This is part 3 of a 3-part series on digital blueprints.
Digital transformation has tremendous potential to unleash value for organizations; thus, more and more organizations are formulating digital strategies. However, many are missing significant value and opportunities that are made possible by a holistic digital strategy. Many digital strategies are focused too narrowly. For example, leaders claim they are achieving the digital strategy by moving applications and infrastructure to the cloud. A digital strategy establishes the enterprise vision and priorities for digital transformation. To power your digital transformation, leverage a digital blueprint– a structured approach used to evaluate opportunity areas, value drivers, and risks, and align the digital path with business drivers.
Common Elements of a Holistic Digital Strategy
So how can an organization build a strong foundation that will lead to true digital innovation? There are five common elements of a holistic digital strategy:
In this, the final blog in the series on digital blueprinting, we will explore the final three success factors to develop a digital blueprint: Imagine, decide, and launch.
IMAGINE: Develop a Comprehensive Strategy
Envision the desired outcomes and define a portfolio of opportunities to drive to the future state. Technology implementation can be an expensive and risky proposition. It is no wonder many organizations approach digital transformation in small steps. There is nothing wrong with small steps, so long as they are not part of a small plan. Unfortunately, many organizations move so cautiously, that while they might leverage new technologies, they miss the more profound transformation opportunities. They fail to recognize that digital strategy is not a single technology or solution.
Digital leaders understand that transformation is about the convergence of new ways of working and problem solving, experimentation and risk-taking, and a reimagination of business and operating models.
The following table illustrates this point. The example on the left may successfully improve productivity with a new capability, but it fails to capture the full potential of digital transformation. By contrast, the example on the right completely rethinks the business process.
Table 1: How is a Digital Strategy Different than Traditional Technology Enablement?
Clearly, multiple new technologies and capabilities may take time to mature. The key lies in the ability to envision a digital future so investments today can be leveraged in new ways tomorrow. To achieve this sort of unconstrained vision, start with the end in mind. Consider all the desired outcomes across the value chain, and begin to envision the types of digitally enabled capabilities that could make it a reality.
Figure 1: A comprehensive digital strategy addresses the entire value chain
DECIDE: Prioritize Digital Initiatives to Mature Digital Capabilities Based on the Vision.
Perhaps the most challenging aspect of creating a digital blueprint is deciding which digital capabilities are the highest priority to achieve the vision. The traditional strategy formulation would simply optimize risk and reward, but this kind of thinking tends to focus on mature capabilities, and all but eliminates innovative, unproven technologies. Essentially, in a traditional strategic portfolio, experimentation and innovation are squeezed out.
By contrast, digital transformation is driven by experimentation. The digital blueprint must encourage innovative risk-taking to identify and build new digital capabilities. Therefore, the digital capability portfolio is designed to shepherd the maturity of capabilities over time.
One way to view the portfolio is by the relative maturity of digital capabilities and their potential impact on the envisioned outcomes.
Figure 2: A robust digital portfolio includes digital capabilities at all stages of maturity
A robust digital portfolio will include capabilities at various stages of maturity:
- Digital Imperatives: Fully matured capabilities with well-defined operational models, ecosystems, and established benefits. (Examples: Cloud, SaaS, Mobile Apps)
- Evolving Capabilities: Capabilities which are proven across multiple organizations / industries, have well defined ecosystems, but are still in early stages of adoption for many companies. (Examples: Advanced analytics, Internet of Things, Robotic Process Automation)
- Proofs-of-Concept: Capabilities which have clear potential, but have limited adoption and rapidly evolving ecosystems. (Examples: Blockchain, 3D Printing)
- Digital Forerunners: Capabilities with unknown potential, limited ecosystems, and a handful of early adopters. (Examples: Artificial Intelligence, Quantum Computing, Nanobots)
Ultimately, prioritization is a byproduct of capability maturity. A future-state outcome that relies heavily on less mature capabilities will have a longer time horizon.
LAUNCH: Enable a Sustainable Digital Transformation Model.
The final common element of a successful digital transformation, establishing the digital operating model, is perhaps the most important. The digital operating model is the engine the powers the myriad of activities needed for success. The operating model addresses three interdependent goals: innovation management, digital product management, and workforce management, as demonstrated in the figure below.
Figure 3: Components of digital vision & strategy
Innovation Management – Includes proactive, structured activities to harness the collective knowledge of the workforce and identify new digital opportunities. Effective innovation management will provide visibility to new technologies and models, support the exploration of new ideas, and evaluate the viability of digital capabilities, products, and services to be included in the digital program. Mature innovation processes often include:
- Promotion and development of new ideas from the business, supported by appropriate processes and incentives to enable and reward innovators
- Identification of new digital technologies and capabilities, as well as engaging the ecosystem of partners and solution providers
- Digital lab environment to explore new technologies without necessarily conducting a full-scale proof-of-concept
- Access to data and data science tools to evaluate if a given opportunity is supported by the enterprise information architecture
Digital Product Management – Enables iterative development of digital products and services in coordination with the business. Often, digital product management leverages agile methodologies and teams:
- Support of human-centered design principles (experience design) to ensure digital products are simple, intuitive solutions to address the needs of customers or stakeholders
- Enablement of digital product development teams
- Access to existing technology infrastructure and platforms to effectively integrate digital solutions. DevOps models are often used to align technology integration and release management with digital product development models.
- Assurance of digital portfolio value and maturity linking evolving digital products and capabilities to business drivers and envisioned outcomes
Workforce Enablement – Delivers the right talent, roles, and tools to drive transformation. Digital workforce enablement generally addresses:
- Identification of the talent and organizational roles needed to sustain a successful effort
- Evolution of culture and practices to actively engage the workforce and help manage change. Many organizations focus on awareness of digital trends. Often training in practices, such as design thinking and agile, are provided for a common core set of skills.
- Rollout of workplace tools to promote visibility and collaboration. These may also include supporting technologies such as mobility devices, cyber-security tools, or data visualization platforms that can equip the workforce for new digital models.
The path to digital success is unique to every organization. Decisions on how best to leverage new technologies must be driven by the business and based on knowledge of customers and markets. However, successful digital strategies will always have several elements in common. Our experience shows that organizations that have mastered the five elements described in this blog series are well on their way to mastering the digital landscape.
Click here to learn more about our Digital service offering. Want to continue the conversation? Contact us at email@example.com, and read the first two parts of the blog series on digital blueprinting.