A Holistic Approach to Digital Transformation

Digital transformation is no new topic - it has been around for the last decade. The race towards digital organizations and the pfoliferation of digital technologies has already begun in almost all industries. Although CxOs know that digital transformation is vital to survival, there is still a lot of uncertainty prevalent on how to approach it. One common mistake is to see digital transformation as a one-off project that will solve all the challenges entailed by digitalization that companies have to cope with. A model is required which, by design, views a transformation as an ongoing effort.

The Digital Transformation Ecosystem (DTE) does exactly that. It enables organizations to flexibly adapt to the changed environment by iteratively assessing the current state of the company. This ecosystem consists of three core areas (see figure I), which are essential for any transformation:

  1. An open Framework,
  2. An iterative Approach based on agile methodology, and
  3. Roles that are required to conduct the transformation.

The Framework is applicable to different industries and helps to focus the transformation effort on strategic and tactical gaps in digital capability, so they receive the right attention at the right time. It encompasses four cross-functional layers that ensure an end-to-end view on the topics of Strategy, Operating Model, Culture as well as Technology & Data. Thereby, each layer comprises certain focus areas that build the basis for the solution development. Due to the framework’s modular structure the layers can be adjusted to the individual needs of the client and furthermore, can also be tackled separately.

The Approach consists of five phases (Assess, Initiate, Realize, Sustain and Learn) to operationalize the framework. It is designed in an iterative manner allowing for quick feedback loops and to facilitate re-orientations of the transformation. Hence, the specific phases of the approach are carried out linking the initial and a follow-up assessment (e.g. Digital Maturity Assessment). Those assessments are conducted regularly to enable a continuous adaption of the transformation through new requirements based on environmental and technological changes. The difference to other transformational frameworks is in how the target picture is perceived. The iterative transformation approach assumes that the first target vision derived from the initial assessment is not necessarily the best and final one and that learning happens continuously throughout the process. It encourages a tight feedback loop to incorporate new knowledge, emerging requirements, and innovative ideas even late in the process that can be accommodated in subsequent iterations. Assessment and transformation can both take place on one or two separate layers as well. This means that depending on needs, an organization is able to assess the culture layer separately while evaluating and transforming the other layers at a different point in time.

Different Roles within a team must be fulfilled to successfully transform an organization. The DTE identifies four key roles that need to be in place to allow for an effective execution of the transformation approach. These four roles are: the Business Lead, the Organization & Culture Lead, the Technology & Data Lead and the Industry Body. In doing so, it is important to keep in mind, that each role must assume the lead for their respective area and is seen as a key stakeholder by the internal workforce or by external advisors. During the transformation team selection process, it is therefore important to consider the individual and collective impact on the transformation. It is essential that these roles have the necessary authority to act and extensive knowledge, mind-set, and influence to lead and execute the required transformation tasks. Since every transformation is unique, the ideal allocation of the four roles varies and depends on the circumstances.

As with any open ecosystem, adaptability and flexibility is key to survival and, even more important, to being successful. Hence, the DTE is adaptable and flexible to meet the needs and requirements of different organizational models with their different purposes.

If you want to receive more information on how the DTE structures and facilitates your company’s digital transformation, reach out to me.

The article was originally published on 16.11.2020 here on LinkedIn.