Human Impact of Digital Transformation

Last month I published an article called Cloud Migration is no longer about “R-Factors” but “Human-Factors” which was written with the intention to consider if the original Gartner Five ‘R’ Factors for cloud migration, originally published ten years ago, were still valid today. This month Boston Consulting Group (BCG) published research stating that only 30% of digital transformation projects met or exceeded their target value. Dismal results of course and BCG, who analysed the common factors in the 895 companies in the study, determined several critical success factors as well as offering six ‘best practices’ that companies should adopt in order to succeed. BCG quote "When trying to bring everyone along with the overall plan, it can be easy to compromise and lose focus on the transformational aspiration. This is where the trouble usually starts".

Consultancy UK also released just afterwards their recommended six steps to be included in digital transformation planning. Most advice relates to business strategy, technology and customers, however, their last recommendation concerns company culture. The importance of this often being overlooked yet will require “organisational agility: the ability to collaborate, accept change, accept risk, and embrace different ways to deliver that potentially haven’t changed in a long time”.

How people adapt and accept change has been proved to be an essential factor. HR Magazine published their findings from digital transformation IFS research entitled ‘The undeniable people factor’. They concluded that businesses often focused too much on implementing the technology solutions rather than considering their staff buy-in. Over a quarter of the companies surveyed admitted people being overlooked.

My own research for the cloud migration article I mentioned above led me to discover how important the human element was. Many organisations reported their journey to the cloud being successful from a technical migration perspective but that despite this most of them had suffered more or less because of how people affected the project.

Several recent market research analysts now name ‘security and compliance’ as the number one reason for why organisations move or want to move their critical applications to cloud. This reason has partially been elevated to the top by the recent pandemic with their work force now more remote and companies cannot rely on physical location-based security measures. I touched on operational procedures and the human factor in this piece as several cases reported how certain aspects of the original design intention were not carried out ‘as planned’ due to how people were using the technology.

Agility is an essential requirement of digital transformation and how easily the infra-structure can adapt to respond to changing demands will undoubtedly require the scalability and flexibility of some form of cloud. There are lessons to be learned from other companies who have migrated to cloud effectively. My earlier article Mistakes moving to cloud: the stakes get higher discovered how nearly all [93%] of companies had hired a third party ‘partner’ to assist them with their cloud migration, yet most of them unfortunately did not actually have the right expertise needed which resulted in problems. Companies had turned to their usual cloud or managed service provider to move their core system yet had crucially not gained the necessary advice from their System/Applications Partner that really understood the intricacies of their system. This proved to be a mistake as both parties did not appreciate the complexities of their core systems [like SAP] compared to the isolated applications running on standalone servers that had previously been successfully moved to cloud. Core systems like SAP are usually multi facet systems with several inter app dependencies that requires assured database integrity. No wonder many companies are nervous about the impact of this big change with 7 out of 10 cloud friendly companies not yet made or making the move to leave on-premises*.

Culture and change in an organisation are massive topics in their own right with thousands of business strategy books published. McKinsey cite 25,000 books published to be precise yet despite this a third of all change projects fail. Forbes also emphasise the importance of people involved “there are still plenty of humans running the show, and the way they think, their approach to collaboration, and how they innovate will be a big factor in the success of any digital transformation”.

Whether a company feels it would benefit from external help with human transformation from an independent change/management consultant, or whether they feel they know their own culture well enough to manage it themselves is for them to decide. All stakeholders, users, processes and procedures will need to change in such a big transformation, its not just change in systems or technology. Staff need to be taken along the journey, to be inspired and motivated sufficiently well enough to assist the change and to keep supporting those changes as the organisation pivots to where it needs to be. All the news and research published show how the ‘buy in’ from staff companies is essential if they are going to succeed.

The success of an enterprise digital transformation will amongst other things include the migration of their core systems to cloud and the successful change of the people processes. The trusted technical partner chosen to assist them with their move to cloud must have the right types of skills and more importantly have enough relevant experience to fully understand the complexities of the systems being moved. Maybe then with the cloud piece in safe hands, the organisation can focus on the human aspects of their crucial digital transformation change programme that could ultimately determine the success of the project to better their odds.

Learn more about Opal Wave’s SAP Platform here and Read more of my SAP/Cloud blogs here

References

* Microsoft commissioned Forrester Research, March 2020

https://www.dhirubhai.net/pulse/cloud-migration-longer-r-factors-human-factors-david-penny

https://www.dhirubhai.net/pulse/mistakes-moving-cloud-stakes-get-higher-david-penny/

https://www.zdnet.com/article/digital-transformation-is-hot-the-success-rates-are-not-says-bcg-data/

https://www.consultancy.uk/news/26029/six-steps-to-include-in-digital-transformation-planning

https://www.itproportal.com/news/employees-are-being-forgotten-in-digital-transformation-journey/

https://www.forbes.com/sites/davidrock/2019/05/24/fastest-way-to-change-culture/?sh=2abb63be3d50

https://www.mckinsey.com/business-functions/organization/how-we-help-clients/culture-and-change#