This guide is part of a progression set of Core, Advanced, and Emerging Digital Transformation practices for the HR function.

What it is

An intense focus on the future of work in a digital organization is critical to the value realization of digital transformation. Investments in technology, process re-engineering, and data management all rely on individuals in the organization to manage the business effectively. Reinforcing HR's role in the organization, and ultimately the relative strength of the HR function as a thought leader in the enterprise, is critical to positioning it to deliver intended value through the organization’s human capital. 

By reinforcing the HR function as an enterprise leader, HR can drive holistic and sustainable value through digital transformation by delivering the skills, knowledge processes, and organizational changes necessary to shape a culture that quickly adapts to changing needs and accelerates benefits delivery to the organization.

In the race towards digital transformation, organizations strive to adapt and thrive to sustain and enhance their business results. Accelerating through this transformation demands a strategic approach, meticulous planning, and unwavering leadership commitment. Key to success is the effective delivery of the digital transformation portfolio, which encompasses many initiatives to revolutionize operations, enhance customer experiences, and drive innovation. Central to this endeavor is cultivating leadership alignment, sponsorship, and vision, laying the foundation for organizational agility and resilience in the digital age. Digital transformation presents a unique opportunity for Human Resources (HR) to transcend its traditional role and emerge as a strategic leader within the organization, shaping the future workforce and driving sustainable growth.

Successfully delivering the digital transformation portfolio hinges on several key elements. Firstly, organizations must adopt a holistic approach, recognizing that digital transformation is not merely about deploying new technologies but entails a fundamental shift in mindset and culture. This necessitates clear objectives, robust governance structures, and effective change management strategies to drive organizational-wide adoption and buy-in. Secondly, organizations must prioritize investments in digital capabilities that align with strategic priorities and deliver tangible business value. This requires rigorous prioritization, continuous evaluation, and agile execution to ensure that resources are allocated effectively and initiatives deliver intended outcomes.

It is important to articulate a compelling vision that inspires and motivates employees at all levels of the organization. A clear vision provides a sense of purpose and direction, guiding decision-making and shaping organizational behavior toward digital maturity and excellence. Leaders must communicate the vision effectively, highlighting the benefits of digital transformation for the organization and its stakeholders and galvanizing support for change. They should also lead by example, demonstrating a commitment to learning, adaptability and innovation, and fostering a culture of experimentation and risk-taking.

Digital transformation presents a unique opportunity for the HR function to elevate its status within the organization as a strategic leader. Digital transformation allows HR to reinvent itself, leveraging technology to enhance employee experiences, optimize talent management processes, and drive workforce innovation. By embracing digital tools and analytics, HR can gain deeper insights into workforce dynamics, identify skill gaps, and develop targeted strategies to attract, retain, and develop top talent. It enables HR to play a proactive role in shaping the future workforce, anticipating future skills requirements, and designing reskilling and upskilling programs to meet evolving business needs to ultimately drive organizational performance and competitiveness.

Why use it

HR will need to drive the future of work in the organization. It must identify and implement specific initiatives focused on transforming how work gets done and enabling employees to adopt and thrive in the digital organization. HR must change the company culture and entrench model behavior across the enterprise to maximize digital transformation. Senior leaders will look to HR to deliver these capabilities and shape the organization for a sustainable future. 

As organizations embark on various digital transformation journeys, HR is central in orchestrating critical change aspects. From nurturing talent and fostering skill development to reshaping organizational structures and leveraging data-driven insights, HR's multifaceted contributions are indispensable in navigating the complexities of digital transformation.

One of HR's primary responsibilities in digital transformation is the development of new skills, training programs, and job architectures. As organizations adopt cutting-edge technologies and embrace digital tools, the demand for specialized skills evolves rapidly. HR is tasked with identifying emerging skill gaps, designing training initiatives, and redefining job roles to align with the changing needs of the digital landscape. This involves collaborating closely with business leaders and subject matter experts to anticipate future skill requirements, develop tailored training curricula, and facilitate continuous learning opportunities for employees. By investing in skill development and job architecture, HR ensures that the workforce remains agile, adaptable, and equipped to thrive in the digital age.

Digital transformation often necessitates fundamental changes to how organizations are structured and operated. HR works closely with leadership teams to assess current structures, identify inefficiencies, and redesign organizational frameworks to optimize agility, collaboration, and innovation. This may involve flattening hierarchies, promoting cross-functional teams, and decentralizing decision-making processes to empower employees at all levels. By reimagining organizational structures and operating models, HR enables organizations to adapt quickly to changing market dynamics and drive sustainable growth. In addition to internal transformation efforts, HR leverages data, people analytics, and external market research to identify new talent and address evolving workforce needs. Data-driven insights are crucial in informing talent acquisition strategies, succession planning, and workforce optimization initiatives. HR harnesses the power of data analytics to identify emerging talent trends, predict future skill requirements, and proactively recruit top talent from the external market. 

HR positions itself as a strategic enabler of the new digital organization once in place. As digital transformation initiatives mature and organizational changes take root, HR plays a critical role in embedding digital capabilities, fostering a culture of innovation, and driving employee engagement. HR develops change management strategies, communication plans, and employee engagement initiatives to ensure that the workforce embraces digital change and remains aligned with the organization's strategic objectives. By nurturing a culture of continuous learning, experimentation, and collaboration, HR empowers employees to leverage digital tools effectively, drive performance improvements, and contribute to organizational success in the digital age.

Outcomes

The adoption of these practices results in several significant outcomes that lead to a heightened profile of the HR function along with both operational and cultural gains.  It helps HR reimagine its identity by positioning the function as a thought leader in the enterprise, equipping HR professionals with the strategy, tools, and resources to do so. By driving the adoption of the new digital capabilities, it teaches HR to enable the expected gains out of digital transformation investments and take control of the organization’s journey so that it operates effectively in the future state. Integrating digital capabilities into the culture provides HR with the knowledge and guidance to design and implement the digital culture required for successful digital transformation. It provides insights and recommended areas HR should prioritize to shape organizational culture and drive digital change. 

Practice guides at the level

Raising the HR profile within the C-Suite to enhance understanding of its strategic value.

Defining how HR positions itself as a thought leader to the rest of the enterprise through external trend identification and analysis, strategy formulation, and cross-functional governance models that bring together the viewpoints of the full range of operational experts in the organization.

Driving adoption of the digital future to optimize the return on digital investments.

Building on change management activities so that new behaviors, skills, and work methods are crystalized into the way the organization operates. Reinforcing employees' expectations while giving them the skills and knowledge needed to execute the new digital tools and methods.

Entrenching model behavior into enterprise operations through measurement and reporting.

Maximizing the return on digital investments through employee communications and process/performance measurement that reinforces what employees expect, how they operate individually or in teams, and, ultimately, how they run the business.

Accelerating the organization toward the future by building a digital culture.

Creating HR and talent solutions that enable the organization's people to fulfill their potential in the digital environment through culture transformation driven by clear behavioral guidance, upskilling, and employee engagement.