Digital transformation is rapidly redefining the ways in which individuals and companies do business; Entire industries already have been remodeled: from taxi to media, from film to restaurants and banks.

A recent report from Altimeter Group shows that 88% of the companies surveyed, state that they are undertaking digital transformation efforts. However, only 25% of those companies say they have a clear understanding of new and underperforming digital touchpoints.
Those numbers do not match up, and we can only conclude that the vast majority of people interviewed claiming to be undertaking Digital Transformation are in fact more likely to be making adaptations to existing process steps instead of looking at the real game-changing forces in their markets. Distracted by day-to-day events they are stuck in the incremental and fail to pay attention to the bigger picture.

What is digital transformation?

Digital Transformation is described as ‘the changes associated with the application of digital technology in all aspects of human society’. In practice, digital transformation overhauls business processes, creates digital links with customers and, in some cases, changes entire revenue models.

The success of Uber is often seen as a synonym of digital transformation. Uber is founded in 2009 and developed a new matching platform for travelers. Since 2012, it is changing the taxi industry in a disruptive manner. But most industries are not disrupted in such a drastic way. Established companies still have time to change with advantages such as extensive customer bases, known brands and industry knowledge. For them it can be a valid strategy not to be first into a new market. How quickly they reduce investments in their traditional, profitable – yet shrinking – operations and invest in the digital future depends on the impact of digital initiatives on each step in their business model.

The impact of digital transformation varies per industry but it is vital to have a clear understanding of how far it is from your current business model, and how to go there; better than finding the world has moved on without you.

From strategy to execution

So, once the need for adapting to this new era of digital transformation has sunk in, how should we bridge the gap from traditional to digital?

For us, it’s important to use an approach that results in clear insights in business processes & digital touchpoints. This enables true decision making, never losing sight on the bigger picture.

Our approach consist of 6 steps:

Get insight in your business: insight in your business model and its functions is a key foundation for developing transformation alternatives and -strategy. We use Business Model Generation (BMG) to get this insight. External consultants model the processes and co-create transformation hypotheses with internal subject matter experts.
Identify which chains in your business models and (IT-) functions can be altered: We help you identify each chain and, if necessary, connect data, costs and benefits to it. By mapping your existing processes and models with what competitors and adjacent industries are doing, your insights are enriched.
Identify and leverage the technology enablers in the market: Together we identify the range of available and emerging technologies.
Determine your goal: typical goals of digital transformation are:
Enhancing the digital customer and end-user experience to improve loyalty, revenues, productivity and retention;
Transforming business processes to optimize value, improve productivity, integrate supply-chain partners and differentiate offerings;
Simplifying services to reduce complexity, solve issues before they occur, and gain visibility and control over assets;
Optimizing infrastructure and operations to improve agility, flexibility, and cost-effectiveness;
Deriving insights from analytics to make better decisions, improve efficiencies and gain competitive advantage.
We help you check the reality of objectives according to budget, time, talent and market constraints.

Build transformation alternatives & simulate outcomes: Compose scenarios, prioritize the transformational options according to budget, time, talent and market constraints. Then evaluate these alternatives by making use of decision models, financial assessments, and qualitative arguments. This all is preferably supported by independent external consultants (internals can have too many vested interests) and with the help of internal stakeholders and – where needed – technology partners as well.
Find leaders capable of executing strategy and courage to do so! Executing a new strategy requires good thinking, guts, and leadership. Strategy execution is difficult in practice for many reasons, but a key obstruction to success is that many leaders don’t know what strategy execution is or how they should approach it. Executing a strategy can be considered a day to day executive activity but it rarely is, a vast majority of strategies fail to implement. We can guide you with a phased execution approach, greatly improving the odds.
By following these steps strategic digital transformation choices are enabled. Next steps are aimed at embedding digital transformation in your organization by mastering the digital lifecycle and organizing for digital innovation; this however, is for a later post. Of course, we take into account that such a journey requires commitment inside your organization to transform and change your business by making use of change management approaches.

To conclude: Not every company, process or business model will benefit from digital transformation. Also, disruption does not come overnight: Facebook, for example, was founded in 2004, Netflix in 2007 and Uber was founded in 2009. So use the time you have to transform… but don’t miss out on it.

For more information: www.ditragroup.com

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