digital transformation plan example

Creating your digital transformation roadmap: A comprehensive 10-step strategy guide

How to create a digital transformation roadmap

Because of the COVID-19 pandemic, the world needed to accelerate its digitalization efforts—and many businesses had to create a digital transformation roadmap that could adapt to hybrid and remote work environments. By adopting successful digital strategies to streamline workflows, businesses can get products and solutions in the marketplace faster and more efficiently. A digital transformation roadmap can also help you plan for trends and develop methods for solving problems quickly, helping to future-proof your business .

What is digital transformation?

Digital transformation is the process of introducing new technologies—or modifying existing solutions—that’ll improve your business’s efficiency and value. Digital transformations, also known as DX, are a common process and can take many forms. From automation to moving older documents to the cloud, to integrating new tools into your legacy solutions, implementing a digital transformation strategy changes how a business operates internally and presents its products, solutions, and services.

But it’s not just about adding new technologies. Businesses need to be able to embrace new workplace culture, workflows, and processes aligned with their IT architecture. And without having a strong digital strategy in place, your digital transformation journey won’t yield the results you’re looking for. This is when your strategy turns into a comprehensive plan or roadmap, as this outlines your future decision making.

What is a digital transformation roadmap?

A digital transformation roadmap is a strategy that outlines the necessary steps to shift from using current digital processes to new ones, helping to define and manage your business initiatives and goals.

In digital transformation, your strategy leads to what your roadmap will become. To map out the transformation process, you need to understand your current business needs and gaps within your current system from your strategy. Creating a timeline with milestones and checkpoints within your digital roadmap will help minimize the risk of failure.

To complete your digital transformation roadmap , you’ll need to consider:

• Why you need a new digital transformation strategy and roadmap.
• How you’ll optimize and digitally transform your business.
• What resources you’ll need throughout your digital transformation journey.
• How long it’ll take to complete your journey.
• How your strategy competes with others in the marketplace.

The benefits of a digital transformation Strategy

Digital transformation is more than just adding digital solutions to your business. You also need to understand how integrating these new technologies can benefit your business, both internally and externally. When done correctly, a successful digital transformation roadmap will help yield faster innovation and increased profitability.

Many benefits of adopting a digital transformation roadmap are not just for enterprises but small businesses as well . These include:

• Increased efficiency. Organizations with a clear, coordinated digital strategy roadmap understand the intricacies of each challenge and how to overcome them. Streamlined workflows will result in a faster product to market and less errors, more productivity, and stronger security.
• Increased revenue. By gathering more complete, contextual, and accurate data, it informs all areas of your business while helping improve decision making, especially in selling a product or solution.
• Faster time to market. Optimizing challenges within areas like manufacturing and supply chain management will help accelerate product development and execution.
• Better customer engagement and experience. Mapping the customer journey, offering possible selling opportunities, and troubleshooting potential challenges can lead to better customer experiences overall. This means attracting new customers and continuing positive experiences with current customers.
• Improved collaboration. Using tools to exchange information for more frequent and agile communication and removing inefficiencies helps teams to not become siloed. Adopting cloud-based tools can also encourage the flexibility of company-wide collaboration.
• Marketplace differentiation. In pursing digital transformation, businesses can stay ahead of the curve, plan for new disruptive technologies, and respond to changing business needs when necessary.

10 steps for creating a digital transformation roadmap

Building a successful digital transformation roadmap is not a single-step process. In fact, it could take years to complete, not factoring in additional obstacles you may encounter along the way. Follow these 10 steps to build your own digital transformation roadmap.

• Assess the situation. You need to ask yourself what’s working, what’s not, and the reasons for both. This involves looking at all your processes in place, areas of improvement, and system gaps, and then determining the expected results from your digital transformation.
• Establish your vision. What do you want to accomplish? How do your goals stand within your organization today? Your digital transformation starting point should be the existing vision for the company, overall mission, and values. Digital transformation entails a huge shift in how you’ve previously worked and how your entire organization will work moving forward, so having a solid vision in place will help.
• Get leadership buy-in. Make sure that the leadership within your organization understands the core purpose of this digital transformation and has clarity about what it entails. By aligning your digital transformation with your leadership team’s vision from the very beginning, those in leadership positions will be able to communicate that vision and future positive results much faster to the rest of the organization and external stakeholders.
• Create a solid taskforce. You’ll need a high-caliber launch team of developers, designers, scrum masters, and data scientists to ensure your digital transformation roadmap gets off the ground. They’ll need to be able to seamlessly integrate new technologies without disrupting current and legacy technologies.
• Prioritize small but meaningful tasks. As you start to implement your plan, challenges will arise. You’ll need to identify which tasks will result in high-impact project opportunities that can yield quick wins with minimal effort. Once you’ve found these simple and easy-to-deploy projects, create a plan for solving them. Also, see if there’s any dependencies that connect to your tasks that could potentially slow down your process and a plan on how to expedite them quicky.
• Get the right tools. You’ll need the right software to ensure that all teams are able to get involved in the digital transformation process. Tools that help gather feedback, employee communication channels, training materials, and digital adoption platforms can all help employees learn, monitor, and navigate the transformation journey—your tech will help enable others to get their jobs done.
• Nurture a tech-ready culture. You’ve already got leadership buy-in for the initial launch, but you need to make sure the rest of your company buys into the vision as well. Before you make any changes, make sure that employees can see the value in your digital transformation journey and the new technologies you’ve brought on for your organization. Discuss the major goals of your digital transformation roadmap, steps to accomplish them, and future state. This will help to reassure teams that these new technologies will make work easier and reduce errors and frustrations.
• Add new tech. Now that your people are primed and ready, you can start to invest in new technologies that offer your organization value. To ensure you’ll get successful results, your teams need the right tools—from AI-powered tools to cloud-computing platforms —to manage, store, and secure your data.
• Set the pace. The first few months will set the pace of your entire digital transformation journey. It only takes a short amount of time to see the beginning of your results, so your first steps are critical. Communicate timelines and manage expectations with frequent check-ins and be sure to acknowledge accomplishments.
• Stay agile. Ensuring an agile project management style for implementing, assessing, and responding to any resulting strategy changes will make sure you have a trusted, collaborative effort. By breaking your project into sprints followed by feedback, you’ll always know what’s working and what isn’t. Since you and your team are always watching and reacting to real-time results, you’re able to easily adjust when needed to improve the entire transformation journey.

Digital transformation roadmap best practices

Now that your strategy roadmap is set and you have the steps to put your plan into action, you need to implement it into your current business strategy. Here are three best practices to ensure a successful digital transformation roadmap deployment.

• Get employee buy-in too. While you’ve gotten teams to buy into your transformation, you need to keep them engaged and motivated throughout the process. Designating trusted team members to function as transformation ambassadors and easily communicate the benefits of this process will help others get on board and feel confident about the upcoming changes. Make sure these members have succinct content, talking points, and statistics to discuss the plan with other employees with ease.
• Accept that change happens fast. Because you’re running at an accelerated pace, it might seem like what worked yesterday has changed today. You’ll be constantly trying out new technologies to see what works best. Communicating milestones, dates to reach goals, and managing expectations will help tackle this speedy transformation.
• Share wins early and often. A digital transformation roadmap can take months or even years to complete. You want your team to stay motivated throughout so once you’ve achieved important milestones or goals, make sure to tell the team, look back at what your team accomplished, and celebrate.

Choosing your digital transformation solution

Despite the adoption of new technologies, many businesses are still struggling to develop effective digital transformation strategies. Digital transformation takes a long time, and even when you feel like you have a strong strategy, you and your entire organization need to keep the momentum, be patient with the process, and stay committed to seeing it succeed.

Choosing a solution that can prioritize your needs, empower your IT department, and simplify and expedite tasks will be key in how your business stays ahead in the marketplace. Microsoft 365 can help bring your digital transformation to life . By leveraging the Microsoft 365 suite, you can improve business efficiency, accelerate product innovation, boost employee performance, and increase customer satisfaction. Find the solution that works best for you.

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The Complete Guide to Digital Transformation (+12 Examples)

Learn why digital transformation is crucial for business leaders and how to succeed. Includes over 12 examples you can learn from.

Chances are you’re already tired from hearing and reading about the digital transformation in the media and from tech businesses of all kinds. It’s been one of the most frequently mentioned technological trends of the last decade or so. Despite such wide and long-lasting publicity, today digital transformation is still very much relevant, as businesses in the post-COVID era need to meet even tougher market demands and customer expectations than ever before.

The ability to collect, store, organize and use data plays a fundamentally important role in enabling the success of digital transformation. Which is why we at Clarify decided it’s a good time to talk about digital transformation in more detail, covering the aspects of it that are the most crucial for business leaders and company managers to know about today.

What is digital transformation?

Digital transformation is an umbrella term that describes various processes and initiatives directed towards integrating new digital technologies into business operations as well as modernizing existing IT/OT systems, workflows, approaches and business strategies.

We should note that digital transformation is a cultural change as well as technological. It encompasses all sides of business operations: from management, sales and marketing to customer experience.

But it is safe to say that technological modernizations still play a leading role in this process. The ability to connect various machines and other industrial equipment into a network, allowing them to exchange information and transmit data to a centralized system for real-time tracking and analysis, is a key component of the digital transformation.

We've seen the COVID crisis rapidly re-shape both the "what" and the "how" of companies' digital transformation agendas. Melissa Swift , U.S. Transformation Leader at Mercer

Why is digital transformation important?

In the modern-day world, businesses and non-commercial organizations simply cannot afford to ignore the need for digital transformation. In fact, for many companies, it’s a matter of staying in business and keeping up with the competition. As the penetration of innovative technologies across industries and market segments continues to unfold, the market demands and customer expectations are also on the rise. And digital transformation is the only way for companies to evolve and stay in the game when the standards of productivity and efficiency are rising, fueled by new technologies.

Already moving full speed ahead, the digital transformation was further fueled by the COVID-19 pandemic and economic turbulence that was caused by it. The pandemic resulted in a significant change in consumer behaviors, disrupted supply chains, increased the demands for operational flexibility, and altered innovation priorities of businesses towards rapid integration of technologies that enable remote work.

“We've seen the COVID crisis rapidly re-shape both the "what" and the "how" of companies' digital transformation agendas. Take employee experience for example. Even as employee experience has become a key theme in the HR community, in IT circles this notion had been getting a mixed reception – sometimes stereotyped as "spoiled employees expecting best-in-class consumer-grade tech on shoestring budgets,” said Melissa Swift, U.S. Transformation Leader at Mercer, an American business consulting company. “Today, with a vast portion of the workforce now remote, employee experience of digital technology has gone from "nice to have" to "the only way work gets done. Consequently, it's getting the problem-solving focus it likely long deserved."

Key benefits of digital transformation in the post-COVID economy

Here are a few most key and relevant reasons why you can’t avoid the need to implement a digital transformation project in the modern post-COVID economy.

• It allows to significantly increase time to market for your products and services;
• Enables quick adaptation to supply chain disruptions;
• Accelerates the rate of automation of business processes and adoption of new technologies;
• Extends the reach of customer support;
• Supports migration from legacy systems and solutions;
• Improves employee happiness and satisfaction with work tools;
• Simplifies workflows and allows to remove repeatable manual business processes;
• Enables smooth remote work and real-time collaboration among employees.

Digital transformation vs. digitization vs. digitalization

If you thought that digital transformation, digitization and digitalization are the interchangeable terms that all basically mean the same, you are not alone. It’s common for people to use them interchangeably even though these three terms do refer to different processes (or different stages of the same process, depending on how you look at it). A few words about each.

What is digitization?

In simple words, digitization defines the very first stage of this process, which begins with moving all business records and documents from analog physical formats and data carriers (paper). The process of converting all business data and the modes of exchanging it from paper to digital formats is digitization. As part of digitization, organizations give up the old-fashioned devices designed with paper-based information exchange in mind, such as faxes, printers and Xerox copier machines, and move to computers and digital files.

What is digitalization?

Now, digitalization is the second stage of this process. This term describes the utilization of the digitized data to improve business processes, optimize workflows and simplify the information exchange. What’s important to note is that digitalization doesn’t involve the transformation of business approaches or creating new types of business models per se. It is limited to leveraging the data in digital format and integrating it into existing business processes to simplify them as much as possible for everyone involved, from company employees to end-customers.

Finally, there’s digital transformation as the final third stage of this process. Digital transformation does involve changing the way organizations operate, moving to new business models, approaches and workflows. It also drives the emergence of totally new business fields and market niches. Digital transformation requires organizations to revise their business operations across every layer, from the management approach, employee training and customer relations to IT systems and hardware solutions.

In other words, digital transformation is taking the full advantage of new technologies to completely transform the way work is done and achieve a significant leap forward in overall efficiency, productivity and business performance.

Digital transformation should begin with a problem statement, a clear opportunity, or an aspirational goal. The "why" of your organization's digital transformation might be around improving customer experience, reducing friction, increasing productivity, or elevating profitability. Jay Ferro , chief information & technology officer at Clario

History of digital transformation

Naturally, digital transformation is quite a new concept, but its history goes far back. Even further than many of us may expect. In fact, its origins are traced back to the 1940s.

In 1948, Dr. Claude Shannon published his paper titled “A Mathematical Theory of Communication,” which is considered to be the very first scientific document detailing the future of digitizing business data and interactions between enterprise systems.

The theoretical concept of digitizing data was first enabled in the 1950s with the invention of semiconductor transistors and microchips. This followed by the establishment of ARPANET (the Advanced Research Projects Agency Network), the first wide-area packet-switched network with distributed control and the predecessor of the Internet, in the late 1960s.

Starting from the 1970s, first businesses began to integrate computer-aided design and manufacturing solutions, and the conversion of analog paper-based data into digital form became a reality.

This process was further extended in the 1980s with the invention of the TCP/IP-based Internet and the penetration of industrial automation solutions across different industrial and business fields. Various specialized business software systems, such as ERPs (enterprise resource planning systems), CRM (customer relationships management), eCommerce and online banking solutions, and other tools, were introduced in the late 1980s and early 1990s, permanently marking the era of digitalization.

Another notable milestone is the introduction of 2G cellular networks in the 1990s with the spread of digital mobile phones and connections around the globe.

Modern-day digital transformation

We can say that the process of digital transformation fully took off in the 2000s when Internet access, connected personal computers and mobile devices became truly widespread, having a dramatic effect on the way people and organizations around the globe communicate and exchange data.

First reports documenting the benefits and success of digital transformation projects started to emerge in the early 2010s.

In 2015, MIT Sloan Management Review and Deloitte published a report titled “Strategy, Not Technology, Drives Digital Transformation,” detailing the main drivers of digital transformation projects and identifying key elements of success in this field.

A study titled "The case for digital reinvention," which was published in 2017, has found out that on average, industries were less than 40% digitized at that point in time despite the relatively deep penetration of digital technologies in media, retail, and high tech.

Today, the process of digital transformation is still far from being over. According to the EIB Investment Report 2020-2021 , 27% of companies in the United States and 37% of European companies, at the time when the survey was conducted, still hadn’t embraced digital technology. A more recent study by the European Investment Bank, EIB Investment Survey 2022 , has shown that 55% of European companies decided to increase their digital transformation efforts in response to the COVID pandemic and economic turbulence caused by it.

Digital transformation market growth

According to Worldwide Digital Transformation Spending Guide , a recently published report by International Data Corporation (IDC), global digital transformation spending should reach $3.4 trillion by 2026 with a five-year compound annual growth rate (CAGR) of 16.3%.

"Despite strong headwinds from global supply chain constraints, soaring inflation, political uncertainty, and an impending recession, investment in digital transformation is expected to remain robust," said Craig Simpson, IDC's senior research manager. "The benefits of investing in digital transformation technology, including automation, data intelligence, operational transparency, and direct support around customer experience, all support targeted areas of business focus to weather the current environment of uncertainty and to make the most of any opportunities in the recovery."

The largest geographic market for digital transformation spending throughout the forecast time interval will be the United States, accounting for nearly 35% of total spending worldwide and surpassing the $1 trillion mark in 2025. Western Europe, with 25% share, will be the second largest region for digital transformation spending. China will see the strongest growth in spending with a five-year CAGR of 18.6%, followed closely by Latin America with a CAGR of 18.2%.

When it comes to digital transformation spending across various industries, discrete and process manufacturing will account for the biggest share, nearly 30% worldwide. The most popular applications for digital transformation technologies throughout these industries will be robotic manufacturing, augmented equipment maintenance and automatization of manufacturing operations.

Businesses in the professional services and retail industries will be the second largest spenders on digital transformation, with back-office support and infrastructure as the most popular applications for digitization projects.

The securities and investment services industry will experience the fastest growth in digital transformation spending with a five-year CAGR of 20.6%, followed closely by banking and healthcare providers with CAGRs of 19.4% and 19.3% respectively.

Latest trends in digital transformation

Digital transformation has been a major business and technology trend for a number of years now. But the world doesn’t stand still and the perception of digital transformation, as well as technologies and solutions that are part of it, continue to evolve and transform.

Here are some of the latest digital transformation trends that are the most relevant today, in the post-COVID era, when the business more than ever before is focused on automating industrial processes, achieving maximum productivity and optimizing the consumption of energy and other resources. According to the Investment Report 2021/2022 done by European Investment Bank, 55% of European companies said that COVID-19 pandemic has increased the demand for digitalization in business circles, and 46% of companies reported that they have grown more digital.

Remote access to enterprise tools and real-time collaboration.

The COVID pandemic has significantly intensified the shift to remote work for businesses in almost every industry and economy sector. Even though enabling the effective remote access to enterprise tools for employees across all teams and business departments has been at the top of the agenda of the majority of organizations in the last couple years as a result of COVID-related lockdowns that restricted the access to workspaces for employees, the transaction to the so-called hybrid work style (when people are able to switch to remote work when needed) is still far from over.

So implementing cloud-based enterprise tools with remote access and real-time collaboration capabilities will continue to be a trend, remaining an important part of digital transformation strategies. That’s one of the reasons why ease of remote access, data sharing and real-time collaboration capabilities are among the top priorities for us at Clarify. Clarify makes it easy to visualize industrial data and access it remotely on web and mobile devices, allowing multiple team members to work on this data simultaneously. Learn more and schedule a live demo with one of Clarify’s experts right now.  

Accelerated growth of direct digital transformation investments.

The volume of direct investments in digital transformation will keep growing in the next couple years. According to the Worldwide Digital Transformation 2022 Predictions study by IDC, digital transformation investment growth rates will accelerate up to 16.5% CAGR for 2022-2024 period. This is an increase of 1% from the 15.5% CAGR for the 2020-2023 time frame. The total amount of investments for 2022-2024 are expected to be $6.3 trillion, which is a $0.9 trillion increase from the 2020-2023 time frame. Digital transformation investments will account for 55% of all ICT investments by the end of 2024.

“For the first time ever, we see that the majority of enterprise organizations (53%) have an enterprise-wide digital transformation strategy, a 42% increase from just two years ago," said Shawn Fitzgerald, research director at IDC.

AI-based automation systems, processes and tools.

Even though AI, ML (machine learning) and AI/ML-powered solutions have been one of the hottest, if not the hottest technological innovation integrated as part of the digital transformation processes, in reality its penetration throughout enterprise IT systems and industrial automation solutions hasn’t been as wide as you would expect. That’s why deploying AI and ML tools and integrating them into operational processes will continue to be a key part of digital transformation strategies in the years to come.

Here are some of AI tools and applications that we expect to be implemented the most frequently as part of digital transformation projects across industries in the next couple years or more.

• AI-powered management of IT operations (AIOps);
• AI-based enterprise IT security solutions for detection and prevention of cyber threats;
• AI chatbots and other customer support tools;
• AI and ML for intelligent search engines;
• AI-based business management and decision making;
• Automation of accounting and financial operations;
• AI-powered enterprise marketing and HR tools.

Focus on sustainability and resilience.

An increased attention to resilience and sustainability in digital transformation projects and initiatives is one of the main outcomes of the COVID-related transformations and economic turbulence that is experienced globally in the first years of the 2020s.

