How to Speed Up Your Digital Transformation https://hbr.

org/2021/08/how-to-speed-up-your-digital-transformation

Technology

How to Speed Up Your Digital

Transformation
by Benjamin Mueller and Jens Lauterbach

August 25, 2021

Hiroshi Watanabe/Getty Images

Summary. Many organizations are confronting the question of how to integrate

fragmented and often makeshift digitalization efforts in a way that’s sustainable.
Are there ways to speed up digitalization and make outcomes more predictable?
Based on their research, the... more

The pandemic has given many organizations an unexpected crash

course in digitalization. While much progress has been made —
from hardware and infrastructure to updated work processes and

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a rejuvenated corporate culture — many organizations are

confronting the question of how to integrate fragmented and
often makeshift digitalization efforts in a way that’s sustainable.

For any digitalization effort, whether the goal is to safeguard

business continuity or enable digital innovations, one of the key
questions for managers remains: Are there ways to speed up
digitalization and make outcomes more predictable? This is
particularly pertinent for small and medium-sized organizations
that need to be more targeted in their efforts and may not have
the resources to engage in the “fail fast” approach often heralded
by the larger poster children of the digitalization movement.

Based on our research, we recommend three levers for

accelerating digitalization projects that will help organizations of
any size reap the benefits of true transformations. These levers
are rooted in the idea of complexity-in-use, a concept we
developed to help understand the difficulties users face when
trying to cope with the impacts of new digital tools on their work.
Once managers master this form of complexity, they’ll be able to
plan and focus their digitalization efforts and deliver more
effective transformations.

Our study

Our insights are based on a two-year research study at one of the

leading banks in Europe, which replaced its core banking system.
We shadowed one of the bank’s business units that provides
shared after-sales services connected to the bank’s mortgage and
loan business. In our study, we focused on the different teams
across the unit’s core departments, the differences in their
approaches to digitalizing their work with the new system, and
their success.

We conducted over 60 interviews with stakeholders at various

levels of the unit and closely observed day-to-day operations —
starting with employees’ established work routines using a 30-
year legacy system and ending when unit’s executives felt their

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teams were performing well with the new system. We were

particularly interested in the contrast between departments that
managed to use the new system effectively and quickly and those
that struggled for a prolonged period. Analyzing these struggles
allowed us to identify both the underlying mechanisms that
constitute complexity-in-use and the responses to it that worked.

Key findings

Complexity-in-use explains why learning and using a digital tool

is easy and straightforward for users in one context and difficult
and cumbersome in another.

In our study, complexity-in-use led to vastly different

digitalization journeys for different departments, even though
they all used the same system for their respective tasks. For
example, one group of clerks used the new SAP-based loan
management system to enter new contracts. For them, learning
how to do their work with the new system was easy. In stark
contrast, clerks who needed to make edits to loans in stock had a
much harder time learning how to work with it. Clerks in the
former group achieved effective use within six to eight weeks, but
those in the latter group needed over six months to do their work
effectively again.

We found that two dimensions explain this difference: The first,

system dependency, looks at how much of a user’s task is
represented in the system — that is, how much of the task and the
relevant environment is implemented in the system through data
and algorithms. The second dimension, semantic dependency,
analyzes the degree to which users need to understand how the
business logic of their task is implemented in the system.
Digitalized tasks (i.e., tasks that are supported by a digital tool)
that have a high degree of both dimensions are the most complex.

In our example, the data entry clerks’ task only requires the loan
contract data to be represented in the system. Understanding the
deeper logic of a loan contract is not required to enter data

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successfully, nor is understanding how loan contracts are

represented or processed in the system. Therefore, learning the
system for that specific task is relatively straightforward.

But it’s a different story for the clerks editing loans. Beyond just
the loan contract data, a significant number of their tasks rely on
additional business concepts (e.g., loan status or certain
calculation rules) that are represented in the system. These clerks
also need to understand what the data means and how it’s being
processed in order to make correct edits to the loan. In effect,
learning the system is much more complex and effortful.

These examples illustrate the dimensions underpinning

complexity-in-use. First, system dependency increases when
more business concepts are represented in the system. Second,
semantic dependency increases if a deeper understanding of
these concepts and how the system processes them is required.
The two dependencies complement and reinforce one another —
the impact of semantic dependency will be much higher if system
dependency is also high.

These dependencies confront users every time they cognitively

prepare for doing a task using a system. Of course, users will learn
over time once tasks become routine, but in the early stages of a
digitalization project, the cognitive efforts of mapping tools and
tasks to one another in order to do work effectively and efficiently
are often immense.

This complexity-in-use is often overlooked in digitalization

projects because those in charge think that accounting for task
and system complexity independent of one another is enough. In
our case, at the beginning of the transformation, tasks and
processes were considered relatively stable and independent from
the new system. As a result, the loan-editing clerks were unable to
complete business-critical tasks for weeks, and management
needed to completely reinvent their change management
approach to turn the project around and overcome operational

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problems in the high complexity-in-use area. They brought in

more people to reduce the backlog, developed new training
materials, and even changed the newly implemented system — a
problem-solving technique organizations with smaller budgets
wouldn’t find easy to deploy. In the end, our study partner
managed this herculean task, but it took them months to get the
struggling departments back on track.

