Chapter 5
Foundation Elements of Digital Business Transformation
November 2021 will be remembered as an iconic month. It is not often that we hear global conglomerates announce serious restructuring, and that month three such organizations announced the transformation—General Electric, Toshiba, and Johnson & Johnson. These companies join the long list of conglomerates that have made the radical decision to dismantle their business empires in the name of unlocking potential hidden value in the complex corporate structure.
General Electric (GE) is splitting up into three public companies focused on growth sectors of Aviation, Healthcare, and Energy. As described in a Forbes article (Fischer 2021), the repeated efforts at downsizing, divestitures, leadership changes, and the constant pressures for improved operational excellence over the past few years have fallen short of the intended outcome. This led to the drastic decision to split the multi-dimensional conglomerate into more manageable “mini” corporate structures.
Similarly, Toshiba faced a trying journey into decline. Following over seven years of challenges, Toshiba has been unsuccessful in managing market disruptions, rapid technology developments, financial under-performance, internal conflicts, and governance failures. Abruptly in November 2021, the board proposed to split the 140-year-old company into three standalone companies—one with an infrastructure focus, the second focused on devices, while the third company includes memory chip pioneer Kioxia Holdings Corp. and Toshiba Tec Corporation. The separation plan, the result of five months of work by the Strategic Review Committee of Toshiba's board of directors, represents a significant inflection point that hopes to look beyond the confines of past Japanese business practices. Several other Japanese conglomerates have already faced calls for restructuring, and will be under pressure to forge ahead in the wake of Toshiba's plan.
Johnson & Johnson (J&J) announced its intention to create a new publicly traded company for the Consumer Health business. According to reports, the separation would create two global leaders that are better positioned to deliver improved health outcomes for patients and consumers through innovation, pursue more targeted business strategies, and accelerate growth. The 135-year-old company, recognized in global health care R&D and innovation, faces a myriad of legal challenges across products, as well as rapidly shifting consumer health care demands and diverse pharmaceutical and medical devices markets. By separating the consumer health business from pharmaceuticals and medical devices, J&J hopes to become better positioned to address the distinct segments through innovation and targeted strategies and to potentially accelerate growth.
These companies, as well as others like Siemens, DowDuPont, and United Technologies, are dismantling their long-standing business empires in the hopes of addressing a looming decline—stagnant growth rates, lack of innovation, shifts in the global industries, evolving consumer behaviors, an increasingly competitive environment (including big tech players and start-ups muscling their way into the traditional industries), and poor governance, among others. These restructuring efforts seek to break the large complex structures into smaller and focused entities that will be able to address dynamic market segment needs in a more agile way. In addition, these companies are positioning the restructuring efforts as major transformation initiatives to better create value in the market and circumvent limitations of complex corporate structures. However, from the outset, it appears that the companies are merely creating more of the same, with little evidence of innovation, agility, new skills, or shift in mindsets.
Based on a report by strategytools.io (Rangen 2020), there are fundamentally three scenarios that trigger transformation, as depicted in Figure 5.1.
- SHOCK: This involves a shock or surprise triggered by outside events or external pressures that force a company to transform, or at least attempt to transform. This is typically portrayed in terms of a “burning platform” and is the most difficult to deal with. Due to the external triggers, the journey is largely out of the company's hands because of lack of awareness and preparation or simply due to hesitation and delay. Typically, they are behind the change curve, and scrambling to retrieve some semblance of continued relevance. A great example of the “shock” scenario includes brands in the broadcast and entertainment industry that have been either driven out of business or forced to explore new offering and business models, following the popularity of Netflix streaming among viewers.
Figure 5.1 Three types of transformation.
SOURCE: Rangen, C. 2021 / StrategyTools.io
- SHIFT: Triggered by a sudden strategic move that carries massive and abrupt changes to the business models and underlying value creation logic. These transformations are commonly referred to as pivots, and often represent jarring changes in status quo, as a result of late awareness of external market and technology changes that have been in motion without being recognized. These preemptive, internally authored transformation journeys are often built around major business-model shifts, leading to a scramble to bring together talent and resources needed to pursue a new strategic path. During the Covid-19 pandemic in 2020, there were many examples of such business pivots, where companies were forced to very quickly find alternative business continuity strategies to overcome global physical lockdowns. One great example is Emi Controls, an Italian company that offers custom-made solutions for fighting fires, dust, and odors with the help of water mist. During the pandemic, the company was able to tweak their product line to offer disinfection solutions for large indoor and outdoor industrial areas.
