Digital Transformation

Understanding the value creation potential of digital technologies starts with a strategic blueprint that focuses on targeted business outcomes. Technology enables delivery of those outcomes, but without a structured, comprehensive, credible, and compelling strategy, backed up by objective quantitative analysis, the technology itself is just a set of tools. A robust digital strategy anchors on a business case that places business objectives first, outlines the mechanics of achieving those objectives, incorporates technology enablers into these mechanics, addresses risk and governance dimensions, and includes measurements to gauge progress and success.

• What is the current set of challenges that we are seeking to address with a new or reimagined digital strategy?
• What existing or potential opportunities can we more effectively capture via an enhanced or redefined digital strategy?
• How confident are we that our strategy will maximize the value creation potential that we seek to achieve?
• What are the implications of our digital strategy for our current portfolio of market offerings, our competitive positioning, our economics, and our operating model?

The vehicle for implementing a digital transformation strategy and delivering the targeted business outcomes of that strategy is the value creation initiative. A digital strategy typically aligns with multiple such initiatives that can be managed as a portfolio. These initiatives align and coordinate prioritized activities across the organization, automate lower-value activities to increase the business impact of human-centric activities, and enable net-new value creation in comparison to a baseline reference point. Key success factors for an initiative include clearly-defined ownership, a holistic mapping of stakeholder and process dependencies, risk management and governance constructs, tools and processes that enable objective measurement, and mechanisms for imparting and sustaining momentum.

• How objective is our process for defining and prioritizing key business initiatives?
• Which of our existing business initiatives are aligned with our digital strategy, and to what degree are they aligned? 
• Have we developed a holistic understanding of stakeholder dependencies and risks that each initiative implies, as well as effective ways to manage those factors? 
• What kinds of governance constructs can increase the probability of our initiatives being successful?

All successful innovations trace back to an initial idea, but the ways in which these ideas emerge differ widely across organizations and situations. While spontaneous or unstructured ideation can spark ideas that ultimately become successful, taking a structured approach to innovation can dramatically improve the success rate and yield from innovation activities and digital transformation strategies by incorporating holistic perspectives, imparting objectivity, and transforming the effort into a sustainable operational capability. 

• Is structured innovation a key component of our digital strategy and value creation philosophy today? 
• How codified is our innovation approach to date? 
• How variable is our current innovation approach, and how variable have the outcomes tended to be? 
• What measurements and mechanisms can allow us to gauge the success of our innovation efforts in an objective and timely way? 
• What best practices should I consider when approaching innovation as a structured capability? 
• In what ways can I most effectively institutionalize structured innovation as a core competency in my organization?

Which came first, the chicken or the egg? When the topic is digital transformation, and the question is recast as business requirements vs. technical requirements, there is no ambiguity. Business requirements always come first, and the technology architecture follows. Even so, almost all organizations begin their digital transformation journey with an existing set of technology enablers. Some of these are viable for driving the new digital strategy, but others must be repurposed, abandoned, or replaced. When embarking on a digital transformation journey, organizations must take an objective and structured approach to defining the technology environment that supports the vision.

• To what degree are there gaps or inconsistencies between our future-state business requirements and the capabilities that our current technology environment can deliver? 
• How would a “zero-based” technology architecture look, and how can we practically move towards that reference point as we seek to enable our digital strategy? 
• What role can cloud technologies, modern application architecture, artificial intelligence, and collaborative workflows play in enabling and accelerating value creation from our business strategy? 
• How can we make our future-state technology environment as “future-proof” as possible? 
• Which technology vendors and solutions are best positioned to help us achieve our business objectives?

Generating transformational business value through digital technologies isn’t simply a matter of defining digital strategies and aligning them with value creation initiatives and technology enablers. Even when a business radically embraces technology by digitizing process workflows, enhancing automation, and shifting workloads to the cloud, people still play a critical role in making the digital strategy successful. Digital transformation implies not only new ways of working, but also change management activities to create understanding, drive acceptance, and ignite enthusiasm, as well as training to recalibrate and optimize performance. Only by properly enabling the organization to succeed can the digital strategy succeed.

• To what degree do our current employees have the capabilities necessary to readily adapt to the new digital strategy, and what steps can we take to address critical gaps? 
• What kinds of training content and programs can help us accelerate employee understanding and mastery of concepts and skills aligned with the new digital strategy and corresponding value creation initiatives? 
• How can we most effectively enable and incentivize individual contributors, managers, and senior leaders to embrace and propel the digital strategy within their respective scopes of responsibility? 
• What constructs can we put in place to impart and sustain momentum to the change management effort, while increasing its probability of success?

Digital transformation is an ongoing journey. It strives for continuous improvement in financial and operating performance as an organization embraces and evolves its digital strategies, business processes, and enabling technologies. It spans strategy, value creation initiatives, innovation, technology architecture, and organizational enablement. But value creation doesn’t happen without a catalyst, a steward, and constructs that drive performance and accountability. Formal and effective program management is essential, and when internal resources can’t offer the capacity, capabilities, or objectivity to shape and drive programmatic activities effectively, an external party can often play a critical role in driving success.

• How can we most effectively assess and evolve our value creation initiatives so that we maximize the potential of our digital strategy? 
• To what extent are organizational siloes creating barriers to cross-functional collaboration, and how can we foster alignment and coordinated activity? 
• What are the benefits of a Center of Excellence to organize, manage, and measure our programmatic value creation activities in support of our digital transformation objectives? 
• How can external program management enhance objectivity and accelerate decision framing and prioritization?