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Culture eats technology in digital transformation

Digital transformation without culture change is an empty phrase, but get the balance right and you can reap rewards

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Investing in technology alone is not enough to bring about meaningful digital transformation, research has revealed.

But if cultural and technical change are given equal weight and both align with organisational strategy, business change initiatives can boost company revenues by up to 44% in a year. These are the key findings of a survey conducted among 301 UK IT and security professionals by telecommunications provider Telstra.

Diana Kearns-Manolatos, global head of digital transformation research for management consultancy Deloitte’s Centre for Integrated Research, agrees. She defines digital transformation as being “the ability to use technology to continuously evolve and reinvent the enterprise”.

But to “maximise value creation” here, she says, it is vital to strike the “right balance across business strategy, technology enablement and cultural change”.

Kearns-Manolatos describes them as being the “three important pillars” underpinning success.  

Rob Robinson, head of tech services provider Telstra Purple, puts it more bluntly. In his view, any failure to achieve “full alignment from a cultural and technology perspective” will inevitably result in “diminished returns on investment and to existing processes”. This means “it’s critical they’re aligned”, he says.

On the other hand, more than three-quarters (77%) of survey respondents also believe that tech has a vital role to play in reinforcing or transforming (82%) company culture. Other key transformation drivers in this context include training (29%), staff resourcing (27%) and fostering collaboration (26%).

The importance of change management

Put another way, this means change management activity is crucial if transformation is to be truly embedded into operational processes and employee behaviour.

As Matt Williams, managing director of Telstra Europe, Middle East and Africa, points out, it is not enough for IT teams to simply assume a “build-it-and-they-will-come attitude”. Instead, “the organisation has to come with you on the journey”, he says.

One of the most important considerations here is enabling dialogue at all levels of the business about how to improve it.

Camille Mendler, chief analyst for service provider enterprise at Omdia, says: “It’s about thinking of all the different layers and establishing what is working or not, and where you can find new ideas and opportunities to improve efficiency. Field workers, for instance, are often the least invested in, but they often have great ideas for improving productivity – if they’re asked.”

There is similar value to be gained from discussing ideas with suppliers and obtaining their input, too. “The most successful enterprises in the digital arena are very demanding about their suppliers talking to them,” says Mendler. “These aren’t transactional relations, they’re very interactive.”

The true value of culture

The problem is that too many organisations give into the temptation of allowing their digital strategies to be driven solely by technology, says Kearns-Manolatos.

“Though most organisations know technology strategy shouldn’t drive business objectives, they fall into the trap of asking ‘what should our AI strategy be?’ or ‘should we be in the metaverse?’” she explains. “Compounding this challenge is the fact that every CXO within the enterprise has a different focus area with goals that may be competing, incongruent or not mutually reinforcing.”

As a result, Kearns-Manolatos recommends developing a “common language” so that everyone can use the same terminology to talk about a form of digital transformation “grounded in technology-agnostic imperatives”. Doing so can help avoid “hot” technologies or approaches, such as agile, becoming “the tail wagging the dog”.

Other common pitfalls include introducing “grandiose plans and too much complexity”, adds Mendler. Failing to undertake audits to understand where assets are located is another frequent oversight.

Ultimately, though, points out Kearns-Manolatos, “value is a highly personalised journey” in which “value for one doesn’t mean value for all”. This means that each organisation’s approach to obtaining it should be based on their risk profile, while investment decisions should be made with “specific business goals, measures and constraints in mind”.

“To successfully move forward in a world of volatility, uncertainty and change, it’s important to have a strong north star that grounds you, whether that’s a purpose to rally around, values that make clear how you plan to execute, or a mission that clearly defines and articulates what you’re trying to accomplish,” she says – and it is here that the true value of culture lies.

Here are two organisations that understand the importance of culture when undertaking a digital transformation initiative. 

Case study: Marks & Spencer

Employee upskilling and the creation of a wider digital culture have been key elements of Marks & Spencer’s bid to become the industry’s most data-driven retailer.

The shift started in 2019, when Jeremy Pee, newly hired chief digital and data (now digital and technology) officer, launched his ‘Beam’ strategy to help the company “become data-driven and digitally led”, as head of enterprise data, Suzanne Howse puts it.

This strategy consisted of three parts, all of which were given equal weighting. The first consisted of putting the right technology in place to enable users to access the information they needed. This involved implementing the Databricks data warehouse and business intelligence tools running on Microsoft’s Azure cloud platform.

The second component involved ensuring employees at all levels of the organisation had the skills to work effectively with data in an increasingly digital world. The third, says Howse, was to: “Deliver value through data to get our leaders excited about how they could use it to solve problems and help the business.”