“The operative word that defines the purpose for digital transformation in 2022 is resilience. The pandemic taught enterprises to be prepared for seismic shifts in the market dynamics and consumer needs. Forward-thinking enterprises will focus on the ability to effectively pivot and deal with change with minimal to no impact to internal and external consumers,” said E.G. Nadhan, chief architect at Red Hat. “There will be increased focus on experimentation with configurable parameters to predict enterprise behaviour using simulated environments. And such experimentation will yield more insight into the optimal configurations that are most resilient.”

Implementation of data fabric solutions.

The role of data and the importance of effective data utilization for various goals across all layers of infrastructure will continue to increase for businesses and organizations implementing digital transformation projects. Delivery and processing of data in modern-day enterprise IT environments is enabled by so-called data fabric.

A data fabric is a software architecture approach aimed at facilitating self-service data consumption and simplifying access to various kinds of data within an organization. Gartner describes data fabric as "flexible, resilient integration of data sources across platforms and business users, making data available everywhere it's needed regardless where the data lives.”  

With such a huge variety of communication standards, systems, devices from different vendors, and components that comprise digital factories and enterprise IT systems, the effective implementation and maintenance of data fabric can be a problem. Clarify is a time series data solution that reduces the complexity of turning your enterprise data sources into value. It is easy to integrate with automation systems and databases regardless of what communication protocols they are using. Clarify provides industrial teams with a next-gen level of time series data intelligence, helping to make data points from historians, SCADA and IoT devices useful for the whole workforce, from field workers to data scientists.

Want to learn how to use Clarify as part of your data fabric solution to save on digital transformation costs and achieve a new level of business intelligence? Get in touch .

Digital transformation framework

As George Westerman, a senior lecturer at MIT Sloan School of Management has pointed out , over the last decade or so the process and approaches to digital transformation have evolved.

“In 10 years of researching digital transformation, we have identified ways in which some companies are becoming “digital masters,” while others fall behind. In seeking to become "digital masters," today’s business leaders should prioritize employee experience, customer experience, and operations,” said George Westerman.

This makes a lot of sense to us at Clarify as well. Originally, the digital transformation frameworks were predominantly focused on the technological side of this process, describing IT systems and tools that should be implemented as part of a digital transformation project. Other areas of business operations, on the other hand, very often ended up being overlooked or did not receive as much attention as they should.

Here’s a digital transformation framework suggested by MIT Sloan experts for use today in the 2020s, the so-called post-COVID era.

Such a structure seems very reasonable and appropriately all-encompassing, so let’s take it as a foundation and talk about each component of this framework in more detail.

Today’s business leaders should prioritize employee experience, customer experience, and operations to become the master of digital transformation. George Westerman , senior lecturer at MIT Sloan.

Business model

Overlooking potential business model enhancements is one of the most common mistakes made by organizations implementing digital transformation projects. It means that companies fail to plan for and include new business models and/or existing business model enhancements when implementing digital innovations.

As you can see on the picture, MIT digital transformation experts specify three aspects of potential business model changes: digital enhancements, information-based service extensions, and multi-sided platform businesses.

Digital enhancement describes all additional services and offers a company can add to its business portfolio with implementation of new digital technologies and solutions. The most common and relevant example of a digital enhancement is the creation of an on-demand service based on the company’s internal technology or IT tool developed in-house for their own business purposes.

Multi-sided platform business is a similar concept, but it describes the development of totally new platforms, publicly available or B2B, to leverage the new digital capabilities of the company. The example of such a business model change are web platforms, like Amazon or eBay, created by various retailers and eCommerce companies to allow the access for third-party businesses.

For us at Clarify, the developer of an enterprise data intelligence solution, information-based service extensions are the most interesting way of integrating new digital transformation solutions into the business model.

It implies companies expanding their business product portfolio with new offers powered with the data ( time series data in the most cases) collected internally from their enterprise networks of industrial automation devices, machines, sensors, IT systems, customers, employees and other information sources.

Having a proper data fabric system in place, which is a key part of a successful digital transformation process that we will address later, allows a company to create and maintain a huge Big Data archive. The data collected can then be sold in a raw format for third-party companies or processed for various insights and business findings powering a new business service. For example, Michelin, the largest tire manufacturer in the world, collects data from the sensors embedded into its products and then sells it to other businesses, as well as to end-customers.

Every digital transformation is going to begin and end with the customer, and I can see that in the minds of every CEO I talk to. Marc Benioff , Salesforce co-CEO and Chairman

Customer experience

Customer experience is also increasingly relevant in the context of modern-day digital transformation projects. It isn’t uncommon for companies focused on integrating new technologies and enhancing their operational processes to forget about the customer experience and the need to put effort in its customization in line with digital transformation changes.

MIT's framework specifies three basic components of enhancing customer experience in the digital transformation process: experience design, customer intelligence, and emotional engagement. Unlike the business model components which can be used separately from one another, the customer experience framework elements are all interconnected and should be utilized in combination with each other. The goal of proper implementation of these elements is to deliver the highest customer experience and “mass customization” for consumers.

Modern-day customer experience design requires time and effort put into mapping the customer journey, coming up with ways to improve it as much as possible, and testing various approaches to find the most suitable one. Finding ways to engage customers emotionally is a part of it.

And all of the above is powered with customer intelligence, enabling the collection of various kinds of customer data, from company website users behavior to customer surveys and demand observations, followed by a real-time analysis performed by a powerful AI-based data intelligence solution .

The evolution of business operations is obviously at the core of the digital transformation process. Core process automation, connected and dynamic operations, and data-driven decision-making are all essential to succeed in it.

When it comes to core processes automation, it can be achieved with a variety of tools and technologies. Naturally, the latest solutions will play a key role in this process. Industrial Internet of Things (IIoT), robotics, augmented reality, machine learning and other innovative tools, when properly implemented and working in combination, enable organizations to automate many workflows and operations that previously required manual and human labor.

The ability to establish all-encompassing connectivity of all these systems is also crucial. The technologies that allow organizations to achieve a new level of industrial connectivity are cloud infrastructure, new types of sensors and embedded systems, as well as 5G, the next generation of cellular network that enables much faster mobile internet connections, supports a high number of devices within one network (over a million devices per square kilometer) and functions with extremely low latency.

Just like with other core elements of the digital transformation framework, the ability to collect and utilize data is central in successful evolution of business operations. In the digital transformation systems, the operational decisions and business analysis are based on real-time data as opposed to reactionary, backward-looking reports typical to the previous generations of industrial technologies. Naturally, the implementation and maintenance of real-time data processing requires organizations to have a strong set of solutions for centralized tracking, organization, and processing of data. New-generation tools such as Clarify allow companies to simplify and automate this process as much as possible, providing an easy to use, flexible, and robust web-based platform for your information intelligence needs. Clarify is a tool that lets you and your team easily share knowledge and explore industrial data — together. Helping you turn data into actual value, every day.

Employee experience

The shift from predominantly technological, centered around an all-encompassing automation and robotization of all operational processes employee experience, is another latest trend of the modern-day digital transformation frameworks. Also described in the Industry 5.0 concept that emerged as a replacement of Industry 4.0, the employee experience component is focused around adding the “human touch” to the machines and utilizing new technologies for better empowerment of human workers, with robotic solutions and smart machines supporting and augmenting human work instead of robots replacing humans.  

The new approach is centered around integrating human workers and machines in manufacturing and other industrial environments, as well as repositioning human workers from assembly line processes and other repetitive tasks to more creative jobs that require problem-solving, experience and intuition.

The future-reading part of this framework component describes the elevation of the role of human talent and its importance to overall success of operations. This includes using innovative digital technologies, such as VR and AR, machine learning and Big Data, to enhance the employee learning process, create more effective learning materials and employee assistance solutions, as well as to minimize errors and improve safety of all operational processes.

Digital platform

Even though customer experience, employee engagement and business models are increasingly important in the course of digital transformation, the technology platform still plays a vital role in enabling it. It lies in the foundation of any digital transformation project, and none of the goals driving them can be achieved without a well-architected, well-structured and advanced technological platform.

The MIT digital transformation experts specify three elements of a digital platform: core, externally-facing and data. This classification is fairly straightforward: “core” stands for the backend solution powering all the layers of organizational IT infrastructure, from ERP systems and other internal software to mobile apps and email servers. The “externally-facing” part of the platform is the frontend or the part of the company's technological infrastructure that is available and visible to customers, business partners and other parties. This includes websites, applications, web portals and other parts of public IT infrastructure.

Naturally, the data is the most fundamental and basic layer of any digital transformation project, underlying all other systems and components of an enterprise technology platform.  A well-structured and properly implemented data platform fuels an organization with the analytical insights and information necessary to enable all the other processes and workflows that are part of the digital transformation framework.

Legacy systems and digital retrofitting

The main problem in implementing the data exchange necessary to digitize industrial and manufacturing operations is lack of digital interfaces and other capabilities supporting this process in outdated legacy equipment.

This is when the concept of digital retrofitting comes in.

Digital retrofitting is a term describing various processes directed at making changes in outdated legacy machines and systems, modernizing them and enabling utilization of this equipment as part of the modern-day digital industrial network.

What are legacy machines and systems?

A legacy system in industrial automation and business environments is basically any machine, computer platform, software solution or other kind of technology that is outdated, difficult to integrate with modern-day solutions and manage.

As we said earlier, legacy systems often end up being one of the biggest barriers in the process of implementing a digital transformation strategy and building a smart factory. This is why digital retrofitting is often viewed as a way to overcome this problem by integrating new IIoT (Industrial Internet of Things) smart devices and sensors into legacy machinery to enable the connection of this equipment to a digital network and extraction of data.

What is IIoT?

IIoT refers to the extended use of IoT in industrial automation solutions, describing the ecosystem of sensors, machines, robotic devices and other instruments connected together, communicating and exchanging data with both internal and external software automation systems. Today, IIoT is widely used across industries, enabling improved productivity, efficiency and analytics with a combination of innovative technologies that are fueling the new generation of industrial automation.

Digital retrofitting solutions

According to a recently published study of legacy manufacturing systems digital retrofitting, based on in-depth analysis of the existing body of knowledge in this area and systematic literature review of retrofitting work within the context of digital transformation and Industry 4.0, there are three basic categories of solutions to retrofitting legacy machines. They are based on interoperability and connectivity between legacy systems and new technologies. These categories are: starter kit solutions, embedded streaming gateway solutions, and IoT hardware-based solutions.

A few words about each category.

Starter kit solutions.

Starter kit solutions (also sometimes called sensor kit solutions) is a legacy retrofitting approach when a third-party provider deploys a connectivity set on top of existing legacy machinery. Such sets typically include sensors, software, hardware, and an integrated data analytics platform. As the authors of another research paper on digital retrofitting explain, starter kit solutions are used to collect data from legacy machinery in order to use it for measuring the overall equipment effectiveness (OEE), its performance, and conduct machine data analysis. This approach does not directly connect the legacy equipment to the IoT network as the data can be processed in a stand-alone manner. However, data from the machine can be integrated into an existing application or data intelligence platform such as Clarify .

Even though starter kit solutions provide a cost-effective, easy, and quick way to retrofit legacy industrial machinery, this method also has multiple limitations related to the power of collected data as it isn’t generated by the actual machine but rather by the third-party sensors integrated in it.

Authors of the legacy retrofitting meta-study note that only 12.5% of total papers used starter kits as a digital retrofitting solution, which is the lowest representation among the three solutions.

Embedded streaming gateway.

Unlike integrated sensor kits, embedded streaming gateways (also known as embedded system update solutions) enable connectivity of legacy machines with the enterprise IoT network by updating the machine's software. The deployment of any additional IoT hardware on top of legacy machinery is not required.

The fact that no hardware installation is required can be viewed as the main benefit of this solution. However, as authors of another digital retrofitting study found out, embedded streaming gateway solution is only achievable if the PLC (programmable logic controller) has sufficient processing power to apply the protocol transformation tasks without affecting the original control functions. So in order for this solution to work, the original legacy system has to have a strong computing processor to support control and connectivity.

IoT hardware-based solutions.

Integration of additional IoT hardware into legacy industrial machinery is the most popular digital retrofitting solution. It extracts original data from legacy machinery and allows the use of new sensors to generate meaningful data.

62.5% of research papers reviewed by the authors of the digital retrofitting meta-study used this approach as it enables fast data collection from legacy machines and newly integrated sensors. The downside of this method is that it is more difficult to implement due to the complexity and multiple types of communication protocols commonly used to manage industrial networks and data.

The majority of digital transformation project fail

A research conducted by McKinsey has shown that the majority of complex, large-scale digital transformation projects end up a failure, not being able to reach their stated goals and going over budget. According to Kevin Permenter, research manager at IDC, the share of digital transformation projects that fail to deliver real business value is even greater — 84%.

Most business leaders are encouraged by digital transformation mistakes  

You would think such high rates of failures should be discouraging to business leadership, but in fact the majority of company top managers perceive the failures as an indispensable part of future success. A survey of UK tech leaders conducted by Citrix has shown that 77% of them see opportunities for success in their past digital transformation failures. 43% of IT decision makers said they have learned from previous experiences of failed digital transformation projects and understand how to use these lessons to their advantage moving forward. Also, 29% of surveyed tech leaders noted that past failure in digitization led to the identification of a new business requirement or focus.

“It is useful to understand that while most IT decision makers have worked on a failed digital transformation program in the past, many recognise the experience was still of personal value to them and represented a significant opportunity in their careers. While no-one will aspire to be associated with failures, it is beneficial to know that IT leaders recognise the learnings they can take from previous projects that didn’t go to plan,” said Mark Sweeney, regional vice-president at Citrix.

What is a failure in digital transformation?

What result can be considered a failure of a digital transformation project is also a bit of an ambiguous question.

Based on the Citrix survey, the most commonly cited factors considered to define a failure of a digital transformation project were:

• Exceeding the project budget (41%);
• Lack of flexibility to suit evolving business requirements (37%);
• Unmet or absent set expectations (35%);
• Project never reaching a completion (35%).

Pitfalls and challenges of digital transformation

There are multiple reasons why so many digital transformation projects fail. Let’s go through the most common pitfalls and challenges modern-day organizations can face when implementing a digital transformation project.

• Lack of clearly stated digital transformation goals and defined strategy;
• No programs and measures in place designed to reduce risks of errors during the project implementation;
• Inadequate budgeting and lack of understanding of the digital transformation project requirements by the CFO;
• Weak employee engagement and lack of motivation;
• Absence of cross-functional collaboration;
• Not enough attention to the experience of other companies in the same field who have already implemented digital transformation projects;
• Poor adaptation of newly implemented digital solutions to existing workflows and operation processes;
• Choice of automation solutions that are incompatible with existing infrastructure;
• No change management strategy in place;
• Forcing to implement digital transformation projects too fast;
• Lack of attention to customer needs and expectations.

Recipe to success. How to approach a digital transformation project

The majority of modern-day business leaders and company managers realize that the digital transformation is unavoidable, and the sooner they start working on implementation of such a project, the better it would be in the long run. However, it isn’t uncommon for them to feel hesitant about the way to approach a digital transformation project, wondering how and where they should start, and what digital transformation strategy to utilize.

Here are several key steps to follow in order to maximize your chances of achieving a success in digital transformation.

Plan any digital transformation project as part of a general business transformation strategy.

It is advisable to start with creating a general digital transformation plan that would include all the aspects of business operations. It doesn’t have to be overly detailed, the purpose of such a plan is for the organization to see a larger perspective on things when considering an implementation of any new digital technology.

Include the adoption of new management and organizational practices as part of your digital transformation strategy.

Keep in mind that digital transformation is about the adoption of new work approaches and management practices across all the layers of the organizational structure. This is why it is important to make sure that your digital transformation strategy includes plans to introduce new ways of approaching business operations along with integration of software and hardware solutions.

Focus on business challenges and organizational issues in your digital transformation strategy.

Another aspect to be aware of when working on your general digital transformation plan is that it should focus on the main issues and problems your organization is dealing with, which can be fixed with an introduction of a new technology. This includes business operations and internal workflow challenges as well as customer experience issues.

Adopt the people change management practices.

People change management is an application of structured approach to enabling the people side of digital transformation. People change management is as important as project management in the course of implementing digital transformation initiatives. As part of this process, review how the changes should affect the roles and responsibilities in your company, how new technologies should improve the management and employee learning process, how digital innovations will help company employees and leadership to communicate more efficiently, and so on.

Put effort into building up your partner ecosystem.

Hardly any business nowadays is able to operate as a standalone enterprise, without a network of partners, suppliers and other entities contributing to the smooth business cycle. This is why it makes a lot of sense to think about your partners when planning and adjusting the digital transformation strategy. Build up and cultivate your partner ecosystem with new technologies.

Build a flexible digital platform supporting long-term evolution.

Even though people change management and approach to work processes are important, the technologies still play a fundamental role. Make sure your technology platform, both the hardware and software layers of it, is flexible enough to sustain changes and upgrades over a long-time period without turning into a legacy solution with all the problems associated with it.

Approach digital transformation as a long-term investment.

As a final part of this list: put effort into adopting a healthy approach to funding your digital transformation initiatives. One of the most common mistakes companies make in the course of this journey is expecting a return on investments way too fast. Any digital transformation project and initiative should be perceived as a long-term investment that won’t deliver measurable results immediately after being implemented.

Digital transformation: successes and failures

As we mentioned earlier, most business leaders try to learn from previous experiences of failed digital transformation projects and see opportunities for success in their past failures. Not paying attention to the experience, both positive and negative, of other companies that tried to implement digital transformation projects is one of the mistakes leading to such failures.

Here are some of the most notable examples of both digital transformation successes and the cases when a project went wrong implemented by leading companies in their fields.

Failure: Miller Coors

Miller Coors, an American beer brewing company, started a project to implement the SAP ERP system in 2013. The solution was supposed to simplify and speed up the supply chain workflows, optimize accounting processes, and boost the efficiency of all MC’s business operations. HCL Technologies, India's fourth-largest technology services firm, was hired for the deployment of this project.

Three years later Miller Coors terminated the project and filed a lawsuit against HCL Technologies and its U.S. arm for $100 million, claiming that HCL failed to meet the project deadline. "HCL was unable to adequately staff the project and maintain the project schedule," said the lawsuit. The implementation of ERP solution, which included two types of SAP warehouse management software — Global Available-to-Promise (ATP) and Extended ATP — was never completed.

Clearly, Miller Coors and HCL both made a number of mistakes when working on this project. Here are some of the most notable ones:

• Lack of clearly defined project expectations from the Miller Coors management.
• Choice of ERP implementation contractor that didn’t have sufficient prior experience of deploying SAP systems for alcohol beverage companies.
• Lack of supervision and tracking of the project progress from Miller Coors leadership.
• Failure to specify the deliverables and project schedule in the contract.
• On HCL’s side, failure to meet the project deadlines and deliver a solution that would meet expectations and requirements.

Success: ThyssenKrupp Materials Services (TKMS)

An interesting case of a successful digital transformation data-driven digital transformation project was implemented by ThyssenKrupp Materials Services (TKMS), one of the largest materials distributors infrastructural service providers for the B2B sector in the world. TKMS has over 250,000 business customers around the globe and processes more than 2 million orders every year.

In order to be able to effectively retrieve and utilize data for subsequent analysis and other uses, TKMS has developed an AI-based data management and analytics solution named Alfred after the company founder Alfred Krupp. The solution, implemented in 2018, is based on Microsoft’s Azure cloud platform. It is able to process data and automatically generate predictive maintenance recommendations, stock level notifications, suggestions for material substitutions and best transport routes, as well as other kinds of reports and business estimations.

Also, based on real-time data analytics, the Alfred platform recommends TKMS management on operation sites to expand and to close down, helps company employees with key tasks, tracks material needs at individual locations, identifies supplying locations for each customer, and delivers multiple other business benefits to the company.

Failure: Hewlett Packard

Back in 2003, Hewlett Packard, one of the world’s largest manufacturers of personal computers, printers and various hardware components, started a project to implement a single centralized ERP solution (it was the SAP software again) across all departments of its North American division. Initially HP planned to give up the usage of multiple decentralized legacy systems and migrate to a new version of SAP. All potential workflow and technical issues that could occur as a result of this migration were supposed to be fixed in a matter of three weeks.

