Digital business transformation is the process of exploiting digital technologies and supporting capabilities to create a robust new digital business model
In today’s increasingly competitive market, CXOs face constant challenges to keep up with the pace of technological change so they can succeed and outperform their competitors. Enterprise-wide success demands an integrated digital business transformation strategy, as opposed to the surprisingly common state of disconnected tactical initiatives.
The digital transformation road map is an approach that leverages your vision, strategy, and goals to plan the holistic digital transformation of your business and:
- Align future strategy and investments toward a long-term vision
- Maximize benefits and returns
- Enhance customer experience
- Minimize business disruption
Where do you start?
Begin by gaining insight into the external context of your business. Understand the external state of the industry, some key global trends, industry trends, and competitive landscapes. For example, today there is a clear, positive trend towards cloud adoption to reduce the total cost of ownership (TCO) and move from a capital to an operational expenditure model.
At this point, you need to gain insight into the internal state of your organization. This is achieved by understanding the leadership vision for the organization, the business and IT strategy, the capabilities and capacities of your organization, and the business network you are connected to.
Understand the leadership vision
To craft a future-proof roadmap, it is of paramount importance to understand the CXOs’ vision for the organization. This is usually achieved by conducting interviews with key leaders. The goal is to understand the importance of the digital transformation and to map relevant strategic components of the digital transformation based on complexity and importance.
The outcome is the prioritization of key strategic components of digital transformation based on their perceived importance and urgency by the leadership team.
Where do you stand?
To set up discussions with the key business stakeholders, it is advisable to prepare a good common starting point that you can openly share.
Key aspects to consider are:
- Your existing landscape – stability, complexity, customization, etc.
- Current usage of capabilities and functionalities – overlapping applications scope
- Use of leading practices – level of operational excellence
- End-user expectations and level of satisfaction
There are several tools and frameworks that can be leveraged at this stage to evaluate the existing environment. From our experience, discovery workshops are very effective to understand key stakeholders’ existing pain points.
You also need to assess the maturity of your organization in terms of capabilities, best practices, and KPI benchmarks.
Conduct a detailed pain-point analysis for each of the transformation areas, and align these pain points to solution enablers. Prepare heat maps based on the alignment of pain points to capabilities and solutions. Prioritize these capabilities and solutions based on inputs from the leadership discussions and discovery workshops.
Identify implementation strategies and deployment options
In this digital era, there are a plethora of implementation strategies to choose from, including system conversion, greenfield implementation, or hybrid implementation. For example, with a greenfield strategy, it is possible to adopt a “big bang” approach to shorten the initiative’s duration or use a phased rollout (for example by regions or lines of business) to manage business capacity or risk.
Not every implementation strategy is a right fit for every business scenario. To identify the right strategy, identify a list of key decision factors and assign a weight to each based on the business inputs. Calculate a weighted average for each deployment option based on these key decision factors, and select the option with the most favorable score.
Some of the key decision criteria to consider are business disruption, new functionality, standardized best practices, time to realize a benefit, and hardware or third-party license costs.
Next, consider the deployment options and evaluate the pros and cons for each. The most common deployment options are public cloud, private cloud, on-premises, and hybrid deployments.
Customers planning to adopt a fit-to-standard approach and that are focused on reducing their TCO tend to pick the public cloud option. Customers who would retain custom solutions but still reduce their infrastructure footprint tend to pick the private cloud option.
Once the deployment option is finalized, you can select the target architecture and transient architecture for the IT landscape.
Formulate your digital transformation road map
Based on the implementation strategy, deployment option, prioritized solutions, and heat maps, prepare a detailed roadmap for the multi-year digital transformation journey.
Map the different factors, like business transformation, solution capabilities, technology dependencies, organizational change management, and data management, against a near-term, midterm, and long-term timeline. Craft a spider-web roadmap depicting the journey from the organization’s current state to the future digital state.
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