- EVOLUTION: This involves long-term, planned, and well-executed strategic responses to a recognition of unfolding external conditions. The evolutionary transformation approach could play out over a longer term, in excess of ten years, and follows a traditional business strategy playbook. A great example of the evolution scenario is Microsoft, as the technology giant develops products and solutions that build on its strengths while taking advantage of emerging trends over time.
Based on this framework, it is clear that the restructuring approach taken at J&J and Toshiba has been triggered by SHOCK, while GE has made a long-term, attempt at the EVOLUTION transformation. Essentially, these organizations are responding to their triggers with restructuring, not the true transformation that will be required for sustainable success in the future.
In the report, Rangen distinguishes between transformation and digital transformation, referencing the former as “a change in value creation logic,” and the latter as “a change in operating logic.” My own view here differs, as I believe that in the current digital economy it is difficult to distinguish digital from organizational transformation. Digital and technology solutions are a key enabler for value creation, as well as a trigger for transformation in any organization, as they have become embedded in almost everything we do in business. There are few transformation initiatives that are not impacted by technology solutions and, in most cases, technology offers rapid and sustainable results across value creation, capture, and delivery.
For the most part, what we are observing is a simple dismantling, rather than transformation change. As a result, these organizations risk creating smaller replicas of their former larger selves, effectively just shifting the problems, not addressing them. This scenario may create less bureaucracy, but without a different way of working, distributed leadership autonomy, or mindset shift, it will be difficult to garner sustainable results.
What Is Digital Business Transformation?
Digital business transformation is not just about restructuring complex organizations or digitizing the existing business. Nor is it about implementing new technology solutions such as artificial intelligence or blockchain, or utilizing digital channels to access customers. Digital business transformation is an organization-wide change that requires a structural redesign of the company and its value chain. This can be a massive undertaking for any organization, particularly if it is not approached in a structured and focused way. At its core, digital business transformation is about changing how your company operates and delivers value to the customer, in order to keep up with the rapidly changing world.
Many organizations have either initiated independent digital ventures, for example, digital business units, incubators, innovation hubs, or start-up collaborations, or launched new technology-based solutions, for example, digital products or services, digital marketing, and communication channels. An effective digital transformation strategy focuses on leveraging new technologies to understand the evolving needs of connected consumers and deliver experiences that exceed expectations. In other words, organizations that are able to look deeper into critical business dimensions such as strategy, operations, people, and technology will effectively succeed in the future.
An organization-wide transformation of this magnitude requires significant adjustments to traditional business and operating models, including operations, resources, physical assets, processes, and customer value propositions. This process can be complex and challenging, but the results can be quite dramatic. Digital transformation goes beyond updating technology implementation or engaging with customers on digital channels. It drives organization-wide change that impacts revenue, operations, culture, and people. Many organizations understand the need to change how they work and have embarked on numerous initiatives, yet few have been able to go beyond isolated success cases or marginal benefits. Many leadership teams are still hesitant to invest in digital transformation without clearly defined returns on investment.
In a typical business environment, concerns over daily operational challenges take precedence over new or innovative solutions. This is further reinforced by top-level communication and organizational metrics. Traditional strategic planning approaches lead executives to view disruption in a binary way—to assume that the world is either certain, and therefore open to precise predictions about the future, or uncertain, and therefore completely unpredictable. Many companies are still locked into strategy-development processes that churn along on annual cycles. Executives are quickly realizing that traditional strategic planning processes that align to annual business cycles are not able to address the high levels of uncertainty created by digital disruption. Conversely, knee-jerk reactions based on current trends may result in companies investing in technology solutions that are the latest hype.
Digital business transformation initiatives are often complex projects. The complexity increases significantly for organizations that span across regional or geographical boundaries, as the specifics of the various markets will need to be considered in developing strategic direction, defining transformation initiatives, and implementing the solutions.
What Is the Difference between Digitization, Digitalization, and Digital Transformation?
One thing I frequently observe when advising companies is the diverse understanding or misalignment on what digital business transformation truly is. This is usually the starting point, even in organizations that are further along their transformation journey or that have demonstrated higher digital maturity and readiness.