Three levers for accelerated digitalization

Our study provides important lessons for those seeking to push

their own digitalization efforts to the next level — and avoids
some of the problems and expenses our study partner faced.
Informed by our findings and the feedback executives provided,
here are our three levers for accelerated digitalization.

First, conduct pre-implementation due diligence. Develop a

complexity heatmap that identifies the different degrees of
complexity-in-use across the organization. The following table
shows what you’ll need to build your heatmap.

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The first two steps will reveal which tasks will depend on the new
system and how the system will be used for them. This allows you
to move to step 3, where you’ll determine where on the x-axis of
your heatmap (see the figures below) individual tasks are located.
Once it’s clear which tasks are system dependent, step 4 will
reveal their degrees of system dependency (the y-axis). Once you
understand where a task is located on the y-axis, you can start
drawing up a heatmap (step 5) to illustrate the relative levels of
complexity-in-use in the various tasks that are to be digitalized.
Place tasks that don’t use the system in the “none” box as shown
in the figures.

We drew up complexity heatmaps for the two areas of our case. A

number of tasks that the loan-editing clerks need to do come with
high complexity-in-use (top figure), an indicator that
transformation efforts in this area will be higher than in the low
complexity-in-use area of data entry (bottom figure).

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While drawing the maps seems like a lot of effort before the actual
digitalization can start, our research shows that this approach can

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prevent costly mistakes early on.

Second, design a step-by-step transformation plan. This

enables you to direct attention and organizational resources
toward areas with relatively low complexity-in-use first. Project
efforts in these “quick-win areas” differ considerably from high
complexity-in-use areas in terms of scope, manpower, and
transformation measures. When a new system is rolled out in a
low complexity-in-use area, the transformation team can be set
up with lightweight project governance and just a few key people,
and change management can be reduced to a minimum. Here,
digitalization investments are likely to pay off quickly.

Beyond financial considerations, quick wins also have an

important psychological effect. Because digitalization projects are
often marathons rather than sprints — requiring gradual changes
to organizational structures and culture over time — successful
pilot projects in the early stages serve as guiding and motivating
lighthouses, enabling a lean approach to transformation
management that can be adapted and improved.

Applying the first two levers helps recoup early investments more
quickly and builds momentum to carry out more complex efforts
later on.

Third, develop tailor-made transformation measures. For

example, low complexity-in-use areas might only require
traditional feature-based trainings to introduce employees to a
new system. In contrast, other training measures are required to
tackle the difficulties typical of high complexity-in-use areas.
Ongoing task-focused trainings are needed here, along with a
temporary suspension of performance goals and opportunities for
self and social learning, to name just a few measures that worked
in our case. Complexity heatmaps help design and direct these
efforts to where they’re needed most because they allow
executives to understand which tasks are the effort drivers in an
area’s digital transformation. This way, organizations can direct

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scarce resources to where they’re needed most and avoid being

bogged down in turnaround mode and losing precious time.

Managerial implications

You’ll find that awareness of complexity-in-use provides valuable

insights that help speed up digitalization and reveals three
important implications for processes, projects, and people.

For processes, system and semantic dependencies, which are

important drivers of complexity, call for updated ways to
document and model processes. Organizations need to be aware
of the dependencies in an area’s tasks if they want to understand
where effort in transformation is created and why (our first lever).

For projects, awareness of complexity-in-use opens up new

perspectives on how to phase transformation projects. This will,
in turn, make transformation efforts easier to plan and execute
(our second lever).

For people, our work shows that one-size-fits-all digitalization

approaches don’t work, and for good reason. Transformation
measures need to be carefully calibrated to the complexity-in-use
of different areas of the organization (our third lever). This applies
to the content of the trainings (learning how to use a tool vs. what
the availability of a new tool means for how people do their work),
the format of the trainings (lecture-style vs. self-learning or social
learning), and the timing of the trainings (pre-go-live only vs.
throughout the weeks or months after go-live until work is done
effectively again).

Taken together, being aware of complexity-in-use enables

managers to apply our three levers to design transformation
journeys so that their companies can reap the benefits associated
with digitalization earlier.
Benjamin Mueller is an associate professor for
digital innovation and design at the University of
Lausanne and an associate researcher at the
Karlsruhe Institute of Technology. He specializes

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How to Speed Up Your Digital Transformation https://hbr.org/2021/08/how-to-speed-up-your-digital-transformation
in digital ethics as well as understanding how
advanced information and communication
technologies transform organizations and
individuals’ work. Follow Benjamin on LinkedIn.

Jens Lauterbach works as an independent

advisor for digital transformation projects at the
intersection of business and information
technology. He helps organizations establish
structures that lead to the effective
implementation and use of enterprise
technologies.

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