Article: Why Human Capital must fuel Digital Transformation


Why Human Capital must fuel Digital Transformation

The digitization of everything around us has created big shifts in the way businesses think, decide and work
Why Human Capital must fuel Digital Transformation

With every innovation spurt comes a fresh call for Human Capital Management to stand up and secure its place at the strategic table. The emerging concept around Digital Transformation is no different.

We’ve spent the last 50 years digitizing. Transformation is now underway. As I wrote in a previous post:

“Travelocity changed how we purchase a hotel room. AirBnB is changing the very definition of a hotel room altogether. Taxi Medallions have been great investments. Until now, that is. Uber is changing the very definition of a cab. Starbucks now deprives your bank of float altogether with its loyalty card that hangs on your money until you buy a drink. Chinese Internet commerce conglomerate Alibaba is now pointing its 230 million active users at its newly minted Mutual Fund business.”

Unlike the late 90s era dot com days when incumbents were threatened by inefficient distribution and supply chain models, this time the very definition of the product you sell is up for grabs.

And then there’s the customer: Thanks to the social web, today’s prospect and customer is highly connected, aware of your good and not-so-good in real time, can be your biggest brand ambassador or worst nightmare in public and can be fickle now that she has a 100 other sellers standing by just one mobile app away on his smartphone.

These are the kinds of big shift ideas that are on the minds of CEOs every single day and even if the cross fires aren’t present in your industry or region, these examples serve as extremely clear proxies. The drawing board for all of these newly created disruptors isn’t a better retail store or a cheaper factory. The drawing board for these mentioned disruptors comprises of data in an excel sheet and a code editor. This is the new battleground that the digitally savvy C-Suite is quickly becoming aware of.

This isn’t about waving a magic wand from the CEOs office. This is as much about functional transformation and perhaps even more so. And one of the most critical functions must be Human Resources. Human capital is at the center of this evolution to digital but it will require leadership and a rethinking of what goals and performance means as strategy and execution levers change, the new role of creators, marketers and sellers of digital products, both the need to learn and un-learn competencies, and real-time resource and skills analytics. Today’s very systems-centric discourse on Core HR, Talent Management and creating silo’d networks for employees, customers and partners just doesn’t stack up.

When you contrast this level of disruption by new upstarts and the level of network connectedness, data availability and agility of your customer, with how your employees and ecosystem of partners and contingent workers are informed and connected today, it’s apparent that today’s human capital set up of most organizations woefully lacks the agility and digital DNA needed to either disrupt or prevent being disrupted.

The transformation levers break out into the following areas and whether it’s behavioral change management or underlying technology, it’s readily apparent why HR will be absolutely central to executing digital transformation:

Digital Transformation Levers

Operational Transformation: Our customers expect the same level of sophisticated data driven decision making from us that they are accustomed to on the social web. We need to re-think identity, how we onboard, goal, enable and digitally empower each functional area to leverage digital.

Ecosystem Transformation: We've spent the last 2 decades outsourcing our demand and supply chains. Many of the best brains who know more about our products and who touch the customer every day don’t directly work for us anymore. How do we break down the barriers that prevent us from digitally leveraging these ecosystem smarts to rally around our customer?

Industry Transformation: The focus on one-size fits all cloud-based technology is great for all the reasons we know. But here’s one big problem: You and your competitors cant differentiated via technology. So as CIOs and HR leaders, how do you select platforms that drive speed of execution for non-core tasks and let you fire drive surgical strikes where you have differentiated core competencies.

Later this month, I'm privileged to be keynoting Tech RH 2014, India's first HR Tech Conference on this topic (thanks to Gautam Ghosh for making the intro). I hope to discuss and learn what digital transformation means to the function of human resources in the region. India has seen its fair share of digitalization recently. 9 billion app downloads by 2019, India, along with China catapults Asia to the top e-ecommerce region globally, this year. The untapped opportunities in the region make it ripe for new transformative ways of work. If you are considering attending the Tech HR Conference, use the code “@sameerpatel” for a discount. The line up is incredible. Hope to meet you at the event.

This transformation isn’t something to be defensive about. As products and industries get re-imagined, it’s one of the most significant opportunities for organizations to seize and own, and create significant shareholder value. And Human Capital is the fuel that’s needed to execute this wonderful transformation that we as consumers and businesses are experiencing every day.

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Topics: Technology, #Innovation

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