The terminology used has various implications relating to the scope, depth, and impact of change required (see Figure 5.2). Each stage is necessary in the journey to becoming a digitally enabled organization that caters to the needs of the consumers. Often, in discussions, I have heard the terms digitization, digitalization, and digital transformation used interchangeably. Each stage is necessary in the transformation journey to becoming a digitally enabled organization that caters to the needs of customers.
Figure 5.2 Differentiating digitization, digitalization, and digital transformation.
SOURCE: Kamales Lardi, 2015
- DIGITIZATION: Shifting from analog to digital Digitization refers to the process of making products and services available and accessible in the digital format. For example, developing an e-commerce platform to offer physical products, or switching from paper-based record-keeping to digital. Most incumbent organizations have surpassed the digitization phase, however there are still some industries or business functions that are trailing behind. In recent years, I developed a blockchain-based traceability solution for agriculture, and was a little surprised to find that manual or paper-based record keeping was still a prominent practice across the industry. As a result, digitization of the existing environment was the first challenge that I needed to tackle, before new technology solutions could be deployed.
- DIGITALIZATION: Utilizing digital solutions for optimization Digitalization, on the other hand, focuses on applying digital technologies to optimize processes or simplify specific operations. For example, implementing robotics process automation to optimize processes or even upgrading technology infrastructure. In recent years, I have engaged with several organizations in the financial services industry, many still operating with legacy technology systems that were over two or three decades old. Proactive efforts to replace the core systems and accelerate digitalization of the business are prerequisites for transformation.
- DIGITAL TRANSFORMATION: End-to-end organization-wide change Digital business transformation is the gradual, end-to-end transformation of the organization in preparation for the future business environment. This includes changing the way business gets done, as well as leveraging and incorporating technology solutions across the business value chain. The incredible shifts that have occurred in the global business landscape, triggered by technology, demanding customers, disruptive entrepreneurs, the environmental crisis and social climates, as well as unexpected shocks and uncertainties have forced organizations to transform themselves to survive into the next decade.
Traditionally, a “transformation” implies there is a start and an end point, with specific changes occurring to achieve the end result. In reality, the digital business transformation is a continuous journey that occurs over time. As the journey progresses, and organizations achieve higher digital maturity, the transformation objectives will also mature and evolve. As such, digital business transformation of an organization will need to be an ongoing process—an evolution. There are three levels of the digital business evolution that organizations will experience, as illustrated in Figure 5.3.
- ACCESS This level includes all external touchpoints and interactions with customers. Change at this level enables companies to better understand the needs and behaviors of digital customers, as well as improve the way they access and interact with these customers. Over the last few years, companies have focused their digital activities on the Access level. Initiatives at this level tend to be less complex and provide quick results, for example, using social media channels as new customer access points, launching apps for e-commerce, or online communities to interact with customers.
Figure 5.3 Digital Business Evolution Model©.
SOURCE: Kamales Lardi, 2017
- ENABLE This level involves elements that make up the value proposition an organization offers to customers, for example, product or service digitization, as well as incorporation of digital elements to physical locations. Changes at this level are a little more complex to implement, but bring demonstrable benefits.
- INTEGRATE The Integrate level includes elements that trigger evolution at the core of the business operating model. It involves understanding how the organization needs to evolve in order to succeed in the increasingly digital business landscape. Changes at this level impact the company operations, people and culture, infrastructure, and technology platforms.
Digital evolution could be triggered at any level, however the impact will eventually involve all levels over time. As an example, Nike started their digital evolution by implementing social media and digital marketing efforts (Access level), and eventually launched the Nike+ digital product suite that includes shoes, mobile device such as iPods, and an online community (Enable level). As customers adopted these products, the demand for customized shoes increased, resulting in Nike offering mass customization for shoes that involved modifying their business model (Integrate level).
With this model, companies will be able to maximize on the investments that have already been made, for example, new technologies or channels that have been implemented. In addition, business leaders will have the option to trigger organization-wide change or identify specific building blocks to initiate long-term change. Either way, the process is a journey over time, rather than a one-time transformation initiative.
