Digital Transformation Strategy Framework for Strategic PM’s

This post looks at the opportunities and challenges of digital technology transformation – and delves into HOW to do it. It looks at the whole picture – all elements required for a successful change transformation – which boils down to a more cultural and human set of obstacles than technology hurdles.

What Is Digital Transformation?

Digital transformation refers to changes that people, organizations, and even society go through as a result of the proliferation of digital technology. Some of this change is reactive – reacting to evolving changes in the environment and ecosystem. Other change can be proactive – trying to take advantage of the trends to achieve strategic advantage.

Digital Transformation, as a two word phrase, has two sides to it:

Digital – This is the technology driver. It relates to information systems or computer technology, but the interesting thing about digital technology is the rapidness of advancement. The speed of change is fast, and the impact it can have touches many areas.
Transformation – This is arguably the more important of the two. It’s all about people and processes. And it’s about putting in place processes not only for dealing with a single change, but for dealing with continuing change due to the rapid evolution of digital technology.

The Digital Transformation allows the organization to achieve objectives in business operations, improve customer experiences, and drive growth.

Core Elements of a Digital Transformation Strategy Framework

Digital Transformation Strategy Framework The following eight elements provide a structured outline of components of a framework for achieving digital transformation. They are ordered, but it is not a completely sequential process; you can return to a prior step after some things become clearer in the later steps.

Vision and Goals – Without clarity, it is up to chance what happens in the following steps. The Vision and Goals need to align with overall organizational strategy.
Current State Assessment – This can take the form of a SWOT analysis, but should also incorporate some competitive analysis – even the old-fashioned kind. What gaps and improvement opportunities are there? What market and business development opportunities might provide the greatest impact?
Digital Ecosystem – What digital structures are in place. It could be common applications, sharing and networking sites, and community and social networking. These can be internal or external to the organization.
Customer Experience – What is the current customer experience? What are all the customer touch points? Are there some touch points missing, and are there some that could be streamlined or eliminated to improve the experience?
Data and Analytics – What data do we currently have available for analysis? What would we like to have? What additional data might become available over time via either our efforts or additional technology capabilities, or likely both? What information, if we had it, could make an impact on operations, customer experience, or growth?
Organization Structure and Governance – What is our current organization structure? What will be required in order to realize our vision and goals? What controls do we need to put in place to manage processes and to obtain feedback for adjustments? What organizational and cultural change will need to happen to get from here to there?
Innovation and Experimentation – What do we and don’t we know? Can we devise some inexpensive experiments to verify what we think, and answer certain pivotal questions? What flavor or level of innovation might be possible?
Roadmap and Implementation – Once we have a clear vision and objectives, what is the approach to get there, what is the timeline and cost, and what are the key milestones? The result should be a detailed implementation plan which includes performance indicators for program monitoring and long term for the organization.

These are the key elements that needed to implement a digital transformation program. Let’s look at digital transformation and its implications for strategy.

Implications for Strategy

While a strategy may be driven by opportunities arising out of technology change, the strategy ultimately will be driven by human, organizational, and value chain changes.

In short, people and processes – things related to culture – are likely to be the more challenging component to making the strategic change than technology. Given this kind of change, the following strategy approaches can be most helpful in devising a viable strategy:

Resource Based View (RBV) – Provides an internally-looking view based on the firm’s resources, based on continuously identifying resources and capabilities, assessing competitive advantage, and analyzing financial impact.
McKinsey 7S Framework – This framework helps assess the organization’s readiness to successfully deliver a program’s objective results.
Universal Competency Framework – Helps to build strategy around organizational capabilities inherent in core human resource competencies.
Business Model Innovation – Can the organization benefit from major changes, even transformation, of its core business model? Does the change under consider require a change to the business model?
Change Management Approaches – There are various models and practical approaches to change management – Kubler-Ross, John Kotter, and Kurt Lewin are a few – that can ease the process and improve chances of success.
Nadler Tushman Congruence Model – What potential issues do we have at the organization, team, and individual levels that could impact our project and change execution?

Thinking through organizational change management can be the most challenging aspect of strategizing for digital transformation.

To help, I recommend the Digital Transformation Frameworks (ppt, paid link), a collection that includes 20 different digital transformation frameworks/models from leading consulting companies such as McKinsey, BCG, Capgemini, Deloitte, Gartner, Accenture, etc..

Implications for Project Management

Digital transformation demands a whole range of skills and approaches from a project management perspective. It requires aspects of agile, waterfall, and hybrid approaches.

However, since digital transformation is technology driven, an agile approach is often going to work the best. Here are a few approaches for implementing agile at scale:

Scaled Agile Framework (SAFe) – Implements agile practices at enterprise scale.
Large-Scale Scrum (LeSS) – Scales scrum practices while limiting “bigness”.
Disciplined Agile (DA) – Emphasizes finding your Way of Working (WoW).
Spotify Approach – People-driven, autonomous approach that emphasizes culture and network.

When initiating a program for digital transformation, it is important to recognize that this likely will create radical change within an organization. The change will likely require a “cultural” change within the organization – one that requires people to develop an agile mindset.

Every situation is different, and the nature of the sources of power is an important consideration. Project managers need to “go with the flow” and take an approach that taps into the power centers within the organization.

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These PM templates will help you think through any initiative (paid link):

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Before embarking on implementation of one of the frameworks above, consider whether it might be best to do a small pilot project to reduce risks. Another approach would be to start by adopting a few agile practices and fully assimilate them before adopting a whole framework.

Consider brainstorming your ideas using Lucidchart – a Visio substitute and more (paid link).

Conclusion and Further Resources

This post has taken a holistic approach to digital technology transformation. It has looked at the whole picture – all elements required for a successful change transformation – that in the end has more human than technology challenges.