Change Management in Digital Transformation

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1 Change Management in Digital Transformation Name Institution Course Professor Date

2 Change Management in Digital Transformation Digital transformation presents a number of changes that have to be taken into consideration by companies. In the family-owned accounting and financial consulting firm, a significant change management strategy will result in improved relevance and competitiveness. A change management strategy is a plan on how different methods will be used to address a number of changes (Siebert et al., 2015). In the development of a change management strategy for the family-owned firm, the focus is on the provision of direction and purpose for activities related to change management. A change management strategy for the family-owned accounting firm leverages employee engagement, best practices, and solid leadership to ensure long term success. Drivers of Digital Transformation The drivers of digital transformation in the accounting firm have contributed to the adoption of a number of digital tools. One of the drivers is customer expectations. Omrani et al. (2022) notes that meeting the expectations of the customers is an important driver for digital transformation in an organization. Due to the fast-paced current digital landscape, customers tend to demand convenience and personalization (Tsenzharik et al., 2020). In addition, customers demand seamless interactions. As a result of customer expectations, the accounting firm must adapt to the expectations so as to remain competitive. By the implementation of certain digital solutions like customer support, mobile applications, and personalized marketing, the accounting firm can enhance the experience of customers Competitive advantage is a driver of digital transformation at the accounting firm. The maintenance of a competitive edge is an important reason why organizations embark on digital transformation (Omrani et al., 2022). The company is embracing digital technologies so as to

3 outperform the competitors. The company is adequately equipped to respond to the existing customer needs and market changes through the maintenance of a competitive advantage. The third driver of digital transformation is operational efficiency. Tsenzharik et al. (2020) observes that digital transformation has the ability to streamline different internal processes in an organization. Through the automation of tasks and integration of a number of software systems, substantial gains are enjoyed. The company’s operational efficiency can further be improved by strategic allocation of resources. Market expansion is an evident driver of digital transformation. With digital transformation, new markets are opened (Hrustek et al., 2019). As a driver of digital transformation, market expansion is done by investments in e-commerce and online platforms solutions. The establishment of an online presence by the company means that the company can diversity its revenue streams. The outcome of the focus on online presence is reduction of dependence on certain geographical markets. Data utilization is another driver of digital transformation. Majchrzak et al. (2016) affirms that data driven decisions are important for the analysis of customer behavior, operational performance and market trends. With valuable information gained through data utilization, there is improved targeting of customers and effective marketing efforts. Potential Impact of Digital Transformation The firms’ business model, operations, and culture are affected by digital transformation. On analysis of the potential impact of digital transformation, it is clear that the company heavily relies on the application of a number of digital tools. With respect to the business model, digital transformation involves shaping the model of the accounting firm. In the digital age, the use of traditional models could prove unproductive as companies shift from product centric model to a

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4 service-oriented model (Omrani et al., 2022). Digital technologies have the ability to create new value propositions and revenue streams that connect the buyers and sellers. The firm’s business model can change to become a customer centric one where the focus is on enhancing the experiences of customers. On analysis of the operations of the firm, it is clear that they are affected by digital transformation. The impact of digital transformation on a firm’s operations is extensive as processes can be streamlined thereby reducing manual tasks (Tsenzharik et al., 2020). Through automation, the firm can do more with limited resources. The supply chains of the accounting firm can become more responsive and agile as a result of digital transformation. This means that the carrying out of operations is done by changing how services are delivered to the customers. The impact of digital transformation on operations is on productivity where collaboration tools are used to ensure the productivity of different processes. The impact of digital transformation on culture is evident in modern organizations. At the accounting firm, the impact tends to be extensive as digital transformation has the ability to transform the work culture. The transformation of culture is crucial and intangible as the focus is on agility and innovation (Hrustek et al., 2019). The employees at the company need to adopt the changes implemented and learn how different digital tools should be applied. Therefore, a culture that is characterized by data driven decision making emerges where a more informed approach is adopted. The shift in the culture of the firm involves embracing constant learning and the desire to iterate and experiment. With respect to culture, the input of the leaders at the organization is important. On evaluation of the adoption of digital tools in an organization, it is clear that there are specific opportunities for growth and challenges that arise. Due to digital transformation, one of

