What is HR’s Role in Digital Transformation?
In our previous post, we looked at where HR currently invests its resources and the importance of reallocating its time and money toward activities that create competitive advantages. In this post, we’re diving into one of the key strategies for transitioning from administrative and compliance tasks to work that generates business value — digital transformation. And we outline three questions every HR professional should be asking their leadership to play a crucial role in this transformation.
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What is Digital Transformation?
First, let’s define Digital Transformation. At a high level, it is a change-oriented approach that leverages new, fast, and frequently changing digital technologies to improve the way we do business.
Organizations across the world are adopting this mindset. In 2019 alone, two-thirds of CEOs implemented at least one or more of these technologies into their business operations.
At the forefront of this paradigm shift are three key technologies.
The first is Artificial Intelligence. AI typically encompasses a range of programs that do one of two things: automate routine, algorithmic tasks or crunch large data sets for business forecasting.
Next is Anything as a Service (XaaS). In general, this term applies to the migration of software and data to outside servers and platforms. In recent years, IT departments have migrated nearly 25% of all the business data to the cloud. Moving that data and software offsite allows companies to pivot and adapt to new technologies quickly and with less risk.
The third is Robotic Process Automation (RPM), which refers to any physical task that can be automated using physical machines. RPM has been a critical driver in the need to upskill employees, as machinery replaces workers in performing routine tasks.
There are many other technologies driving digital transformation, including blockchain, augmented and virtual reality, and the internet of things (IoT). Each shares a common thread: they’re changing rapidly and offer a potential competitive advantage to companies that can quickly adopt them. Digital transformation is a strategic approach to implementing and iterating those types of technologies.
How Can HR Become a Leader in Digital Transformation?
The impact of RPM on people strategy is one of many examples of how digital transformation directly affects Human Resources. Even though this shift presents many challenges, it also offers HR an opportunity. It’s a chance to elevate HR’s position to a strategic differentiator within its organization.
There are three key questions HR professionals can ask to elevate the conversation with leadership around digital transformation.
1. How is our operating model changing? And what does that mean for our structure? Adopting new technology isn’t a simple plug-and-play. It requires many changes to take place simultaneously and many touchpoints over a long time horizon. Using best practices behind employee engagement and training can help ensure a successful rollout.
2. Do we have the talent we need? Do we need to build or buy that talent? Are we located in the right physical locations to be able to get the talent we need to make this digital transformation happen? And what skills do we need to build internally (such as coding) to maintain and optimize what we’ve turned on? These talent questions can form the basis of a talent acquisition strategy that ensures your organization can support new technology and use it to its full potential.
3. How will we create consistent iteration? Digital transformation is an ongoing process. With experience in change management, HR is well equipped to gather feedback and provide valuable insights for continual improvement.
The benefit of asking these three questions is twofold. It brings HR into leadership conversations and it can help HR think about transforming itself. By undergoing digital transformation first, HR can free up its time and improve its knowledge for leading an organization-wide change.
Digital transformation poses many challenges, but they are ones that HR already knows how to solve. We just need to know the right questions to ask.
By understanding the concept on a deeper level and proactively preparing to be part of the change, HR can use this opportunity to be a strategic differentiator within its organization.