In reality, however, the team responsible for the project implementation failed to integrate the newly implemented ERP with old systems and operational processes. This led to serious problems with customer order fulfillment. Specifically, more than 20% of servers ordered were never shipped to the customers.

Overall, the failure of the SAP implementation project ended up costing Hewlett Packard’s Enterprise Servers and Storage (ESS) business division around $400 million in lost revenue and $275 million in operating profit.

Here are some of the lessons the HP management learnt from this digital transformation failure:

• IT solution implementation teams should not work separately from other departments.
• Retention of existing workflows and data connections during and after the migration should be a priority.
• Backup plans and risk mediation solutions should be prepared in the case of project pitfalls and errors.
• Communication with customers can help to mitigate potential issues that occur as a result of digital transformation project failure.

Success: Bosch

German multinational engineering and technology company Bosch has implemented a large digital transformation project at Bosch Automotive Diesel System (RBCD), its factory located in Wuxi, China.

Bosch was able to significantly improve the efficiency of all operational processes at this factory, which produces high efficiency and low emission diesel engine parts, by implementing tool identification based on RFID (radio-frequency identification), embedding sensors into machinery, and establishing an IIoT network that interconnects all production components and collects sensor data for real-time analysis.

"Having this data connectivity with our machines allows us to react much faster, be more agile with regards to changeovers, our maintenance time, our breakdown reactions, and with these technologies, we can get much greater insights in these pain points, and that has allowed us to maintain the output that's required," said Stuart Brown, director of Technical Function at RBCD. He also noted that the main challenge for factories on the way to digital transformation lies in finding new talents and bringing in new expertise such as higher level IT skills and mathematical knowledge, which are normally absent within these factories.

Failure: Procter & Gamble

In 2012, Procter & Gamble, one of the world’s largest manufacturers of consumer goods, started a company-wide digital transformation project with the aim to become “the most digital company on the planet.” Lacking specific goals and results-focused innovations, the initiative was problematic right from the start. Even though Procter & Gamble didn’t disclose the total amount of losses from this project, it clearly was a multi-million dollar failure, which led to the resignation of the company CEO.

Based on the experience of implementing this failed digital transformation project, Tony Saldanha, former vice-president of Procter & Gamble, wrote a book titled “Why Digital Transformations Fail. The Surprising Disciplines of How to Take Off and Stay Ahead.”

“What I learned over that experience was that failure was seldom because of the technology, but because of change management and how organizations go about rewiring themselves. 90% of success in digital transformation is determined by change management or the culture of the organization and only 10% by the technology deployed,” said Tony Saldanha in an interview.

Success: BAE Systems

A good example of utilizing IoT and visual reality technologies for employee training purposes as part of the digital transformation initiatives comes from BAE Systems, a British multinational arms, security, and aerospace company. BAE Systems developed an augmented reality solution to improve the assembly of complex batteries used in aerospace embedded systems.

In order to achieve their goal, BAE Systems engineers used HoloLens, smart glasses from Microsoft, and Vuforia Studio, a software tool developed by PTC company that enables easy integration of IoT and CAD data collected from industrial systems into scalable augmented reality experiences.

The VR environment designed with Vuforia Studio provided manufacturing facility workers with three-dimensional real-time instructions on battery assembly. 3D modeling and drag-and-drop structure of the VR training environment allowed BAE Systems to increase battery assembly time by 50%, reduce training time by 40%, improve the quality of the end product, and minimize errors.

Failure: General Electric (GE)

General Electric had been one of the biggest promoters of digital transformation back when this concept wasn’t so widely recognized and accepted by the business community. In 2011, GE started a full-scale digital transformation initiative, building its own IIoT platform and integrating digital sensors into its industrial products. In 2013, the IIoT solution was launched under the Predix brand, supported by GE Predictivity Solutions, various software tools and services by GE aimed to assist GE customers with improving asset performance management and business operations.

In 2015, the company launched a new business unit called GE Digital, responsible for maintaining the Predix platform and developing other innovative digital transformation solutions. Despite multi-billion dollar investments and multiple business projects that were supposed to generate profits, GE Digital wasn’t able to meet expectations of GE leadership and shareholders. Poor performance of GE Digital business unit plummeted GE’s stock price and led to the resignation of Jeff Immelt who was the company CEO at the time.

Let’s take a closer look at the main mistakes made by GE and the lessons learnt from the business failure of GE Digital and Predix IIoT platform.

• No clear vision and unified digital transformation strategy.
• Lack of support for the business side of digitization projects.
• No step-by-step plan of the initiative implementation with proper distribution of efforts at every stage of the project.
• Lack of a change management plan.
• No clear metrics to evaluate the achieved progress.

Success: General Electric (AR technology)

Even though General Electric had its share of digital transformation failures, it can still boast a number of successful projects. The implementation of an AR technology at GE’s jet engine manufacturing facility in Cincinnati is one of them.

Executed in collaboration with a company called Upskill that makes augmented reality (AR) software, GE Aviation developed an AR solution, which connects AR glasses that use Upskill’s Skylight software to the jet engine manufacturing equipment, enabling quick and easy practical training of performing the most challenging tasks for company employees.

“Skylight alerts mechanics through the smart glasses when they need to use a torque wrench. Next, when the Wi-Fi-enabled torque wrench starts to apply torque, it shares the information with the Skylight server. Skylight then tells the mechanic whether they are properly tightening and sealing crucial jet engine b-nuts. Skylight will verify the correct value in real time before the mechanic moves on to the next step. This has tremendous potential to minimize errors, cut down on costs and improve product quality. We’ve also seen an increase in productivity and efficiency improvements,” said Ted Robertson, engineering manager at GE Aviation.

Here’s a video showcasing how GE’s AR glasses work in action.

Failure: Ford

In 2016, Ford, one of the largest automobile manufacturers in the world, started its own massive digital transformation project called Ford Smart Mobility. The new project was supposed to include the integration of digital components into Ford vehicles, manufacturing of electric and self-driving cars, a vehicle-sharing program, and a ride-hailing app.

The initiative ended up being problematic on multiple levels, failing to keep up with great business success expectations. Today, after more than six years of development, the Smart Mobility platform still isn’t completed, and key implementation partners have abandoned the project. In 2017, Ford Smart Mobility business unit reported a loss of $300 million. The failure of the Smart Mobility project to deliver business value was one of the main reasons why Ford’s stock value has plummeted more than 40%, leading to Ford CEO Mark Fields being fired that same year.

Here are some of the main reasons why Ford Smart Mobility digital transformation initiative has failed to deliver:

• The Smart Mobility business unit was viewed, and operated, as a separate company division, not a part of business operations as a whole.
• Lack of support for Smart Mobility initiatives from the company managers and employees.
• Excessively ambitious plans for the new business divisions and multiple business projects being developed at the same time.
• The technological platform behind Smart Mobility was too complex and poorly designed, preventing its integration into Ford’s vehicles and other company products.

Success: Brioche Pasquier

Brioche Pasquier, France's leading pastry and breadmaker, is a great example of a digital factory implementation by a food manufacturing company. Having 18 production sites around the globe, Brioche Pasquier fully digitized all their industrial processes and interconnected different production sites into a single network through a cloud platform.

Brioche Pasquier uses Vault data management software for training simulations and technical documentation, Autodesk Product Design & Manufacturing collection and Autodesk Inventor for digital design and 3D modeling of the production line. AutoCAD, Navisworks, and Recap tools are used to scan the company's existing sites in 3D to integrate the data into the digital model.

In addition to digitizing the existing facilities, Brioche Pasquier creates virtual simulations of new factories that are being designed to allow people who are less familiar with reading 2D plans to have a visual representation of the future facility.

“This 3D experimentation is something that we don’t want to become passive for its users. In addition to 3D animations, Brioche Pasquier is going to deploy an active experience in which the digital tools—which were initially implemented purely to serve the needs of industrial planning—will be used to train technicians on their work tools. I think it is reasonable to envisage that staff will be provided with these digital capabilities “within five years,” said Freddy Papin, methods and projects coordinator at Brioche Pasquier.

Failure: Revlon

One of the most recent large-scale failed digital transformation cases happened at Revlon , American manufacturer of cosmetics and skin care products. In February of 2018 Revlon began to implement a new ERP system, S/4HANA, which is the latest version of SAP ERP, across its manufacturing facilities. The migration caused multiple business issues, resulting in hindered manufacturing processes, delayed shipments of finished goods, plummeting sales and tainted relationships with customers in the retail sector.  

As a result of the failed ERP implementation project, Revlon’s net loss in the fourth quarter of 2018 alone reached $70.3 million. The company’s stock price fell 6.9% upon the announcement of such devastating financial results.

Here are the main lessons that can be learnt from Revlon’s failure:

• All ERP system components have to be thoroughly tested before being deployed across all business departments and operations. Revlon failed to do that.
• The implementation of digital transformation initiatives should not interfere with the most crucial production processes and business workflows.
• Legacy solutions to be replaced with new systems as part of digitization projects have to be kept fully functional as a backup.
• Customer relationships teams and departments have to be a part of new IT projects implementation to minimize risks of losing clients in case of technical issues and order fulfillment delays.

Success: Volkswagen

Since 2018, Volkswagen, another major German automotive vehicles manufacturer, has been working in partnership with Microsoft to implement a cloud platform named Volkswagen Automotive Cloud (VW.AC). The solution serves a multitude of purposes within Volkswagen’s facilities, including the development of automated driving (AD) solutions, smart home connectivity services, predictive maintenance of autonomous and electric vehicles, media streaming, personal digital assistant feature, automatic updates of software in embedded systems in cars, etc.

The VW.AC platform is focused on integrating all the digital services and mobility offerings across all Volkswagen’s brands and models. VW.AC’s engineering team, based in Seattle, has enabled data to be exchanged between the vehicles and the cloud through Azure edge services. The cloud connectivity allows Volkswagen to deliver vehicle updates and new features independently of the vehicle hardware.

In February of 2021, Volkswagen announced a new project in collaboration with Microsoft to build a cloud-based Automated Driving Platform (ADP) on Microsoft Azure and leverage its compute and data capabilities to deliver faster and better automated driving experiences.

“We are building the Automated Driving Platform with Microsoft to simplify our developers’ work through one scalable and data-based engineering environment. By combining our expertise in the development of connected driving solutions with Microsoft Azure and its compute, data and AI capabilities, we will accelerate the delivery of safe and comfortable mobility services,” said Dirk Hilgenberg, CEO of the Car.Software Organisation, a business entity established by Volkswagen in 2020 to make the automotive experience safer, more sustainable and more comfortable for people.

Final words

Clearly, digital transformation is a very complex and all-encompassing process that affects all the layers of organizational structure and business processes. The integration of innovative tools and technologies is only a part of it.

Data in its various forms and applications plays a fundamentally important role in enabling the success of a digital transformation initiative. Which is why adopting a powerful and advanced data intelligence platform should be one of the cornerstones of your digital transformation strategy.

Vetted by reputable industry experts , such as Walker Reynolds, Clarify is an affordable and simple data intelligence platform that can augment your data historian or enable you to properly utilize process manufacturing data collected over the years.

Clarify can be easily integrated with the majority of data historians from all vendors, including the ones that only support on-premise deployments, allowing you to combine data from multiple time series databases, visualizing and accessing it in real time. Clarify also simplifies the process of connecting third-party data science tools and applications to your data for advanced analysis.

Regardless of your data management requirements, the Clarify platform is a versatile solution that can be used as a universal intermediary tool, augmenting your data management infrastructure and solving challenges with processing, integrating and visualizing time series data across industrial automation systems and software components.

Want to see the capabilities of the Clarify platform with your own eyes? Take a tour .

Clarify is the operational intelligence cloud. Add analytics, automation, and AI to any asset. Empower your team to build better operations. Do it together with Clarify. ‍

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Digital Transformation Plan: A How-To Guide

• Written by Rob Biedron
• 15 min read

In today’s fast-moving, global economy, business is done in both the virtual and physical worlds. 

Companies need to understand digital technologies, and implement them effectively, in order to generate business value and cost savings, achieve short- and long-term goals, and protect both business continuity and competitive strength. 

Consequently, businesses who want to maximize their return on investment (ROI) and ensure they’re doing more than just “keeping up with the Joneses” prioritize business transformation via digital transformation. And they do so by crafting a kind of roadmap known as a digital transformation strategy.

Whether you’re a chief information officer (CIO), chief digital officer (CDO), chief procurement officer (CPO) or part of a larger team tasked with building your company’s transformation roadmap, digital transformation success begins with understanding how digital transformation works, the potential obstacles you’ll face, and the tools and practices you can use to help your organization complete its digital transformation journey. 

Ensuring you have a digital transformation change management plan will be key to your success.

What is a Digital Transformation Plan?

Digital tools like artificial intelligence (AI), robotic process automation (RPA), and deep data analytics are all part of a larger phenomenon known as the Fourth Industrial Revolution , aka the next evolution in how technology affects the ways we live, work, and play. 

These digital tools, along with other important concepts like The Internet of Things (IoT), digital twins , and virtual reality, are playing increasingly important parts in all areas of life—including how we do business.

Integrating these technologies into your business processes helps your organization compete and generate value by introducing continuous improvement, automation of high-volume, repetitive tasks, actionable insights for more strategic decision making, and more. But just as no two companies are alike, there’s no one way to achieve digital transformation success.

Consequently, companies craft a digital transformation strategy to identify the areas in need of optimization, recognize obstacles to adding new technologies to existing workflows (and developing new workflows to replace outdated ones), and develop a short- and long-term plan to achieve digital transformation, either in stages or in one fell swoop. 

Such a plan also includes evaluation tools such as key performance indicators (KPIs) teams can use to measure (for example) internal process efficiency, vendor compliance, changes in total cost of ownership (TCO), etc., as well as strategies for further refining the organization’s digital initiatives to meet future challenges and business needs.

“(The) general path to digital transformation can take many twists and turns, depending on the goals and needs of your business. 

It can be long and winding, or short and modular. What matters most, however, is in moving through the stages in order to ensure you’ve invested the time, resources, analysis, and planning required to achieve the digital transformation goals you’ve set for your organization.”

Crafting a Digital Transformation Plan for Your Business

Like other professionals, seasoned “digital cartographers” know there’s rarely a need to reinvent the wheel—or re-map well-established territory—when establishing the foundation of their digital transformation strategy. 

You can take a page from their atlas by building your digital transformation plan on a firm foundation provided by established processes like the SOSTAC® planning model, executed across three distinct stages.

Originally created as a marketing model in the 1990s by PR Smith, SOSTAC allows companies to pursue digital transformation in myriad ways by providing a uniform procedure for needs analysis, procedural and tactical planning, implementation, and refinement.

SOSTAC is an acronym:

• What’s our current level of digital readiness?
• What areas would provide the greatest benefit if digitized or are most in need of digitization to preserve our operational integrity and competitive performance?
• Objectives: What are our goals, timeframe, and budget for digital transformation?
• Will we use a comprehensive or modular approach?
• What obstacles must we overcome to achieve success?
• What benchmarks will guide us as we develop and implement this strategy?
• Tactics: What processes must we change or develop to reach our goals?
• Action: What are the specific phases of pre-implementation, implementation, and review?
• Control: What KPIs will we use to evaluate our success in reaching our benchmarks and overall goals?

This six-step process takes place over three stages:

Stage One: Definition

• Perform needs analysis. Prioritize areas with the strongest potential for optimization via digital transformation.
• Establish clear, detailed, and measurable goals for each initiative.
• Document and demonstrate the benefits of digital transformation for each step of the process, e.g. process improvements, immediate and long-term cost savings, value creation, etc.
• Get full buy-in from senior management, who will be instrumental in securing buy-in from the rest of the organization at all levels.

Stage Two: Implementation

• High-value projects receive initial investment and digitalization, with improvements spreading across the organization as time, budget, and overall operational goals dictate.
• Projects are managed by team(s) of staff with the skill sets and experience required to meet goals in time and under budget.
• The benefits provided by digital technologies are promoted within the organization, and staff receive all necessary training, education, and support to embrace these changes and achieve even greater gains in efficiency, accuracy, cost effectiveness, etc.
• Corporate cultural changes, such as the introduction of flexible schedules, remote teams, etc. demonstrate value beyond the bottom line and provide morale and job satisfaction improvements that strengthen team commitment to digital transformation.

Stage Three: Enhancement and Scaling

• At predetermined stages, each implementation (as well as the progress of the company’s overall digital transformation) is reviewed to measure impact and effectiveness.
• Gains made from successful implementations can be invested in pursuing further digital transformation goals.
• The insights gleaned during analysis and review can be used to further optimize workflows, internal controls, and business process management strategy to accommodate and leverage new technologies as they become available and relevant.

It’s worth noting that this general path to digital transformation can take many twists and turns, depending on the goals and needs of your business. It can be long and winding, or short and modular. 

What matters most, however, is in moving through the stages in order to ensure you’ve invested the time, resources, analysis, and planning required to achieve the digital transformation goals you’ve set for your organization.

A Path to Digital Transformation Success through Optimized Procurement

Understanding the general methodology used in creating and following a digital transformation strategy is only the first step. 

To gain a deeper grasp of how a company might choose to introduce digital tools and create new business models and transformation initiatives that support their overarching digital transformation efforts, it helps to look at a specific example.

Take, for example, procurement. In a highly competitive, data-driven global economy, it’s no longer just what you buy, but how you buy it that can have a significant impact on your ability to compete, grow, and even turn a profit. 

All of the goods and services that flow into your company, and all of the money flowing out to pay for them, travels through both procurement and accounts payable via the procure-to-pay process .

This particular business process (also called the purchase-to-pay process or simply the P2P process ) is a strong choice for businesses of all sizes and types who are looking for a starting point to bring digital transformation to their entire organization. 

It’s a single area, but it touches on all other areas of your business, and so significant improvements using digital technologies quickly produce benefits your entire team can see and appreciate.

Let us consider how implementing a comprehensive, cloud-based procurement solution like Planergy can help you build and follow your digital transformation roadmap to success.

• In a single transformation initiative, you can introduce powerful and versatile digital tools like machine learning , advanced data analytics, and robotic process automation to your workflows. This not only allows for measurable improvements readily demonstrated to stakeholders, but helps nurture a corporate culture of digital readiness and encourages buy-in at all levels for additional improvements.
• Centralized data management and analysis provide a transformation framework for additional initiatives through the introduction of detailed, accurate, and complete data collection, organization, and review. SOSTAC is much easier to achieve with digital data tools and clear insights into your existing processes.
• Core concepts like iterative optimization and continuous improvement are introduced through the automation of high-volume, repetitive tasks such as invoice processing and approval workflows.
• Automation provides immediate and measurable improvements to accuracy, speed, and efficiency. It also generates cost savings via lower cycle times and more discounts captured, as well as greater value by liberating your team from drudgery like data entry and exception management to turn their skills toward more strategically valuable tasks.
• A guided buying environment creates value and lowers costs by eliminating maverick spend and invoice fraud, along with human errors like duplicate, lost, or incorrect/incomplete orders.
• Data analytics transform Big Data into actionable insights for improved decision-making and more accurate financial reports and forecasts. Strategically important areas like cash flow management, strategic sourcing, and business continuity planning are all enhanced by complete and accurate data available in real time.
• Full integration with both your existing internal software environment—e.g., enterprise resource planning (ERP) suites, accounting software, customer resource management (CRM), etc.—and vendor systems lets you establish and monitor KPIs for internal benchmarks as well as vendor compliance and performance.
• Platform-agnostic access from mobile and desktop devices makes it easier to implement other digital transformation initiatives such as remote work.
• Data analytics and flexible, easily customized automated workflows set the stage for a more agile and resilient supply chain by allowing you to analyze and review data to modify existing workflows, add contingencies, or create new ones to protect essential goods and services that keep your company clicking along when potential disruptions loom.

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Digital Transformation Strategy Template

What Is A Digital Transformation Strategy?

A digital transformation strategy refers to the optimization of technology and technological services as a means of facilitating business transformation. This can be done by modifying business processes, for instance, with the automation of manual processes, or creating new processes with new technology. It entails harnessing the power of digital technologies to redefine business models, streamline workflows, enhance efficiency, and deliver better value to customers.

