Welcome to the 4th part of the series on “Upskilling to Digital Architect” wherein I will focus on the first foundational skills block “Digital Transformation Strategy and Innovation” for digital architects.
According to Mckinsey research, 70 percent of large scale transformation programs fail. Common pitfalls are resistance to changing culture, lack of leadership, poor cross-functional collaboration. While there is no Silver bullet answer but below is my 3 pager attempt to enable future Digital Architects to reduce the Digital Transformation risk.
Digital Transformation Strategy and Innovation Are Pivotal for Digital Architects to Learn
Innovation and Digital Transformation strategy are the two inter-related skills that together represent both an opportunity and a threat. Digital architects need to learn, practice, and master these skills and catalyze innovation for the present and the future.
The first and foremost step to learn these skills is to understand the 5 domains of digital transformation:
- Customers
- Competition
- Data
- Innovation
- Value
How Can Digital Architect Master Digital Transformation Strategy?
1. Define your organization Digital Ambition
2. Identify the key challenges and their solutions
The first and important step to understanding digital transformation strategy is to understand the key barriers and how you can overcome them. The most common challenges in achieving a perfect digital transformation strategy are:
- Lack of Maturity for Modern Processes: Many organizations are not able to incorporate modern operations such as enterprise agile development, iterative deployment, everything as Code, and DevOps/DevSecOps into their systems.
- Insufficient knowledge of Digital Transformation Levers and benefits at CXO and CXO-1 level
- Considering Optimization and Transformation as one thing
- Focusing solely on technology: Don’t focus solely on implementing new technologies. These new technologies should be followed by business processes that support them and employees trained to work with them.
- Regulatory Compliances: Regulations should focus on analyzing the effect of innovation is harmful or not and regulatory agility instead of a multi-stakeholder jurisdictional approach.
3. Define your Digital Transformation Framework
Digital transformation framework is a roadmap of what digital strategies guide your business in a competitive evolving business landscape. I would say it’s a reference point and root of digital transformation projects and establishes principles for architecture governance (technical and business), prioritization matrix, stakeholder accountabilities & RACI, and overall plan. It aims to improve business’ digitization processes by identifying the goals of digitization.
You will find different Digital Transformation Frameworks. Pick the one that makes sense for your organization; but at the core of any framework, you will find below 5 layers.
Check Top 5 digital transformation frameworks in 2020 > run frictionless for some base information on different Digital Transformation frameworks that you can check to start with:
Pro Tip: Familiarize yourself with Strategy palette
The strategy palette — a strategy for strategy
Today, the one-size-fits-all approach to strategy, if that was ever useful, does not work and firms need to have strategies for setting their strategies. Based on the strategy palette concept, companies can adopt five different approaches when dealing with environmental changes in the digital age.
The strategy palette — five approaches to strategy and their business environments — © BCG and HBR Unpredictability: Can we predict it? Malleability: Can we shape it? Harshness: Can we survive it?
The correct digital transformation framework will help digital architects in creating tangible benchmarks, meaningful metrics and, clear indications of progress and, areas where more attention is required.
Irrespective of the framework that you choose, I would suggest Digital Architect follow below:
A. Set Clear Digital Transformation Objectives
- Improving customer experience
- Creating agile and innovative operations
- Increasing profitability
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B. Create a Strong Digital Transformation Strategy
- Create and integrate digital operations
- Use digital content, insight, and engagement to increase customer value
- Build a new set of capabilities around the new operation models
C. Be Bold, Fresh, and Pragmatic
- Challenge all past assumptions while identifying the Digitization and Transformation initiatives
- Reduce your Technology Debt. Keep in mind not every Technology Debt is bad.
- Focus on building the new resilient and sustainable Supply Chain.
D. Select the Imperative Technologies
- Digital Twins
- IoT, IIoT, OT/IoT
- Autonomous things
- Customer intelligence
- Personalization engine
- Omnichannel
- Chatbots
- 5G
E. Incorporate a Digital Culture Among the Employees
- Experimentation
- Collaboration
- Employee involvement and training
- Establish a Digital Fluency framework and program.
F. Focus on Cybersecurity and Compliance
- Ensure your solution are Secure by Design
- Use advancement in Cybersecurity technology to address the aspect of Security as a barrier.
- My personal view: Cybersecurity should be the Catalyst for accelerated Digital Transformation.
G. Digital Immunity
- Focus on Building Digital Immunity
4. Define the high-level path for Digital Transformation
Digital architects need a high-level roadmap for the digital transformation required to safeguard management, completely understand the new trends, respond quickly to various aspects of the company, and achieve the objectives efficiently. This can be done in two ways:
a. Reimagining the operating model and culture
b. Reimagining customer value and journey
c. Focus on Digital Operations and building future resilient and sustainable supply chain
Additional References
- When Do Digital Transformation Fail? 9 Misfortunes That Can Affect Your Transition.
- 12 Secrets for Successful Digital Transformation
- Top 15 Digital Transformation Trends Of 2021
- 5G-Powered Digital Transformation Scenarios
- IT Roadmap for Digital Business Transformation from Gartner
- More than 50% of digital transformation efforts fizzled completely in 2018. (Forrester)
- Check Emerging Technology hype cycle – Hype Cycle for Emerging Technologies, 2021
- Only 16% of employees said their company’s digital transformations have improved performance and are sustainable in the long term. (McKinsey)
Important Courses and certifications
- UC Berkeley Executive Education Digital Transformation program
- Coursera Digital Transformation course
- Digital Transformation Cornell Certificate Program/
- Digital Transformation: From AI and IoT to Cloud, Blockchain, and Cybersecurity
Suggested Exercise / Practice
- Develop the Digital Transformation Framework for your organization
- Establish the current Digital Fluency baseline for your organization and develop your future plan
- Establish your baseline for Technology Debt and your strategy to reduce the same
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