Foundations of digital transformation

I have previously explained that strategy is vital to guiding digital transformation, and how teamwork and culture are critical to success. I introduced a structured agile approach to the change process (see Figure 1) and I will now explain the prepare and horizon scan steps in this process which are fundamental in setting the change process off in the right direction.

Figure 1: Structured, agile approach to digital transformation

Prepare step

Strategic clarity and technology alignment: Technology choices must always be made based on sound business change goals, avoiding the latest fads, fashions and avoiding doing tech for tech's sake. The best way of achieving this is to make sure that the strategy is clear and well understood and that the technologies chosen are best suited to support the strategic change.

In their advice about operationalising strategy in ‘Beyond Default’, David Trafford & Peter Boggis suggest combining operating principles (to state what will be done) with design principles (to state what changes are needed) as a way of ensuring alignment of the 'what' with the 'how'. An illustration of this alignment for tech inspired change from one operating principle (in practice, strategic vision will comprise several) is shown in Table 2. 

Table 2: Aligning tech with strategic intent

This alignment should be validated by the tech team and business team working together at the prepare stage.

Information and process base: An organisation’s business processes and information base define how they do business, and the prepare stage must scope the improvement opportunity through digital transformation. In the example cited in Table 2, the 'as-is' trade finance business process must be well understood and documented before it can be enhanced to support smaller clients. Similarly, the underlying data structures used to track consignments from dispatch through to their destination must be totally clear and under control before they can be enhanced to provide the new offerings. 

There are many excellent resources available covering mapping and managing business processes and organisational data, but I’ve included five practical ‘hints and tips’ on each in Table 3.

Table 3: Five “hints & tips’ for business process and data / information management

Culture, again! Organisational culture plays a central role in transformation and the prepare step offers an ideal opportunity to assess the organisation’s cultural readiness for change. In their book Building Digital Culture, Daniel Rowles and Thomas Brown introduce a framework as shown in overview form in Figure 4.

Figure 4: Digital Culture Framework

This framework can be used in the prepare phase to assess organisational readiness for digital transformation, and also to fill the gaps needed to make the transformation a success.

Horizon scanning step

When the strategic requirements of technology are clear, and the information and process bases understood, a technology search envelope can be defined to set the scope for the horizon scanning step. Horizon Scanning is defined by the OECD as "a technique for detecting early signs of potentially important developments through a systematic examination of potential threats and opportunities, with emphasis on new technology and its effects on the issue at hand."

Leveraging open source information: there is an abundance of information in the public domain to facilitate the horizon scanning process, as shown in Figures 5 & 6. This information is compiled by Industry Analysts such as Gartner and ATOS, and often are available by industry. Once the search envelop is clear, the tech team can access this information to determine which technologies can be used to implement the required strategic change.

Figure 5: Gartner Hype Cycle

Figure 6: ATOS Technology Radar

The tech team and business team can work together (for example) to construct a Technology Radar specific to their organisation. The compilation and refinement will be an interactive, agile process with the tech team researching candidate technologies, explaining them to the business team and deciding together if they go onto the radar plot, and in which segment.

For technologies that can be leveraged in the near term, the tech team will immediately focus on learning more about them (more about this in my next post) to validate their positioning and business potential. For technologies offering longer term benefit, the tech team should keep a 'watching brief' on the technology and how it evolves over time.

Tech and biz term roles

The role of each team at these two stages is shown in the Table 7 and as always a balanced and collaborative working will be key to success. 

Table 7: Roles of tech & business teams at prepare & horizon scan steps

In summary, prepare and horizon scan provide the vital foundational steps in the agile approach to digital transformation. When executed diligently with close teamwork between the business and tech teams they get the organisational change process off to a powerful start.

I would sincerely appreciate comments on this blog post, or feel free to contact me directly if preferred. Follow this link for my strategy & transformation blog posts.