At its core, a digital transformation strategy involves embracing and integrating digital technologies across different areas of an organization, including but not limited to communication, data management, marketing, operations, and customer engagement. It goes beyond simply implementing isolated digital solutions and instead aims to create a holistic and interconnected digital ecosystem that supports the organization's overall business goals and objectives.

📚 Recommended read : Digital Transformation Strategy: Process, Challenges & Examples

What Is A Digital Transformation Strategy Template?

A digital transformation plan template is a predefined framework or structure that organizations can use as a guide to develop their own digital transformation roadmap . It provides a systematic approach to creating a digital strategy by outlining key components and steps required for successful digital transformation.

The template typically includes various sections and elements that assist in the planning and execution of the digital transformation journey. One crucial aspect is the roadmap, which outlines the timeline and milestones for implementing different digital initiatives. It serves as a visual representation of the organization's digital transformation journey, helping stakeholders understand the overall plan and the sequence of activities.

What's Included In This Digital Transformation Strategy Template?

Check out this quick video to see your template live and learn how to make the most out of it:

Here's what you'll find:

• 4x Digital Transformation Focus Areas
• 12x Digital Transformation Objectives
• 19x Digital Transformation Projects
• 27x Digital Transformation KPIs

Once you have set your template, you can also create dashboards for real-time performance monitoring.

And yes - you get free access with no credit card required. ✅

Who Is This Digital Transformation Strategy Template For?

The digital transformation strategy template is primarily designed for organizations of all sizes and across various industries that are embarking on a digital transformation journey. While it is applicable to both established companies and startups, the template particularly addresses the needs and considerations of organizations undergoing significant business transformation.

Chief Information Officers (CIOs) are responsible for the majority of a Digital Transformation plan. CIOs can facilitate directing an organization toward digital transformation and instill more plans and procedures to help this transition go more smoothly. CEOs would also be extremely crucial in communicating this new direction and ensuring there is sufficient information provided to all stakeholders (internal and external) to ensure everyone is able to adapt and progress.

How Is This Digital Transformation Strategy Template Relevant To Your Organization?

You can use this Digital Transformation to enhance the value of some of your core business functions, from sales and HR to finance and operations. Using this template can help you efficiently use your time by automating key areas and, thus, invest more time in greater business opportunities.

These are some of the benefits of using our Digital Transformation Strategy Template:

• Structured approach : The template provides a systematic approach, ensuring that your organization follows a clear roadmap. It helps you define business goals, identify key initiatives, and establish a step-by-step plan for your digital transformation process.
• Tailored to your needs : It can be customized to fit the unique requirements of your organization. Whether you are a startup or an established business, the template can be adapted to align with your specific industry, size, and goals.
• Strategic decision-making : With the template, your organization can make data-driven and strategic decisions regarding technology investments and initiatives. It helps you evaluate your current state, assess opportunities for improvement, and prioritize digital projects that will have the most impact.
• Maximizing efficiency : Digital transformation is all about enhancing efficiency. The template guides you in identifying areas for automation, streamlining processes, and leveraging digital tools to improve operational efficiency. It enables your organization to respond quickly to market changes, customer needs, and emerging trends.
• Leadership alignment : Our template facilitates alignment among key stakeholders, including CIOs, CEOs, and other leaders within your organization. It provides a common language and framework for discussing and executing digital transformation efforts.

How To Use The Digital Transformation Strategy Template

Creating a Digital Transformation Plan from scratch can feel overwhelming. But don't worry, our Digital Transformation Strategy Template is here to make the planning process a breeze, so you can jump right into the exciting part: getting things done!

Just grab the template and follow these simple steps:

1. Define clear examples of your focus areas

The focus areas of your Digital Transformation Strategy can be as broad or narrow as you want, depending on the overall mission you are trying to achieve. The Digital Transformation Strategy Template we devised focuses on areas via the core business functions.

Examples of these focus areas are:

• Customer Experience : Enhancing satisfaction throughout the customer journey, delivering personalized interactions, and leveraging digital technologies to understand customer needs.
• Operational Processes : Streamlining workflows, automating tasks, and adopting the right technologies to improve efficiency, reduce errors, and enhance productivity.
• IT Infrastructure : Modernizing technology, embracing cloud computing, big data and artificial intelligence, and implementing secure systems for a solid foundation that supports seamless integration of digital solutions.
• Organizational Culture : Cultivating a culture of innovation, agility, and continuous learning by promoting adaptability, collaboration, and providing resources to embrace digital practices.

💡Pro Tip : Always include a focus area related to cultural change. Why? Because digital transformation has a significant impact on organizational culture. To navigate this change, effective change management and cultural transformation are essential. As organizations embrace digital technologies, they must also cultivate a culture that embraces innovation, agility, and continuous learning. This involves breaking down silos, promoting collaboration, and encouraging employees to explore new ideas and take calculated risks.

2. Think about the objectives that could fall under that focus area

Objectives can assist you and your team with more clarity about the things you have set out to achieve. A lot of the objectives you set should be specific and applicable to the broader focus area you’re trying to achieve. Setting clearly defined and measurable objectives help improve time management and organizational efficiency.

Examples of objectives that fall under the focus area of IT Infrastructure could be:

• Support changes to business models and product offerings, systems, and processes
• Improve the level of efficiency by providing solutions to customers
• Analyze efficiency and IT activity metrics that deliver value

3. Set yourself measurable targets (KPIs) to tackle the objective

Setting measurable targets, also known as Key Performance Indicators (KPIs) , is crucial to address your objectives effectively. KPIs serve as important metrics that can be designed and established to drive business success. They provide measurable indicators and performance benchmarks, allowing you to track progress toward your overall business strategy.

Here are examples of KPIs for this strategic plan related to the focus area of IT Infrastructure :

• Increase innovation rate by 20%
• Improve the level of adoption of new products by 15%
• Increase automation of manual processes in the supply chain by 10%

Ensure that these KPIs have a defined time frame and are quantifiable, allowing you to track progress accurately.

💡Pro Tip : Regularly monitoring and analyzing these KPIs will provide insights into the effectiveness of your strategic plan and enable you to make informed decisions to drive success.

4. Implement related projects to achieve the Product Management KPIs

In a similar way to objectives providing clarity on the goals you are trying to achieve, projects provide clarity on how to achieve these. Projects provide you with tangible actions you can set for your team and yourself to achieve your said objectives.

Examples of projects that fall under the focus area of Customer Experience can be:

• Optimize smartphone app functionality to enhance user experience
• Personalize digital marketing campaigns for targeted customer segments
• Implement social media listening and sentiment analysis for brand insights

5. Utilize Cascade tools to track and visualize performance

Cascade is the world’s #1 strategy execution platform, remediating the chaos of running a business to help you move forward.

Launch your transformation strategy confidently and achieve faster results with Cascade's comprehensive features:

Streamline strategy reporting and gain valuable insights with Cascade reports . Easily generate concise real-time snapshot reports with complete control over columns, filters, sorting, and other customization options. This feature is ideal for presenting large amounts of data in a user-friendly and easily digestible format.

Cascade dashboards quickly and easily provide a visual aid of the KPIs you are trying to achieve. You can create multiple Dashboards and add numerous widgets to display both the projects and the KPIs you want to track in real-time.

Consolidate your business systems underneath a unified roof to reach clarity in your strategic decision-making with Cascade’s integrations . These integrations span across a range of tools, including communication platforms like MS Teams and project management tools like Jira.

A Digital Transformation Case Study: Amazon

Amazon 's Digital Transformation Strategy revolves around leveraging digital technologies to enhance its marketing techniques, improve customer experiences, and optimize its logistics system. Here are the key points:

• Marketing Strategy : Amazon's success lies in its aggressive marketing approach. It focuses on product assortment, competitive pricing, strategic placement, and effective promotions. The company also utilizes SEO optimization, pay-per-click advertising, and user-generated content to drive customer engagement.
• Personalized Recommendations : Amazon utilizes customer data and past shopping patterns to provide personalized product recommendations. This strategy helps retain loyal customers by anticipating their needs and enhancing their shopping experience.
• Shorter Delivery Times : Amazon's digital transformation involves deploying innovative technologies in its supply chain for faster deliveries. It plans to introduce drone delivery services for packages under 5 pounds, autonomous delivery with electric vehicles, and robotic arms for sorting and inventory management.
• Strategic Partnerships : Amazon invests in start-ups to tap into emerging technologies that can improve its logistics and supply chain management. By collaborating with innovative companies, Amazon aims to enhance its capabilities and make online shopping more convenient.

📚 Want to know more? Check out our Strategy Study: How Amazon Conquered the E-Commerce and Tech Industries Worldwide

Related Templates

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• Amazon Supply Chain Strategy Template
• Change Management Plan Template
• Culture Change Plan Template

🔍 Didn’t find what you were looking for? Check out our Template Library with thousands of templates to help you streamline your strategic planning process.

Digital Strategy Roadmap

Only 33% of organizations successfully meet the challenge of digital disruption. Those that do tend to make big strategic bets—on the order of 10% of their market capitalization. They are rewarded with significant revenue growth and 14 extra points of total shareholder return. The critical question is this: which strategic bets should you make—and in what order?

The digital strategy roadmap answers those questions in just 8-12 weeks. Recently recognized by Forrester Research as a leader in digital transformation services , BCG brings strong digital business strategy capabilities and helps you improve your strategic planning to better understand how to layer new technology into business strategy and operations. Our digital strategy roadmap sets you up for success by laying out the transformation plan, accountabilities, and metrics needed to ensure your results match your aspirations.

How We Help Clients Create a Digital Strategy Roadmap

Most digital transformations start with high aspirations for a step change in performance, yet most companies never realize those aspirations. They move through the three key phases—blueprinting the high-level strategy, activating the initiatives and minimum-viable products, and scaling across the organization—before confronting a reality that falls short of their hopes. Much of this disappointment can be traced to a lack of precision when initially defining the digital strategy.

BCG’s digital strategy model is designed to bring necessary rigor to the blueprinting phase. Each digital strategy roadmap engagement is customized to your situation and yields five essential deliverables that answer key questions:

• Digital vision . How is digital changing your industry? What new offerings, operating models, and business models can it enable? What new rivals can it empower?
• Competitive advantage assessment.  How is digital affecting competitive advantage? Where are we well positioned? Where are we disadvantaged?
• Prioritized list of digital bets . Which digital opportunities are consistent with your business strategy based on value potential—and with your ambition and capabilities? In what order should you pursue them?
• Gap analysis.  Based on your bets, what gaps in capabilities, organization, and systems need to be filled to win?
• Transformation roadmap.  What are the timelines, targets, and accountabilities for each of your programs? What moves are needed to fund the journey?

Together, these deliverables create a mutually-supportive and internally-consistent system of choices that embed digital strategy in business strategy—and tie execution tightly to both.

Beyond Great

Nine Strategies for Thriving in an Era of Social Tension, Economic Nationalism, and Technological Revolution By Arindam Bhattacharya , Nikolaus Lang , Jim Hemerling

Our Digital Strategy Work with Clients

Our digital strategy consultants helped this company explore a broad range of digital opportunities, align on a new digital business model vision, develop their data strategy, and devise a plan to address six capability gaps. Our work led to a major reallocation of investment, a reshaping of innovation priorities and process, and the company becoming a clear digital leader in its field.

Our digital strategy consultants helped bring strategic clarity to a wide range of digital efforts dispersed around this organization. We developed a digital strategy and identified priority digital initiatives that supported growth, reduced complexity, and delivered cost reduction. To help the client sustain its momentum, we helped establish global data, digital, and technology governance across both the new digital businesses and the core.

Together with the company, our digital strategy consultants envisioned the future of the sector and translated this vision into a clear strategy, yielding a potential set of 50+ digitally-enabled use cases across their value chain. Through a strict prioritization exercise, we helped them select the top AI-driven use cases to pursue across four domains—marketing, sales, innovation, and support functions—and develop the investment strategy to “fund the journey.” We also supported the launch of a global network of digital centers and accelerators to drive continuous digital innovation.

With our support, this company transformed from laggard to leader. Historically below-average in digital investment, we supported the development of an overarching digital transformation encompassing customer journeys , simplification, agile at scale , data and analytics , and IT platform replacement . We worked side by side with the client to ensure that the work was optimized for value, to accelerate deliverables and to build digital capabilities. The client is already generating significant EBITDA uplift, has new products and customer experiences in the market, and is progressing well towards full delivery.

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Digital Transformation Strategy Framework: 10 Key Steps for Strategic Planning

Published: 18 January, 2024

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Transformation

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Table of Contents

At the forefront of strategic digital transformation , Digital Leadership stands as a trailblazer in guiding organizations through the intricacies of the digital landscape. As the digital revolution continues to reshape industries, businesses are compelled to not only adapt but actively shape their future in the digital realm. Digital transformation goes beyond the adoption of new technologies—it necessitates a fundamental reshaping of business processes, organizational structures , and organizational culture.

Digital transformation is a strategic approach that transcends mere technological upgrades. It is a holistic reimagining of how organizations operate, enhance value creation , and engage with their stakeholders. Through this guide, we aim to unravel the layers of developing a digital transformation strategy framework that goes beyond surface-level initiatives, delving into the core of strategic digital evolution.

The benefits of digital transformation are compelling companies worldwide to embrace a digital transformation strategy, fostering the creation of innovative business models and the development of new capabilities. As industries navigate various business transformations, the key to success lies in actional intelligence and the implementation of robust digital transformation strategies.

What is a Digital Transformation Strategy?

A digital transformation strategy entails reshaping the enterprise by integrating digital technology across relevant aspects. It aims to attain various objectives, ranging from enhancing efficiencies and fostering collaboration to accelerating delivery speed and improving customer satisfaction.

It serves as the guiding blueprint for organizations seeking to reinvent themselves through the integration of digital technology into key facets of their operations. This strategic approach goes beyond the mere adoption of digital tools; it involves a comprehensive overhaul to achieve specific objectives. These objectives span a spectrum of goals, including the enhancement of operational efficiencies, the cultivation of collaborative environments, the expeditious delivery of products or services, and the elevation of customer satisfaction. 

A well-defined digital transformation strategy provides a roadmap for aligning technology initiatives with overarching business objectives, ensuring a purposeful and impactful journey into the digital realm. As organizations embark on this transformative journey, the strategy becomes a pivotal tool in navigating the complexities of the digital landscape, fostering innovation, and ultimately driving sustained success in an ever-evolving business environment .

What is Digital Transformation ?

Digital transformation has become a pivotal term in the business world, It is about utilizing digital technologies to fundamentally change how organizations operate, enhance value creation, and interact with their stakeholders.

The ultimate goal of digital transformation is to foster innovation, enhance efficiency, improve agility, and generate fresh value for both customers and stakeholders. In the face of a rapidly evolving digital landscape, it is imperative for organizations to not only stay competitive but also to foster innovation successfully.

The UNITE building blocks of digitalization serve as a strategic framework encompassing key elements essential for a successful Digital Transformation . It serves as a guide for organizations seeking to navigate the complexities of Digital Transformation, highlighting the importance of unified efforts across technology, people, processes, and culture. You can download it now

Your download is now available!

You can now access the complete Building Blocks of Digitalization Package, including a full presentation, related models and instructions for use.

The UNITE Building Blocks Of Digitalization

These foundational components include not only technological aspects but also organizational and cultural considerations. The chart provides a high-level and holistic perspective, emphasizing the interconnected nature of digital initiatives.

What are Your Main Digital Transformation Business Objectives and Strategic Intention?

The primary goal of digital transformation is to gain a competitive advantage and achieve increased revenue and cost reduction through optimized business operations. This strategic intention forms the backbone of successful digital transformation endeavours.

Strategy, often misconstrued, is, at its core, a clearly expressed direction accompanied by a verified plan outlining how to reach that destination. It goes beyond lofty ambitions and growth goals, delving into the deeper “why” that resonates with team members and customers aligning themselves with organizations driven by business purpose and values.

Importantly, a robust strategy is not just about setting ambitious business goals ; it necessitates a detailed plan for achieving those strategic goals , providing a roadmap for the organization’s broader purpose . A well-explained strategy becomes a constant north star, guiding and federating all members of the organization. It serves as a feedback mechanism, ensuring the organization stays on the right path and makes progress toward its defined goals.

To initiate the strategic planning process for a digital transformation , the first crucial step is to articulate the organization’s Business Intention, sometimes referred to as motivation. This key directional decision serves as the highest-level definition of what the organization aims to achieve. It is imperative to document this intention, as failing to do so can lead to initiatives that deviate from the original purpose and fall outside the intended scope.

What is a Digital Transformation Framework?

A digital transformation framework is a structured approach to remodelling an enterprise, incorporating digital technology across various facets. It aims to achieve greater efficiencies, collaboration, improved delivery speed, and enhanced customer satisfaction.

It serves as a comprehensive guide, outlining principles, best practices, and guidelines to navigate the complexities of a successful digital transformation. This structured approach is crucial for organizations aiming to adapt, innovate, and thrive in the ever-evolving digital landscape. At its core, the framework provides a systematic pathway from initial assessment and planning to seamless implementation and continuous improvement.

A pivotal component within the Digital Transformation Framework is the digital transformation strategy . This strategy acts as the heartbeat of the framework, offering a clear direction and business purpose to the entire transformation initiative. It is crafted to align technological advancements with broader business objectives , answering the crucial “why” and “how” of digital transformation. Developed during the initial stages of the framework, the strategy sets the vision, defines specific strategic goals , and establishes a roadmap for execution.

By seamlessly incorporating the digital transformation strategy into this comprehensive framework, organizations can systematically navigate the challenges and opportunities presented by the digital landscape. This integrated approach ensures that every facet of the business transformation aligns with the organization’s overarching goals , fostering sustainable growth, and promoting a culture of innovation.

How to Develop a Digital Transformation Strategy Roadmap?

Building a roadmap is a critical component of ensuring the success of your digital transformation strategy . This comprehensive guide breaks down the process into 10 actionable steps, guiding you from vision to execution. Let’s dive into the key elements that make up an effective digital transformation strategy roadmap.

10 Steps to Develop and Plan Digital Transformation Strategy Roadmap :

Step 1: Assess the Current State and Identify Gaps

Conducting a comprehensive assessment of the current digital landscape is a critical and foundational step in the digital transformation journey . At Digital Leadership, we understand the paramount importance of a comprehensive and strategic approach to digital transformation .

This thorough examination involves a meticulous analysis of various facets, including:

• Evaluate the effectiveness and efficiency of current systems.
• Examine digital tools and platforms in use, assessing integration capabilities.
• Align current technologies with organizational objectives outlined in the Digital Transformation Strategy.
• Scrutinize workflows, communication channels, and collaboration mechanisms.
• Identify bottlenecks, redundancies, and areas ripe for optimization.
• Understand the human element in the context of technology usage.
• Assess adaptability to change and openness to embracing digital innovations .
• Recognize the role of cultural aspects in determining readiness for change.

The assessment aims to provide a nuanced understanding of the organization’s:

• Identify areas where current technologies and processes are effective.
• Recognize types of organizational culture that support digital transformation.
• Highlight areas where improvements are needed in technologies and processes.
• Assess cultural aspects that may pose challenges to the digital transformation journey.
• Explore possibilities for leveraging existing strengths.
• Identify areas where technology, process, or cultural enhancements can yield positive outcomes.
• Recognize challenges that may impede the successful execution of digital transformation.
• Assess risks associated with technology, process, or cultural factors.

The identification of gaps becomes the linchpin of strategic planning , serving as focal points for targeted interventions, including:

• Address disparities in existing technologies to align with strategic goals .
• Streamline workflows, eliminate redundancies, and enhance operational efficiency.
• Implement strategies to foster an organizational culture conducive to digital innovation .

The Organizational Culture Canvas Model is instrumental in digital transformation strategy success, offering a structured framework to shape and optimize culture. Its importance lies in aligning culture with digital goals, identified through a comprehensive assessment. This process identifies strengths and areas for improvement, fostering a positive and adaptive environment. The canvas promotes high employee engagement, crucial for effective digital adoption, and encourages innovation. You can download it now.

You can now access the complete Culture canvas Package, including a full presentation, related models and instructions for use.

The UNITE Culture Canvas

This strategic approach ensures that the subsequent stages of the digital transformation roadmap directly address the areas where transformational efforts are most needed, maximizing impact and fostering a seamless transition toward the desired future state.

