Digital transformation involves a complete rethink of the way an organisation operates and is not simply about technology, PepsiCo’s former head of HR has said.
Shakti Jauhar, the soft drink giant’s former senior vice president of global HR operations and shared services, said digital transformation has “become a bit of a buzzword” but many HR teams do not understand what it means.
“We’re talking about function-wide or organisation-wide [transformation], fundamentally rethinking the business model. This is not about automation,” he told delegates that this week’s UNLEASH Conference and Expo in Paris.
HR teams should lead the transformation as it is the only function that represents the needs of every employee. However, they need to learn how to be agile more open to change.
“Unfortunately, HR is the most difficult function for instigating change. Most of the time some key HR leaders are driving the change, but everybody else in HR is pushing back,” he claimed.
“In larger companies, HR doesn’t even know what the transformation looks like because they haven’t been through it themselves.”
The UNLEASH Conference & Expo took place at the Paris Convention Centre this week. The next UNLEASH event takes place at London’s ExCeL on 24-25 March, 2020.
Jauhar, who now has his own start-up healthcare technology business, said organisations need to step out of their comfort zone when changing the way they do things, “If you have not shed a tear, you are not [transforming the organisation].”
True transformation will also deliver a return on investment of “at least 25 to 30%” in the short term, he said, and continuously deliver increased profit or reduced costs.
He claimed that $1.2 trillion dollars was spent on digital transformation in 2018, but $900 billion of that investment went to waste because the changes organisation had made had not delivered value.
“It never ends. The way organisations think about digital transformation is the initial investment… but the ROI should fuel further transformation going forward. You should always be investing that money back into the business and getting more and more out of it,” he said.