Digital doesn't transform anything. You can only choose to be transformed using digital technologies
He is lecturing in Slovenia on November 11 on the occasion of Annual Presidents' Forum at IEDC-Bled School of Management. Joe Peppard is a Professor at ESMT, Germany, where he designs, directs and teaches on customized executive development and intervention programs for customers such as ThyssenKrupp, Bosch, E.ON, and Munich-Re. Additionally, he is an adjunct professor at the University of South Australia.
How does digital transformation transforms the nature of work and everyday life?
Let me start by first setting out my position on so called 'digital.' For me, digital has two elements, the technology piece and the information and systems element. Too often managers get caught up with the technology, for example, social media, analytics, mobile, cloud, internet of things. All these technologies do is provide a capability, the challenge is figuring out how to harness this capability; this is the information and systems element. Throughout the decades, this has always been a challenge that organizations have struggled with. Merely deploying technology, no matter how sophisticated or "leading edge," achieves little.
So, to answer your question, digital doesn't transform work; in fact, digital doesn't transform anything! Organizations can choose to "transform" work (or themselves) using digital technologies. But this is a conscious decision and action. They can design and implement new processes or work practices, perhaps facilitating greater collaboration. They can re-imagine conventional management practices. Whatever they decide to do will be enabled by technology, but the change from the 'as is' current situation to a new 'to be' blueprint will need to be managed. Hence the title of my presentation.
Regarding everyday life, we can, of course, choose not to use digital technologies. But many 'apps' make even mundane tasks so much easier. For example, do I wish to drive to my bank, find parking and queue for perhaps 10 minutes to pay a bill, when I can do it from the comfort of my home painlessly on a smartphone? Even governments are incentivizing citizen to transact business online, for example giving those who submit their tax returns online line an additional month to do so.
Deploying new technologies alone will not guarantee that people throughout the organizations harness the power of those technologies. So, which are the main challenges for leaders in an increasingly digitally-enabled business?
Simple, managing the change!
Within an organization, this change falls broadly into two categories. The first is where technology is infused in work processes. It is for this reason that technology has traditionally been deployed in organizations. It can positively impact transaction costs, coordination costs, search costs, interaction costs; all costs associated with running a business. A new business model may require a new operating model, impacting the current organization design. Employees will need to embrace new ways of working if the expected benefits of the investment are to be achieved.
The second is where technology is being used to augment human cognitive processes, such as with analytics and big data. Here, managers will need to rethink how they use data/information in making decisions or in generating insight. They may now have access to much more information than they previously had decision making processes can be re-thought to take account of this data deluge.
"Technology Isn't Enough to Empower Employees, Even in a Digital World." So, if technology is not enough, what is than needed in order to create a digital world where employee's needs come first?
See my blogpost with Don Marchand on this one:
https://hbr.org/2016/02/technology-isnt-enough-to-empower-employees-even-in-a-digital-world
How does digitalization changes the IT function itself?
I am not sure that digitalization changes the IT function per se, although the IT function in most organizations has been undergoing a steady evolution over the decades. However, the shift on the technology supply side to cloud computing opens up a new delivery model for applications, services and IT infrastructure. IT functions are having to re-tool themselves to accommodate these new supply options, shedding obsolete skills and embracing some newer ones. Operating in such a cloud-based environment is fundamentally different than when all computing capability was delivered "on premise" or when supply was outsourced to a vendor in a traditional outsourcing relationship.
Probably the bigger shift is in the expectations of their business colleagues. They are expected to be ever more responsive to evolving business requirements; many new business models are heavily dependent on digital technologies. They cannot sit idly by, waiting for business demand but are expected to work with the business co-creating digital innovation.
Consequently, they are also being forced to adopt more agile approaches in their development efforts, working evermore closely with colleague and other ecosystem partners.
Can you perhaps give us some tips on how to use digital technologies in meaningful and differentiated ways for customers, employees, suppliers, and other partners?
I don't think that it is possible to give tips. This is a strategic choice that every leadership team has to make. They can, however, be inspired by examples of what others have done.
On the occasion of Presidents' Forum (IEDC-Bled School of Management, 11. November 2016) you will have a keynote speech titled Digitalization as Investment in Change. Can you share with us some insights?
I think that I have covered some of these above. However, a key message that I hope participants at the forum will leave with is the investments in digital should not be seen as investments in technology but investments in change. This includes everything from business model change to changes in employee work practices.
A second key point that I will make, is that in the c-suite, conversation about digital should not be about technology. They should, however, be about how digital technologies are enabling new business models, or improving the customer experience or leading to a true onmichannel. These are all changes from what the organization is currently doing.
A third point, 'transformation' or change is an ongoing journey not a destination.
More info about the Annual Presidents Forum: http://www.iedc.si/events/iedc-event/annual-presidents-forum