Four components your digital transformation framework should include

In this post, we’ll focus on the benefits of using a digital transformation framework as the foundation for a successful digital transformation strategy. To understand the value of the framework, it helps to remember that digital transformation is more than just new technology.

I think we can all agree that buying new pots, pans and fancy cooking gadgets won’t earn your kitchen a Michelin star. Delivering a great dining experience requires talented staff, coordinated processes and attention to every detail of the customer experience.

The same is true of digital transformation. It's a business transformation that reaches far beyond an ecosystem of new digital technologies. The transformation process requires culture changes, new skills, workflows and operating models. A digital transformation framework connects these pieces and aligns business units around common goals.

What is a digital transformation framework?

Huss Sadri at the Business Model Institute defines a digital transformation framework as follows:

“A good business framework creates an organizational environment in which people think and act for themselves, yet collaborate to achieve common goals and objectives.”

A digital transformation framework outlines organizational goals and priorities tied to becoming a digital business without being overly prescriptive about how to achieve them. People at all levels of the business can use the framework to make intentional decisions about where to focus their transformation efforts, even before a formal digital transformation strategy is in place.

In this way, the framework becomes an enabler, empowering people to think and act in ways that drive transformation forward.

Empower people to build better customer experiences with these four strategies.

Three reasons to use a framework in your transformation process

Digital transformation has a lot of moving parts. The new digital playbook involves people, processes, and technology with many interdependent changes happening in each area.

Business leaders are trying to hire new people, manage culture change, optimize business processes, and invest in digital technologies. It’s not surprising that many of them lose sight of the overall digital transformation strategy.

“While 85% of CEOs accelerated digital initiatives during the pandemic, most can’t articulate their overall strategy and progress beyond that they made a tech investment,” states Deloitte Insights in “A new approach to digital transformation.”

A digital transformation framework provides continuity, coordination, and alignment as the business moves through the stages of digital transformation. It helps business leaders understand how process changes and investments contribute to the overall digital transformation effort and how they are related. For example, to maximize the value of new technology, companies need the people and processes to use that technology to deliver better customer experiences or other business value.

Try this six-step process to ensure new technology is tied to your digital transformation goals.

Continuity: A digital transformation framework provides continuity as your digital transformation strategy evolves

As part of the transformation process, business strategies will evolve as companies move through different stages of digital maturity. At each stage of digital maturity, the framework is a reference point for decision making and setting priorities. It keeps the focus on key goals — better customer experiences, operational excellence, speed and agility — as the digital transformation strategy evolves.

We use the model below to illustrate the changes that occur at each stage of digital maturity.

This digital maturity model breaks the digital transformation process into three stages: exploration, unification, and transformation. It shows how the capabilities increase in both technology and customer experience.

On the technology axis, higher values reflect increased speed, flexibility, reusability, and standardization. Moving up along the business axis denotes more sophisticated engagement, conversion, acquisition, retention, and generally improved customer experiences.

Find out which stage you're in and what strategies you should focus on now.

Using a digital transformation framework to coordinate initiatives and stay focused on common goals enables companies to move up and to the right faster. It becomes a roadmap through the transformation process.

In the exploration stage, the framework articulates organizational goals and encourages people to experiment with new technologies and ways of achieving those goals.

As companies progress to the unification stages, the framework serves as the foundation for a formal transformation strategy and helps digital leaders identify enterprise-wide initiatives that will move the business forward faster.

In the final stage, the framework continues to keep strategies and business units aligned as they adapt to an ever-changing digital world.

Coordination: A framework coordinates business units, which is critical to accelerating digital transformation

A digital maturity model helps businesses visualize the path to transformation, but that vision isn’t enough. “It [becoming Future Ready] also requires that the company and its top management team align on both a pathway for the journey and how the company will deal with unavoidable significant, disruptive company-wide changes needed to become Future Ready,” wrote P. Weill and S. L. Woerner in “Update on the Four Pathways to Future Ready,” MIT Sloan CISR Research Briefing, Vol. XXI, No. 2, February 2021.

Their research shows the importance of keeping transformation efforts coordinated across business units.

MIT CISR’s research identified four pathways to transformation. Companies that pursued multiple pathways and were well coordinated, made the most progress, while those on multiple pathways but not coordinated made the least.

A digital transformation framework provides a common language and shared goals. It highlights dependencies and shows how priorities relate to each other. This transparency helps stakeholders from different business units coordinate to overcome challenges instead of operating in disconnected silos.

Change is hard. Take these steps to manage change and encourage collaboration on your digital transformation journey.

Alignment: A framework aligns digital transformation efforts with organization goals

In the push for transformation it's easy to mistake change for progress. Adding a new social channel, tapping into the internet of things, or using real-time reports can feel like big wins if you measure success based on changes made. But if those changes don’t further business goals or improve the customer experience, they might be taking resources from more impactful initiatives.

A framework focuses on goals and priorities, rather than the details of how to get there. It strips away all the details contained in business strategies and focuses on the desired end goals. Checking the value proposition of initiatives and new technology against the framework enables people to align their efforts with the most important goals.

Four components your digital transformation framework should include

There are a lot of digital transformation frameworks available, each with their own language and level of detail. The goal isn't to find the perfect framework. Pick one that addresses these four components and adapt it to fit your business.

• Customer-centricity: Customer expectations in a digital world are the driving force behind digital transformation. Increasing digital capabilities, agility, and adaptability to meet those changing expectations and increase profitability is the end goal.
  Digital transformation provides a competitive advantage by bringing the people who build customer experiences closer to customer insights and enabling them to solve customer problems faster.

• People: The digital-first era requires new digital skills, strong digital leadership and a different mindset. Your framework should set the tone for the culture changes that are necessary for business transformation. Learn how to evolve leadership and manage agile teams in part one of the digital-first playbook.

• Process: Companies need new business models and operation models that optimize business processes and take advantage of automation and scalable architectures. See how Canadian food and pharmacy leader, Loblaw Companies Limited, scaled their digital operations.

• Technology: While the framework shouldn’t jump to specific technologies like artificial intelligence, IoT or new products, it can surface technology needs that are common across business units. Shared technologies, like analytics or a unified content platform, can be the starting point for assembling a modern digital platform.

Further your transformation with this collection of resources, FAQs and actionable steps for successful digital transformation.

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