Step 2: Define Your Vision and Objectives

Defining a clear vision and objectives is not a static task; it is a dynamic process that shapes and is shaped by the evolving digital landscape. The adaptability embedded in this step allows organizations to stay attuned to emerging opportunities, fostering a transformative journey that remains purpose-driven and aligned with strategic goals. As stakeholders collectively commit to the articulated vision, the organization sets sail on a unified and purposeful digital transformation expedition.

• Engage in collaborative efforts with key stakeholders to meticulously define a clear and compelling vision and objectives.
• This step transcends mere formality; it is a strategic imperative.
• Craft an articulated vision that serves as the organization’s guiding light.
• This vision provides a shared sense of purpose and direction, reaching beyond the digital realm.
• Formulate SMART objectives—specific, measurable, achievable, relevant, and time-bound.
• These objectives act as strategic milestones, guiding decision-making and meticulously measuring progress.
• As the organization progresses, these objectives become touchstones for decision-making.
• They ensure unwavering alignment with the overarching purpose outlined in the Digital Transformation Strategy.
• Guide resource allocation with precision and efficacy based on the defined objectives.
• Inclusivity of stakeholder perspectives fosters a sense of ownership and commitment.
• Stakeholder involvement lays the groundwork for a unified and cohesive transformation effort.
• The dynamic and iterative nature of the process allows for adjustments to maintain relevance.
• Embrace the adaptability highlighted in the Digital Transformation Strategy.
• This flexibility allows for adjustments to seize emerging opportunities and overcome challenges.
• Seamlessly integrate the articulated vision and objectives into the broader Digital Transformation Strategy.
• This integration ensures that every facet of the organization resonates with the defined business purpose and ambitious business goals .

Step 3: Engage Stakeholders

Digital transformation is a collaborative endeavour that necessitates active involvement from all key stakeholders. This step involves ongoing processes to cultivate shared ownership and commitment to the transformative journey.

• Involving stakeholders from diverse departments, including leadership, middle management, and front-line employees, ensures a comprehensive perspective on organizational challenges, opportunities, and aspirations.
• Platforms such as town hall meetings, workshops, and collaborative sessions create opportunities for stakeholders to express views, share concerns, and contribute ideas. This inclusive approach gathers valuable insights and instils a sense of transparency.
• Effective engagement works towards aligning digital transformation objectives with broader organizational goals. This alignment is crucial for creating a unified approach where every stakeholder understands their role in achieving shared objectives.
• Stakeholder involvement extends beyond providing input; it includes active participation in decision-making processes. Valuing stakeholders’ input strengthens commitment and enhances organizational agility in responding to challenges and opportunities.
• The engagement process serves as a platform for education and awareness. As digital transformation often introduces new technologies and ways of working, ensuring stakeholders understand the ‘why’ and ‘how’ behind these changes is crucial for building confidence and buy-in.

By incorporating stakeholder engagement into the digital transformation roadmap, organizations establish a foundation for a collective and united effort. This collaborative spirit propels the organization forward and creates resilience for navigating the complexities of the digital landscape.

Step 4: Prioritize Initiatives

In the intricate landscape of digital transformation , the prioritization of initiatives is a pivotal step that demands a judicious balance between impact and feasibility. The recognition that not all initiatives can be addressed simultaneously underscores the importance of strategic prioritization, aiming to optimize resources and maximize outcomes.

The prioritization process involves a comprehensive evaluation of potential initiatives based on their potential impact on the organization’s objectives and their feasibility in the current context. Impact, in this context, refers to the extent to which an initiative aligns with the overarching goals of the digital transformation strategy and its potential to yield tangible benefits.

Feasibility, on the other hand, considers the practical aspects of implementation, taking into account factors such as technological readiness, resource availability, and organizational preparedness. Striking the right balance between impact and feasibility ensures that selected initiatives are not only aligned with the strategic vision but are also realistically attainable within the organization’s current capabilities.

An effective strategy in the prioritization process is the identification of quick wins—initiatives that can be implemented with relative ease and speed, showcasing immediate success. These quick wins serve as powerful catalysts, demonstrating the tangible benefits of the digital transformation journey to key stakeholders.

By delivering visible and early successes, quick wins play a crucial role in building momentum and confidence within the organization. They serve as compelling evidence of the positive outcomes achievable through digital transformation, motivating teams and leadership to stay committed to the broader and more complex initiatives on the roadmap.

Furthermore, prioritization is an iterative process that acknowledges the evolving nature of digital transformation. As the organization progresses, priorities may need to be reassessed based on emerging trends, technological advancements, and shifting organizational dynamics. Flexibility in prioritization ensures that the digital transformation strategy remains agile and adaptive, ready to respond to the dynamic nature of the digital landscape.

Step 5: Develop a Detailed Action Plan

Embarking on a digital transformation journey requires a meticulous and well-defined action plan to translate strategic priorities into actionable steps. This phase involves breaking down overarching objectives into granular tasks, setting realistic timelines, assigning responsibilities, and understanding interdependencies.

• Precise Task Definition: The first aspect involves defining tasks with precision, leaving no room for ambiguity. This clarity ensures that everyone involved comprehends their roles and responsibilities, fostering a sense of ownership and accountability.
• Realistic Timelines: Time is a critical factor, and the action plan sets achievable timelines for each task. Balancing ambition with practicality, these timelines guide the pace of execution and allow for regular evaluations to ensure the journey stays on course.
• Ownership and Responsibility : Assigning responsibilities is crucial for success. The action plan designates tasks to individuals or teams, fostering a sense of accountability and ensuring dedicated champions for each aspect of the transformation.
• Understanding Interdependencies: Tasks within a digital transformation often have interconnected relationships. The action plan delineates these interdependencies, providing a holistic view of how different elements influence one another. This understanding is vital for seamless execution and avoiding bottlenecks.
• Contingency Measures : Acknowledging the dynamic nature of digital transformation, the action plan incorporates contingency measures. It outlines strategies for mitigating risks and addressing unforeseen circumstances, enhancing the plan’s resilience.
• Alignment with Strategy: Every task within the action plan is aligned with the broader business strategy. This alignment ensures that each step contributes meaningfully to the overarching vision and goals of the digital transformation, fostering a cohesive and purposeful journey.
• Communication and Monitoring: Communication is pivotal throughout the execution phase. The action plan includes a communication strategy to keep stakeholders informed. Regular monitoring and evaluation mechanisms are integrated to provide real-time insights, allowing for adjustments and adaptations as needed.

Step 6: Align with Business Strategy

The success of a digital transformation hinges on its seamless integration with the broader business strategy . This step ensures that the digital transformation roadmap is not a standalone initiative but a strategic enabler of the organization’s overarching goals.

• Complementary Objectives: The digital transformation roadmap should be intricately woven into the fabric of the broader business strategy, sharing common objectives and outcomes. It’s not merely an independent venture but a synchronized effort that amplifies the impact of both.
• Strategic Contribution: Each element of the digital transformation should contribute meaningfully to the long-term success of the organization. This alignment guarantees that resources, efforts, and innovations driven by digital transformation directly support the strategic direction of the business.
• Holistic Integration: Integration goes beyond avoiding conflicts; it’s about creating synergies. The digital transformation roadmap should seamlessly integrate with existing business processes, technologies, and structures, fostering a cohesive and harmonized operational environment.
• Flexibility for Adaptation : While alignment is crucial, the d igital transformation roadmap should also exhibit the flexibility to adapt to changes in the business landscape. This adaptability ensures that the organization can pivot when needed without compromising the overall strategic vision.
• Measurable Impact: The impact of digital initiatives should be measurable in the context of broader business goals . Key performance indicators (KPIs) aligned with the business strategy provide a tangible way to gauge the success and contribution of the digital transformation .
• Continuous Assessment: Alignment is not a one-time task but an ongoing process. Regular assessments and evaluations are integrated into the roadmap, allowing for adjustments based on the evolving needs of the business and the dynamic digital landscape.
• Stakeholder Involvement: In ensuring alignment, stakeholders from various levels of the organization are engaged. Their insights and perspectives contribute to a holistic understanding of how digital transformation aligns with and enhances the overall business strategy.

In essence, aligning the digital transformation roadmap with the business strategy is the linchpin that ensures that the journey is purposeful, and impactful, and contributes significantly to the sustained success of the organization.

Step 7: Invest in the Right Technologies

Strategic investment in technologies is a pivotal aspect of a successful digital transformation . This step involves identifying, evaluating, and adopting technologies that align seamlessly with the defined digital transformation objectives , propelling the organization into a realm of innovation and competitiveness.

• Strategic Alignment : The selection of technologies is not arbitrary but a strategic decision grounded in the alignment with the digital transformation objectives . Each chosen technology should contribute directly to the realization of specific business goals outlined in the roadmap.
• Objective-driven Adoption: The adoption of technologies is purposeful, driven by the need to enhance operational efficiency, customer experience , or other targeted outcomes. Whether it’s Artificial Intelligence (AI) for data analysis, the Internet of Things (IoT) for connectivity, or cloud computing for scalability, each technology serves a defined business purpose .
• Innovation Catalyst : The right technologies act as catalysts for innovation within the organization. They enable the exploration of digital business models , streamlined processes, and enhanced products or services. The investment is not just in tools but in the potential for transformative change.
• Competitive Edge: The selected technologies should position the organization competitively within its industry. Whether it’s gaining a speed advantage, improving quality, or offering unique features to customers, the right technologies contribute to a sustainable competitive edge.
• Scalability and Flexibility: The chosen technologies should have the scalability to grow with the organization’s evolving needs. Additionally, they should offer flexibility to adapt to changes in the business environment , ensuring that the technology stack remains relevant over time.
• Integration Capabilities: Seamless integration with existing systems and processes is crucial. The investment in technologies should not create silos but should enhance the overall ecosystem, creating a unified and efficient digital infrastructure.
• Return on Investment (ROI): The decision to invest is measured not just in terms of immediate benefits but with a keen eye on long-term returns. Organizations should assess the potential ROI of each technology investment, considering both quantitative and qualitative factors.
• Continuous Evaluation : The landscape of digital technologies is dynamic. Continuous evaluation of emerging technologies is integrated into the digital transformation strategy , allowing for the timely adoption of innovations that can further elevate the organization’s capabilities.

Step 8: Build Agile and Adaptive Teams

Creating agile and adaptive teams is a fundamental pillar in the edifice of successful digital transformation . This step involves fostering a culture within the organization that embraces agility, adaptability, continuous learning, and improvement.

• Agile Culture Cultivation: Building agile teams starts with cultivating a culture that values flexibility and responsiveness. This involves encouraging team members to embrace change positively, view challenges as opportunities, and remain open to adapting strategies based on evolving circumstances.
• Agile Methodologies Adoption : Embracing agile methodologies is crucial for enhancing the organization’s ability to respond efficiently to changes in the digital landscape. Agile methodologies, such as Scrum or Kanban, facilitate iterative development, allowing teams to deliver value incrementally and adapt their approach based on feedback.
• Cross-functional Collaboration : Agile and adaptive teams thrive on cross-functional collaboration. Breaking down silos and promoting collaboration among different departments or teams fosters a holistic understanding of the digital transformation goals and ensures that diverse perspectives contribute to innovative solutions.
• Continuous Learning: A culture of continuous learning is essential for staying abreast of the latest technologies, methodologies, and market trends. Providing learning opportunities, training programs, and resources empowers team members to enhance their skills and contribute more effectively to the digital transformation journey.
• Innovation Encouragement: Agile teams are more likely to innovate and experiment with new ideas generation . Creating an environment that encourages innovation, where team members feel empowered to propose and test novel solutions, is crucial for driving digital transformation success.
• Adaptability as a Core Competency: The ability to adapt is elevated to a core competency within agile teams. Team members are encouraged to be proactive in identifying changes, learning from experiences, and adjusting strategies accordingly. This adaptability ensures resilience in the face of uncertainties.
• Leadership Support: Leadership plays a pivotal role in building agile and adaptive teams. Providing support, guidance, and resources for teams to embrace agility requires leadership commitment. Leaders should exemplify the values of agility and foster an environment where teams feel safe to experiment and learn.
• Feedback Mechanisms: Establishing feedback mechanisms is integral to agile teams. Regular retrospectives, feedback loops, and transparent communication channels ensure that teams continuously reflect on their processes, identify areas for improvement, and make adjustments to enhance performance.
• Scalability Considerations : As the organization grows, scalability becomes a consideration. Agile frameworks should be scalable to accommodate larger teams and complex projects while maintaining the principles of flexibility and adaptability.

Step 9: Establish Key Performance Indicators (KPIs)

The establishment of Key Performance Indicators (KPIs) stands as a pivotal step in the digital transformation journey , providing organizations with a compass to navigate the effectiveness of their initiatives. This step involves defining measurable KPIs that serve as barometers for progress and success.

• KPI Definition: The first aspect of this step is to clearly define the KPIs relevant to the digital transformation objectives . These indicators should align with the overarching business goals and the specific outcomes expected from the transformation journey. A well-defined set of KPIs ensures that organizations are measuring what truly matters in the context of their unique transformation goals.
• Measurability and Tangibility: KPIs should be inherently measurable and tangible, allowing for quantifiable assessment. Whether it’s enhancing operational efficiency, improving customer satisfaction, or achieving cost reductions, each KPI should have a clear metric associated with it. This ensures that progress can be tracked objectively, providing valuable insights into the impact of digital transformation efforts.
• Alignment with Strategy: The selected KPIs should align seamlessly with the digital transformation strategy. Each indicator should reflect a specific aspect of the strategy, whether it’s related to process optimization, customer experience enhancement, or innovation metrics. This alignment ensures that KPIs become meaningful tools for assessing progress in the context of strategic goals.
• Real-Time Monitoring: The digital landscape evolves rapidly, and real-time monitoring of KPIs is essential. Establishing mechanisms for continuous monitoring allows organizations to stay agile and make informed decisions promptly. Real-time insights enable proactive adjustments to strategies, ensuring that organizations remain on course even in dynamic environments.
• Adaptability of KPIs : Digital transformation is a dynamic process, and KPIs should be adaptable to changing circumstances. Organizations should be prepared to revisit and adjust KPIs based on evolving business priorities, technological advancements, and market shifts. This adaptability ensures that KPIs remain relevant and reflective of the organization’s evolving objectives.
• Cross-functional involvement: Involving key stakeholders from various departments in the KPI definition process enhances alignment and ownership. Cross-functional perspectives contribute to a comprehensive set of indicators that capture the holistic impact of digital transformation across the organization. This involvement fosters a shared understanding of how each department contributes to the overall success of the strategy.
• Balanced Scorecard Approach: Adopting a balanced scorecard approach ensures a well-rounded assessment. Instead of focusing solely on financial metrics, consider a mix of indicators that cover financial, customer, internal process, and learning and growth perspectives. This comprehensive approach provides a nuanced view of the organization’s performance in the digital transformation landscape.
• Continuous Improvement: KPIs should not be static but subject to continuous improvement. Regularly assess the relevance and effectiveness of selected indicators. Solicit feedback from stakeholders, evaluate the correlation between KPIs and business outcomes, and be willing to refine or introduce new indicators as needed.
• Transparency and Communication: Establish transparent communication channels regarding KPIs. Regularly share updates with relevant stakeholders, fostering a culture of accountability and collaboration. Transparent communication ensures that everyone is informed about progress, challenges, and the collective impact of their efforts.

Step 10: Monitor, Evaluate, and Iterate

The final step in the digital transformation roadmap is a dynamic and iterative process that involves continuous monitoring, thorough evaluation, and a readiness to iterate based on insights gained. This ongoing cycle is crucial for ensuring the long-term success and relevance of the digital transformation strategy.

• Continuous Monitoring: Continuous monitoring involves the real-time tracking of key performance indicators (KPIs), project milestones, and other relevant metrics. This proactive approach allows organizations to identify emerging trends, address potential issues promptly, and make informed decisions on the fly. Continuous monitoring serves as a radar system, providing early detection of shifts in the digital landscape and enabling organizations to respond swiftly.
• Progress Assessment : Regularly assessing the progress of digital transformation initiatives is essential. This involves comparing actual outcomes against predefined objectives and KPIs. Analyzing the data provides valuable insights into the effectiveness of the strategy, revealing areas of success and identifying aspects that may require adjustment. Progress assessments serve as checkpoints, offering a comprehensive view of the journey’s advancement.
• Gathering Stakeholder Feedback : In addition to quantitative data, gathering qualitative feedback from key stakeholders is integral to the evaluation process. This feedback provides nuanced insights into the human and organizational aspects of the transformation. Stakeholder perspectives offer a holistic understanding of how the initiatives impact different facets of the organization, contributing to a well-rounded evaluation.
• Iterative Approach : The digital landscape is dynamic, and strategies must evolve accordingly. An iterative approach involves revisiting the digital transformation roadmap based on insights gained from monitoring and evaluation. This may entail refining existing strategies, introducing new initiatives, or adjusting the prioritization of activities. An iterative mindset acknowledges that digital transformation is not a one-time event but an ongoing, adaptive process.
• Flexibility and Adaptability: Organizations must embrace flexibility and adaptability during the monitoring and iteration phase. The ability to pivot in response to changing circumstances, emerging technologies, or shifts in market dynamics is a key factor in sustaining the effectiveness of the digital transformation strategy . Flexibility allows organizations to capitalize on new opportunities and navigate challenges effectively.
• Data-Driven Decision-Making : The monitoring and evaluation process should be driven by data. Data analytics and insights gleaned from the performance metrics and feedback mechanisms guide decision-making. This data-driven approach ensures that adjustments to the roadmap are rooted in empirical evidence, enhancing the likelihood of successful outcomes.
• Communication and Transparency : Transparent communication regarding the results of the monitoring and evaluation process is essential. Sharing both successes and challenges with stakeholders fosters a culture of openness and collaboration. Transparent communication builds trust and reinforces the collective commitment to the digital transformation journey.
• Learning and Continuous Improvement : Each iteration should be viewed as an opportunity for learning and continuous improvement. Organizations should capture lessons learned, document successful strategies, and apply insights to enhance future initiatives. The learning process is intrinsic to the adaptive nature of digital transformation.

Digital Transformation Strategy Examples

Digital transformation strategies vary based on the specific goals and context of each organization. Here are a few examples of digital transformation strategies that companies might adopt:

1. IT Digital Transformation Strategy

Organizations often embark on digital transformation journeys to enhance operational efficiency, cybersecurity, and user experiences. This strategic evolution aligns with comprehensive IT strategic planning , ensuring that technological advancements are integrated seamlessly into the organization’s broader objectives and goals.

Key Components of IT Digital Transformation Strategy

• Cloud Adoption:

Organizations strategically migrate on-premise infrastructure to cloud platforms, such as Amazon Web Services (AWS) or Microsoft Azure, to achieve scalability, flexibility, and cost efficiency. Hybrid Cloud Models: Implementation of hybrid cloud models allows for a balanced approach, retaining certain on-premise elements while leveraging the benefits of cloud infrastructure.

• Cybersecurity Integration:

Advanced Threat Intelligence: Incorporation of advanced threat intelligence solutions to proactively identify and mitigate potential cybersecurity threats. Encryption Protocols: Implementation of robust encryption protocols ensures the security and integrity of sensitive data, safeguarding against cyber threats and unauthorized access.

• Agile Methodologies:

DevOps Implementation: Adoption of DevOps practices and principles to integrate organizational development and operations seamlessly, leading to faster and more reliable software delivery. Continuous Integration/Continuous Deployment (CI/CD): Implementation of CI/CD pipelines ensures the rapid and automated deployment of software updates, reducing time-to-market.

• Data Analytics:

Actionable Insights: Utilization of big data analytics tools to derive actionable insights from vast datasets, enabling informed decision-making. Predictive Analytics: Implementation of predictive analytics models to forecast trends, optimize IT resources, and proactively address potential issues.

Case Study: 

A multinational IT corporation underwent a digital transformation by transitioning its traditional IT infrastructure to a cloud-native architecture. This shift improved agility, reduced costs, and enabled seamless scalability to meet evolving business demands. The implementation of advanced threat intelligence and encryption protocols ensured the heightened cybersecurity posture of the organization, fostering a secure IT environment.

