From Digitization to Digital Transformation: A Strategic HR Guide

by Raj Sundarason, Global Head, HR Line of Business, WalkMe

The move to “digital” systems is a priority across virtually every organization. Most departments have been through some form of this disruption, including HR teams, where paper-only files have given way to workforce management, talent management, and other solutions in the cloud.

Digital HR

For companies to gain a competitive edge, however, digitization is not enough. The next step is the wholesale “digital transformation” of a business, a shift that has become top priority for CEOs and business leaders the world over.

The term “digital transformation” goes beyond viewing it as a buzzword within the corporate statement, or ticking it off once the rollout of more automated, cloud-based systems is completed. Rather, the litmus test of whether a company has truly embraced and benefited from this shift is in how an organization applies these sophisticated tools to deliver real value and a superior user experience.

While most CEOs and senior leaders are championing going digital, for the initiative to be truly successful it must be led by the CHRO and HR department. That’s because the impact is dependent on the extent that people in the organization can adopt these new technologies.

Setting the Wheels in Motion

Here’s the Catch-22 though, when it comes to digital transformation—in many businesses today, the CHRO does not have a strategic seat at the table, even though they’re the first person a CEO will approach about the program because of its impact on the workforce.

Historically, HR teams have been limited to “softer” responsibilities within the organization, such as recruitment, onboarding, handling personnel files, and exit interviews. Yet the tide is turning where, by working with the CIO to effectively roll out these new processes and systems, CHROs have a clear opportunity to engineer the company’s vision.

A People-First and Data-First Approach

One of the biggest challenges for the CHRO is that because he or she has been more people-oriented in the past, the concept of standardizing digital processes can seem foreign. Establishing a data mindset is a gap that exists in many organizations, and CHROs need to recognize that it all boils down to asking senior management the right set of critical questions, and leveraging data to identify and plan for success.

From the onset the CHRO should be asking senior management lots of questions to set the right foundation and goals for the program. For example, will the new system help to reduce new employee onboarding time by 50%? How will it drive greater employee engagement—and how do we know that this has been successful? Will the system save time in the long run? And so on. If HR isn’t asking these questions—and setting specific metrics around them—then the success of the program will be limited at best.

Applying Predictive Analytics for Insights

Once the goals of the program are clear, HR can easily identify what data to scrutinize to ensure that an effective digital transformation is taking place. Fortunately, HR possesses a huge amount of information about its people, helping create data-driven predictive models that can support the well-being and performance of its workers.

For example, HR systems today can create models to review attrition rates, and alert the CHRO proactively when the rate of employee churn is running high. HR teams can then scrutinize the data and look at which teams are affected, and delve deeper into the reasons for the churn. On closer inspection, one reason could be that employees are leaving due to feelings of limited career advancement, which can lead to a refresh of existing policies.

At Hewlett-Packard (HP), the company experienced high rates of attrition in its ranks—up to 20% in sales divisions. By applying predictive models, HP was able to combine 2 years’ worth of data to create a “Flight Risk” score, which attempted to predict who was most likely to leave the organization. This helped the company make better decisions to ultimately save an estimated $300 million in costs associated with employee churn.

But Wait, There’s More

We’re only at the tip of the iceberg when it comes to embracing analytics—as well as using more sophisticated innovations in machine learning and artificial intelligence today. Analytics can already help businesses understand how people are using systems, and if they are being utilized to their fullest extent. When companies are investing significantly in the latest systems, it’s absolutely critical to know that people are using them effectively to get the job done.

Additionally, there are further inroads being made so that businesses can gain invaluable insights into the extent someone is using a system, and where exactly the problems areas are in the user experience. There are already significant time and cost savings available in using systems to guide how and where an employee enters their personal information into a HR system during the onboarding process, for example. But think about how much more savings would take effect when the system recognizes common system use areas so that HR and IT teams can proactively fix the problem.

While predictive analytics is still a nascent tool within many organizations, it’s an ever-expanding category that can carefully scrutinize how people are using technology and how this impacts business performance. As the systems we use at work change constantly, HR is in a prime position to not only take the business through a successful digital transformation, but also evolve their roles to more strategic and visionary leaders within the organization.

Raj SundarasonRaj Sundarason, Global Head, HR Line of Business, WalkMe has over 12 years’ experience in the HR technology sector, advising organizations on their HR transformation needs. Prior to joining WalkMe, he held various management roles in companies including SAP, NGA Human Resources and ADP. WalkMe’s digital adoption platform helps companies better onboard, manage and support their employees in using technology.

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