The most common misconception about digital transformation

But despite the fact we’re now living in an age where a generation who have been brought up with digital tools have purchasing power, digital transformation projects still fail more often than they succeed. Forbes and Gartner have both noted the difficulties many Fortune 500 companies have had with their modernising projects.

There are plenty of reasons for this, but there is one misconception about digital transformation that we see time and again, which makes the chance of failure much higher. All too often we see businesses only focus on the technology itself.

They get caught up in which digital tools they want to bring in. They get caught up in artificial intelligence, machine learning, data processing, the Internet of Things, and other new technologies. And in so doing, lose sight of the most important part of a digital transformation journey.

The reality is, technology is only the means to an end. Successful digital transformation relies on people. The teams working with the technology and the ways in which they interact with it will determine the success of the change.

Only 28% of digital transformations are led by the CIO, and 23% are owned by the CEOⁱ, but 71% of leaders say the workforce is important in supporting their digital transformation strategyⁱⁱ."

Technology can open up new opportunities - it has the power to disrupt your industry. But it's the skills to use those tools effectively that will ensure they reach their potential. You can implement a new CRM system and automate marketing emails to its customers, but the creative campaign behind the emails, the decisions around who should receive certain messaging - these still need human skill and knowledge behind them.

That element of human knowledge and creativity is needed in other areas of digital transformation too. Artificial intelligence (AI) is the new “must-have” technology. AI writing, AI imagery, AI scheduling - all are featuring heavily within marketing department decision making at the moment.

AI, with its many benefits, is weaving its way into everyday life, accomplishing tasks that would be impossible for humans to complete, problem solving for us, completing work quicker, enabling companies to expand their services.

But ultimately, AI is still limited by the people who use it. The rise of Chat GPT has only given way to numerous tools, tips and guides on the best prompts to use to get useful answers.

AI can only reach its potential if the people using it understand how best to use it, and crucially, understand its limitations. Its usefulness relies on comprehensive, accurate data, as a recent hiccup in Bing's AI chat discovered (after insisting that the year was 2022, and insulting the user when they corrected it).

AI's knowledge needs to come from human sources and draw from human life. If it draws knowledge from other machine learning outputs, eventually the flaws will grow to the point of unreliability.

If the data used to feed machine learning is incorrect, the results will be inaccurate, causing huge issues for AI based decision-making tools. Having computer science skills within your organisation will undoubtedly give you the edge if you choose to bring AI into your company.

It's crucial for your people to understand the technology and its capabilities to make use of it effectively. This might mean your team need to learn new skills, but it doesn't mean they are no longer a necessary part of the equation.

In fact, it makes their contribution even more important. Where AI is used as part of recruitment, the AI may be able to analyse the applicant's CV for appropriate keywords or job history, but it cannot understand the applicant's backstory, character, personality, whether they are trustworthy or hardworking. All these aspects need human intervention to gauge.

AI is just one step in a journey. It can provide and analyse data sets based on pre-existing knowledge. But any meaningful insight or learning needs to come from the team's evaluation of AI output. For example, AI might be able to diagnose medical conditions, but the diagnosis will need to be evaluated by a human to make sure it's accurate.

As the gap between outdated processes, customer expectations, and modern technology grows, upskilling your employees has become essential. Any sort of digital implementation journey will need your team to be brought up to speed with the latest technology, more efficient processes and methods of working, and agile project management strategies.

Ensuring you have digitally savvy professionals in leadership and teaching roles in your company will help you move towards having the right skills and knowledge across your workforce for successful digital transformation.

There are several ways to upskill employees during a digital transformation:

Training and development:
Proper investment in training and development will pay for itself. Digital L&D programs will help employees stay up to date with new technologies and practices. Courses to teach your teams problem-solving skills, workshops on AI technology, or you could even look at putting a team member on a computer science course.

On-the-job learning:
Having the right talent within your company could be the key to helping your wider team to learn new skills. Give your employees the opportunity to learn from their colleagues. Provide mentoring with managers and leaders in the digital space. Bring your employees along with you by making sure they have the guidance and advice on how to use new technologies and processes.

Mentoring programs can be a great way to provide employees with the support and guidance they need to stay up to date with the changing landscape. Mentoring can also help to create a culture of learning and collaboration, as employees can learn from each other and share best practices.

Certifications:
Professional certifications can help employees demonstrate their expertise and provide recognition for their skills and knowledge. When people come to work for you, they want to know that they can develop their career and grow within your company.

Providing formal learning opportunities to widen both their industry knowledge and their digital skills will not only make them more valuable to your business but is likely to help them choose to work for you over other employers and could also see them staying with you for longer.

Cross-training:
Cross-training is where employees learn new skills and take on different tasks to become more versatile, valuable, and ultimately help them to become better prepared for a digital future. When companies go on digital transformation journeys one of the main causes of failure is not getting buy in from operational staff. By cross-training your team to use the digital tools and techniques being introduced, you're more likely to keep them engaged in the process. 

Overall, upskilling employees during a digital transformation is essential for the success. It is important to ensure that employees are given the opportunity to develop their skills and knowledge, and that they are provided with the necessary resources to do so.

Employees at companies with less than 100 employees are nearly three times more likely to say their digital transformation was a success than employees at companies with more than 50,000 employees. At least part of the reason for this is that employees at smaller companies are likely to have been engaged and communicated with throughout the journey. This means if you're thinking about digital transformation within a large organisation, it's crucial to consider how you will upskill and engage your teams.

When we're implementing digital change within the companies we work with, the five most common digital tools that we incorporate are:

• Communication platforms
• Project management tools
• Customer relationship management (crm) systems
• Data management systems
• Information governance tools

Used together, these five tools enable organisations to offer better customer service, operational efficiency, and internal effectiveness. They ensure that a company is adhering to regulations and data security standards.

Communication tools might include external AI driven tools like chat bots, which benefit customers by giving them a more convenient way to contact a company and receive help and benefit the organisation by providing quicker and more comprehensive customer service.

It might also include internal platforms - the creation of an advanced intranet can improve productivity, collaboration, and employee engagement.

Project management tools promote higher levels of collaboration and accountability. With more visibility over tasks and timelines, these tools give project managers the ability to keep their projects on track, mitigate risks, and forecast and resolve potential issues before they arise.

Customer relationship management systems give companies the ability to build closer relationships with their customers. By tracking customer data, interactions, and feedback, they can create a high quality, personalised experience, tailoring ads, emails and product or service suggestions.

Finally, data management and information governance systems ensure businesses can manage and store data more efficiently and securely. In a time when data security is critical (and mistakes in this area can lead to huge fines), having secure data handling systems isn't an optional extra.

The digital technology you choose is important, but technology is only one part of digital transformation. People and the way they work with your technology are the key to successful innovation. Investing in the right people and the right training is just as important to successful digital transformation as shiny new tech. A digital future requires more than just computers. True innovation comes from people. Creating the right environment and support for them is the most critical part of the journey.