2. HR Digital Transformation Strategy

 The Human Resources (HR) function plays a pivotal role in organizational success, and digital transformation strategies are reshaping how HR operates. This evolution focuses on optimizing talent management, improving employee experiences, and enhancing overall HR processes.

Key Components of HR Digital Transformation Strategy:

• Employee Self-Service Portals:

Description: The implementation of user-friendly portals empowers employees to manage various tasks independently, such as leave requests, performance reviews, and benefits management. Benefits: Streamlined processes, increased transparency, and improved employee satisfaction through self-service capabilities.

• Data-Driven HR:

Description: Utilizing HR analytics for workforce planning, talent acquisition, and employee engagement. Data-driven insights enable informed decision-making and strategic planning. Benefits: Improved decision accuracy, enhanced workforce planning, and a deeper understanding of employee needs and preferences.

• Robotic Process Automation (RPA):

Description: Automation of routine HR tasks, such as data entry and paperwork processing, to improve efficiency, and accuracy, and free up HR professionals for more strategic activities. Benefits: Increased operational efficiency, reduced errors, and time savings for HR teams.

• Learning Management Systems:

Description: Integration of digital platforms for employee training and development, offering a centralized hub for learning resources, courses, and skill development. Benefits: Enhanced employee skills, improved training accessibility, and a culture of continuous learning within the organization.

A global company transformed its HR processes by implementing a comprehensive Human Resources Information System (HRIS). This centralized system streamlined recruitment processes, improved employee engagement through data-driven insights, and facilitated strategic HR decision-making. The HRIS also enabled the organization to adapt to changing workforce dynamics efficiently.

Digital transformation in HR goes beyond technology implementation; it’s about creating an agile and employee-centric HR function that aligns with the organization’s overall goals . As businesses recognize the strategic importance of their workforce, HR digital transformation becomes a critical enabler for attracting, developing, and retaining top talent in the digital age.

3. Bank Digital Transformation Strategy

Banking institutions are leading the charge in digital transformation , leveraging technology to enhance customer experiences , strengthen security measures, and optimize financial processes. The key components of their digital transformation strategies are digital banking platforms revolutionizing the banking sector by introducing user-friendly mobile and online interfaces, offering customers convenient access to services. This enhances customer convenience, accessibility, and engagement through digital channels. Blockchain integration ensures secure and transparent financial transactions, reducing fraud risks and building trust. AI-powered customer service, employing chatbots and virtual assistants, provides personalized interactions, ensuring 24/7 availability and boosting customer satisfaction. Additionally, risk management solutions, leveraging advanced analytics and machine learning, contribute to more accurate risk assessments, proactive issue identification, and improved decision-making processes.

• Introducing user-friendly mobile and online banking interfaces that provide customers with convenient and seamless access to banking services.
• Benefits: Improved customer convenience, enhanced accessibility, and increased engagement through digital channels.
• Description: Utilization of blockchain technology to ensure secure, transparent, and tamper-proof financial transactions. Blockchain enhances trust and reduces the risk of fraud.
• Benefits: Increased security, transparency, and efficiency in financial transactions, leading to greater customer trust.
• Implementation of artificial intelligence (AI) through chatbots and virtual assistants to provide personalized and efficient customer interactions. AI-driven solutions enhance customer support and streamline query resolution.
• Benefits: Improved customer service, 24/7 availability, and personalized interactions, leading to higher customer satisfaction.
• Adoption of advanced analytics tools to assess and mitigate financial risks. Predictive analytics and machine learning contribute to more accurate risk assessments.
• Benefits: Enhanced risk management, proactive identification of potential issues, and improved decision-making.

A leading bank embraced digital transformation by introducing a mobile banking app equipped with features such as biometric authentication, real-time transaction alerts, and AI-driven financial insights. This strategy resulted in a significant increase in customer satisfaction and engagement. The mobile app not only provided customers with convenient access to their accounts but also personalized financial guidance based on their transaction history and preferences.

The banking sector’s digital transformation journey is a response to the evolving expectations of customers and the need for greater efficiency. By embracing cutting-edge technologies, banks aim to stay competitive, build customer trust, and create innovative financial solutions for the digital age.

Digital Transformation Strategy Types

(1) cultural transformation.

Cultural transformation is a specialized aspect of digital transformation, focused on reshaping an organization’s culture for success in the digital age. Key elements of digital transformation strategy include securing leadership commitment, defining a clear digital vision, fostering innovation-promoting values, open communication, employee involvement in cross-functional teams, digital skills training, recognition for desired behaviours, embracing an agile mindset, establishing measurable metrics, promoting collaboration and knowledge sharing by breaking down silos.

(2) Process Transformation

Process digital transformation involves strategically integrating digital technologies to optimize existing business processes. This detailed strategy includes assessing current processes, defining SMART objectives, selecting and integrating relevant digital tools, redesigning workflows, training employees, promoting continuous improvement, aligning with organizational values, involving stakeholders, ensuring data security, and designing scalable and flexible processes for future adaptability and growth. Executed thoughtfully, this strategy enhances efficiency and positions the organization for sustained growth and competitiveness in the digital age.

(3) Business Model Transformation

Business model digital transformation involves a strategic overhaul of the fundamental structures and processes that define how an organization creates, delivers, and captures value. Here are key components of the strategy for business model digital transformation:

Assessment of Current Business Model:

Before embarking on transformation, conduct a thorough analysis of the existing business model. Identify strengths, weaknesses, opportunities, and threats. Understand current revenue streams, customer segments, and value propositions . The Business Model Canvas, a widely acclaimed strategic management tool, serves as an invaluable asset in this assessment. By visually representing key elements such as customer relationships , revenue streams, and cost structures, the canvas provides a holistic view of the current state of the business. It not only facilitates a comprehensive understanding but also fosters collaborative discussions within the organization, ensuring that every aspect is thoroughly examined and considered. You can download it now.

Download the Complete eXtended Business Model Canvas package, including instructions for putting it to work for you today.

The UNITE Business Model Canvas

Utilize tools like the Business Model Canvas for a collaborative view, encouraging dynamic discussions within the organization to identify gaps and areas for innovation. Define clear digital transformation objectives aligned with organizational goals and explore innovative revenue streams . Adopt a customer-centric approach , leveraging technologies like AI and analytics for enhanced transformation. Foster an agile culture for adaptability, consider collaborations to boost innovation, and prioritize risk management. Implement pilot programs and iterative testing for real-world feedback and continuously monitor and optimize performance based on market trends and organizational needs.

(4) Domain Transformation

Domain transformation in digital transformation involves optimizing specific areas within an organization strategically. The process starts with a thorough assessment and opportunity identification of existing processes and challenges, identifying pain points and opportunities for improvement. The strategic vision is then defined, ensuring alignment with the overall organizational strategy , and a roadmap is established. Technology integration involves identifying and incorporating relevant digital technologies, promoting seamless integration with existing systems. Cross-functional collaboration breaks down silos, fostering an integrated approach. Agile methodologies are implemented to enhance flexibility and responsiveness and change management strategies address cultural shifts for a smooth transition. Key performance indicators are established for continuous evaluation, and scalability is ensured for future advancements. User-centric design principles prioritize end-user experiences, and continuous monitoring processes optimize and refine the transformed domain.

7 Key Components of Digital Transformation Strategy

1. customer experience and centricity.

In digital transformation, prioritizing the customer involves understanding their needs and pain points through data analytics and market research. Implementing personalization strategies with AI and machine learning tailors experiences to individual preferences. Ensuring an omnichannel presence across online and offline platforms provides a consistent customer journey. Simplifying user interfaces and collecting feedback contribute to positive experiences while mapping the entire customer journey aids in understanding and enhancing the overall customer experience

2. Agile Methodologies and Adaptive Culture

Agile Methodologies and Adaptive Culture are pivotal components of a robust Digital Transformation Strategy . Let’s delve into each of these components:

• Agile methodologies involve an iterative and flexible approach to project management and product development. It emphasizes collaboration, adaptability, and customer feedback throughout the development process.
• Flexibility and Responsiveness: Agile allows organizations to respond quickly to changing market conditions, customer feedback, and emerging technologies. This flexibility is crucial in the dynamic digital landscape.
• Continuous Improvement: Agile encourages a mindset of continuous improvement, with regular iterations and feedback loops. This iterative approach aligns with the evolving nature of digital technologies.
• Customer-Centric Approach: By involving customers throughout the development process, Agile ensures that the end product or service meets customer expectations and delivers value.
• An adaptive culture is an organizational mindset that embraces change, values innovation, and encourages employees to be proactive and responsive in a dynamic environment.
• Embracing Change: Digital transformation often involves significant changes in processes, technologies, and organizational structures. An adaptive culture helps employees embrace and drive these changes rather than resist them.
• Innovation and Creativity : An adaptive culture fosters innovation by encouraging employees to explore new ideas generation , experiment with emerging technologies, and contribute to the organization’s overall growth.
• Resilience : In the face of uncertainties and challenges posed by digital disruptions, an adaptive culture instils resilience in employees. They become more adept at navigating change and finding solutions in complex situations.

3. Digital Innovation and Technology Adoption

Digital Innovation and Technology Adoption are two crucial elements that play a pivotal role in shaping the success and sustainability of any strategic initiative in digital transformation. Let’s delve into the significance of these key components and how they contribute to the overall Digital Transformation Strategy.

1- Digital Innovation:

Digital innovation serves as the driving force behind transformative change within organizations, emphasizing the exploration and application of new technologies, ideas, and processes. The key aspects of digital innovation within a Digital Transformation Strategy encompass fostering a culture of creativity and ideation. This encourages employees to think beyond traditional boundaries and propose novel solutions. The strategy also emphasizes experimentation and prototyping , enabling organizations to test new ideas and technologies in a controlled environment before full-scale implementation. Collaboration and ecosystem engagement with external partners, startups, or industry networks are crucial for diverse perspectives and accelerated innovation. Implementing agile methodologies further enhances adaptability and responsiveness to changing requirements and feedback, ultimately contributing to the success of digital innovation initiatives.

2- Technology Adoption:

Innovation generates new ideas, but effective technology adoption turns these ideas into operational realities. Key considerations for successful technology adoption include ensuring strategic alignment with overall organizational objectives. Technologies should be scalable, integrating seamlessly with existing systems, and prioritizing user-centric design for a positive user experience. Implementing effective change management strategies, including training and support for employees, is crucial to ensure a smooth transition and minimize resistance to technological changes.

4. Digital Landscape

The Digital Landscape, a crucial element of an effective Digital Transformation Strategy, involves navigating technological innovations, competitive intelligence, regulatory compliance, cybersecurity, data privacy, adaptability to change, and global market opportunities. Organizations must stay ahead with emerging technologies like AI and IoT, analyze the competitive landscape, navigate compliance challenges, integrate robust cybersecurity measures, prioritize data privacy and ethics, embrace organizational agility, enhance value creation and explore global market opportunities. This comprehensive understanding ensures informed decision-making and a strategic approach to thrive in the dynamic and rapidly evolving digital realm.

5. Data Curation and Privacy Protection

In digital transformation , ensuring the proper handling of data is paramount to success. Two critical components that serve as the bedrock for a robust digital transformation strategy are Data Curation and Privacy Protection.

1. Data Curation: Building a Foundation of Quality and Relevance

Data lies at the core of any digital transformation strategy, and data curation is key to ensuring its quality and relevance. This process involves carefully managing, organizing, and enhancing data to derive meaningful insights and make informed decisions. Key steps in data curation include assessing data quality, organizing data effectively, enriching it with additional information, and implementing governance policies for regulated usage. A robust data curation strategy not only optimizes internal processes but also sets the stage for advanced analytics, artificial intelligence, and other transformative technologies.

2. Privacy Protection: Safeguarding Trust and Compliance

In an age dominated by data breaches, prioritizing privacy protection is imperative. Organizations must uphold robust privacy measures to safeguard sensitive information entrusted by customers, employees, and stakeholders. Key components include adhering to data protection regulations, implementing encryption for secure data transmission and storage, enforcing access controls to restrict unauthorized access, and ensuring transparency and explicit consent for data collection and processing.

6. Business Process Optimization

I n digital transformation strategy, Business Process Optimization is a pivotal component, strategically refining and enhancing processes to leverage the full potential of digital technologies. Key steps include a comprehensive assessment of existing processes, aligning optimization with broader business objectives, integrating digital technologies, redesigning processes for innovation, fostering cross-functional collaboration, providing employee training, implementing performance monitoring, and ensuring compliance and risk management. This approach ensures that optimization efforts contribute to the overall success of the digital transformation strategy by promoting efficiency, innovation, and adaptability.

7. Digital Transformation KPIs

• Measuring Progress and Success: KPIs gauge success, measuring metrics like tool adoption and process efficiency.
• Aligning with Business Objectives: KPIs closely align with business goals, tracking revenue growth and customer satisfaction.
• Enhancing Decision-Making: KPIs guide informed decisions, assessing tool implementation time and employee productivity impact.
• Identifying Areas for Improvement: KPIs reveal strengths and weaknesses, targeting refinements in processes and user engagement.
• Ensuring Employee Engagement: KPIs measure employee buy-in, tracking training participation and tool integration.
• Adapting to Market Dynamics: KPIs monitor market trends, adjusting strategies based on industry benchmarks and competitor initiatives.
• Enhancing Customer Experience: KPIs on customer interactions measure success in improving overall satisfaction and Net Promoter Score.

Digital Strategy vs. Digital Transformation: What is the Difference Between Them?

Digital Transformation and Digital Strategy , although distinct, play complementary roles in driving organizational success.

1. Digital Transformation:

It is a holistic and comprehensive approach that goes beyond solving specific issues. It involves reimagining the entire organization, encompassing processes, culture, and technology. The goal is to achieve a profound and lasting impact on the business. It is a long-term journey characterized by continuous evolution. It requires patience, as the process involves experimentation, prototyping, and fundamental changes that may take considerable time to unfold.

2. Digital Strategy:

Digital Strategy is more focused and addresses specific challenges or goals within the organization. It is often designed for the short to medium term, with a clear understanding of the problems it aims to solve. It involves creating applications or solutions to address particular issues. It’s about leveraging technology strategically to achieve predefined objectives.

Integrated Approach:

• Phased Implementation: Organizations may adopt a phased approach, starting with specific digital strategies and transitioning into a more comprehensive Digital Transformation initiative.
• Continuous Iteration : Both benefit from a culture of continuous improvement, adjusting strategies based on feedback and evolving business landscapes.
• Leadership and Change Management : Successful integration requires strong leadership guiding the organization through immediate changes and the more extended transformation journey.

The most effective organizational approach involves integrating both Digital Transformation and Digital Strategy . This strategic symbiosis allows an organization to address immediate challenges through digital solutions while simultaneously laying the foundation for long-term, transformative change. By combining the holistic and future-oriented aspects of Digital Transformation with the targeted and immediate benefits of Digital Strategy, organizations can maximize their impact in the digital landscape. This integrated approach ensures resilience, innovation, and sustained success in a rapidly changing business environment.

Related UNITE Models For Navigating Digital Transformation Strategy for Success

1- the unite business model environment canvas.

The Business Environment Canvas plays a pivotal role in shaping successful digital transformation strategies, providing a structured approach to analyzing external factors that impact an organization. By serving as a compass for informed decision-making and strategic planning, it becomes an indispensable tool that holds significant importance for businesses navigating the complexities of the digital landscape. You can download it now.

Download the Complete Business Model Environment Canvas Package, including instructions for putting it to work for you today.

The UNITE Business Model Environment Canvas

The digital transformation canvas is crucial for businesses as it facilitates a holistic analysis of external factors, identifies growth opportunities, and ensures strategic alignment with broader business objectives. It aids in adapting to technological shifts, navigating regulatory frameworks, and visualizing potential risks for effective risk management. Serving as a collaborative tool, it enables leadership teams to make informed decisions about digital transformation and informs efficient resource allocation, optimizing overall business success during the transformative process.

2) The Unite Operating Model Canvas

The Operating Model Canvas serves as a critical tool in the realm of digital transformation strategy, offering a structured approach to understanding and optimizing an organization’s operational dynamics.

The UNITE Operating Model Canvas

Its significance extends to businesses in several crucial ways:

A holistic operations view is essential for businesses aiming to thrive in the digital era. It involves streamlining processes, ensuring strategic alignment with digital transformation objectives, and identifying and addressing operational inefficiencies. Agile operating models facilitate swift adaptation to technological and market changes, enhancing competitiveness. Promoting collaboration and resource optimization accelerates digital initiatives and profitability. Integration of innovation and a customer-centric approach ensures businesses stay technologically advanced and customer-focused. Structured risk management and a culture of continuous improvement help businesses proactively address cybersecurity, compliance, and operational challenges, ensuring sustained relevance and growth in the dynamic digital landscape.

3) The Unite Business Model Innovation Canvas

The Business Model Innovation Canvas stands as a vital instrument in the digital transformation playbook , offering a structured approach to reshape and optimize business models. Its importance to businesses is paramount.

You can now access the complete Business Model Innovation Patterns Package, including a full presentation, related models and instructions for use.

The UNITE Business Model Innovation Patterns

Impactful digital transformation affects key dimensions by aligning the business model with transformation goals, ensuring strategic positioning for sustained growth. Holistic assessments enhance operational efficiency while uncovering innovation opportunities directly contributing to revenue growth. Agile business models enable swift responses to market changes, fostering resilience. Customer-centric reorientation enhances satisfaction and loyalty, and seamless technology integration maintains competitiveness. Optimized resource allocation leads to cost savings, and a structured innovation framework fosters creativity. Identifying and addressing risks safeguards against challenges, ensuring brand reputation and financial stability. Fostering a culture of continuous evolution secures long-term sustainability and growth in the dynamic digital landscape.

4) The Unite Four Waves of Economic Development

The significance of understanding the Four Waves of Economic Development in the context of digital transformation cannot be overstated for businesses. This historical framework provides businesses with a roadmap that traces the evolution of economies through various technological eras. Recognizing the historical patterns of economic development equips businesses with insights into the current wave of digital transformation, guiding them in shaping strategies that align seamlessly with the ongoing technological revolution.

Download the complete 4 Waves of Industrial Revolution Package, including instructions for putting it to work for you today.

The 4 Waves Of Industrial Revolution

The Initial Industrial Revolution , marked by the advent of textiles, coal, and iron, triggered significant socio-cultural shifts despite early challenges for workers. The Second Industrial Revolution, characterized by electrification and mass production assembly lines, brought transformative changes driven by figures like Henry Ford, shaping industrial and economic models. The Third Industrial Revolution, known as the digital revolution, introduced automation, digitization , and global interconnectedness through computers and the Internet. The ongoing Fourth Industrial Revolution, defined by digital transformation and technologies like AI, industrial IoT, and data analytics, blurs the lines between digital, physical, and biological realms. This era embraces a shift to renewable energy sources, leveraging advancements like Big Data Analytics and the gig economy to revolutionize global industries.

The Digital Transformation Strategy Framework comprises a meticulous process aimed at reshaping enterprises for the digital age. By following the 10 key steps outlined in this guide, organizations can navigate the complexities of digital transformation with confidence. At Digital Leadership, we stand as your strategic partner, providing the expertise and support needed for a successful digital transformation journey . Contact one of our partners to explore how we can guide your organization towards a digitally empowered future.

Frequently Asked Questions

1. who should be involved in creating a digital transformation strategy.

Creating a robust Digital Transformation Strategy requires the active involvement of various stakeholders. Executive leadership sets the vision, with the CEO and board members securing essential resources. IT leaders, including the CIO, align technological insights with business goals . The DTO or CDO oversees strategy alignment, while business unit heads and customer-facing teams offer operational and customer-centric perspectives. Data and analytics experts, led by the CDO and data scientists, leverage data for decision-making. The CHRO manages cultural change, the CFO ensures financial viability and change management specialists guide the organization. External consultants bring industry insights, and legal and compliance experts ensure regulatory adherence. Frontline employees contribute practical perspectives, fostering a collaborative effort that aligns the strategy with organizational goals and navigates digital transformation successfully.

