Organizations of all sizes continue to transform their businesses to keep up with unprecedented macroeconomic, competitive, and technological changes along with an ever-changing consumer. To successfully meet these evolving demands, a roadmap for digital transformation is not a nice to have – it is a must have. This is especially true for organizations under two key scenarios:
- Incumbents whose legacy digital platforms are outdated and numerous, requiring a significant amount of simultaneous human capital, business processes, and financial investments to update/upgrade their digital tools; and/or
- Industry pioneers migrating into the digital world, who require a growing set of new digital tools & capabilities.
Through developing hundreds of roadmaps for digital transformations, we’ve learned that successful leaders need to develop a deep understanding of their organization’s current capabilities and shortfalls. More critically, leading organizations leverage out-of-industry best practices as a way of expanding “the art of the possible” and solving a problem from a different vantage point from where it was created.
To get there, we suggest leaders seeking to digitally transform their organizations should closely follow a set of specific steps when creating a roadmap for their digital transformation. These steps include:
- Develop a comprehensive “inside-out” understanding of your organization’s needs and challenges.
- Leverage “outside-in” digital ideas, looking inside and outside of your industry for best-in-class innovative solutions.
- Identify the disparities between #1 and #2 and develop a holistic roadmap to close the gap(s).
Below we offer a series of fundamental diagnostic questions that every leader should be asking – and be able to answer – in their journey to develop a roadmap for their digital transformation.
Step 1: Inside- Out: Articulate your ambition & understand the most critical challenges to develop a roadmap for digital transformation
- Have you articulated your long-term digital strategy and ambition, gaining alignment around “the art of the possible” while grounding the goals with your operational and budgetary realities?
- Has your organization systematically engaged & gathered input from all critical cross-functional stakeholders (i.e., not just from IT, but critical functions such as sales, marketing, operations, quality, R&D, supply chain, customer service, etc.)?
- Is there a full understanding and buy-in from the executive team on the overall direction & need to develop a roadmap for the digital transformation?
- Have you identified the most critical challenges in your technology platforms, digital strategy, and related business and operational practices that need to be overcome to achieve your digital ambition?
Step 2: Outside-In: Leverage best-in-class digital practices for developing a roadmap for digital transformation
- Are you leveraging best-in-class digital practices from within your industry but more importantly from outside of your industry confines?
- Is there a clear & agreed-upon digital scorecard that will be used to evaluate your digital capabilities and gaps across all necessary digital assets?
- Have you performed a vendor evaluation to understand the different tools, platforms, vendors, and capabilities available in the market?
- Have you collectively prioritized the most promising ideas that should be pursued as part of the roadmap for digital transformation?
Step 3: Closing the Gap: Building the roadmap for digital transformation
- Have you identified how to close the organizational, cultural, and capability gaps between your current state and leading digital practices?
- Is there a robust financial business case in place with a cost benefit analysis to support the go-forward path?
- Has the plan(s) been socialized across all critical stakeholders and executives to get buy-in, alignment, and accountability from all necessary parties?
- Does your final roadmap include the following elements: include clarity of scope, SMART goals and tasks, governance frameworks for accountability, definition of roles & responsibilities, org. structure redesign (if/as required), financial modeling/budgets, and risk & mitigation tactics?
A roadmap for digital transformation is as much about the journey (i.e., the three steps described above) as it is about the destination. Leaders should recognize that while there is work to be done to develop a comprehensive digital roadmap and activation plan, this is just the first step in a much longer expedition.
From that perspective, the role of a digital transformation leader is to inspire and activate the organization, acting as the quarterback to bring all required groups along and ensure everyone moves in unison and towards the same ultimate ambition: to enable the organization’s transformation through the right digital tools.