5 the opportunities for growth at the accounting firm is the expansion of the market reach. There is an expectation of an expansion of the market reach of the firm as a result of the creation of a strong online presence (Tsenzharik et al., 2020). Another opportunity for growth is enhanced experiences of customers. Digital transformation allows the accounting firm to personalize customer interactions thereby improving the overall experience. Digital transformation does not only create growth opportunities but also challenges. Some of the common challenges are resources and cost constraints, data privacy, and employee resistance to change. Change Management Strategy Digital transformation is affecting how different processes are carried out in the accounting firm. Therefore, there is a need for the company to implement digital solutions effectively and embrace change. A working change management strategy is important for the competitiveness of a company and the handling of a number of aspects of change management (Majchrzak et al., 2016). In this change management strategy, the focus is on changing the current processes so that change can result in positive results. Leadership and vision At the firm, effective change management depends on strong leadership and a well laid out vision for transformation. The leadership of the firm should focus on: Setting a vision that is compelling. The leadership should focus on the definition of a clear vision for the transformation of the digital aspects at the firm. a compelling vision should outline the objectives and benefits of digital transformation (Siebert et al., 2015). The focus is on ensuring all employees understand what the vision entails. Leading by example: the leaders of the different departments are required to lead by example when implementing changes. Leading by example involves modeling the required

6 behaviors and participating in the change management process. It is vital for the leaders to show they are committed to digital transformation (Majchrzak et al., 2016). Invest in change champions. Leaders at the company are required to identify the change champions at the firm. The identification is a first step to the inspiration of other employees to adopt the changes available. The intention is to use the employees to implement digital change. Communication and Transparency The change management strategy is also characterized by communication and transparency. The firm should focus on opening a transparent communication channel. The channel is important for the successful implementation of different change elements. The firm should focus on: Establishing a plan for communicating. It is important that the emphasis is on the development of a communication plan that focuses on outlining the communication channels and key messages. The communication plan is also focused on provision of regular updates to the employees. Two-way communication: by investing in two-way communication, the firm can improve the communication process between the leaders and employees. In a two-way communication, channels that ensure open dialogue can be created (Majchrzak et al., 2016). Celebrate successes: with respect to communication and transparency, it is important success is celebrated. Leaders should focus on the recognition and celebration of wins (Siebert et al., 2015). The celebration of small wins is important in maintaining engagement and motivation. Employee Engagement This change management strategy is also characterized by employee engagement. The engagement of employees is important which is why the firm should focus on:

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7 Involving all employees. It is vital for the leadership of the firm to involve all employees in the change management process. Involvement of employees is important for the purpose of decision making (Kane et al., 2015). The input of the employees should be considered before the adoption of a digital transformation strategy. Provide employee training. The engagement of employees depends on how well the employees understand the changes to be implemented (Siebert et al., 2015). The leadership should provide resources and training to the employees so that the necessary digital skills can be acquired. Throughout the learning curve, the employees should be adequately supported. Identify and address existing concerns; there are concerns that are bound to arise as a result of digital transformation. Therefore, it is important that the leadership understand that all employees have certain concerns and fears. The fears should be actively addressed so that reassurance is provided to all employees. Training and Development The change management strategy for the firm will focus on constant training and development. A well detailed training program is important as it equips the employees with the knowledge and skills that are required for digital transformation. The firm should focus on: Assessing training needs: Siebert et al. (2015) asserts that in assessing the training needs with respect to the employees, it is important that the emphasis is on the existing skills. The trainers should conduct an analysis of the skills gaps and also identify the specific needs of employees. Design customized programs: it is vital for all training programs to realize the intended results. On analysis of the accounting firm, it is clear that there are employees with varying

