The 3 pillars of digital transformation

We can identify 3 operational pillars linked to digital transformations and all are essential to succeed: technology, organization and culture.

If you had to choose between technological, organizational or people excellence, which one would you prioritize? Before you answer, this article can help you clarify the stakes and, maybe, could you then make another choice. By the way, on which of these 3 domains do you feel better qualified?

We can identify 3 operational pillars linked to digital transformations and all are essential to succeed: technology, organization and culture.

The thing is that we need to be realistic, few organizations will have the same level of efficiency in each of these 3 domains. Based on our experience, we could observe that the first two, the technological axis and the organizational axis, are often leading.

This can be explained because companies are more mature on these domains and related practices are, in general, often more numerous and present. These domains being better known, they often take the lead.

The cultural axis is less concrete, sometimes beyond the main competencies of the IT department and so, in fact, almost always less, or not as much at least, addressed.

The technological pillar

Technology is there to support the evolutions within a company, to facilitate them and even to enable them… Often, technology comes first. It is what creates the need, for example following novelties or a supplier’s recommendation.

One difficulty about the technological axis is the speed of the evolutions and, potentially, of the obsolescence as well. Decisions are often a bet on the future: the investments are to be sustainable and we need to avoid using tools, concepts or services that are outdated within a few years.

If we want to be ahead of competition, we must take the risk to implement new technologies, potentially less stable ones. Today we are looking for disruption, to be the first to create the business model that will propel us years ahead; and this makes the move even riskier. In France, 80% of the startup companies fail [cré ]. If your digital transformation relies on the technology invented by one of these startups, then your business is at risk, isn’t it?

Apart from this difficulty linked to the economical reliability of your partners, the IT departments have the needed technological expertise, or they can usually access software publishers or integrators that have the required knowledge. So, IT departments are able to choose solutions that meet the needs of a company. With clearly defined specifications and a master plan that is up to date, the technological axis can be managed with success.

The organizational pillar

The organizational pillar refers to the very act of implementing the transformation and also the target organization, the company in its new setup and its operations through time.

It deals with topics such as change management, target organization definition, added value clarification, specifying new roles and new processes.

If managing the technical implementation is embedded in the technological domain, managing the change project is on the organizational axis. This is in the spectrum of expertise of large consulting firms and they can provide all the services needed to describe and drive this step.

As transformations become recurring, many companies also train their staff, to grow internally part of the skills required by the organizational pillar. This guarantees that they have enough employees who can become change agents and lead the transformation from an organizational perspective.

The cultural pillar

Concerning digital transformations, 3 directions are interesting to investigate when it comes to the cultural pillar :

  • What is the digital maturity of the company? For example, this can apply to the IT department and how it interacts with the other business units, or it can relate to the overall digital culture of the company.
  • What are the beliefs or values of the company and how do they facilitate, or hinder, the transition? Example: “digital can revolutionize the core business of our company.” Reading this sentence, would the employees of your company agree or not? This belief that they would then express, what impact will it have, in your opinion, on the implementation of the planned digital transformation?
  • What practices are in place, collectively or individually, and how do they facilitate or slow down the transition phase? Even further, what are the practices required for this transition to take place?

To address properly these topics, we believe that 3 departments are directly concerned in the company: 

  • The IT department: whether it is through the CIO or the CDO, if s/he exists, or perhaps through a project manager in charge of the digital transformation, the services in charge of the technological aspects are also concerned by the human factor of the transformation. What is their role in the transformation? Are they a show stopper, a facilitator or even a sponsor? What is their business implication? How do they interact with the rest of the company?
  • The Human Resources: both for the change management and probably also to support the new jobs setup, whether it is about new values or new skills, the Human Resource Department must be involved on the cultural axis management as much and as soon as possible.
  • The internal client: potentially any operational or functional entity that is at the heart of the transformation. This entity will have to explain its needs, even if it doesn’t know it at first. Digital illiteracy – this refers to the lack of skills needed to deal with digital information or systems – will not help with the expected transition. In any case, this may require a lot of work around digital acculturation.

Then, there is another population that is concerned, or rather involved, which is the target of the transformation: they are called the users. Whether they are internal or external, a big part of the cultural axis is actually dedicated to them, to help them fit into the desired transformation and to make them own the success.

A real difficulty about the cultural axis is due to its relative youth and a chronic lack of mastery of the topic. The offering in this area is quite diffuse and often not mature. The direct effect of this situation is that this cultural pillar is potentially ignored at the start of many digital transformations.

If this is the case, it will always come back at you once the transformation process has begun, with a first effect of slowing it down. In extreme cases – not so uncommon though – the human factor becomes a potential source of failure, because it will not have been managed, or at least too late.

It therefore seems appropriate to focus on the human factor in the digital transformation from the beginning of the initiative, if only to evaluate the relevance of each strategic option in this light. This helps prevent, and therefore reduce, transformational barriers. You can then even create forces, out of the human factor, that will make your transformation a real success.

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Coauthor: Gilles Baudens