Digital Transformation Framework

Transformations alter the status quo, so it’s important to design a framework that helps you manage that change. Luckily, there’s a simple shortcut: borrow from established change management models.

Take the McKinsey 7-S model, for instance. The model is designed to maintain the balance between seven elements: strategy, structure, systems, skills, shared values, style, and staff.

Because digital transformations involve a lot of moving parts — training, technology, people, etc. — maintaining balance is crucial. If you focus too intently on a new tool (system), you might overlook the need for additional employee training (skills, staff).

Essential Digital Transformation Roles

 While digital transformation projects will involve several teams across departments, there are four essential digital transformation roles:

• Chief Information Officer (CIO)
• Digital Transformation Specialist
• Digital Adoption Manager
• Digital Product Manager

 

Here is an overview of the responsibilities associated with each role:

Chief Information Officer (CIO)

Traditionally, CIOs are in charge of a company’s information technology (IT) systems and processes. However, the role is becoming more focused on heading up business strategies and digital transformation initiatives.

The responsibilities of a CIO:

• Establish objectives for digital transformation initiatives and IT-related processes.
• Analyze the costs and potential value of technology.
• Run risk analyses for IT investments and initiatives.
• Design digital transformation strategies.
• Oversee technology implementation.

CIOs often manage other key players in digital transformation, including digital transformation specialists, digital adoption managers, and digital product managers.

 

Digital Transformation Specialist

Digital transformation specialists find ways to leverage technology to enhance a company’s technical performance and help them remain competitive. This could mean digitizing outdated processes, augmenting operations with the help of machine learning or automation, etc. Specialists work across departments to identify both gaps in service and opportunities for improvement.

The responsibilities of a digital transformation specialist are:

• Stay up to date on tech trends.
• Recommend digital transformation initiatives that would benefit the business.
• Provide strategic advice for implementing and managing digital transformations.
• Guide companies throughout the transformation process.

 

Digital Adoption Manager

Digital adoption managers oversee a company’s digital strategy and identify ways to help people learn new technologies. It’s their job to make sure teams know how to use digital tools to their full potential.

The responsibilities of a digital adoption manager are:

• Onboard new hires.
• Train employees on software and other technology.
• Recommend new digital tools and business processes to leadership.
• Gain leadership buy-in for digital initiatives.
• Monitor the success and ROI of digital transformations and investments.

 

Digital Product Manager

Digital product managers take ownership of the entire digital product life cycle, from the idea phase to launch. Their work involves collaborating with multiple teams, including IT, marketing, sales, and legal. They oversee the development of digital products and do market research in order to make more informed design and product decisions.

The responsibilities of a digital product manager are:

• Perform market research to identify opportunities for new products or improvements on existing products.
• Create strategies for developing digital products.
• Serve as a liaison between the various teams involved in digital product development.
• Track performance metrics for digital products and projects.

Measuring ROI on Digital Transformation

 Digital transformations require investments of both time and money, so it’s important to have a system in place to measure the return on investment (ROI).

To establish how you’ll measure and track your digital transformation’s success, follow these three steps:

1. Set goals — What does success mean to you? What is your ideal outcome?
2. Establish key performance indicators (KPIs) — What metrics will you monitor? How will those metrics tell the story of your digital transformation? What level of KPI growth are you hoping to achieve?
3. Monitor progress — What types of reports will you use to keep an eye on your KPIs and the progress of your transformation? How often will you run reports and adjust your strategy?

To illustrate how a business might apply these steps in a real-world scenario, here’s a simple example:

• Goal: Decrease customer support queries without negatively affecting customer satisfaction
• KPIs: Number of support queries received each day, time spent responding to support tickets, average support query response time
• Monitor: Run weekly reports on KPIs and send monthly surveys to customers to gauge satisfaction

The Pillars of Digital Transformation

 Daniel Newman, principal analyst and founding partner at Futurum Research, says to understand the foundation of digital transformation, you have to look closely at the six pillars of digital transformation.

He argues that digital transformation is not about technology; it’s about “tech-enabled change.” And, to look beyond the technology aspect, focus on the pillars that support the change.

• Experiences

Experiences could refer to the customer and/or employee experience. Successful digital transformations lead to a positive experience for the people who are affected by it. Ask yourself — will this initiative improve how I connect with my customers? Will the transformation help employees become more efficient?

• People

Remember: culture is a top driver of digital transformation as well as its greatest barrier. You cannot neglect the people affected by tech-enabled changes and expect positive results. You can strengthen the people pillar by designating change leaders who actively support and accelerate your transformation. The key is to design an initiative that leverages technology to improve the human experience.

• Change

Transformations can’t happen without change. Luckily, you can address the change pillar by borrowing from proven change management models and best practices in change management communication.

The change pillar encourages you to communicate your expectations for a transformation and establish clear goals. This pillar also ties back to the people pillar, as no change can be successful without the support of the people affected by it.

• Innovation

Newman defines innovation as “a sudden spark of creativity that leads to the creation of something that changes the face of your business.”

The innovation pillar focuses on creating space for collaboration and new ideas. Innovation supports digital transformation by encouraging businesses to find creative solutions to problems.

• Leadership

If you aren’t leading, no one is following. It’s crucial for leaders to proactively monitor not just the implementation plan but also the outcome of any digital transformation initiative. It’s leadership’s responsibility to establish key performance indicators (KPIs) and guide teams towards a successful transformation.

• Culture

Business culture is a crucial aspect of digital transformation. Newman recommends a people-first approach — worry about employee and customer experience first and then move onto technology.

Digital Transformation Challenges

 When you hear “digital transformation challenges,” you might think of a problem you need to fix. However, identifying the challenge is more about determining which parts of your business need improvement or growth.

Common digital transformation challenges include:

1. Improve the customer experience
2. Increase productivity internally
3. Become more competitive in your industry
4. Increase sales/profits

Frequently Used Digital Transformation Technologies

 Here are some of the most common technologies businesses use to enable digital transformations:

• Mobile phones and apps
• Cloud computing
• Internet of Things (IoT)
• Digital twins
• Artificial intelligence/machine learning

 

Examples of Digital Transformation Across Industries

Take a look at a few digital transformation examples across industries.

 

Industry	Example
Retail	Takealot automates self-training for their sellers.
Human Resources	ManpowerGroup streamlines HR platform adoption.
Healthcare	Cardinal Health creates self-help options across multiple websites for customers.
Finance	Experian drives Salesforce adoption.
Nonprofit	Dimensions UK drives Iplanit adoption.

Reasons for Digital Transformations Failure

 Digital transformations fail for many reasons, but most issues can be linked back to one of three things: people, communication, and measurement.

• People

People can make or break your digital transformation. Remember: culture is both a top driver of digital transformation and one of the six pillars of successful ones. If you don’t put enough focus on people and culture, your initiative is bound to fail.

Sixteen of McKinsey’s 21 keys to success in digital transformation involve people.

• Poor Communication

Announcing a digital transformation initiative is not the same as communicating with your team about it. Often, leadership simply mandates changes without taking the time to explain the why and how. If you don’t provide specific and actionable guidance before, during, and even after a transformation, your initiative won’t make it very far.

• Lack of Measurement

You can’t have a successful digital transformation if you failed to define what success means to you. Companies sometimes assume they can monitor success based on the key performance metrics (KPIs) they’ve already established for their business. But if you’re changing the way you do business, you’ll need to set additional KPIs to monitor the effects.