From bringing analog information into digital and making it usable by computers (digitization), the process evolving towards digital transformation, which is the activity of transforming business activities, business processes, products, and models by entirely using digital technology opportunities, is one of the most critical issues that attract the attention of today’s institutions and organizations.
Currently, almost 700 billion dollars are spent annually on digital transformation projects in the world. Yet, again, according to the data obtained, only 30% of these projects worldwide can be completed.
Moreover, among these successful projects, the organizations that can get maximum efficiency constitute much less than this percentage.
What could be the reason why the vast majority of digital transformation’ projects, in which so much money is spent and invested, fail?
Factors to success
As in all restructuring processes of institutions, the most critical factor of success in digital transformation projects is the necessity to position ‘people’ at the center. Of course, the human factor mentioned here will be the organizations’ customers subject to the project, but more importantly, it is the internal customers, i.e., employees of the relevant organizations.
In other words, the internal customers of the organizations must believe and adopt the digital transformation’ processes and steps both operationally and mentally, and heartily, and the organizations must have this strategic perspective and plan in the integration and implementation of these projects.
At this stage, the definition of Bionic Organization made by the Boston Consulting Group (BCG) is critical. In other words, the process in which man and machine work together, and man can use the machine to provide maximum efficiency, is defined as a bionic organization.
The aim is not only the digitalization of the processes within the organization but also the organization’s and its employee’s ability to get the highest efficiency from this process.
For the digital transformation process to be carried out healthily, first and foremost, as mentioned above, internal customers, including employees of the organization, should be prepared for the digital transformation in terms of operational (mind) and individual values (heart).
What can be implemented to make this process systematic, transparent, manageable, and efficient?
Key areas and dimensions
There are two key areas and two critical dimensions that all digital transformation projects should focus on. The first of the two central areas involves functional (operational) change, while the other involves organizational culture transformation.
In digital transformation’ projects, active change management steps in terms of operational and cultural transformation management steps in terms of individual-organization value alignment steps should be planned separately but implemented in coordination.
The former aims to show the users, i.e., internal customers, that the digital transformation steps to be implemented will make the work being done more efficient, effective, and easier; the latter aims to harmonize the motivational factors of internal customers with the corporate culture and values targeted with digital transformation.
Operations change management
In operational change management, the focus is on the vision, strategy, plans, objectives, organizational structure, systems, and processes. While, the need for change arises due to operational reasons and logic, and success is related to the operational competencies of the relevant organization.
On the other hand, in corporate culture transformation, while focusing on the habits, attitudes, prejudices, feelings, fears, values, and beliefs of the employees to ensure maximum adaptation of the employees to the digital transformation requirements to be made, the need for transformation arises due to the mental needs and emotions of the employees and success is related to the mental competencies of the employees.
These two main topics are necessary for the success of the digital transformation’ move to be explained by coincidence, which will usually not happen anyway.
Using digital technology and tools, together with human skills and abilities, will create value-creation opportunities for organizations. The competencies and mindset of the human resources employed by organizations play a vital role in the strategies developed by organizations.
The strategy created by organizations reveals the necessary processes, and these processes show the technology that will be needed.
As it can be understood once again from this hierarchy, digital transformation’ projects can only be successful if the human factor in organizations, the necessary corporate culture, and the change management to be implemented operationally are planned and managed together and in harmony with each other.
In confirmation of this situation, as Peter Drucker states, ‘Corporate culture eats corporate strategies for breakfast.’
In digital transformation projects, there are also two main dimensions to focus on after the two main areas of focus. The first is the individual focus, while the other focuses on employee groups. These dimensions, which are primarily of interest to human resources management or organizational development units, are vital in planning the implementation of digital transformation projects in the relevant organization and the healthy management and sustainability of this transformation process in the following periods.
In the individual dimension, the focus area of institutions and relevant units from an objective perspective will be to measure and improve the competence and behavior levels of employees toward digital transformation. In contrast, from a subjective perspective, it can be planned to develop leadership, teamwork, and personal maturity competencies.
In the dimension of employee groups, the objective perspective should focus on organizational structure, systems, products, and results. In contrast, the subjective view should focus on guiding values, restrictive attitudes, and shared strategic vision.
One of the most important keys to success in all digital transformation projects is to position the human factor, i.e., the employees of the organization, at the center and manage projects in line with their needs, competencies, and demands.
Such processes will only be successful if they are integrated with the human capital factor. One of the innovative ways of positioning people at the center of organizations is to define the relevant employees as internal customers and to consider the digital projects to be transformed as a product or service to be launched.
Just like marketing a product or service, it would be significant for companies to make a planned marketing fiction to convince their internal customers of the digital transformation program.
When planning a marketing strategy for internal customers, the main focus, as in all Marketing strategies, is to analyze the ‘target audience’ and to classify, i.e., segment, all internal customers, i.e., the employees of the relevant organization, to contact them with the appropriate activities.
At this stage, it will be very efficient to classify employees according to their value judgments and, as mentioned above, to carry out cultural transformation steps with appropriate activities to be planned according to the characteristics and needs of the classifications made and to try to reach the maximum number of loyal internal customers at the end of the process.
Just as in the brand marketing of any product or service, there is a customer disposition funnel that goes from brand awareness to loyal customers; in digital transformation projects, the necessary planning must be made so that the employees of the organization, who are the target audience, can become loyal users of the new technology(s) at the end of the transformation process.
Values and motivations
At this point, the main goal should be to classify and divide internal employees into groups according to their values judgments and motivation factors, to focus on activities for each group’s own needs, demands, and development areas, and to turn these users into loyal internal customers suitable for digital transformation.
On the other hand, from an operational point of view, another integrated goal should be to create functional user groups and segments within the scope of the digital management systems to be newly established by the digital transformation steps and stages to be carried out, and to obtain efficient and loyal internal customers for use this time.
As a result of these, it will be significant, effective, and valuable for the digital transformation projects of the organizations to turn the internal customers, that is, the employees of the organization, into loyal customers both in terms of cultural and motivational values and functional usage practice, by the digital transformation project purpose and in a way that can get maximum efficiency.