OK, maybe this headline exaggerated. There probably is no one step-by-step guide to digital transformation, but it’s safe to say that a thorough evaluation of five clearly defined areas can help companies assess digital business readiness based on a Digital Business Innovation framework developed by Digital Bridge Partners & SAP. This assessment of the key elements we have observed in successful digital innovation stories serves to identify strengths, weaknesses, gaps, and opportunities on the road to digital transformation.
A framework for success
The Digital Business Innovation (DBI) framework is a system of assessing the CIO’s and IT’s readiness for, and progress along, a digital transformation journey.
The framework consists of four pillars supported by DBI leadership:
- Define a digital strategy to raise awareness, set direction, and drive decision making
- Apply a best practice organizational innovation model and culture, including agile solution development processes to drive digital business value
- Establish a collaborative and agile IT operating model that allows for incubation of new approaches
- Deliver the right platforms ‒ technical and commercial ‒ to support enterprise-wide transformation and innovation required by digital business model changes
Where should your digital transformation start?
According to the 2015 MIT Center for Information Systems Research survey, board members think that 32% of company revenues will be threatened by digital disruption by 2020. This should create a sense of urgency in any company. But preparing for transformation requires clarity in two areas: a strategy that outlines the scope, depth, and size of the change needed to realize your goals, and an assessment of what is required in terms of culture, capacity, leadership, models, and tools.
Many digital maturity assessments exist, but most are quite complex and time consuming, or lead toward a specific vendor’s solution. However, this assessment was designed to bring quick, clear focus to proven key success factors. The sample assessment questions below are a starting point for the conversations we have with technology leaders across a range of industries, so they are necessarily high-level. This approach focuses efforts on the degree to which maturity has been achieved and identifying strategic next steps rather than simplistic, tactical snapshots of the status quo.
- To what degree do the CIO and IT recognize the importance of leading/driving a digital business innovation agenda?
- To what degree is the CIO a key leader of digital business innovation?
- How mature is IT’s drive of the digital business innovation function and culture?
2. Digital strategy
- How well defined is the company-wide, CEO/board-driven business transformation agenda?
- To what degree has the company committed to a comprehensive digital strategy that is aligned with your business transformation agenda?
- To what degree does your leadership have a clear portfolio management approach to evaluate the risks and rewards of digital transformation?
3. Innovation model
- To what degree do business peers look to IT as their co-innovation partner?
- To what degree does your innovation model work enterprise-wide through agile, cross-functional teams working a well-managed portfolio of innovations?
- To what degree is your organization ahead of competitors in its ability to leverage technology to drive innovation and financial results in both business processes and business models?
4. IT operations
- To what degree has IT built a roadmap to close its tools and skills gaps between what is required and what is in place today to deliver on your digital strategy?
- To what degree do business teams leverage IT’s tools and skills to drive digital business innovation?
- To what degree does IT blend security, reliability, openness, and agility to support both ongoing operations and innovation work?
- To what degree does IT have the end-to-end technical and commercial platforms required to facilitate effective digital transformation?
- To what degree does IT have a clear plan for developing the technology platforms (owning or joining industry platforms, Big Data analytics, and APIs) required to facilitate value creation across your entire ecosystem?
- To what degree is your organization clear about its relationship to the platform business models emerging in your value ecosystem (own, co-develop, join, counter)?
If a far more granular view would be helpful, use SAP’s Digital Innovation and Transformation Assessment.