Published 18. Mar. 2019

Weighing the challenges and opportunities of digitalization

Digital transformation has become a requirement for organizations that want to thrive in the era of constant disruption. Managing it begins with acknowledging that digitalization is a process, not a destination.
Human Resources
IT Management

In the year 2018, the number of internet users around the world crossed the 4 billion mark for the first time. Digitalization continues to move forward like a freight train – though to some, it may look like a runaway train. While digitalization has mostly made life easier and more convenient if not more enjoyable for the consumer, it presents challenges to organizations. But deep within those challenges are opportunities for both the worker and the employer.

Organizational Challenges

Technology and digitalization are so pervasive in most organizations, that when the technology “moves” so fast, and in so many directions, it can shake the organization. This creates challenges in terms of talent requirements, structure, perhaps the most challenging of all: the employees’ response to the changes imposed by technology.

Lack of Expertise

Technology changes fast. And each change in technology requires an upgrade in the skills required to manage it. According to the Director of Product Marketing for Neocase Software, “When companies publish RFP’s for new business applications, questions about product functionality no longer comprise the bulk of the RFP. In recent years, most of the focus has been on security, and the skills and expertise required to manage the application. So, buyers are cognizant of the fact that new technologies typically require a new set of skills.”

Shaking the Organizational Structure

For years, technology reported up into either the CFO, or the COO until there became CTO’s, and CIO’s. But with today’s more easily configurable business applications, much of the work that IT used to do is now done by the business users themselves. This, and other similar dynamics are pushing against the boundaries of the organizational structure so that reporting alignments that made sense in the past may no longer be relevant today. Strange as it sounds, changes within technologies may drive changes in organizational structures to better serve the business needs.

Employee Resistance to Change

Ever since Ned Ludd and his band of Luddites protested the implementation of the steam engine during the Industrial Revolution, employees have resisted new technologies.  Artificial Intelligence and Robotics have stirred those fears like no technology in recent memory. The McKinsey & Company’s 2017 landmark study, “Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages” predicts that 30% of their activities within 60% of current occupations will likely be automated by technologies that already exist.

While predictions like this, taken alone, are cause for concern, the report also speaks of the high likelihood that new jobs and new careers will be created through adoption of the new automation. And many existing jobs are likely to change.

The liberating effects of technology in the workplace

Investing in the skills to manage new technologies and realigning the organizational structure may be considered standard business costs in an age of hyper digitalization.  But dealing with resistance to change is never standard or easy. And the effort can pay dividends for those who endure the change.

Employees are really consumers at work.

People choose careers according to their interests and passions. But so much of the time spent at work is “administrative overhead.” Paperwork, completing forms, following procedures, seeking approvals, and all the things that fall outside of what employees considers their passion. Eliminating the administrative side of work would make work less like work, and more like an inspiring pursuit.

The digitalization of work does exactly that – it automates the employee experience, so that signing up for benefits, or applying for tuition reimbursement feels a lot like ordering something from Amazon. The experience is easy, and it doesn’t get in the way of work that the employee wants to do. Thus, the employee is unencumbered to pursue her passion.

The 73 – 27 dilemmas for HR

Human Resource professionals possess social and emotional skills that are beyond the capabilities of algorithms.  The essence of human resources is to apply these uniquely human skills to organizational challenges, to identify and build initiatives aligned with the overall strategy of the organization, while catering to the unique needs of employees.

But that higher mission of HR is often stifled by administrative work like onboarding new employees, processing leaves of absence, transfers and global relocations, complaints, and any of the myriad transactions that occur during the employee lifecycle. The University of Southern California Center for Effective Organizations notes that on average, HR organizations spend 73% of their time doing administrative work, which leaves only 27% of their time for the strategic work that matters (and that’s more interesting!).

Robots to the rescue!

Previously, we referenced McKinsey’s prediction about the percentage of human work that can be performed by existing technology. Work that comprises the 73% is the work that can be performed by artificial intelligence and robotics. This work typically includes high-volume transaction involving decision-making based on known criteria, execution of processes, and the entry of data into software applications.

Though robots are capable of doing administrative work, they’re not able to do the work requiring uniquely human communication, organizational and leadership skills. This is good for the HR professionals, and good for their employee customers. So, rather than being a threat to employees, digitalization can be an enabler.

It’s like déjà vu all over again.

The tidal wave of digitalization challenges every organization. And the greatest of these challenges is the employees’ resistance and anxiety to the changes brought by the digitalization.  Artificial intelligence and robotics turn this anxiety up on notch for some obvious reasons. But if we’re to learn anything from the past 150 years of technology in the workplace, it’s that we do survive, and if we have the will to change, we come out better for it. Technology has the capability to do the work we like least; thus, allowing us to focus more on the work that challenges us, engages us, and makes us more creatively productive humans, as only humans can be.

It’s like déjà vu all over again. Except better this time.

Neocase Software will be attending the 600Minutes Leadership & HR in Sweden on the 2nd of April 2019