Digital Transformation Models – What Works?

Category: Blog  |

Digital transformation is the application of digital technologies to fundamentally impact all aspects of a business.  Digital transformation models are attempts to provide frameworks to guide the process.

One advertised digital transformation model has five steps – digitize, organize, automate, streamline and transform.  It’s an interesting gimmick, but it misses the point.

If the first step of a digital transformation initiative is to digitize, the effort is doomed to fail.  There are lots of reasons to digitize.  Some of the benefits include secure browser-based document capture and retrieval, and reduced document storage costs, but it’s the wrong first step.  It’s tactical and not strategic.

These digital transformation models are tempting but incomplete.  The models are like sirens drawing listeners to destruction and these digital transformation models understate the enormity of the initiative.  Digital transformation is less about technology and more of a fundamental reshaping of enterprise, where technology is an enabler – a catalyst for the transformation.

The first step in any digital transformation initiative has to be an understanding of how the transformation will impact the entire organization and its customers, supply chain, partners, and employees.  This begins in the C suite.  It’s not as simple as deciding to go paperless – it’s a strategic decision to fundamentally realign the enterprise to take advantage of technology to remain relevant and competitive.

Digital transformation is less about technology and more of a fundamental reshaping of enterprise.

Digital transformation is less about technology and more of a fundamental reshaping of an enterprise.

The value of the effort must be defined and senior management must commit to it.  This requires setting clear, ambitious and unambiguous goals, and making the commitment to invest in the resources needed.

The CEO, not the CIO, must drive the transformation.  It goes beyond mere sponsorship.  The CEO must be relentlessly disruptive to the point of discomfort.  A digital transformation model that starts with digitization captures none of this – there must be an uncompromising commitment to change the business.  If the CEO is not driving this through the organization, the effort will fail.

Goals must be set upfront with an understanding of what great looks like.  The targets must be ambitious and audacious.  This is not a place to be as good as the competition. This may require an external benchmarking effort to really understand what’s at play.  It also requires a deep understanding of what’s important to the organization’s customers.

Digital transformation also takes resources. These resources also might include the addition of new positions within their organization such as a Chief Digital Officer as well as other changes to the organizational structure to support the effort.

Digital transformation takes time as well.  The CEO must be tireless as well as relentless, and the resources have to extend through the entire process.

So instead of a model, there has to be a vision. A recent Harvard Business Review article highlights three critical focuses:

  1. Define where change is needed the most, especially in four key areas: customer engagement, digital products and services, operational performance, and anticipating disruptive new business models
  2. Choreograph the change, which involves defining new roles, adding new skills, and deploying new ways of working
  3. Empowering people at every level of the organization to work together to devise and implement solutions

The next time someone comes to you with a digital transformation model, stop and ask how a first step of digitizing really gets you to where you want to be.