The game is changing very fast and transformations are moving from being buzzwords to a different level of competitive seriousness. As of today, digital transformations should be at a higher level of business transformations.
From a macro-perspective, there is a shift - from a cost and operations-centric mindset and a ”digital-reskinning mindset” with substantial investments in Marketing - to a human-centric approach. This elevates the status of human capital management from the bottom to the top. What is even more interesting is that the pace of transformation is accelerating with 45-50% of companies across every industry reporting serious or aggressive investments.
The question is - how well does your company or business function understand all this and how fast will adjustments be made to keep or set the pace? A global survey of 9,000+ executives across 18 industries revealed that it will be a case of ‘be proactive and transform or perish.’ Because to err might be human, but to forgive is not the policy of the transformation tsunami.
The current state of transformation across business functions
It’s only the beginning: Less than 10% of business functions have been truly digitalized, i.e., a majority of the business models and processes have been transformed using digital technologies to deliver high velocity, low touch and new experiences to stakeholders.
Supply chain and manufacturing have received the highest investments: manufacturing process automation, robotics, supply chain integration, intelligent devices/IoT have led digitalization. When coupled with finance, the data shows a strong bias towards ”cost-optimization” as the main focus.
Marketing, sales and services get strong attention: As nearly 1/3 of companies cross a tipping point where a significant component of their operations are digitalized, there will be a continuous transformation of customer and partner experiences.
Human capital investments have been cost-centric: The focus thus far has been on treating employees as resources and costs. There is a bias towards self-service and cost optimization in human capital management.
The pace is accelerating across industries - Are you ready?
Human capital transformation is the # 1 priority: Right now, the emphasis is on transforming the employee experience from the recruitment process to their careers and beyond. Leaders are investing in digital sourcing, digital workplaces, process automation and AI/ML-based techniques to identify levers and methods for performance optimization and growing careers. Leaders realize the criticality of training and development, specifically in ”post-digital” scenarios so that employees understand new models, processes and the pervasive use of technology to be productive.
Procurement is looking for new sources of supply: As products and services change and as manufacturing focuses more on quality, existing suppliers are unable to transform and keep up with new demands. This creates a challenge and opportunity for procurement, which is going beyond cost optimization to leveraging global sourcing and digitalized supplier engagement models to find new alternatives and drive collaboration.
Marketing is still important: Marketing has historically received a larger share of investments to give companies a new look as ”digital brands” and a chance to reposition. The focus shifts from ”digital skins” to a “holistic experience” through better engagement with prospects, customers and in every part of the ecosystem.
