely on AI to analyse risks. Healthcare as an industry has turned to analytics. Manufacturing firms are starting to implement IoT in their smart factories. These disruptions, though they seem nominal, represent significant changes that must be navigated with care.
According to McKinsey & Company, 70% of all large-scale transformations fail to achieve the desired outcome. This is due to a lack of employee engagement, a culture that is not aligned to the mission, and other people challenges. Businesses should therefore adapt their way of thinking about modern problems in the current era. Successful transformation is not just about technology, it is about transforming the way business is done. This cannot be done without the right mix of structures and workforce, and it cannot be done without managing the change effectively.
Digital transformation drastically changes ways of working in three areas: technology, process and people.
New technologies are paving new ways to serving existing needs. This, in turn, changes the dynamic of the talent market and the in-demand skills at any given time. Some of the leading technology themes that emerging include automation & AI, IoT & data analytics, cybersecurity, cloud computing, blockchain, AR/VR and 3D printing.
These emerging technologies directly impact an individual’s and an organization’s way of working, and data shows that they will cause up to 375 million workers to change their occupational category by 2030.
Technological advancement has forced organizations to change their ways of working and operating models to be more efficient. For example, the automation of simple tasks has led to some human roles becoming redundant and some requiring significant augmentations. This change in processes is accompanied by a change in governance structures across organizations.
Some prominent themes that will lead the process change in the coming years include gig economy and remote working, agile & DevOps, digital mindsets, and sustainability.
Every year, we see a change in workplace demographics and corporate mindset. This is motivated by the influx of millennials, who will comprise 58% of the workforce in the next decade. They tend to focus on inclusivity, sustainability, and digital savviness.
This era also points to “New Collar Jobs” that will require creativity, soft skills and the ability to work with AI and smart machine interfaces- a scenario with stark differences to the traditional demand for skills in the talent market. Roles that did not exist a decade or two ago are emerging in all industries today: Innovation Professionals, Workplace Productivity Specialists, Growth Hackers, AI & ML Specialists, Agile Project Managers.
With rapidly emerging and evolving technologies, the World Economic Forum estimates that more than half of all employees will require reskilling by 2022 to meet talent demands of the future.
It has become imperative for businesses to ride the sea of change and adapt to the new normal. While technology is important, Change Management is the ark for businesses to thrive in the ever-changing world. Applied correctly, a positive change experience translates to achieving intended sustainable outcomes.