8 skills. Therefore, the emphasis is on digital tools and analysis of important data. Relevant industrial regulations will be taken into account when developing customized programs. Change management and Evaluation To track the progress made as a result of digital transformation. The firm will put more emphasis on: Definition of KPIs: the focus is on the establishment of well developed KPIs to ensure there is a measurement of the transformation impact. When defining KPIs, there is improved emphasis on the satisfaction of clients, improved efficiency and growth of revenue. Assess progress: the firm will focus on the regular progress assessment. When assessing progress, it is clear that the transformation progress can be easily improved (Skogland & Hansen, 2017). The transformation progress is analyzed with respect to KPIs. The firm will adjust the developed strategy so that it is based on the assessments made. Overcoming Resistance The existence of change as a result of digital transformation could result in resistance from employees. Therefore, the change management strategy is focused on overcoming resistance so that the intended goals are realized. The resistance will be handled by: Identifying resistance sources: this is the first step towards handling any existing resistance. Through the identification of the sources of resistance, it is possible to understand the underlying reasons (Skogland & Hansen, 2017). The sources of fear can include fear or uncertainty. Develop clear rationales: as the accounting firm has to work on handling the existing changes, it is important that the emphasis is on the provision of well detailed rationales. The leaders in charge of implementing different digital tools should adequately communicate the

9 reasons for the change and the connection to the long-term goals. The existing concerns are therefore addressed adequately. Offer resources and support: the firm will focus on ensuring the employees have access to the necessary support and resources. On this, it is possible to navigate the different changes in a successful manner. Adaptation and Flexibility Digital transformation is a process that is continuous. The process involves the adoption of different processes and measures. However, for the process to be productive, it has to be adaptive and flexible. Embracing flexibility at the firm is by: Constant improvement: the focus of the different department leaders is on encouraging a culture of constant innovation and improvement. The leaders should be open to feedback form the employees and customers while adapting the needed transformational strategy. Staying updated. Changes that arise as a result of digital transformation require a company to stay informed and updated (Skogland & Hansen, 2017). It is vital for the company to stay informed so that it remains competitive in the changing market. Effectiveness of the Change Management Strategy The change management strategy is effective as it focuses on the achievement of laid out objectives. The different measures adopted in relation to digital transformation are focused on the achievement of objectives. The challenge is focused on leveraging the available resources to ensure the achievement of short- and long-term objectives. The change management strategy is also effective as it focuses on employee engagement and buy in. The emphasis is not only on the generation of revenue but also on the engagement of all employees. With employee engagement, it is possible to improve the change management process. The engagement of employees has

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10 been done by developing strategies to eliminate resistance. The change management strategy is effective in that it focuses on the adoption of digital skills. One of the primary goals of digital transformation is to equip employees with the required digital skills. In this change management strategy, the employees will be equipped with important digital skills so as to ensure productivity. Conclusion A change management strategy for the family-owned accounting firm leverages employee engagement, best practices, and solid leadership to ensure long term success. As brought out in this paper, the company is characterized by a number of digital transformation drivers. The drivers tend to contribute to growth opportunities and challenges that have to be adequately handled. With respect to digital transformation at the company, a change management strategy is developed that focuses on how different change elements will be handled. References

11 Hrustek, L., Furjan, M. T., & Pihir, I. (2019, May). Influence of digital transformation drivers on business model creation. In 2019 42nd International Convention on Information and Communication Technology, Electronics and Microelectronics (MIPRO) (pp. 1304- 1308). IEEE. Kane, G. C., Palmer, D., Phillips, A. N., Kiron, D., & Buckley, N. (2015). Strategy, not technology, drives digital transformation. MIT Sloan Management Review. Majchrzak, A., Markus, M. L., & Wareham, J. (2016). Designing for digital transformation. MIS quarterly, 40(2), 267-278. Omrani, N., Rejeb, N., Maalaoui, A., Dabić, M., & Kraus, S. (2022). Drivers of digital transformation in SMEs. IEEE Transactions on Engineering Management. Siebert, S., Paton, R. A., & McCalman, J. (2015). Change management: A guide to effective implementation. Change Management, 1-336. Skogland, M. A. C., & Hansen, G. K. (2017). Change your space, change your culture: exploring spatial change management strategies. Journal of Corporate Real Estate, 19(2), 95-110. Tsenzharik, M. K., Krylova, Y. V., & Steshenko, V. I. (2020). Digital transformation in companies: Strategic analysis, drivers and models.

Change Management in Digital Transformation

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