The Digital Transformation of Organisations

By Henrique São Mamede, researcher at the Centre for Information Systems and Computer Graphics (CSIG)

Long before the pandemic caused by SARS-COV-2, organisations were reflecting on the best process to benefit from the momentum created by the convergence of a set of technologies like server and data centres’ virtualisation, cloud computing models, the evolution of communications networks and protocols (MPLS, SDN, 4G/5G, LPWAN), the Internet-of-Things, machine learning algorithms and even virtual reality and augmented reality. The more comprehensive and adequate use of these technologies, combined with a real desire to increase organisational efficiency, led us to the point of defining this process by calling it digital transformation.

A particular example of the importance of this topic is the establishment, for the first time, of a State Secretariat, with the appointment of the respective Secretary of State in October 2019. In fact, the moment of said assignment seems the result of a prophetic foresight, as it almost concurs with the beginning of a new era caused by the pandemic – that still persists -, and which ended up acting as a catalyst for the faster, and in many cases, disruptive transformation.

Over recent years, particularly since 2015, we have been witnessing many success cases – as well as some less thriving ones – in these digital transformation processes, among organisations from all sectors, including Public Administration.

However, these processes have always been somewhat limited, since it is not always possible to create the conditions and assume the risks of promoting disruptive changes. This comes from the organisations’ need to make decisions over which they cannot have – or sometimes simply feel – some form of control over the risks – excluding start-ups, due to their nature. Simply put, transformation is important, but with small incremental steps.

From late 2019 onwards, the digital transformation began to take on another importance, because there was no other possibility. Companies were required to quickly take up the capacity for transformation at all levels. With this process, remote and spread work teams have become a common practice for everyone, and not just for many of the tech companies that, over the last decade, had adopted this work method. The need for teleworking models on a global scale was required, essentially to mitigate the risk of spreading the virus in more vulnerable physical working environments. Organisations that were able to run their operations online with digital tools, quickly adopted a remote working model to keep their employees and teams working from home. This led to a scenario where most organisational processes and methods were performed by personnel working remotely, using digital tools, platforms and networks, rather than working in person – at an office, for instance.

However, this transformation was so quick and sudden that people did not have time to reflect on the changes and their impact. Hence, the possibility of transforming a physical business model into a teleworking model, totally or partially, remains open to question; if it’s possible, then how can one lead this process, resorting to the required transformation plan? And according to which directions?

There are many endeavours and work in progress, but their development and evaluation processes require significant time, until they can represent practical elements that help us understand the answers to said questions.

The sudden focus on new sales channels, in some cases completely replacing traditional physical methods – only partially in other situations -, led to the need to rethink the business model. E-commerce transactions have increased, and will keep increasing, because many consumers suddenly realised the advantages of using these channels to make their purchases. Which means they will continue to use them even after the post-pandemic period. Regarding organisations, it meant transitioning from a physical world to a virtual dimension, with no time for plans or the definition of strategies, moving directly to operations.

At the same time, in the wonderful new post-pandemic world, in which nothing will be the same as it was in 2019, we must find ways to accelerate the transformation of the organisations’ backoffice, since that’s the only way it can actually support a virtual model – or, to be truly accurate, a hybrid model. The natural way to implement this transformation is by using Robotic Process Automation (RPA) tools – which, in due time, and with new technologies and functionalities, we’ll be able to integrate not only in the backoffice, but also in the frontoffice.

Much of the current value of RPA, focusing on cost savings and other factors, comes from simply implementing pieces of software to automate the execution of repetitive and predictable tasks. As AI capabilities become part of these tools, giving them certain cognitive elements, the type of application of said tools will certainly evolve. Thus, the RPA will evolve from a tool capable of executing a repeatable process into a tool capable of learning over time, while being able to change the way it executes processes and handles exceptions. In this sense, the field of machine learning (ML) is expected to trigger the next wave of innovation in RPA. This process will make bots – instances of RPA – more intelligent, as they learn from repetitive errors, while enabling the ability to create community concepts and network association. At that time, when faced with a common error, the bot will solve the problem, instead of putting it in an exception queue, scheduled for manual handling by a human operator, while sharing the solution found with the community in which it is integrated.

But the functionalities currently likely to be found in these tools, if implemented correctly, provide comprehensive benefits to the organisation, far beyond the cost savings on employees. In broad terms, it may seem that RPA is almost exclusively about the subject of cost optimisation in business operations. However, this is a narrow, two-dimensional view of the benefits associated with RPA. In fact, RPA has significant potential to enhance the customer experience and to help an organisation increase the market share, by providing a superior level of service to its customers – while working as a virtualised backoffice that is still necessary to support the remote teams.

RPA technology must be carefully examined and understood. Otherwise, organisations may risk losing the competitive advantage, due to the inability to capitalise through disruptive innovation.

Finally, we must consider the human factor, a fundamental part of the transformation – which would not make any sense without it. The human ability to adapt to changes in the environment, even if only in societal terms, never fails to amaze me. The fact that there are more and more people supporting digital innovation, simultaneously more capable of using digital tools in both traditional and innovative ways, allowed this whole situation to develop as it did. At the same time, it shows that technology, rather than replacing human tasks, acts as an enabler and a prosthetic device capable of expanding human capacity, leading to performance and efficiency levels that were unimaginable just a couple of years ago.

But we must realistically consider how we can replace aspects associated with the physical workspace, like the fact that it acts as a social anchor, as a facilitator of knowledge sharing, and as a key point in free collaboration processes. All these aspects are very important, and we must find ways to mitigate them, since the human being, due to its specific nature, is a social animal. We cannot simply ignore all aspects of this socialisation without risking everything else to fail.

Having said this, I believe it is vital to take part and share a reflection on what this new world will really be. There are two things I know for sure: nothing in our current society will ever be as it was in early 2019, in absolute conformity with the statement by the Secretary of State for the Digital Transition; the technological level achieved allowed us to overcome the pandemic, with human ingenuity taking the greatest possible advantage from adversity, in the shortest time possible.

Finally, and for those who still have doubts, I propose a simple reflection: try travelling back 30 years and place yourself in the beginning of the 1990s. Now, imagine the whole pandemic context we have experienced thus far, and answer this question – honestly: would organisations have been able to survive the same way?