Digital Transformation Assessment Framework
Updated: Aug 27, 2020
In the fast-paced world of digital advancement, emerging business and technology trends are disrupting the status quo, as a result accelerated change is inevitable. Businesses rush to stay relevant leveraging disruptive and exponential technologies to achieve competitive advantage. In this blog, we'll highlight the significance of doing an assessment before embarking on the digital transformation journey. A brief walk-through of the digital transformation assessment framework with its different dimensions and elements.
Digital disruption has happened and is bound to happen again and again. Thought Digital transformation has become a buzzword, it is not something new. The convergence of the computer and distributed networks in the 1980s led to this digital revolution thus history has taught us that digital transformation is an ongoing process of change. With digital transformation at the center of modern organizational strategies. IDC estimates the economic value of digital transformation to almost $19 trillion or more than 20% of global GDP in 2019.
Most organizations are tempted to jump straight into digitally transforming their businesses to avoid being disrupted and to disrupt other businesses. To avoid pitfalls, organizations should assess their change readiness before embarking on the transformation journey, e.g. is the change necessary? how will the change be implemented and will it benefit the organization? This can be achieved by doing a digital transformation assessment to identify pain points, digital maturity and opportunities for improvements. Yes, improvement opportunities to guide the future roadmap in order to deliver successful digital transformation initiatives. Doing an assessment will identify what needs to be fixed before creating new initiatives that may not add value. Having a digital transformation strategy is about continuously improving your business capabilities in order to stay ahead of the curve. Transformation is evolutionary not revolutionary. The digital transformation strategy will help to consolidate and align all digital and technology efforts with common business objectives. The diagram below depicts four assessment dimensions.
In setting up your digital transformation strategy you will need to evaluate or assess all dimensions that make up your digital ecosystem. The strategy should clearly define future goals or objectives, opportunities and risks. This will prepare the organization for digital disruption and in turn improve the bottom line through value creation. Below are some of the questions organizations should ask during the assessment:
1. Strategy and Vision
Is there a clear vision and strategy to help deliver the organization's objectives?
Does everyone in the organization share a common understanding of the digital vision?
Is the strategy clearly communicated so everyone knows the targets for improvement?
Does the organization have a clear understanding of how new technological trends are changing its competitive environment?
2. Leadership and Culture
Is there leadership support and focus to deliver the digital vision?
Does the organization embrace collaborative mind-set and innovative culture?
Is there a dedicated team to manage the organization's adoption and change management for the digital transformation initiatives?
Does the leadership culture embrace digital change?
3. Process and Governance
Are the processes automated to support digital operations and in turn enable business agility?
Are the roles and responsibilities clearly defined and enforced with a central governance structure?
Is communication effective and works top-down, bottom-up across the organization?
Is there a central governance body that monitors all digital transformation initiatives under one umbrella?
4. Technology and Capabilities
Does the organization have a clear understanding of how the required digital skills and workforce will change in the digital ecosystem?
Does the relevant digital capabilities exists to effectively manage digital dexterity?
How does the organization empower people with digital technology capabilities?
Does the organization invests in new business models and innovative initiatives?
Once the information gathering is completed through surveys, interview sessions and working groups, data is then analyzed using a combination of industry best practice frameworks and business strategy models to determine gaps and recommendations. Subsequently initiatives are derived from key findings to formulate strategic options for implementation. A business case should be defined to translate digital transformation strategies to tangible business models / outcomes and to ensure the return on investment will materialize.
A transformation's success requires that people across the organization should have a specific role to play and that everyone knows how to carry out their part. Digital transformation strategy creates competitive advantage, people and the culture of innovation sustains it. Disruptive Technologies, i.e. artificial intelligence, cloud, edge computing, mobile, social media, 5G, digital twin, cognitive computing etc. enables the digital transformation strategy. To avoid technical debt, scope creep, additional cost and in most cases failed digital transformation initiatives - it is best to determine your existing digital maturity early in your transformation journey, target maturity, maturity index, key performance indicators and critical success factors to frequently measure success.
In closing, below are some of the advantages of doing an assessment for your digital business transformation initiatives:
To establish a baseline maturity and strategic roadmap to address pain points
Capture existing process workflows and identify opportunities for automation (RPA)
Enables superior stakeholder engagement and alignment with overall business strategic imperatives
Obtain clearly defined improvement and transformation plans
Help identify application capability for cloud readiness
Addresses and remediate known and unknown gaps
Capture end-to-end view of your data center, i.e. hardware and software inventory as well as application portfolio etc.
Helps to quantify IT infrastructure candidates for virtualization and cloud adoption.
Though assessment process is invaluable, research suggests that many strategies fail in execution. Leadership and change management is extremely important to minimize the risk of failure. Thus organizational leaders should create a sense of urgency and find innovative ways to enable the driving forces and mitigate restraining forces for the business transformation change.