2. How Does the Digital Transformation Strategy Impact Business?

Creating a successful Digital Transformation Strategy requires active involvement from executives, department heads, IT professionals, and employees directly impacted by the transformation. Executive leadership sets the strategic vision, department heads provide domain-specific insights, and IT professionals ensure technological implementation. Involving employees fosters ownership and brings valuable firsthand knowledge to the strategy. This inclusive approach improves plan quality, facilitates smoother implementation, and helps proactively address potential challenges. Overall, collaboration and inclusivity are crucial for successfully navigating the complexities of the digital landscape.

3. Consequences for Businesses Lacking a Digital Transformation Strategy

A successful Digital Transformation Strategy involves executives, department heads, IT professionals, and affected employees. Executive leadership sets the vision, department heads provide insights, and IT ensures technology integration. Employee involvement fosters ownership and enhances the strategy with valuable firsthand knowledge. This collaborative, inclusive approach improves plan quality, facilitates smooth implementation, and proactively addresses challenges, crucial for navigating the digital landscape.

4. How to Create a Digital Transformation Roadmap?

Crafting a comprehensive roadmap is essential for organizations navigating the digital landscape. This strategic blueprint integrates the overarching digital transformation strategy , guiding the organization from initial assessment to the full realization of digital initiatives aligned with strategic objectives. The roadmap emphasizes assessing digital maturity in harmony with strategic goals , with crucial stakeholder involvement for collaboration and buy-in. Highlighting the strategic role of technology, it realigns business processes to foster a culture of innovation and efficiency.

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The Essential Components of Digital Transformation

• Tomas Chamorro-Premuzic

It’s about so much more than your technology.

It’s problematic when companies decide to embark on a digital transformation agenda without having a clear definition, let alone vision, for what it means. The fundamental meaning of transformation is not about replacing old technologies with new ones, or capturing high volumes of data, or hiring an army of data scientists, or trying to copy some of the things Google or Amazon do. In fact, the essence of digital transformation is to become a data-driven organization, ensuring that key decisions, actions, and processes are strongly influenced by data-driven insights, rather than by human intuition. In other words, you will only transform when you have managed to change how people behave, and how things are done in your organization.

The digital revolution forced every organization to reinvent itself, or at least rethink how it goes about doing business. Most large companies have invested substantial cash in what is generally labelled “digital transformation.” While those investments are projected to top $6.8 trillion by 2023, they’re often made without seeing clear benefits or ROI. Although these failures have multiple causes, they are generally the result of underestimating the various steps or stages required to successfully execute a transformation agenda.

• Tomas Chamorro-Premuzic is the Chief Innovation Officer at ManpowerGroup, a professor of business psychology at University College London and at Columbia University, co-founder of  deepersignals.com , and an associate at Harvard’s Entrepreneurial Finance Lab. He is the author of  Why Do So Many Incompetent Men Become Leaders? (and How to Fix It ) , upon which his  TEDx talk  was based. His latest book is I, Human: AI, Automation, and the Quest to Reclaim What Makes Us Unique.   Find him at  www.drtomas.com . drtcp

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We live with a constant stream of new technological developments, which gives us the impression that our society is evolving rapidly. Certainly, digital change is unavoidable . Digitalization is a disruptive element which is accelerating the transformation of our world.  

Digital is transforming how we relate to each other, reshaping pedagogical systems, and changing both schools and universities ; it has modified the concept of information and is creating a huge tsunami in communication media; it is changing the concepts of representativeness and participation, and plunging the models of both trade unions and political parties into crisis. And digital transformation is also having a powerful effect on the world of economics.  

Digital transformation has already led to the disappearance of sectors that we considered to be stable, and to the appearance of new industries and players: two opposing examples can be seen in Kodak and Google ; while some players disappear, others emerge with unusual strength. In view of this situation, clearly there is no sector, profession or process which can escape the need for deep reflection on how it is affected by digital and how a digital transformation plan should be developed.  

Digitalization is forcing companies to rethink processes of all kinds : marketing, brand development, customer service, staff selection, internal communication, relationships with suppliers, market research, internationalization processes, crisis management, innovation processes, staff training… and the list goes on, covering each and every process of every organization, regardless of the particular functional area or the specific sector. 

Faced by this situation, the question that immediately comes to mind is where do I begin? We will try and provide an answer by outlining a digital transformation model and determining how to develop a plan for it. 

What is a digital transformation plan?

A digital transformation plan focuses on the 'how' and the 'what' . Digitalization involves the incursion of technology into a corporate environment and digital transformation involves how we use this technology to evolve the business model. The digital transformation plan will help us to identify what we must do and how we should do it, thereby enabling us to set objectives, generate planning and, above all, take stock of the resources needed to develop this plan. 

Digital transformation road map

This model serves as a diagnostic tool (where is my company now in relation to my target market?) and as a lever for drawing up a plan (where do I want my company to be in the future?), so that actions based on a corporate strategy can be identified. The digital transformation model is underpinned by three pillars : vision, activity and culture. 

The first lever is related with the organization's need to explore the new opportunities offered by digitalization over the next few years. It is necessary to step back from day-to-day management to survey the horizon and design a roadmap that bases the value proposition on trying to anticipate the changes that will occur (with all the risk that this involves).  

In order not to lose focus, it is necessary to develop the vision while connecting two concepts, the market and the business itself: 

• In the case of the market, there will be a need to understand the depth of the social and behavioral changes of consumers, in order to be able to anticipate their impact.  
• In the case of the business, there will be a need to raise new questions leading to a response that is different from the way in which the organization has responded to date.  

This point will entail making a strategic decision: how is a digital transformation plan going to be useful for me? There are two options here:  

• First, it can be used with the aim of generating greater efficiency in the current model , as financial institutions did some years ago, where the transformation did not serve to open up new avenues of business, but to create greater efficiency in the existing line (digitalization of processes, reduction of times…).  
• Second, it can serve to explore new opportunities linked with new business models, products or services . Here, the criterion will be to invest in unprecedented possibilities aimed at generating new revenue models. In this respect, we can see how automotive companies are exploring the field of services linked with mobility (car sharing, for example). 

Activity or business

The second lever for identifying and drawing up a plan of action is centered around the company's activity or business. The focus here is on how digitalization affects the basic functions of the business : processes, touchpoints, products and services, and monetization models. 

1. Processes   

The first steps towards digital transformation in most companies are focused on the mechanization and optimization of processes . With the first spreadsheets, computing began to make inroads into the finance and accounting departments of most companies, prefiguring the arrival of robots on production lines. 

Sectors like banking set out on this path more than thirty years ago. Digital transformation in financial institutions saw the appearance of ATMs, the disappearance of bankbooks, and the rollout of debit and credit cards. Today, every bank employee works in front of a computer terminal, and soon every customer will have access to electronic banking.  

However, the mechanization of processes is not linear across all sectors and functional areas . It is now common to see taxi drivers with GPS, but there are still some who do not accept payment by credit card. The digitalization and digital transformation of processes is uneven, but it is progressing as the profits to be drawn from its implementation begin to exceed the costs of investment.  

2. Customer touchpoints  

From 2005, people began to access the internet on a massive scale, not only to look at what companies publish, but also to take the opportunity to speak their opinion . This was what was known as the Web 2.0, later referred to more simply as social media, whose use has become widespread as a means for people to interrelate and for consumers and companies to interact , leading us today towards environments like the metaverse . 

This forces organizations, from within their digital transformation strategy, to shift their view of “touchpoint” from a channel perspective (I have a website, an app, a profile on social media, I send out a newsletter or I have a physical store) to an omnichannel perspective (where a central focus is given to consumer touchpoint needs).  

Beyond the conjunctural phenomena of Facebook and Twitter , people demand to be attended to 24 hours a day, every day of the year, wherever they may be, face to face, by telephone or online. Especially online. And if it is online, they want to receive a good service regardless of the device they use, be this a desktop computer, a tablet, a mobile phone... And before very long the device will be some glasses, a watch, training shoes, or a T-shirt with an internet connection. Furthermore, they want to be attended to synchronously and immediately . Right here and now.  

Thanks to the meteoric rise of mobile devices, consumers are interacting on a massive scale and their demands are spiraling. Millions of users are interacting in real time, at any time of day and in every corner of the globe.  

This has heralded the second stage in the digital transformation of a company's activity: having mechanized our back office, now we have to focus on our front office . Reviewing all our customer touchpoints requires a comprehensive redesign of processes, systems, professional profiles, and even company culture; this brings us squarely into the territory of segmented databases, user personalization and user experience, but also transparency, with markets that are increasingly well-informed. 

3. Services and products  

If a company has correctly mechanized its internal processes and also its consumer touchpoints, almost inevitably it moves on to the third stage of digitalization, centered on the design of new services and products.  

Examples of digital transformation strategies and their implementation are all around us :  Amazon suggests what books we might like to read, carriers can inform us where our goods are, telephone companies could tell us how many French people entered the country yesterday, VISA knows the average cost of a meal in every restaurant in Barcelona, a doctor can remotely monitor the vital signs of a patient who is at home... There are a host of new opportunities which were science fiction before digitalization and now, of course, they are much in demand. 

This is not innovation, but adaptation to the new environment in which one of the fundamental effects of digitalization may be observed: any product subjected to digital pressure is transformed into a service .  

4. Monetization models  

The final stage of the digital evolution of an organization's activity will involve reconsidering the monetization model, which is still surprisingly unusual. 

In most sectors, today's dominant player negotiates the first three stages more or less smoothly, but proves very stubborn towards the idea of wholeheartedly exploring this fourth stage . It would appear to be clear that the digitalization of the publishing sector will lead the business to a flat fee model, as has already occurred with music, but the large publishing groups still insist on selling physical or digital books one by one.  

In order to be competitive, it is vital to triangulate a response based on the three elements in a digital transformation plan: vision, activity, and organizational culture . Many organizations focus on strategy and the impact on business, but they forget that the culture facilitates or restrains what we have been able to define in our strategy .  

The culture is the fundamental element which will ensure things happen. And what happens depends on the set of values or characteristics that predominate in an organization. As Stephen Hawking said: “intelligence is the ability to adapt to change,” so the challenge lies in how we can make our organization intelligent through these cultural values.

Conclusions  

In summary — as we explain in more depth in our digital transformation programs and masters , when drawing up a digital transformation plan — it is important to establish whether our aim is to generate efficiency in the organization or, on the other hand, to explore new opportunities. And the development of this plan will always involve creating and sharing a vision; identifying and executing a plan of action focused on how the various components of the business will be affected; and finally, aligning the people and the teams in pursuit of this common objective. 

Director of the Executive Master Digital Business

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Unlocking success in digital transformations

As digital technologies dramatically reshape industry after industry, many companies are pursuing large-scale change efforts to capture the benefits of these trends or simply to keep up with competitors. In a new McKinsey Global Survey on digital transformations, more than eight in ten respondents say their organizations have undertaken such efforts in the past five years. 1 The online survey was in the field from January 16, 2018, to January 26, 2018, and garnered responses from 1,793 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of them, 1,521 have been part of at least one digital transformation in the past five years at either their current or previous organizations. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP. Yet success in these transformations is proving to be elusive. While our earlier research has found that fewer than one-third of organizational transformations succeed at improving a company’s performance and sustaining those gains, the latest results find that the success rate of digital transformations is even lower.

The results from respondents who do report success point to 21 best practices, all of which make a digital transformation more likely to succeed . These characteristics fall into five categories: leadership, capability building, empowering workers, upgrading tools, and communication. These categories suggest where and how companies can start to improve their chances of successfully making digital changes to their business.

Transformations are hard, and digital ones are harder

Years of research on transformations has shown that the success rate for these efforts is consistently low: less than 30 percent succeed . 2 We define a successful transformation as one that, according to respondents, was very or completely successful at both improving performance and equipping the organization to sustain improvements over time. In our 2016 survey, the rate of success was 20 percent; in 2014, 26 percent; and in 2012, 20 percent. This year’s results suggest that digital transformations are even more difficult. Only 16 percent of respondents say their organizations’ digital transformations have successfully improved performance and also equipped them to sustain changes in the long term. An additional 7 percent say that performance improved but that those improvements were not sustained.

Even digitally savvy industries , such as high tech, media, and telecom, are struggling. Among these industries, the success rate does not exceed 26 percent. But in more traditional industries, such as oil and gas, automotive, infrastructure, and pharmaceuticals, digital transformations are even more challenging: success rates fall between 4 and 11 percent.

Success rates also vary by company size. At organizations with fewer than 100 employees, respondents are 2.7 times more likely to report a successful digital transformation  than are those from organizations with more than 50,000 employees.

The anatomy of digital transformations

Whether a change effort has succeeded or not, the results point to a few shared traits of today’s digital transformations. For one, organizations tend to look inward when making such changes. The most commonly cited objective for digital transformations is digitizing the organization’s operating model, cited by 68 percent of respondents. Less than half say their objective was either launching new products or services or interacting with external partners through digital channels. Digital transformations also tend to be wide in scope. Eight in ten respondents say their recent change efforts involved either multiple functions or business units or the whole enterprise. Additionally, the adoption of technologies plays an important role across digital transformations. On average, respondents say their organizations are using four of 11 technologies we asked about, with traditional web tools cited most often and used in the vast majority of these efforts.

At the same time, the results from successful transformations show that these organizations deploy more technologies than others do (Exhibit 1). This might seem counterintuitive, given that a broader suite of technologies could result in more complex execution of transformation initiatives and, therefore, more opportunities to fail. But the organizations with successful transformations are likelier than others to use more sophisticated technologies, such as artificial intelligence, the Internet of Things, and advanced neural machine-learning techniques.

The keys to success

Having these technologies on hand is only one part of the story. The survey results indicate how, exactly, companies should make the technology-supported changes that differentiate successful digital transformations from the rest (Exhibit 2).

Our research points to a set of factors that might improve the chances of a transformation succeeding (see sidebar, “Twenty-one keys to success”). 3 The survey tested for best practices in a digital transformation by using different types and structures of questions. To make commensurate comparisons of each practice’s impact on the likelihood of transformation success, Total Unduplicated Reach and Frequency (TURF) and Shapley value analyses were run. TURF analysis was conducted among respondents reporting successful transformations to identify the most common combinations of the 83 practices tested in the survey. This analysis was carried out by determining the proportion of respondents agreeing with or selecting at least one practice, then calculating the incremental value of including or excluding each practice. Shapley value analysis was then applied to the TURF output to rank the practices by their average expected marginal contribution to the likelihood of a successful transformation. The 21 keys to transformation success are the practices with the highest Shapley values. These factors fall into five categories:

Twenty-one keys to success

Out of 83 practices that were tested in the survey, 1 The survey tested for best practices in a digital transformation by using different types and structures of questions. To make commensurate comparisons of each practice’s impact on the likelihood of transformation success, Total Unduplicated Reach and Frequency (TURF) and Shapley value analyses were run. TURF analysis was conducted among respondents reporting successful transformations to identify the most common combinations of the 83 practices tested in the survey. This analysis was carried out by determining the proportion of respondents agreeing with or selecting at least one practice, then calculating the incremental value of including or excluding each practice. Shapley value analysis was then applied to the TURF output to rank the practices by their average expected marginal contribution to the likelihood of a successful transformation. The 21 keys to transformation success are the practices with the highest Shapley values. the following are those that best explain the success of an organization’s digital transformation:

• Implement digital tools to make information more accessible across the organization.
• Engage initiative leaders (leaders of either digital or nondigital initiatives that are part of the transformation) to support the transformation.
• Modify standard operating procedures to include new digital technologies.
• Establish a clear change story (description of and case for the changes being made) for the digital transformation.
• Add one or more people who are familiar or very familiar with digital technologies to the top team.
• Leaders engaged in transformation-specific roles encourage employees to challenge old ways of working (processes and procedures).
• Senior managers encourage employees to challenge old ways of working (processes and procedures).
• Redefine individuals’ roles and responsibilities so they align with the transformation’s goals.
• Provide employees with opportunities to generate ideas of where digitization might support the business.
• Establish one or more practices related to new ways of working (such as continuous learning, open physical and virtual work environments, and role mobility).
• Engage employees in integrator roles (employees who translate and integrate new digital methods and processes into existing ways of working to help connect traditional and digital parts of the business) to support the transformation.
• Implement digital self-serve technology for employees’ and business partners’ use.
• Engage the leader of a program-management office or transformation office (full-time leader of the team or office dedicated to transformation-related activities) to support the transformation.
• Leaders in transformation-specific roles get more involved in developing the digital transformation’s initiatives than they were in past change efforts.
• Leaders in transformation-specific roles encourage their employees to experiment with new ideas (such as rapid prototyping and allowing employees to learn from their failures).
• Senior managers get more involved in digital initiatives than they were in past change efforts.
• Leaders in transformation-specific roles ensure collaboration between their units and others across the organization when employees are working on transformation initiatives.
• Senior managers ensure collaboration between their units and others across the organization.
• Engage technology-innovation managers (managers with specialized technical skills who lead work on digital innovations, such as development of new digital products or services) to support the transformation.
• Senior managers encourage their employees to experiment with new ideas.
• Senior managers foster a sense of urgency within their units for making the transformation’s changes.
• having the right, digital-savvy leaders in place
• building capabilities for the workforce of the future
• empowering people to work in new ways
• giving day-to-day tools a digital upgrade
• communicating frequently via traditional and digital methods

Having the right, digital-savvy leaders in place

Change takes place at all levels during a digital transformation, especially when it comes to talent and capabilities. Nearly 70 percent of all respondents say their organizations’ top teams changed during the transformation—most commonly when new leaders familiar with digital technologies joined the management team.

Indeed, adding such a leader is one of the keys to transformation success. So is the engagement of transformation-specific roles—namely, leaders of individual initiatives and leaders of the program-management or transformation office who are dedicated full time to the change effort. Another key to success is leadership commitment. When people in key roles (both the senior leaders of the organization and those in transformation-specific roles) are more involved in a digital transformation than they were in past change efforts, a transformation’s success is more likely.

Other results indicate that when companies achieve transformation success, they are more likely to have certain digital-savvy leaders in place. Less than one-third of all respondents say their organizations have engaged a chief digital officer (CDO) to support their transformations. But those that do are 1.6 times more likely than others to report a successful digital transformation.

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Building capabilities for the workforce of the future.

The survey results confirm that developing talent and skills throughout the organization—a fundamental action for traditional transformations —is one of the most important factors for success in a digital change effort. Of our 21 keys to success, three relate to the workforce’s digital capabilities. First is redefining individuals’ roles and responsibilities so they align with a transformation’s goals, which can help clarify the roles and capabilities the organization needs. Respondents are 1.5 times more likely to report a successful digital transformation when this practice is in place.

Two other keys relate to engaging the specific roles of integrators and technology-innovation managers, who bridge potential gaps between the traditional and digital parts of the business. People in these roles help foster stronger internal capabilities among colleagues. Integrators are employees who translate and integrate new digital methods and processes into existing ways of working. Because they typically have experience on the business side and also understand the technical aspects and business potential of digital technologies, integrators are well equipped to connect the traditional and digital parts of the business. For their part, technology-innovation managers possess specialized technical skills and lead work on a company’s digital innovations.

Beyond these three keys for success, we found that companies with winning transformations have a better-funded and more robust approach to talent than others do. Transformation success is more than three times likelier when respondents say their organizations have invested the right amount in digital talent .

Success is also more likely when organizations scale up their workforce planning and talent development (Exhibit 3). For example, 27 percent of respondents report successful transformations when their companies set cross-functional or enterprise-wide hiring goals based on specific skill needs—nearly twice the share of respondents whose organizations do not.

During recruitment, using a wider range of approaches also supports success. Traditional recruiting tactics, such as public job postings and referrals from current employees, do not have a clear effect on success, but newer or more uncommon methods do. Success is at least twice as likely at organizations that run innovative recruiting campaigns (such as having recruits play games or find hidden messages in source code as part of the recruiting process) or host technology conferences or “hackathons.”

Empowering people to work in new ways

Digital transformations require cultural and behavioral changes such as calculated risk taking, increased collaboration, and customer centricity, as our previous research has shown . In this survey, the results suggest two primary ways in which companies with successful transformations are empowering employees to embrace these changes.

