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Digital transformations as opposed to digital improvements are wide in their scope and deep in their impact. Improvements are incremental; transformations are exponential. Transformation initiatives not just transform business processes, but most often fundamentally change business models. Some examples are transformations in the entertainment space with personalized choices of movies and shows reaching consumers at their homes (Netflix or Amazon or Spotify) or convenience of doorstep delivery of groceries, medicines or food. These types of transformations take into account not just the digital landscape but also the convergence of technology with humans – both within an organization as well as outside. The race for digital dominance is in full swing, with organizations globally investing heavily in cutting-edge solutions, such as AI, automation, and cloud computing. According to International Data Corporation (IDC), global Digital Transformation (DX) spending is expected to reach $4 trillion by 2027.
Gartner reports that 91% of businesses are actively pursuing some form of digital initiative, and 87% of senior business leaders prioritize digitalization, highlighting the pervasiveness of this strategic shift.
However, achieving impactful outcomes requires more than simply deploying the latest tools and technology. The true measure of success lies in harnessing their potential through user adoption, process improvement, and demonstrable ROI.
The Use it or Lose it Dilemma
Investing in technology can boost productivity, increase profits, and enhance engagement amongst customers, employees and partners – but only if users actually adopt the digital solutions! While DX initiatives are accelerating at an unprecedented pace, a McKinsey report reveals that only 30% of digital transformations achieve their desired outcomes. This highlights a critical gap between technology investment and impactful user adoption. DX journeys often encounter roadblocks because of
Lack of customer centricity: Digital transformations that place the consumer at the heart of the design significantly enhance an organization’s competitive ability. Well-thought-out and well-executed digital transformations can often lead the industry, drive multi-year growth, and be highly rewarding for all stakeholders.
Design shortcomings: designing digital transformation “looking backwards” (often to remedy past mistakes/difficulties) instead of focusing on “looking ahead” (what challenges an organization is going to face), tend to fail because they are not focused on making the business future ready
Employee resistance: Low employee engagement due to concerns about job security or lack of understanding about the benefits of new technologies.
Leadership misalignment: Weak leadership commitment hindering effective change management.
Rigid or inflexible implementation of digital transformation initiatives, characterized by a lack of agility in adjusting the approach, often results in only partial success
Achieving lasting impact necessitates a significant cultural shift, a challenge many leaders find difficult to navigate.
Building Bridges, Not Walls
Successful user adoption hinges on a strategic change management approach, focused on people, processes, and operational adjustments. This means fostering a mindset shift within the organization and creating a culture of engagement where stakeholders feel safe, empowered, and supported in embracing new tools and workflows. This is where these four key strategies to drive user adoption come in.
1. Transparency and Alignment: The Foundation for Change
Digital transformation is a human endeavor as much a technological one. McKinsey research indicates that companies that prioritize understanding customer, employee and other stakeholder needs and integrate their feedback into the process are 3.5 times more likely to succeed. For instance, a B2B paper packaging manufacturer sought extensive feedback from its distributors before designing its customer portal. Involving channel partners ensured that the company built its portal with an “outside in” view of what the customers thought important, and not based on what the company thought its customers felt important. NPS scores doubled within 6 months of the launch of the portal.
From the outset, fostering transparency by clearly communicating the purpose and benefits of the new technology is essential – how it will streamline processes, improve efficiency, and contribute to the company’s success. A comprehensive communication strategy, encompassing townhalls, newsletters, one-on-one sessions, training programs, and roadshows/workshops builds buy-in and improves employee participation and engagement in the DX journey, paving the path for better user adoption rates. At a home décor company, for instance, proactive and consistent engagement with the sales team, ensured adoption levels of >90% at their significantly upgraded CRM, up from ~40% earlier.
2. User-Centric Design: Technology for People, Not the Other Way Around
Technology should serve human needs and enhance behaviors instead of dictating workflows. Understanding user needs and pain points through in-depth research and engagement is paramount. Involving stakeholders across levels and functions throughout the technology selection and implementation process, gathering feedback, addressing concerns, and tailoring the technology to their workflows fosters a sense of ownership and in turn drives user acceptance. It is important to acknowledge that employees may have diverse needs and skills-sets, want their leaders to communicate change and walk-the-talk, and expect ease of use and ongoing support in adopting new technologies. An EPC company with projects at over 100 sites found it challenging to get regular updates from their on-site operations teams. The status reports required completion of lengthy forms, uploading pictures of progress from a desktop application; in an environment of poor internet connectivity. The implementation of a mobile app, with pre-filled options on various parameters, easy to navigate tabs, ‘click and attach’ feature for photos, dramatically improved centralized visibility into site progress. Over a period of 12 months, gross margins improved ~200bps and on-time task completion improved from 72% to 90%. This became possible because the time taken by the on-site employee to complete a daily report reduced from 23 minutes to 2 minutes. This PWC article emphasizes the importance of user-centric design, highlighting that solutions designed with user needs in mind are more likely to drive adoption rates and positively impact the organization’s digital transformation strategy.
3. Bridging the Skills Gap: Equipping Your Workforce for Success
New technologies often require new skillsets. The World Economic Forum’s 2021 report states that 50% of all employees will need reskilling by 2025. Robust training strategies, including structured, continuous support and personalized learning paths are integral to improving user adoption and optimizing technology effectiveness. Automobile industry is perhaps offering a clue to the importance of upskilling the work-force to remain relevant. From about 200 moving parts in a typical internal combustion engine, new age EV engine has about 20 parts. This shift in consumer preferences is forcing conventional auto companies to adopt new skill sets from designing cars, revitalizing supply chain, and to recalibrating new revenue streams. A consistent upskilling across its operations is one of the reasons TATA Motors has been able to improve its market share from mere 4.8% in 2020 to 14% now, in 2024.
4. Celebrate Wins and Cultivate Champions: Building Momentum for Change
Driving user adoption is not a one-time effort. Celebrating early wins can reinforce positive behavior and motivate others to embrace change. Providing multiple and regular feedback mechanisms, such as reviews, workshops, or anonymous channels encourages stakeholders to share experiences and suggest enhancements to the new systems. Identifying and empowering “champions” within different teams creates internal advocates for the new technologies. Recognizing and rewarding teams and individuals who contribute to the adoption journey can further reinforce a “student for life” approach. Overall, it is about enabling and nurturing a continuous improvement and feedback culture that promotes long-term adoption and innovation. According to Prosci, organizations that excel at change management are six times more likely to meet or exceed their objectives.
Unlocking the True Potential of Digital Transformation
Transformations are inherently challenging, and digital ones are even tougher to crack. Successful digital transformation hinges on the synchronized movement of several key levers. Whether it is technology strategy, program design, talent or skill gaps, legacy culture issues, leadership and governance aspects, vendor management, project funding, or change management, addressing every potential risk factor is essential to ensure a seamless and successful digital transformation. Focusing on customer centricity, user needs and fostering a culture of continuous learning are key to ensuring that everyone is on board and equipped to navigate the exciting path ahead…and in delivering exponential Enterprise Value impact.
About the Authors: SVenkat (Co-Founder at Practus) with Co -Author: Amit Kikani (CFO – Americas at the Dohler Group)
Disclaimer: The views expressed are solely of the authors and ETCFO.com does not necessarily subscribe to it. ETCFO.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.
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