Why Human Resources and HCM Are Key to Digital Transformation

Written By: Eric Kimberling
Date: January 28, 2022

When thinking about what stakeholders are identifying as most important to make a digital transformation successful, it's easy to pinpoint project managers, executive stakeholders, outside consultants, and system integrators. But no want talks about the real unsung heroes in this debate, the employees in human resources.

Here are the ways they can help with any digital transformation project.

Project Resourcing

The first way that HR can enable a successful digital transformation is to help address the problem that many digital transformations have, which is not enough resources supporting the project. The key to this is the A players or team, the top performers within the organization who understand the business but also see the vision of how the business could be improved in the future. Those are the people that are needed on the digital transformation core team.

The subject matter experts support that core team, however, are typically people that can be hardest to nail down because they’re in high demand within other parts of the business. This is where that HR department can help. They define a vision of how to engage those people and identify the right team to support the overall project. For that reason alone, it's important to work with the HR department to accomplish the vision of the company.

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Future Skills and Competencies

Another reason why HR and HCM are key to digital transformation is because of organizational change management. Oftentimes, this gets overlooked which derails implementations. One of the specific areas why change management is so critical is the fact that HR can help with is defining what the future state skills and competencies are within organizations. In other words, technologies are not just deployed, they must be deployed with a new operating model, organizational design, and a new way of doing business.

To achieve this status, the new technology would not be enough. The people with the right skill sets to use the technology, are an important factor. Their skillset enables other business processes and new ways of thinking that support new culture, and new operating models. Let’s not forget, HR should still absolutely be involved in helping define what that future state vision is in terms of organizational design, job skills, jobs, roles, and responsibilities.

In the end, when it is all clearly defined, the easier change management is going to be along the way. This is partially related to training and communications, but there is more to it. The key here is to make sure these skillsets are enabled in the employees and getting them the competencies, they need to support the business model going forward.

Preventing Burnout

When going through a digital transformation, it's oftentimes referred to as a marathon rather than a sprint. Typically, transformations are long-term endeavors. People are trying to juggle multiple jobs at the same time to support a digital transformation and in turn, get burned out. If they are not treated well, and the organization does not have a good plan to rotate team members in and out and compensate and reward those team members, the best will not come out of them.

The focus and dedication will be lacking and that is the very thing that is needed to make the transformation successful. This is another area where HR can leverage its strengths allowing the organization to draw on the HR department. Those people within HR are trained and focused on helping ensure that people are motivated, eliminate or mitigate the risks of burnout along the way.

Identifying Change Impacts

I talked earlier about how HR can support new skills and competencies within the organization. Similar to that, it is time to now identity what the change impact to the organization might be. Prepare for new skills, new competencies needed, and new roles and responsibilities for people.

A clear vision of what that future state job design is going to look like is the next important thing on the list. There needs to be an understanding to be able to articulate the target, how different parts of the organization and different workgroups and teams within the organization are going to be impacted specific to them. HR is instrumental in helping define what that future state organizational vision is.

This process that HR is bringing gets back to playing to people's strengths and their strength is typically organizational design, culture, and learning and development. All those things can enable some of the goals trying to be accomplished as part of the digital transformation. That is another reason why it is important to make sure to have HR involved in the digital transformation and supporting it. A good support system goes a long way.

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Executing Change Strategies

Some of the best candidates for an organizational change team that I've seen in my career internally within an organization is the HR department. Typically, people within the HR department are focused on more of the people aspect of their careers. Hopefully, they're focused on the people aspect because that's what their job is to do. That human-centric mentality to focus on organizational change management is key to success.

Those skill sets are very transferable from HR to make the digital transformation process successful on the people side of the equation. The execution of change strategies and defining what these change strategies are is largely based on those change impacts and changes to skills and competencies that I alluded to earlier. It is critical to have the HR department involved because it shows the organization is serious about the people side of digital transformation.

This could be a great way to leverage those internal competencies and strengths that people within the HR department might have. When looking for change management support, yes, it's important to look for outside consultants that specialize in change management, has high-quality methodologies, toolsets, and frameworks to help, but it’s also important to partner those outside consultants with the HR department and others like that, that can help enable those change strategies.

Enabling Culture

If success is the end goal, enabling a good culture is the way to go. It helps mitigate some of the headwinds that transformations often experience and allows a more focus-centric approach to the culture. Look at how culture might affect the goals and objectives that are set forth in the organization and look at the transformation of the culture while going through it. This is where HR can be most beneficial.

HR is used to measure employee engagement employee morale and other factors that feed into the culture. Having a formal assessment of the current state culture, what the culture should evolve into, and the future of this culture is important to assess along the way, it is critical to be able to last long term.

This is another natural fit oftentimes for HR professionals because now HR is involved in defining what that future state culture is, helping articulate what the current culture is, and what its strengths and weaknesses are for the cultural state in the future. One thing I'll mention as a side note is a culture in general, oftentimes gets overlooked, just like change management in general. Often, it's completely overlooked and not even considered as part of a digital transformation.

However, in the end, and to be successful, addressing culture is a critical part of this whole thing. Being able to leverage the HR department within the cultural piece is going to be something that suits the organization well along the way.

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Inclusion and Diversity

Oftentimes when thinking about inclusion and diversity within HR, things like gender and race, socioeconomic status, and making sure we have an inclusive environment for these different types of people generally lead that conversation. That's very important especially for digital transformation, not just in terms of gender, race, or other factors, but how is it impossible to include more people in more transformations? These changes aren't happening to them, but they become part of the change.

In the end, HR can piggyback on the trends towards diversity inclusion and use the digital transformation to further enable those goals and objectives. If this is something that's a priority as an HR department, or as an organization, this can be a great way to kill two birds with the same stone make diversity inclusion part of the overall digital transformation, and help them feed off one another.

Resources

I hope this has provided some tips and guidance on how to make your overall transformation successful, as well as, how to address the organizational change components and human components of your transformation. Most of all, what better group to help with the change management components of transformation than the HR department.

I want to also point you to a few resources in particular: our Guide To Organizational Change Management. Another resource that will be helpful to you is the 2021 Digital Transformation Report which provides general best practices for making your digital transformation successful. I encourage you to download those today.

If you have any questions regarding why HR and HCM are key to digital transformations, please don’t hesitate to reach out to me directly. I am happy to be an informal sounding board as you move through your digital transformation journey.

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Author:
Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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