Demystifying Digital Transformation for Human Resources

By Sandeep Chanana, APAC HR Manager, Rakuten [TYO: 4755]

Sandeep Chanana, APAC HR Manager, Rakuten [TYO: 4755]

Demystifying Digital Transformation

We are already past the middle of 2019 and in-between the fourth industrial revolution. And fortunately, all of a sudden there seems to be so much of a focus on HR as a Tech Oriented function (unlike a traditional and operational one). Expectations are changing with highly agile business environments, the gig economy becoming a reality, new business models changing the landscape of how work is done and the “future of work” becoming a new buzzword.

Where does HR stand in all of this?

Are we in HR actually playing any role in this significant revolution at work?

Take Digital Transformation as an example.

"Digital transformation aims to create an agile organization that is ready to evolve as technology keeps advancing. Technology will always be ahead of the curve. The absence of this agility can be one of the reasons why a digital transformation strategy could fail"

Keep “digital” separate from “transformation” and you will notice that both individually are current buzzwords. The question remains, “Do we in HR, really understand Digital Transformation?” “Do we even understand the meaning and the difference between digitization, digitalization and digital transformation?”

Here is a quick way to understand this.

Digitization is simply the automation and/or digitization of business or HR processes which in turn is based on the digitization of paper (so, removing paper-based processes), and along with this, the removal of manual labour where it isn’t viable or effective/efficient.

An HR centric example here would be a basic payroll process run on paper is digitized and run on a system. (A single module on Workday/Peoplesoft or any local HRMS platform)

Digitalization: Adopting business models and processes to leverage digital opportunities in order to create revenue, improve business (not just processes) and create a digital culture whereby digital information and data is at the core.

Digital Transformation: Digital transformation on the other hand, is a very vast and enterprise-wide exercise that fundamentally transforms a business with a focus on processes, capabilities, acceleration, innovation, creation of new revenue streams and even a full change of business model.

This journey warrants constant innovation, a cultural and a mindset change, a data centric approach and a huge focus on customer/employee experience.

It involves automating processes and creating a culture of automation. It goes a step further and looks to eliminate routine tasks that held value when processes were manual but now have no place in a digital organization.

Digital Transformation in HR has to come with 3 mandatory aspects –

a) Data Orientation: there needs to be an outcome based on data, which leads to a better outcome in terms of employee engagement scores, attrition/retention, revenue per FTE, etc.

b) Employee experience (EX): To top it all, digital transformation is NEVER complete without a defined POSITIVE and measurable employee experience. The intent of HR digital transformation needs to surround EX at its core.

c) Cultural transformation: Agile mentality + constantly evolving employee skills to align towards a constant innovation mindset in the employees leading to a business growth in terms of revenues is a critical factor.

HR Systems

HR must accept that there has been close to 30+ years of HR systems, programs and capabilities, which have been often over-hyped and under supported with change management. Branding things like "the new game changing HR system" often hasn’t helped as well.

Unfortunately, the implementation of HR systems in the current format is more HR focused than end user (employee) focused. HR system implementation is aligned to HR objectives since it becomes the “Single Source of Truth” rather than an instrument to enhance employee experience.

So, Who is a Digital HR Leader?

A Digital HR Leader is a transformation and change oriented HR leader who can bridge the gap between digital experiences through technology and EX with a business-focused output.

The business output would need to be defined by data and must lead to a revenue impact.

Bear in mind, that today’s workforce is all about “work-life INTEGRATION and no more work-life balance.

What does a Digital HR Leader actually Do ?

Be Worthy of Technology Assessment

Being aware of technology trends in the field of HR is essential. The world is turning digital, HR can’t and should not stay behind.

Which processes are already digitalized or automated? Which tools and systems are being used and to what extent do they meet the needs?

Be able to Define the HR Digital Strategy

The digital agenda is part of your digital strategy for HR which is a detailed blueprint for the digital transformation and describes where you need to go and how you will be getting there. Project management skills certainly help to define the project roadmap of the journey.

Be a Consulting HR Partner

Understand employee and business needs to articulate individual journeys rather than define a policy to impose it downwards (This is a paradigm shift, and requires a lot of technology tools). Some companies are already moving ahead using this approach of personalization, wherein every employee is a customer and the integration of AI in HR is leading to an increased EX, while showcasing increased revenues.

A necessity to deliver this would be a “Design Thinking” mindset, wherein the transformation never ends and is only a journey towards a swift and agile organization. Keep listening to your customers (employees) and keep prototyping solutions to keep in pace with the expectations.

Come with a Solid Stakeholder Management Experience

A highly rated soft-skill mandatory for HR. Get stakeholders, such as, business leaders, solution providers, and corporate IT involved early on and actively manage them throughout the transformation process.

Be able to Lead Team Transformation

Your HR department needs to be in loop to enable a smoother transformational journey, re-skill, upskill your team. Hire the right minded individuals who are aware and willing to upskill. Inspire them so that they understand how digital can improve employee journeys and HR processes.

What does It Take to be a Digital HR Leader?

Being Business Savvy

Being aware of how to be able to align HR strategy with business needs. This includes understanding how HR technologies can drive greater business value.

Come with a Strategic Focus

Understanding how HR will change and anticipating future needs. Understanding business needs, knowing the business revenue lines, market focus, and not process/policy centric

• Be Skilled in Change Management

Excellent communication and change management skills are necessary. You need to understand how and when to manage what kind of stakeholders.

• Being Tech Savvy

As the digital HR leader you will need to have a detailed—and up-to-date—overview of the HR tech landscape. You are curious and can learn quickly how new technologies work.

Digital transformation aims to create an agile organization that is ready to evolve as technology keeps advancing. Technology will always be ahead of the curve. The absence of this agility can be one of the reasons why a digital transformation strategy could fail.

Finally, digital HR is about innovating existing HR practices. And to understand how HR can add value to the business you will have to know how HR and technology works. So be ready to get your hands down and dirty in all HR operational processes while being ready to roll up your sleeves to know how your teams actually work.

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