The next two modules of the class are very closely linked.
In this module, we cover the key steps involved in developing a transformation strategy ‘fit-for-purpose’ in a digital era. Module 5 discusses implementation issues, the barriers and obstacles that need to be overcome.
As a foundation for our online discussion please complete the Module 4 interactive poll now.
Questions 15 to 18 of the Interactive Polling Tool will give you a good overview of the wide range of issues to be considered here. You can access these by going to www.menti.com using the code number 337826 to login.
Does your company have an agreed digital transformation strategy?
List up to five key digital initiatives being implemented by your organisation.
To what extent will digital disruption force a change in your underlying business model?
List the key issues that should be covered in a well-planned digital supported transformation strategy.
There is growing evidence that ‘transformation planning pays’ i.e. ‘leading digital’ organisations who plan their transformation well consistently outperform digital laggards.
The planning approach recommended in Module 4 will ensure that the digital ‘actions and initiatives’ your organisation agrees on are fully aligned with and supportive of your overall business goals and objectives; that KPIs are agreed for monitoring and evaluating digital business performance, business impact and ROI; and all key success factors are considered, especially the organisation, people, cultural and resource aspects critical to successful strategy implementation
The approach being recommended will also be very useful for internal and external communications – a simple framework for presenting digital supported business goals, objectives, key actions and initiatives to colleagues, partners and other stakeholders. Importantly, it will help to prioritise competing digital initiatives based on their relative contribution to achieving overall business goals and objectives; avoiding 'digital muddle' in the process.
In completing the exercise, please ensure that you don’t suffer ‘paralysis by analysis’. The approach being recommended is aimed at speeding up, not slowing down, the strategy development process.
Below we present a simple framework for digital strategy development, implementation and performance measurement built around six key questions to address.
With IDC predicting that 70 per cent of digital transformation programmes could fail, the underlying theme of our suggested approach is that ‘Digital Business Planning Pays’. In other words, planning may not guarantee success; however, done properly, it will significantly reduce the likelihood of failure.
Addressing the six key questions listed below will ensure that:
- The digital business actions and initiatives you implement are fully aligned with and supportive of overall business goals and objectives.
- KPIs and targets are agreed for monitoring and evaluating digital business performance, business impact and ROI.
- Competing digital projects are prioritised based on their relative contribution to short and longer-term business objectives, KPIs and targets.
- All key success factors are considered, especially the organisation, people and resource aspects critical to successful strategy implementation.
- Your organisation does not suffer from ‘paralysis by analysis’. By providing an agreed framework to follow, our suggested approach considerably speeds up, rather than slows down, the strategy development and implementation process.
- The recommended approach can be very useful for internal and external communications – a simple framework to present digital business goals, objectives, key actions and initiatives to colleagues, partners and other stakeholders.
There are six key issues to address in developing a digital transformation strategy for your organisation. These are shown in Figure 4.1 and summarised below.
Figure 4.1: Transformation Strategy Framework
Digital Business Planning Pays: The Six Key Questions
- Vision– what is the overall digital vision for your organisation? While this is listed first, agreement on the vision is often best left until after the other stages have been complete.
- Business Objectives– what are the key objectives and targets to be achieved? Are these fully aligned with and supportive of your overall business goals and objectives? What KPIs will be used to measure on-going digital performance and business impact? Have targets been agreed for each KPI?
- Customers– who are your customers? A broad definition should be adopted here covering ALL ‘customers’ of your digital strategy including Existing Customers, Potential Customers, Internal Customers (Staff) and Business Partners. It is important to agree who your ‘Most Valuable’ and ‘Most Growable’ customers are as this will help to prioritise competing initiatives.
- Digital Actions and Initiatives– what digital actions and initiatives do you need to implement to achieve agreed business goals and objectives? Digital actions and initiatives can be listed under the five key pillars of successful digital transformation shown in Figure 4.2 below – initiatives that enhance the overall customer experience with your organisation, build Digital Operating Advantage, derive actionable insight from data, create a more collaborative and knowledge sharing way of working and, where appropriate, transforming your underlying business model. Competing priorities can then be ranked according to their relative contribution to achieving agreed business goals and objectives. For each priority initiative, the approach being recommended here can then be cascaded to ensure alignment with overall business goals.
- Organisation, Resource, People Issues– the main barriers to successful digital transformation are organisation, resource and people related rather than technology. At the strategy development phase, the main obstacles to change should be identified with appropriate measures being introduced to overcome these. The topic of implementing digital transformation will be discussed in more detail in Module 5 to follow.
- Performance Measurement– how will digital transformation performance and business impact be measured?
Figure 4.2: The Five Key Pillars of Successful Digital Transformation
- Engage and connect: Leveraging the full potential of digital technologies for enhancing the customer experience with your organisation, especially at ‘Key Moments of Truth’ in the customer journey.
- Digital Operating Advantage: Technology embedded at the core of your organisation, building a Digital Operating Advantage difficult for others to copy. Using digital technology to streamline internal systems and processes, maximise efficiency and reduce costs, building a more agile, fast-moving, data driven organisation.
- Actionable Insight: Developing actionable insight from the wealth of data your organisation holds - the missing link between data and deriving business value from that data. Developing actionable insight requires the use of modern, visual based, self-service Business Intelligence Software.
- Collaborate and Share Knowledge: In a fast moving environment characterised by turbulent digital change and digital disruption, leveraging the full potential of emerging technologies for supporting collaboration and knowledge sharing, internally and externally with business partners, is critical.
- Transform: Leveraging technology to transform the way you engage and interact with customers, the way you operate internally and, where appropriate, your underlying business model.
Module 4: Background Reading
The main objective of Module 4 is for you to apply the Transformation Strategy Framework to your own organisation or organisation of your own choice.
You may, however, find the following references to be interesting in providing additional background information:
- Charting the digital transformation genome
- Why so many high profile digital transformations fail
- Digital leaders outperform digital laggards
- The case for digital reinvention
- The real reason superstar firms are pulling ahead
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Dr Jim Hamill