A pragmatic digital transformation framework

This is a re-posting of a blog article of Throput.

We have been providing consultancy on digital transformation to some organisations. Through conducting these consultancy studies, we have developed a digital transformation framework, including a digital architecting process and a digital architecture to guide us through designing the digital transformation programme for our clients. Here, I will outline this process and framework. In the future, I plan to share in more detail what we need to go through in each step with practical examples.

Digital architecting process

Based on our experience, a consultancy project of architecting a digital transformation programme usually takes six to nine months. If the consultancy is too short, it would likely be filling in a standard digital transformation template for the organisation, leading to vague or impractical recommendations. After all, digital transformation is a change process, which should deeply involve representatives from different stakeholder groups, including the management, operations as well as the external stakeholders and the customers or the front-line staff who can give the external views. It would take time to gather needs, views, and suggestions from these representatives and have them promulgate the ideas and plans to the stakeholders they represent. The consultant can only serve as outside-in stimulator. The purposes, goals, action plans, and governance of the digital transformation should be at best grounded inside-out with support and commitment from all concerned stakeholder groups. However, if the project takes too long, say over one year, it would likely need to chase the moving targets as the technology is changing very fast. The digital architecting should be an on-going and iterative process. It is more important to start off the digital transformation with a practical governance and change management process in place than to define a 100% accurate or risk-free programme. On the one hand, the consultant can help the organisation to set out the long-term (e.g., five-year) digital strategy and the first-wave short-term (e.g., two-year) implementation roadmap. On the other hand, the organisation should establish a Digital Task Force to keep digital architecting a continuous process.

The following diagram outlines the digital architecting process, which we have defined through adapting and simplifying common enterprise architecture practices.

• Define Digital Vision. A clear vision of the digital transformation programme, which we call the Digital Vision, is defined. This Digital Vision provides the direction of the digital transformation journey. This covers the purposes, goals, strategy and guiding principles of implementing the digital transformation programme.
• Define current state. The existing business architectures and IT infrastructures are defined. The stakeholder needs and pain points, operational improvement opportunities, and the existing IT plans are analysed. The relevant technology trends are also studied.
• Define target state. The future state that the digital transformation targets to achieve is defined. The gaps between this target state and current state are analysed. The long-term execution strategy is also defined to deploy the target state.
• Define implementation roadmap. Based on the gap analysis, the implementation roadmap to achieve the target state is defined. IT projects can be proposed for implementation in the near term (in 2 years). Areas for project implementation can be proposed for the long term (in 3 to 5 years).
• Define governance and Key Performance Indicators (KPIs). The governance organisation (e.g., Digital Task Force) and framework (e.g., change management process) as well as the KPIs are proposed to steer the execution and monitor the progress of the digital transformation programme.

Digital Pyramid - a digital architecture framework

We have designed a framework for formulating the digital architecture, which we called the Digital Pyramid, that is used to systematically specify the target state of the digital transformation and perform gap analysis with the current state.

The following figure illustrates the Digital Pyramid, which comprises six domains in four layers. Each layer guides the design of the layer below it. In other words, the implementation of a layer supports the realization of the layer above it.

• The first layer / domain defines the Digital Vision, which defines the purposes, goals, and objectives for the digital transformation programme. It provides the directions for all analysis, design, planning, execution, and governance activities throughout the programme. It serves as the “north star” for defining the other domains in the framework.
• The second layer / domain defines the target business models that the organisation can revitalise to deliver its products and services using modern digital technologies. It propose the ways for the organisation to rethink the value propositions and customer base to realise the Digital Vision.
• The third layer defines in what ways the processes of stakeholder engagement and operations can be adapted and improved with new use of technologies to achieve the new business models. The stakeholder engagement domain focuses on how to reinvent the stakeholder interactions and the customer experiences using new communication and collaboration platforms. The stakeholders may comprise the customers, business partners, and internal employees. The operations domain aims to propose the process improvement opportunities to increase operational efficiency and productivity, in particular through workflow automation.
• The fourth layer defines what digital technologies can be used to achieve the transformation of stakeholder engagement and operations. The technology domain identifies the applicable digital technologies (e.g., mobile communications, workflow automation, Internet of Things). It can also introduce new the technology innovation process and culture to the organisation (e.g., agile development process, and lean start-up culture). The data domain studies what data can be aggregated from the existing systems and what data can be collected from new channels, and how the data can be cleansed, organised, integrated, and analysed with modern big-data platforms. It can also propose the data strategy and good practices for the organisation.

I hope our digital transformation framework can help you set out a digital transformation plan. Rather than a fixed framework set in stone, you can adapt it to meet the business needs of your organisation. In some occasions, you may be more comfortable with analysing the current state first before crafting the digital vision, when you are unsure about what the organisation actually needs. Like most enterprise architects often do, you can also perform the digital architecting process in an iterative fashion, e.g, focusing on high-level strategies first and developing implementation plans when you have sufficient details.

Digital transformation is inevitable for your organisation to stay ahead of the competition; or your business would possibly be obsoleted by the global digitalisation. If your organisation has not yet planned any digital transformation, you should start socialising the idea with the top management and other key stakeholders now, and get their support to kick it off as soon as possible.