The first is reinforcing new behaviors and ways of working through formal mechanisms, long proved as an action that supports organizational change. One related key to transformation success is establishing practices related to working in new ways. Respondents who say their organizations established at least one new way of working, such as continuous learning or open work environments, as part of their change efforts are more likely than others to report successful transformations. Another key is giving employees a say on where digitization could and should be adopted. When employees generate their own ideas about where digitization might support the business, respondents are 1.4 times more likely to report success.

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A second approach to empowering workers is ensuring that people in key roles play parts in reinforcing change. Success depends on both senior leaders and those engaged during the transformation. 4 The survey asked which of the following roles were engaged by the organization to support the execution of the digital transformation: initiative leaders, integrator roles, leaders of the program-management or transformation office, technology-innovation managers, chief digital officers, and coaches. One related factor is encouraging employees to challenge old ways of working. Respondents who say their senior leaders and the people engaged in transformation-specific roles do this are more likely than their peers to report success (1.5 times more for senior leaders and 1.7 times more for those in key transformation roles). Another factor for success relates to risk taking. Success is more likely when senior leaders and leaders who are engaged in the transformation all encourage employees to experiment with new ideas—for example, through rapid prototyping and allowing employees to learn from their failures. A third key to success is people in key roles ensuring that their own units are collaborating with others when working on transformations. When respondents say their senior leaders and those in transformation-related roles have done so, they are 1.6 and 1.8 times, respectively, more likely than others to report success.

Giving day-to-day tools a digital upgrade

For organizations to empower employees to work in new ways, the survey findings show how, and by how much, digitizing tools and processes can support success. We asked respondents about seven structural changes their organizations had made since the transformations began (Exhibit 4). Three of these changes—each of which involves making the use of digital tools a new organizational norm—emerged as keys to success.

The first key is adopting digital tools to make information more accessible across the organization, which more than doubles the likelihood of a successful transformation. The second is implementing digital self-serve technologies for employees, business partners, or both groups to use; transformation success is twice as likely when organizations do so. A third key, focused on technology in company operations, is organizations modifying their standard operating procedures to include new technologies. Beyond these factors, an increase in data-based decision making and in the visible use of interactive tools can also more than double the likelihood of a transformation’s success.

Communicating frequently via traditional and digital methods

We also found that using remote and digital communications to convey the transformation’s vision does a much better job of supporting success than in-person or traditional channels. When senior managers and initiative leaders use new digital channels to reach employees remotely, the rate of success is three times greater.

Looking ahead

While respondents say that many digital transformations fall short in improving performance and equipping companies to sustain changes, lessons can be learned from those who report success. The survey results suggest steps companies can take to increase their chances of success during a transformation:

• Reimagine your workplace. The results show that success requires both digital-savvy leaders and a workforce with the capabilities to make a digital transformation’s changes happen, which other McKinsey research also confirms. 5 For more, see James Manyika and Kevin Sneader, “ AI, automation, and the future of work: Ten things to solve for ,” McKinsey Global Institute, June 2018; Jacques Bughin, Peter Dahlström, Eric Hazan, Susan Lund, Amresh Subramaniam, and Anna Wiesinger, “ Skill shift: Automation and the future of the workforce ,” McKinsey Global Institute, May 2018; and Pablo Illanes, Susan Lund, Mona Mourshed, Scott Rutherford, and Magnus Tyreman, “ Retraining and reskilling workers in the age of automation ,” McKinsey Global Institute, January 2018. The workforce implications of digitization, automation, and other technological trends are significant, and companies will need to invest in and hire for radically different skills and capabilities. Whether or not an organization has already begun a digital transformation, it is important for all companies to think critically about the ways in which digitization could affect their businesses, in the near and longer term, and the skills they will need to keep up. One critical step is for organizations to develop clear workforce strategies to help determine the digital skills and capabilities that they currently have—and will need—to meet their future goals.
• Upgrade the organization’s “hard wiring.” As digital requires new ways of working as well as changes to the organization’s overall culture, employees must be empowered to work differently and keep up with the faster pace of business. The implementation of digital tools and upgrading of processes, along with the development of a nimbler operating model—that is, the hard wiring of the organization—will support these changes. Of course, leaders have important roles to play, too, by letting go of old practices (command-and-control supervision, for example). Since not all leaders will have the experience to support or enact such changes, dedicated leadership-development programs could help leaders and employees alike to make the necessary shifts in mind-sets and behaviors.
• Change the ways you communicate. Good communication has always been a key success factor in traditional change efforts, and it is just as important in a digital transformation. In a digital context, companies must get more creative in the channels they are using to enable the new, quicker ways of working and the speedier mind-set and behavior changes that a digital transformation requires. One change is to move away from traditional channels that support only one-way communication (company-wide emails, for example) and toward more interactive platforms (such as internal social media) that enable open dialogues across the organization. Another key to better communication is developing more concise—and even tailored—messages for people in the organization, rather than lengthier communications.

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The contributors to the development and analysis of this survey include Hortense de la Boutetière , a partner in McKinsey’s Paris office, and Alberto Montagner and Angelika Reich , an associate partner and partner, respectively, in the Zurich office.

They wish to thank Cristy Chopra, Carolyn Dewar, Julie Goran, and Michael Krüsi for their contributions to this work.

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What is digital transformation?

Digital transformation is the process by which companies embed technologies across their businesses to drive fundamental change. The benefits? Increased efficiency, greater business agility and, ultimately, the unlocking of new value for employees, customers and shareholders.

Many different paths lead to digital transformation and each organization’s journey will be unique. For example, a company might introduce AI or cloud computing to enhance its customer experience . Or it might redesign its supply chain to make better use of machine learning. A company can even make spot-on predictions about the products customers will want in a few months’ time, then shift production to meet demand.

In every case, though, starting a digital transformation journey requires a new mindset. It is a chance to reimagine how companies do things, often from the ground up.

Two concepts related to digital transformation are digitization and digitalization .

Digitization is the process of translating analog information and data into digital form—for example, scanning a photo or document and storing it on a computer.

Digitalization is the use of digital technologies to change business processes and projects—such as skilling employees to use new software platforms designed to help launch products faster. While digital transformation might include digitalization efforts, it goes beyond the project level and affects the entire organization.

For most companies, digital transformation requires a shift away from traditional thinking and toward a more collaborative, experimental approach. These new ways of approaching work reveal new solutions which, in turn, can improve customer experience, drive employee innovation and spur company growth at the fundamental level.

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Why is digital transformation important?

Prior to the COVID-19 pandemic, digital transformation largely focused on customer experience. Then, everything changed—and accelerated. Now, digital transformation is the centerpiece of operational efficiency and innovation across the organization.

Across industries, change is happening in shorter waves than ever before, and CEOs feel the pressure but recognize the opportunity for the entire organization. And, according to our most recent survey, accelerated digital transformation , including cloud and data, has become the number-one topic CEOs prioritize for the board since the pandemic hit. Our research "Make the Leap, Take the Lead" shows that leading companies in enterprise technology were growing two times faster than most companies, and by doubling down on their tech investments recently, they are now growing five times faster. Leaders harness key cloud technologies, including AI, to outpace their peers. They adopt innovative technology sooner and reinvest more frequently. And they direct their IT budgets toward innovation. The benefits are more revenue and more growth—and the ability to stay ahead of the curve.

The COVID-19 pandemic has accelerated the rate of tech adoption

The top priority for leading companies? Scaling innovation through digital transformation.

Digital transformation strategy

Driving big change in an organization is too difficult to pull off without a plan. There are five major areas companies must address, often in parallel.

• Business strategy transformation Today, all companies are tech companies; all CEOs are tech CEOs. Digital transformation puts technology at the core of business strategy. This approach can reduce operating expenses and inefficiency. It could even change the course of your business. With a unified model across business and technology, it’s easier to achieve future ambitions. The technology path you choose now will determine, more decisively than ever, your company’s success.
• Business operations realignment Transforming business processes and adopting new ways of working for agility and experimentation are crucial to success. What do your customers and employees need most, and how can digital processes help? Starting with these questions can create better processes across the board, whether that’s improving customer service through better data and analytics, moving key services to the cloud, or building sustainability across engineering, manufacturing and supply chain functions.
• Adoption of new practices for agility and experimentation As customer expectations and the pace of change increase, it’s necessary to introduce new ways of working coupled with modern engineering capabilities. Most companies are making suboptimal decisions about how to direct their tech investments. It all comes down to embracing change and innovation. Successful digital transformation is a radically different approach—one that sees technology as accessible and people as adaptable.
• A flexible technology core for sustainable change It’s important not to get locked into just one technology. By staying nimble and flexible, you can catalyze innovation in your company and more easily form ecosystem partnerships that drive speed and scale. A modular approach allows for fast and sustainable change, and staying focused on customer needs is key.
• People change management Digital transformation affects all aspects of business. For it to work, the digital foundation, digital operations and a digitally skilled workforce collectively need the backing of leaders and a culture that is aligned on which new technologies to adopt and how best to integrate them into daily life. What should the future of work look like? How should roles and responsibilities evolve? In what ways can technology enable better knowledge sharing and collaboration? How can leaders be trained to communicate better, have greater empathy and earn trust in a remote-work environment? Technology introduces new challenges for workers, but it can also solve many of them. To create sustainable change, companies often need to build new skills as employees work in new ways .

Forrester ranked Accenture as a leader in digital transformation management , saying that leaders "bring a clear vision for how they execute transformation with evidence from clients that this successfully leads to positive business outcomes."

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How to enable digital transformation

Companies know that digital transformation is essential. Questions we often hear include "How should I start?" "Where do I start?" and "How can I fund this transformation?" Here are six action steps that help answer those questions and make change possible:

• View it as business transformation. Customers should be top of mind in any transformation. Companies should start by identifying the key friction points that customers may be facing—whether in equipment sales, parts, service or elsewhere. Companies across industries are embarking on large-scale transformations as dramatic market shifts drive reinvention.
• Develop your strategy and organizational change. A clear vision, an integrated approach and a focus on value are key to any transformation. Having the right transformation strategy and workplace—typically called a transformation office—is critical for all stakeholders.
• Break down barriers to change. Focusing on customer challenges enables the breakdown of functional silos. It generally takes multiple functions to share information and solve for a quality customer experience.
• Cultivate your partner ecosystem. Our study in the high-tech and software segment found that 89% of partners are looking for new sources of growth and operational effectiveness.
• Adopt an agile approach. Agility is the key to any transformation. Fostering it starts with creating a business culture in which experimentation is encouraged and innovative ideas can flourish.
• Fund it as an investment. Funding digital transformation is a complex process that is best approached one step at a time. In the short term, start with an end-to-end view of digital opportunities and requirements across the customer journey. From there, choose a challenge that fits your desired investment and payoff opportunity. By doing these things, organizations can self-fund innovation, optimize technology investments and remove roadblocks to change.

Today, all companies are tech companies.

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Frequently asked questions

What are the five main areas of digital transformation.

The five main ways to address digital transformation are: reimagine your growth strategy powered by technology, realign your organization to put technology at the heart, adopt new practices for agility and experimentation, create a flexible technology core for sustainable change and empower your people to innovate with technology.

What is an example of digital transformation?

Think of two, similar consumer product companies. One has undergone a digital transformation, the other hasn’t. The traditional company simply produces and sells products according to what customers order. The transformed company, however, uses a steady flow of real-time data and insights on which products are being consumed, where and how quickly inventory is depleting. This informs production to maximize efficiency in the here and now, but also helps the company predict what consumers will want months or even years into the future.

How do you fund digital transformation?

Funding digital transformation is a complex process that is best approached one step at a time. In the short term, start with an end-to-end view of digital opportunities and requirements across the customer journey.

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Digital Transformation Strategy and Plan

• Great for beginners
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Digital transformation is the process of modernizing your business processes , systems, and organizational culture to deliver better products and services faster. It’s a crucial element of staying competitive in today’s digital-first economy, but it can be challenging to plan and execute without the right tools.

That's where ClickUp's Digital Transformation Strategy and Plan Template comes in! This comprehensive template offers all the tools you need to:

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Take control of your digital transformation today with this one-stop strategy and plan template from ClickUp—and unlock the power of digital innovation in no time!

A digital transformation strategy and plan template can be a valuable asset for any organization looking to make the leap to the digital age. Benefits of using such a template include:

• Providing a clear roadmap for the entire digital transformation process
• Giving stakeholders a better understanding of the goals, objectives, and expected outcomes of the transformation
• Helping to identify areas for improvement and facilitate effective decision-making
• Helping to ensure that resources are allocated appropriately and efficiently

ClickUp's Digital Transformation Strategy and Plan Template is designed to help you track your organization's digital transformation journey. This Folder template includes:

• Custom Statuses: Create tasks with custom statuses such as To Do, Complete, On Hold, Blocked, and Needs Approval, to keep track of the progress of the project
• Custom Fields: Categorize and add attributes to manage your tasks and easily visualize the progress of the project, such as Task Complexity and Task Effort
• Custom Views: Open 3 different views in different ClickUp configurations, such as the Overview, Gantt Chart, and Getting Started Guide so that you can hit the ground running
• Project Management: Improve digital transformation tracking with automations, AI, collaboration, comment reactions, and more

The first step is to define the purpose of your digital transformation. What are the goals that you want to achieve, and what digital initiatives will help you get there.

Create Goals in ClickUp to clearly define the purpose and objectives of your digital transformation.

The next step is to identify who the key stakeholders are and how they can help you achieve your goals. This includes team members, customers, partners, and any other relevant parties.

Use Board view in ClickUp to create a visual representation of all the stakeholders involved in your digital transformation.

Once you’ve identified the stakeholders, it’s time to create a plan. This should include a timeline, milestones, tasks, resources, and success metrics.

Use the Gantt chart view in ClickUp to create a timeline and assign tasks to specific team members.

Finally, you need to monitor progress and make changes as needed. Regularly review the progress of your digital transformation initiatives and adjust your plan as needed.

Set up recurring tasks in ClickUp to review progress and keep the plan updated.

Business leaders can use this Digital Transformation Strategy and Plan Template to help everyone stay on the same page when it comes to developing and implementing a digital transformation strategy.

First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a comprehensive digital transformation strategy and plan:

• Use the Overview View to get an at-a-glance look at your digital transformation goals and objectives
• The Gantt Chart View will help you plan out tasks and keep track of progress
• The Getting Started Guide View will provide you with a step-by-step guide on how to get started on your digital transformation project
• Organize tasks into six different statuses: To Do, Complete, On Hold, Blocked, Needs Approval, to keep track of progress
• Update statuses as you progress through tasks to keep stakeholders informed of progress
• Monitor and analyze tasks to ensure maximum productivity

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Digital Transformation Roadmap Example

If you already know what digital transformation is and why you’d want to undertake it , then the next step is to learn how.

There are plenty of articles out there with generic advice about everything you need to consider, but much of it is common sense to the seasoned strategist. You’ve got the bones, but no meat.

So, with help of example company RedYabber, we’re going to take you through the step-by-step process and delve into the nitty-gritty in this digital transformation roadmap example.

The process involves answering six fundamental questions, each of which flows logically into the next:

• Why do we need a digital transformation?

What must we achieve in order to transform?

• What exactly do we need to transform?
• What changes are required in order to transform?

What packages of change should we form to execute the transformation?

• How do we sequence the packages of change over a transformation time horizon? ‍

Our digital transformation roadmap example case study

RedYabber is a traditional wooden toy company that sells its products through local and global retail outlets. With the advent of online markets, such as eBay, and manufacturing and supply chain automation, RedYabber has begun to struggle to rival its competitors on price, speed of delivery, reach and quality.

Its vision hasn’t changed – but the business goals have. The leadership team has decided that it’s time to embrace digital ways of working and undertake a digital transformation.

They have set out with four clear goals, to be achieved in the next three years:

• Automate manufacturing and warehousing for just-in- time delivery to reduce inventory and product cost.
• Decision making based on data, not intuition.
• Market and sell online – reduce dependency on traditional retailers.
• Develop innovative wooden toys that provide children and parents with an alternative to digital devices.

Why do we need digital transformation?

Firstly, here’s a quick recap of some of the common reasons for pursuing digital transformation:

• To improve customer experience
• To improve efficiency
• To improve decision-making
• To outstrip the competition

These are all pretty relevant to RedYabber, and most likely to your own organization too.

The starting point of a strategy roadmap for digital transformation is to articulate the challenges faced by your organization. A clear list of challenges will keep you aligned with your strategic vision or goals and heading in the right direction.

Keep in mind that a challenge is not just a problem; it can also be an opportunity.

When the RedYabber team sat down to lay out their challenges, they homed in on just six core ones.

For each challenge, identify at least one objective.

An objective will specify what must be achieved within the time horizon (three years for RedYabber) in order for digital transformation to be successful.

To demonstrate what we mean, the image below shows RedYabber’s nine objectives, linked back to their six challenges.

Some of these objectives aren’t specific to digital (e.g. ‘reduce order to dispatch time by 50%’).There’s a simple reason for this: digital transformation, or digital, is just an enabler. The question is how digital technologies can be applied in order to achieve the objective.

What do we need to transform?

Digital transformation is about creating capabilities, not just products and definitely not just projects. Capabilities are simply the building blocks of a business that enable it to do what it does.

To understand what capabilities are needed for digital transformation, start by creating a capability map.

As the word ‘map’ suggests, this is a visual that displays all of the capability building blocks that make up the business (or an area of it). It’s a core technique in capability-based planning .

With this in hand, review each capability and determine:

• Does the capability deliver or help us to meet our objectives?
• What level of change is required in order to meet our objectives?
• What is the priority for implementing the change?

Remember to consider each capability from people, process and physical perspectives, i.e. what changes would be required to each of these aspects of the business. In the case of digital transformation, ‘physical’ is often replaced with ‘technology’.

You should then develop the visual to communicate the answers to these questions.

This means using colour coding and simple labelling systems to indicate the relationship of the capabilities to each other and to the digital transformation objectives.

In the RedYabber example, they have used colour coding as described in our capability mapping article , i.e. red to delineate a high level of change required, orange for medium, yellow for low, blue for none.

They have also applied two types of label: numbers circles, which link a capability to one of the nine objectives; and stars with letters, indicating if the priority is high, medium or low.

What changes are required to transform?

Once you’ve established the current state of your capabilities and the required future state, you need to plan how to get from one to the other.

For each capability, list the actions which must be completed in order to meet the linked objective. Your focus should of course be on the capabilities that are a priority, meet objectives and require change.

Courses of action should consider the people, process and physical (or technological) changes required to a capability.

The below image shows a sample of the courses of action required for some of RedYabber’s capabilities:

The people, cog and spanner icons against each course of action in the RedYabber example indicate whether the action primarily relates to people, process or technology respectively.

You’ll end up with quite a large number of courses of action, so the next step is to group them into logical packages, which we’ll refer to as initiatives.

Depending on the level of granularity defined, an initiative can be a project or a program.

Here’s a sample of six initiatives from RedYabber:

How do we sequence the packages of change over a transformation time horizon?

Your list of initiatives feeds directly into a roadmap for the digital transformation strategy.

For RedYabber, the initiatives must be sequenced across the three-year time horizon that they have set themselves for digital transformation. In their roadmap, the columns signify five time-boxed stages to ensure that everything is spread logically and attainably over the three years.

The rows split up strategic themes, e.g. the initiatives relating to marketing are positioned within one row. This makes sense since initiatives that are similar may be reliant on each other or may be natural progressions of each other.

Below you can see the final outcome of our digital transformation roadmap example.

Summarizing and communicating your roadmap

After completing the six steps, you have the answers to the why, what and how of digital transformation.

There are many tools out there for building and presenting strategy roadmaps, but they generally fall into one of three categories : generic desktop tools, specialized business architecture tools, and dedicated lightweight tools. Our preference is for the latter type, due to the efficiency and ease of communication that’s usually inherent.

Whatever tool you use, ensure that it will help you build a substantiated roadmap and you’ll be well on your way.

How Jibility can help

RedYabber’s diagrams in this article were created using Jibility, an app dedicated to building strategy roadmaps logically and efficiently.

A free Jibility account gives you access to the full version of the RedYabber digital transformation example used throughout this article, which you can duplicate into a template that will fast-track the creation of your own strategic roadmap.

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