The Human Factor in Digital Transformation

In this feature Drew Morahan, Head of Business Change and Design at Codec, one of Ireland’s leading IT companies, explores the importance of understanding the human factor in digital transformation projects and how change management could be the key to unlocking success.

Digital transformation is a complex and sometime fraught undertaking. With so many elements to consider, it can be a mammoth commission. When rolling out a new technology or way of working, one element that is often underestimated is the human factor. If those undertaking the transformation project are not fully bought into the project from the outset, digital transformation will not be successful. In fact, a study by McKinsey in 2021 reported that 70% of digital transformation projects fail, with one of the key contributing factors being organisations failing to get employees onboard.

How to achieve successful Digital Transformation

A great example of this oversight was a project I worked on a few years ago as part of a team tasked with implementing a new company-wide technology solution for a major retail bank which included updating all their computer systems. However, a change management consultation with staff, and with customers, revealed the biggest challenge for the bank was customer wait times.

No amount of technology implementations or upgrades to systems was going to help address the queues within branches, or the frustration of customers waiting to access a kiosk to undertake their banking requirements. On the back of this consultation, it was concluded that having handheld tablets that staff could use around the branch would resolve much of this problem. They could attend to customers swiftly and move around rather than having a long queue of customers on their feet, waiting for prolonged periods of time.

Without consulting the people at the heart of the business, the new technology roll-out would have had limited success. Upon implementation, staff and customers alike would have found that their pain points still existed and the investment in the new technology would have been largely wasted.

It’s easy to forget that humans are at the centre of technology; they design it, they pay for it, and they are the ones that use it. But so often, organisations fail to consult the people involved and can blindly implement fantastic, state-of-the-art solutions that still fall short of their intended outcome by underestimating the human factor in digital transformation.

Stakeholder Analysis

Humans are hard-wired to resist change. It’s coded into our DNA as a safety net and for many people, it’s hard to override. When it comes to digital transformation, we encounter different groups of people all with their own approach. In these instances, stakeholder engagement is key. To be able to engage with stakeholders, it’s vital to fully understand who your stakeholders are within a project, and the various categories that they fall under.

Working out who within the business are your ‘allies’ and who are the ‘lifers’ is crucial.  Those dedicated to the current state of play, can help when going through change management, as well as those who are reticent to change in the design process.  Workshops are crucial to better understand their needs and concerns and have an open dialogue on ways to overcome these. A stakeholder analysis sounds very formal, but it’s simply an opportunity to look at the human side of the project; getting to know those people who might be impacted by the project to gain a better understanding of their nuances can be the difference between a successful adoption and a failed project.

Decision-makers are vital for every part of the transition. Rather than having one senior member of staff that needs to approve all decisions or be part of every conversation, having ‘boots on the ground’ team members who are empowered to make decisions that will impact their part of the business is invaluable and increases the likelihood of a smooth and on-schedule project delivery.

Working out the human requirement should be the starting point for a digital transformation project. Implementing change workshops, whereby organisations take their teams through the perceived challenges and the proposed solutions gives people the opportunity to not only understand what will be happening, but to give their input on what their experiences are and what they feel would solve their challenges. Discovering the pain points of the wider team further informs the transformation project and further increases the likelihood of success and technology adoption.

Strategies to assist change

It’s crucial to understand where people are within the change curve and guide them through the process and provide the support that they need.

Employing processes such as the ADKAR methodology gives a structure and formality to the process which in turn can provide support. Achieving each of the five outcomes of this process; awareness, desire, knowledge, ability, and reinforcement is critical for change to be effective and consciously working through these outcomes puts the stakeholders on the right path to successful adoption.

Communication is also a fundamental pillar in overcoming resistance and encouraging adoption. Stakeholder engagement is key to better understanding the pain points and designing a solution that addresses and overcomes these. It’s important to evaluate the dynamics and needs of the various stakeholders, and to create a communications plan to meet these.

A little investment goes a long way

In terms of how much project budget to invest in the human side of a technology roll-out; the answer is that it’s totally scalable and varies from project to project. Ultimately, a little investment goes a long way when it comes to change; no change effort is too small. Some businesses may feel that if they don’t have a multi-phase, multi-million project then there’s no point, but that’s certainly not the case.

When organisations do investigate change, they see not only the benefits, but also the glaring risks that need to be addressed to ensure a successful transformation. This gives them an opportunity to alter the proposed design before implementation.

Metrics for success

Measuring success, and how managing the human factor within a project has impacted that success, can be complex and multi-faceted.

The starting point is to set out the criteria for success and benchmark at both the start of the project and the end. User activity is also an important measurement. Identifying whether the technology is being used and by which divisions gives a good indication of adoption and success rates. It also gives the business and technology partner the opportunity to address the challenges and bring the users in line with the rest of the organisation.

Adoption checkpoints are incredibly valuable in a roll-out as they give all parties visibility of the stages of the project. In advance of ‘go-live’, the checkpoints demonstrate the stage of the project, and adoption monitoring in the months after roll-out gives the chance for the technology partner to check-in and provide support to users.

The ultimate metric is a successful roll-out with user adoption and return on investment. The human factor and role of change management to achieve this should never be underestimated.

See more breaking stories here.