Digital transformations haven’t quite reached the level of business transformations as I showed in my previous blog. Just about 5% of companies understand the difference and have elevated their game to the highest level. However, the game is changing and changing very fast, and transformations are moving from being buzzwords to a different level of competitive seriousness.
From a macro-perspective, we see 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 makes fast adjustments to keep or set the pace? As the Trasers research shows, 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: we are still in the early stages
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 & Services get strong attention: As nearly one-third of companies cross a tipping point of sorts 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,” and hence a bias towards self-service and cost optimization in Human Capital management as well.
The pace is accelerating across industries - Are you ready?
Human Capital Transformation is the # 1 priority: The emphasis now 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. They also 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 even 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, partners, etc. in every part of the ecosystem.
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Trasers insights are based on comprehensive Ab-Initio 2019 surveys and engagement with leaders (Directors and above) with over 9,300 responses and an analysis of over 1 million data points. Our insights are fact-based and organized into industry-specific libraries for Boards & CEOs, CXOs of Business Functions, CIOs, and their direct teams. We present all our insights through a digital collaboration platform designed for leaders to share their perspective with teams and to drive action and collaboration.
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