As part of the move, a centralised data science team was also set up to concentrate on two key areas: customer and enterprise data. The former, which is currently the most mature, focuses on the firm’s Sparks loyalty programme, personalised marketing activities and the digital customer journey.

“The more people shop, the more data we get, so it’s a huge benefit to the business as we can use it to add value and solve particular problems,” says Howse.

The importance of culture and mindset

In 2020, meanwhile, the team also launched its BEAM Academy to upskill the wider workforce in all things data and digital. As a result, tailored training was provided for three key groups of learners:

  • Practitioners, which include data scientists, analysts and engineers. The focus here is on the skills and technology required to drive a data culture;
  • Leaders, to provide them with the support they need to lead teams in a data-driven way;
  • Support centre and in-store staff. A three-hour Digital Essential Skills Training course based on content was rolled out for support centre workers in early January. A two-hour version for in-store staff will follow in April. One of the aims is to help them understand the company’s digital strategy, the business benefits of its Sparks programme and what their role in it is.

“A big part of this is about mindset and culture,” says Howse. “Although we do technical skills development, a lot of it is about people learning to think and behave differently – it’s been a big focus.”

Read more about culture in digital transformation

The Academy also hosts regular events, which include hackathons, to bring employees from different disciplines and parts of the business together. The aim of the hackathon, for example, is for participants to learn by doing, develop a more experimental mindset and solve problems as groups.

As to why all of the retailer’s data activities have been branded under the moniker “Beam”, Howse points out that “we found people reacted better”.

“The branding solved a lot of problems,” she says. “People say ‘we’ve heard about that’ or ‘that Beam thing’s about data, isn’t it?’ It’s made it much easier to get a conversation going.”

But Howse also says the word ‘Beam’ itself is not a traditional M&S acronym. “It’s a bit more abstract than that, as we needed people to think differently,” she says. “It’s more around the concept of a beam of light shining on data.”

This is important because “the way we talk about this is less as a one-off initiative and more part and parcel of who we are as data becomes increasingly core to the business and to our decision-making”, adds Howse.

Case study: Barking, Havering and Redbridge University Hospitals NHS Trust

The introduction of a more collaborative culture was key to automating the referral process for outpatient physiotherapy at Barking, Havering and Redbridge University Hospitals NHS Trust.

The aim of the initiative was to improve the experience for patients who saw varying quality of care when trying to access the Trust’s musculoskeletal (MSK) services. Due to organisational boundary and historical funding issues, waits ranged from six to more than 26 weeks depending on where people lived.

In addition, 3,000 referrals a year were rejected as essential clinical information, such as X-rays, was missing. Other patients were also referred to the wrong clinician or service, which meant the process had to start again.

In an attempt to address these issues, Barking, Havering and Redbridge University Hospitals NHS Trust launched its initiative to replace paper-based referrals with a digital process. The aim was to enable clinicians – GPs, primary care providers, consultants and physiotherapists – to share electronic patient data securely and effectively, with the support of a single triage team at the Trust.

To break down traditional siloed working approaches and ensure all stakeholders were involved in designing the clinical pathways the new system would support, it also set up the North East London MSK Alliance – a mix of representatives from the local NHS Trusts and Integrated Care Board.

With support from DigitalHealth.London’s Digital Pioneer Fellowship programme, AI-based referral management platform NEC Rego was then introduced in October 2022. The platform was integrated with local GP patient administration systems to pre-populate it with (adult-only) patient records and enable clinicians to add information such as scan results. The aim here was to ensure all the pertinent data was included in the referral.

Further integration with the NHS e-Referral Service national booking system also meant the platform could identify the correct patient service based on clinical information and send it on for approval by the triage team.

The value of communication and collaboration

But, says Rebecca Coughlan, therapy manager at the Trust’s Outpatient Services, one of the key elements of getting the initiative right was ensuring that “clear lines of communication” existed between GPs, consultants, physios and members of the ICB from the outset, as “it made life much easier”.

“You can have the best technology in the world, but if people don’t know about it, like it or see the value in it, they won’t use it,” she says. “We spent a lot of time with the different teams communicating and making them feel part of the wider collaboration – it was very important for the success of the project and how things would work.”

As for the value the initiative has produced so far, it has already halved the amount of time it takes for the Trust’s triage team to process referrals. The number of accurate referrals has increased by 70% and waiting times have fallen by more than a month.

Moreover, GPs can now fill in referral forms, which include automatically loaded clinical document attachments, in less than 90 seconds during patient consultations. This equates to a saving of 3.5 minutes per patient, which over the course of a year is expected to save up to 3,000 hours – the equivalent of a practitioner’s annual workload.

The next step will be to create clinical review groups staffed by original working group participants to evaluate the effectiveness of each pathway and ensure they are fit for purpose.

The Trust is also currently exploring whether to roll out a similar system for other departments, too.

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