The human dimension of digital transformation

Digital transformation is hot! Organizations in all sectors are evaluating "digital solutions" that ensure a better customer experience, less paper waste, faster processing times and, ultimately, a better outcome in every possible way.

An accepted definition of digital transformation is "the conversion of commercial activities, processes, competencies and models to maximize the changes and opportunities of digital technologies." And “Using digital technologies to improve (and connect and often radically change) processes, enhance customer experiences, focus on the area where business and customer value meet and seeing new and better possibilities, while using different and digital-intensive ways to realize them”. It is an optimization process to ensure (or find) other ways to increase revenues, create human value and improve experiences while reducing (or improving) costs, increasing efficiency and adapting to evolutions that bring benefits. You can also think of it as fusing the needs of people with the elements of business success and the potential of technology.

Understanding about digital technologies like the internet of things, big data and analytics, machine learning (ML) and artificial intelligence (AI), augmented reality (AR) and virtual reality (VR) is the new rule. They are all part of digital transformation processes that businesses are adopting, as this ceased to be an option. It is a mega-trend whose impact goes beyond the area of technology: the result of a global revolution, it shapes the way people interact with the world in all aspects of their daily lives, both personal and work related.

However, we often forget one of the great key points for this process to succeed in a company: the human factor in digital transformation. It is dangerous to take an initial approach that is way too simplistic (as in, “leave everything to the machines”): and it is understandable since, the idea of an autonomous and decentralized work model, linked, networked and digitally mature teams organized in a more creative and intelligent way sounds excellent and tempting. They invent their own processes and, only at the end, naturally seek and implement - and often informally - the solutions that best meet their daily needs. But, as wonderful as all that sounds, businesses need something called experience design (human centered digital transformation) to ensure that what they give to their customers, colleagues and employees is of value. Experience design is made up of people and not machines.

There are many factors in the digital transformation that handle many aspects of a business, such as business models and processes, projects and improving the customer experience. You should understand that this is not a short-term process or strategy. It is a profound change to a culture based on stakeholders (customers, partners, workers, shareholders). Successful and intelligent businesses know that they should guide their digital transformation projects based on how to best serve their stakeholders (connect goals and needs of each one) and create capabilities that achieve that goal.

Brian Solis (Principal Analyst and futurist at Altimeter) once stated that “digital transformation is really a human story”, since the focus shifted towards using technology in order to increase performance. Also, Laura Overton (CEO and founder of benchmark Towards Maturity) presented new data that shows that two out of five CEOs are now making digital transformation a priority; and companies have increased their budgets in technology departments from 19% to 22%. You can see it in this manner: we are in an on-going process of adopting a more organizational culture, where new ways of working, learning and communicating within our companies are introduced.

The internet of things is about analyzing data and turning it into actions, human experiences and outcomes. Same goes for artificial intelligence, social technologies, cognitive computing (used to understand data and its sources like mobiles and social platforms) and so on. Behind all these processes and transformations there are people, connected through information. An employee, a user, a consumer ... there is always a person at the edge of processes.

Why do some companies fail in their digital transformation?

According to Forbes and IBM, "More than 80% of companies that start a digital transformation process fail." That is because they forget that all this is still human business. They focus too much on digital optimization and digital marketing when they should be focusing on the center that handles everything: humans. The writer and branding specialist Andy Stalman explained in one of his articles for the Huffington Post: “when we assume that it is human creativity that generates the technological wonders, we will stop weighing the result and begin to give value to the process.”

In short, using technology to better solve customer problems is what digital transformation is about. According to a report from Telstra (a global telecommunications company), a lot of U.S companies are relying too heavily on the technology side instead of focusing more on the people that make the decisions. Nicholas Collins, President of Telstra for the Americas, says that digital transformation loses its effectiveness (and sense) if companies forget about people: “Technology alone is not a silver bullet for digital transformation. While investing in the right technology is crucial, placing too much importance on the role and performance of technology in digital transformation is a barrier to success.”

Focusing all efforts only on information and communication technologies can be a wrong decision. Don’t chase technology. Focus on what you want your company to be for your customers.