How to Do Digital Transformation
The stakes are high. The world is changing. Our organizations need to change just to maintain their competitive position. We need to understand how to do Digital Transformation.
Since the time of the steam engine, every new technology has created the opportunity and need to transform. Most transformation project fail. They fail because everything is new. We literally don't know how to take advantage of new technology. We don't know how to operate in the new world. We have to try, improve and try again.
About Digital Transformation
Every Digital Transformation effort is an Organizational Transformation effort. Irrespective of the industry.Irrespective of product or service. Existing firms have to balance adoption of digital operations and continuity of existing business.
Successful organizations reshape the way they do business. They also derive value from existing strategic assets. They have a clear business vision.
We know that successful transformation will “stitch” services together. New digital services. Legacy services. Replacement digital services. All aligned to amplify employee and customer experience
Start of Digital Transformation
Digital Transformation is fundamentally a strategy and an operating model change. Technological advancements are leveraged to improve human experiences and operating efficiencies. Technology advancements evolve the products and services to which customers will remain loyal.
Most people assume that start-ups or IT giants are the source of disruption and challenge. Most disruption comes from organizations within your vertical. They use their knowledge of the industry vertical to incrementally change.
Digital transformations all come from opportunity and threat in our ecosystem. New technology opens an opportunity to improve, or create a threat. Actions of organizations in our ecosystem do the same.
1 - Business Process Transformation
2 - Customer Engagement & Experience
3 - Product or Service Digitization
4 - IT & Delivery Transformation
5 - Organizational Culture
6 - Strategy
7 - Ecosystem and Business Model
How to Do a Digital Transformation
We know doing a Digital Transformation will reshape the way we do business. We know we have to leverage existing strategic assets. We need a clear business vision.
If we are going to change our organization, we need to know where we are starting from. We need to know what we are facing in our ecosystem. We need to understand what we hope.
We start with the Navigate Atlas to support Strategy. The point is to crystalize the business vision. Often, we do not need to create it, we simply need to re-frame the current vision in terms that assist the transformation.
Hambrick's Strategy Diamond helps confirm we have a complete understanding of the vision.
- Ensure we have clarity where the strategy will be activated
- Identify how we will out-compete others in our market
- Confirm the change programs we will use, re-purpose, or enhance
- Sequence our change and clarify our pace of change
- Understand where the return comes from
Digital transformation does not mean we have to create a new vision. a 125-year-old company can maintain the same core vision and undergo a Digital Transformation. Leverage new technology to improve the customer and employee experience.
It does not differ from other new technology. You leverage the new technology to improve the customer and employee experience. Steam engines. Telegraph. Railway. Telephone. Shipping containers. Long-Haul diesel truck. Fax. Internet. Smartphones. IoT.
Sequence of the Digital Transformation Journey
We sequenced the Seven Levers of Digital Transformation. We designed them to improve your success in leveraging new technology. They allow you to build experience with technology and digital change.
Lever 1 - Business Process Transformation
Start with your existing business processes. Take your successful activity and improve it. Learn a lot. Learn about your business, digitization, managing technology.
You will stop flying blind. You will see places to use Bots and AI.
Lever 2 - Customer Engagement & Experience
With a foundation of your processes, you can successfully embark on customer engagement and customer experience. The most common gap we see is failing to connect all internal processes and to make the customers feel “known."
It is wise to keep in mind that in a digital environment the cost of change and access to alternatives can dramatically lower the barrier to switch. A wise man said, online the exit door is 20 pixels away.
Covering this lever ensures that you have a loyal, integrated customer base.
Lever 3 - Product or Service Digitization
Building on process and customer engagement, you will have the knowledge to transition your products to digital. Start from a foundation of continuous learning. Gather data through connected processes. Make sense of the customer’s reality with empathy. Discern transient wants from persistent needs.
The Business Model Canvas provides solid guidance on a per-product basis of target customer and value proposition.
You will build an agile enterprise that is responsive and proactive.
With Lever 3 in hand, you will not miss the mark on your value
Lever 4 - IT & Delivery Transformation
Operational technology and IT are not efficiency drivers or cost savers. You require radical changes to how operational, information, and communication technologies are conceived, built, and operated.
We take a Business Architecture approach to the design of IT organizations and use the IT4IT Reference Architecture.
Without addressing Lever 4 you will suffer from low enterprise agility and imprudent decisions.
Lever 5 - Organizational Culture
Every enterprise made most of its choices in the past. We made those decisions with a set of assumptions and constraints that are unlikely valid in a digital future.
The timeless phase “culture eats strategy for breakfast” is always relevant. During a digital transformation it has never been more relevant.
Reinvention is means your employees have to believe in the future. Without belief, they will fail. Change needs employees with commitment, ownership, and gumption. Top-down mandate and budget approval are insufficient.
Building on process, customer engagement, new product, and the ability to deliver digital products, you have the foundation to create a digital culture.
Without covering organizational culture you will founder on skilled
incompetence and low ownership.
Lever 6 - Strategy
We start with a clear business vision. Yet Strategy is Lever 6. Frankly without the information and experience from the previous levers you are unprepared for a radical change in strategy.
We build the best strategies on hard investment and process configuration choices. You need the feedback and experience to manage the change portfolio. “Digital savvy” organizations invest the same amount of money in their portfolio, but they revisit their portfolio often to adjust the priorities
We never stray very far from vision and strategy during a Digital Transformation. Not that the strategy changes. Instead, the journey is adjusted. Hambrock's Strategy Diamond and the Navigate Atlas to support Strategy. keep us focused on the constraints, value, vehicles and economic logic necessary to succeed.
Early unprepared work will suffer from tone-deafness and systemic failure.
Lever 7 - Ecosystem and Business Model
Revisiting the ecosystem your organization lives in is an inevitable step during a Digital Transformation. The role of different businesses that come together to deliver value to the customer is subject to change. In all business-to-business our customer always use our products and services to serve their customer. We use our suppliers' products to serve our customer.
While you are doing your Digital Transformation, the ecosystem is subject to change. Disintermediated supply chains. Reconfigured value propositions.
As your journey through the digital transformation matures, you need to examine the ecosystem and your business model. Without that, you will lose synergy. Businesses don't have parachutes.
Help to do your Digital Transformation
Conexiam will deliver consulting from strategy to implementation, or develop your team's ability to guide your digital transformation.
We share our method and tools. Some are free and available online, some are not. If you want to explore, we suggest our Free EA Community. Or start with reading Seven Levers of Digital Transformation.
How to Do Digital Transformation
We have always changed our business. We have taken advantage of new technology and market opportunity.
Doing Digital Transformation is no different. We cannot see how our technology revolutions will change. We simply know they will change everything. Just like the steam engine, the railway, and inexpensive cargo planes.
The level of unknowns means we doom many transformation projects to fail. We can expect some failure because everything is new.
Blindly trying something is an expensive path to somewhere. Follow a successful path to do a digital transformation.
Start with your current vision. Learn to set the Seven Levers of Digital Transformation. Get the help you need to speed up your journey.
Keys to Doing Digital Transformation
Prepare to self-disrupt; build a talent pool that balances digital technology and industry-specific Value Chain