How Many Steps Toward Digital Transformation?
Whether it’s Accenture, Forrester, or Gartner, everyone seems to be telling you how important digital transformation is, and painting a glowing future of what life will be like once you implement it. But just what’s involved in a digital transformation?
It’s particularly important for CIOs to take the initiative in such projects, because recent studies have shown that CIOs are too busy keeping the lights on to tackle such projects. Consequently, people like the Chief Marketing Officer (CMO) are tackling these projects—and getting the credit, according to a recent study by the Altimeter Group. “CMOs lead digital transformation initiatives at 34 percent of the companies surveyed, followed by CEOs (27 percent), CIOs or CTOs (19 percent), and chief digital officers (15 percent), according to the report,” writes Matt Kapko for CIO.
CIOs are more likely sit on the sidelines, because their agendas are already full with a project backlog, Kapko writes. “There’s an aspect of being in IT that is always looking in the past, or at least working in the past,” according to Altimeter’s Brian Solis, principal analyst. Conversely, CMOs live and die by how successful they are in reaching new customers, driving sales and conversions, he adds.
Moreover, digital transformation projects have the potential to transform the IT department, and the entire organization, as well, according to a study from Sungard AS and Vanson Bourne. “The vast majority of IT directors (85 percent) reported that they picked up new skills and their jobs were made more exciting by digital transformation,” writes Pedro Hernandez in Datamation. “The benefits also ripple across the general workforce the study found. End-users are more productive (60 percent) and enjoy increased staff mobility (52 percent). Overall, successful digital transformation projects have increased revenue, improved customer satisfaction, and enhanced agility for approximately 40 percent of companies.” In addition, 41 percent of the companies Altimeter surveyed reported an increase in market share, while 37 percent said employee morale was improving.
All that’s great, but what is digital transformation and how do you do it? It’s one of those things where everyone has a different definition and everyone has a different process.
Solis defines it as “The realignment of or investment in new technology, business models, and processes to drive value for customers and employees and more effectively compete in an ever-changing digital economy,” writes Vala Afshar in the Huffington Post. He goes on to define six steps:
- Business as Usual
- Present and Active, where there are pockets of innovation
- Formalized, with intentional experimentation
- Strategic, where individual groups begin to collaborate
- Converged, where there is a dedicated digital transformation team
- Innovative and Adaptive, where digital transformation is a way of life
In contrast, OpenMatters defines a five-step process in the Harvard Business Review that it calls PIVOT:
- Pinpoint where you are by identifying your current assets
- Inventory your company assets
- Visualize a new future where you imagine where you can collaborate with external networks
- Operate a pilot project
- Track the progress of the pilot project
Organizations such as CapGemini, McKinsey Consulting, and MIT Sloan have even more elaborate (and longer) steps listed for digital transformation. But despite the different lengths and descriptions, they have some points in common, according to the Enterprisers Project.
“These digital transformation elements are often cited:
- Customer experience
- Operational agility
- Culture and leadership
- Workforce enablement
- Digital technology integration
“CIOs should look for those important shared themes when developing their own digital transformation strategy.”
The two important things to remember about digital transformation?
- It’s a journey, not a destination
- It affects the entire organization, not just a silo
“In a digital business transformation context, all these aspects: business functions, processes, activities, assets, models, and activities are interconnected,” writes Mark Edmead in CIO. “This is an essential aspect of digital transformation: the inter dependency and inter-contentedness of everything.”