Quadra

Connecting Technology and Business.

Digital Transformation - Focusing investment

The challenge. Enterprises that aspire to transform digitally must have a keen focus on the things that are important, commit real money to fund initiatives and keep moving everything in the same direction. They need a clear vision and an action plan that highlights some of the major landmarks on their digital transformation journey while taking into consideration improved customer experience, increased operational performance and adaptation of the business model as the dominant objectives.

This must also translate into strategic goals that will guide them in building a roadmap of initiatives. These goals should not just be about financials but also in terms of customer experience, operations and building organizational capabilities. A strategic scorecard incorporating all these goals would be the basic template and a point of reference for the entire team. Recognizing the entry point is crucial. Enterprises must engage practitioners and operational specialists early in the design stage to minimize the traditional vision-to-execution gap. Design must focus on business outcomes, not technology. This roadmap can become the canvas of the transformation, but it must make allowance for iterations and course correction as the journey contains many unknowns.

The approach. Gartner recommends enterprises take a dual mode – continuing the traditional on one side while experimenting on the transformational model on the other, however, in small measures; a series of sprints – not launching out into marathons.

Building the right governance model is another area of focus. Appointing a digital transformation owner – a Chief Digital Office - who would steer all the efforts in a common direction amid a broad cross-functional set of stakeholders would make a significant difference.  The CDO can decide on the coordination and sharing of resources, technology platform, talent and data that will be needed among teams involved. The CDO would encourage standardization but also simultaneously encourage innovation. Other governance mechanisms like steering committees, digital champions and shared digital units would also help. Such units centralized with shared infrastructure like unified customer database, enterprise wide platform, advanced analytics teams or innovation labs would drive synergy across the firm.

Building the right governance model is another area of focus. Appointing a digital transformation owner – a Chief Digital Office - who would steer all the efforts in a common direction amid a broad cross-functional set of stakeholders would make a significant difference.  The CDO can decide on the coordination and sharing of resources, technology platform, talent and data that will be needed among teams involved. The CDO would encourage standardization but also simultaneously encourage innovation. Other governance mechanisms like steering committees, digital champions and shared digital units would also help. Such units centralized with shared infrastructure like unified customer database, enterprise wide platform, advanced analytics teams or innovation labs would drive synergy across the firm.

Funding the transformation is the decider. As most of the digital transformation journey would be across uncharted territory a pragmatic approach is needed. Doing a diligent cost benefit analysis that incorporates digital skill building, organizational change, communication and training would reveal the cost of the journey versus the business benefits projected. Foundational investments for core systems, platforms and tools needed for the launch, maintenance investments that are RoI driven and early stage innovation investments must be considered during the analysis. As these investments are speculative and returns are highly variable enterprises must take a test and learn approach.

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