When it comes to digital transformation, it seems most organisations still have a long way to go. According to the third edition of Deloitte’s Digital Disruption Index, published in January 2019, an alarming 28% of senior leaders classify their organisations as still being in the early stages of development.
And when it comes to the digitalisation journeys of individual functions, progress in HR is perhaps even more sluggish than most. An October 2018 Harvard Business Review article, headlined ‘HR Leaders Need Stronger Data Skills’, argued that while HR leaders are working hard to develop and recruit people who advance digital transformation across their organisations, most have struggled to advance their own digital competencies. Concerns that HR is beset by a digital skills gap are given further credence by the Global Leadership Forecast survey, which found that HR leaders lag far behind other professionals in their ability to operate in a highly digital environment and to use data to guide business decisions.
This can’t be put down to lack of opportunities, given the HR software market is on course to exceed $10 billion by 2022, according to a Grand View Research report.
The resources, it seems, are there for the taking. But HR is trailing behind other functions in successfully exploiting the opportunities that digital technology brings.
So it stands to reason that HR should be taking inspiration from other functions that are further along on the journey. Here, three function heads share their experiences of digital transformation in their business areas and offer some lessons for HRDs to apply to their own.
Luboš Libiak, head of procurement, MallGroup
“I am primarily responsible for procurement of our goods not for resale, with a team of eight and €120 million annual spend. We’re also helping out in our direct goods for resale area, with a purchasing volume of around €400 million.
"As a company that has grown through mergers and acquisitions, this created an environment where legacy systems were not fully in sync and there were different processes for doing similar things across different parts of the business. People would spend days working on repetitive manual tasks that weren’t bringing much value.
"First, we wanted to simplify the process and make it more efficient. This meant not simply doing a copy and paste of our current, inefficient process into a digital tool – something businesses need to think about a lot if there’s an expectation to improve.
"Secondly we needed to gain transparency and wanted to act based on data, not just on gut feeling. Thirdly we wanted synergies throughout the process, not only in procurement but in finance and the rest of the organisation.
"What worked well – but at the same time was one of our biggest challenges – was getting buy-in from our internal stakeholders. We didn’t want them just to sit at the table, but rather to have a supporting, consulting capacity that we could utilise to ensure we encompassed most of the use cases and didn’t forget anything important. When it comes to digital transformation, it’s key that cross-functional teams are set up and involved from the very beginning. Moreover, you also benefit from another view or approach to tackling the issue.
"Having a very robust solution is of course the desired end state. However, in terms of time to implement a digital transformation, you might want to split this up into a couple of waves. Then not only can the supplier meet the requested deadlines, but your team can also provide the necessary support.
"You must have a very clear vision of what the goal is and how to get there but be able to change course when circumstances change. This happens a lot during digital transformations.
Also, think about how the technology will evolve. Many companies are replacing big suites with platforms that are easier to connect with each other, and often provide enough capability to help you move from where you are towards your end-state process.”
Suky Baines, head of finance transformation, Transport for Wales
“Transport for Wales, a not-for-profit company wholly owned by the Welsh government, is responsible for the development of a high-quality, safe, integrated, affordable and accessible transport network. This includes a £5 billion investment in the Wales and Borders rail service over the next 15 years.
"We wanted to streamline our processes and be able to access data wherever the location, to improve efficiencies. To do this we started with a discovery phase consisting of workshops with the key users affected by transformation changes within the organisation.
"In conjunction with our consultants, we were able to scope out the requirements with our targeted planned ‘go live’ dates. We then ran a procurement exercise using the scoping document to source suppliers for the work, enabling us to determine the required budget.
"We used Agile methodology in the project, involving key users so we could make the decisions as a group. The main challenge that can arise in such a project is that users will always have different requirements. Some may even be resistant to change, though fortunately we did not experience that. It’s crucial to meet everyone’s needs in one solution.
"Using Agile project methodology helps you arrive at decisions quicker. Key to this is managing the project with a plan of assigned tasks to ensure you meet your timelines. There will always be some areas throughout the implementation that will make you question how you will use the system differently.
"We measured success with ROI and key metrics around efficiency, and of course by happy end-users and the benefits they have seen from using the system.
"One of the most enduring challenges is ensuring that planning goes beyond the first three to five months. It’s vital to have a strategic vision to help evolve your initial phase. But I’d caution against trying to do too much too soon – phase your programme of implementation. Have a detailed plan, don’t overlook your data and do ensure compliance with the GDPR legislation.
"Also remember that digital transformation affects every area of the business and requires teams to co-ordinate and collaborate. To successfully lead digital transformation leaders must be intentional in building a digital culture, including changing legacy technology and structures that hinder transformation.
"Encourage collaboration across departments with strong communication. When all departments are aligned, a strong company culture forms, allowing for a successful and confident transition.”
William Douglas, chief marketing officer EMEA, JLL
“I’m a member of JLL’s EMEA board and have global responsibility for brand. We have 217 people in marketing across 21 countries in the EMEA region, including a pan-EMEA marketing leadership team. We deliver business line marketing, digital marketing, marketing communications and creative services to our EMEA business, which employs around 12,500 people.
"Digital transformation, in my opinion, is too broad a term and can feel a bit overwhelming or generic. We started our digitalisation journey in marketing by focusing on our mundane analogue problems, such as how to reach our target audience more effectively and gain insights into their needs, and looking for digital solutions that are attractive not only because they are fast, but because the tracking is far superior to analogue approaches.
"We worked with a number of external partners on this, including technology providers, digital media consultants and data and analytics consultants. This space is not short on consultants trying to help, and some prove more valuable than others. I would recommend looking for partners offering specific solutions and who are prepared to grind out a dedicated solution for you. Avoid wide-ranging digital consulting projects.
"Speaking generally, digital marketing has had a rollercoaster journey in terms of measuring and selling its own success. At the beginning, because measurement in such a specific way was so new and exciting, there were teams set up to spend time putting together huge dashboards on digital metrics that nobody understood, and which didn’t easily correlate to a commercial outcome. In addition, there was a cycle of overselling where the rest of the business leaders – often outside of the marketing function – started to question the validity of the measurements.
"I, and many other marketing leaders, took a stand a few years ago to simplify and scale back how and what we measure to focus on the most commercially relevant metrics.
"I think this is normal and to be expected when data that you’ve never had before comes flooding in; people have a tendency to over-report it and connect things that don’t necessarily connect. But it does settle.
"My advice would be to control the technology directly. Though IT is an important partner, you can’t be fighting for budget priority. You need to have direct budget responsibility for the supporting tech.
"You’ve also got to be prepared for people to not like what they hear. Getting your hands on more data and uncovering new insights is all well and good, but some people are happy not to know. Be aware that change in one part of the business usually doesn’t happen in isolation. Eventually it touches everyone and not everyone is prepared for this at first.”
This piece appeared in the October 2019 HR Technology Supplement