A key challenge organizations face, in the context of digital evolution, is thinking beyond the existing business model or operations. I usually combine the Digital Business Evolution Model© with business model design thinking principles to enable companies to define potential future scenarios. This enables companies to explore the impact of digital technologies and digital consumer behaviors on the existing business model. Design thinking in this context is useful because it involves reimagining the business environment with digital economy elements (e.g., technology developments, digital entrants, customer behavior, regulatory requirements, etc.) and the potential impact on the business. In a way, it allows companies to disrupt themselves, instead of being disrupted by external drivers.
Digital Transformation Building Blocks
True digital transformation involves organization-wide change to achieve sustainable value in the digital economy. I developed the Digital Transformation Building Blocks© to break down the effort into smaller, more manageable parts. The building blocks provide a holistic structure for thinking through, managing, and delivering large-scale transformation programs, as illustrated in Figure 5.4.
Figure 5.4 Digital Transformation Building Blocks©.
SOURCE: Kamales Lardi, 2015
This approach enables organizations to address initiatives across four key focus areas in the business, tackling these in a phased and pragmatic way to ensure sustainable return on investments. The digital business transformation roadmap and initiatives may be grouped in alignment with the building blocks:
- Customer Experience Convergence of digital and physical touchpoints to offer superior consumer or user experiences.
- Products & Services Leverage new technology to digitize product and service offerings that better meet the needs of consumers.
- People, Processes, & Operations Optimize, automate, and streamline business operations and processes with a focus on cost reduction and improved efficiency, as well as shaping the future workplace and culture.
- Business Models Explore new revenue opportunities and business models based on disruptive market trends, technologies, and consumer needs.
This approach makes it easier to align initiatives to specific strategic objectives and link the outcomes of the digital business transformation initiatives to success measures and business metrics. Additionally, initiatives in each building block may be organized as workstreams, with teams of people allocated to manage and deliver the workstreams. The ultimate aim of the building blocks approach is to break down transformation efforts into smaller, more manageable parts. Companies will still need to address initiatives across all building blocks and prioritize according to value and impact for the business. The guiding principle is that eventually, over time, all building block areas will need to be addressed. Due to the dependency across all building blocks, organizations will see sustainable results from digital business transformation once all areas are tackled.
For example, an organization may focus on developing and implementing digital acquisition channels for customers in order to increase revenue potential, as well as leverage technology solutions to offer personalized touchpoints at scale to increase engagement with customers. These initiatives would clearly fall into the Customer Experience building block. However, these initiatives would bring limited results if the internal process and operational environment are not optimized to deliver on these new demands from the digital channels and touchpoints. Additionally, staff will need to be upskilled and trained to manage these new technology solutions, as well as interact with customers on the digital platforms. Superior customer experience can only be developed when the internal operations and people support the delivery of it. These are initiatives that fall under the People, Processes, & Operations building block.
During the coronavirus pandemic, many companies found themselves in a similar situation. As digital acquisition channels and touchpoints were hastily launched to ensure business continuity, operational environments struggled to deliver on these, particularly if the processes and operations were not already supported by digital and automated solutions.
Building Block 1: Customer Experience
Enabling Superior Customer Experiences with Technology
Gucci is reinventing itself. The luxury fashion house has invested tens of thousands on digital, online, and social media channels in their effort to target, connect, and engage with a new generation of consumers. Kering Group, the parent company of Gucci and several other recognizable luxury brands such as Bottega Veneta, Yves Saint Laurent, Balenciaga, and Stella McCartney, has seen enviable growth in the last few years. Online sales have continued to grow at a steady pace, despite the global pandemic that caused disruptions to most other industries. At the helm, Gucci's earnings, composing 39% of Kering's corporate revenues, grew by 4.5% in 2021 (Kering 2021). This growth aligns closely with the group's strategic direction indicating a strong focus and investment on new market approaches and growth platforms.
Recognizing rapidly growing trends such as the impact of disruptive technologies on the global market and the rise of the “always-on” generation of consumers, Gucci has launched several digital initiatives targeted at Generation Z. Currently, this segment may have a lower buying power than traditional luxury consumer segments. However, they have a high level of influence and reach across digital channels, which translates to real-world acquisitions. Gucci recognizes that this segment is changing the rules by bringing new expectations and desires to the market. They are continually searching for purpose, meaning, and for ways to stand out and be seen—and their behavior influences people of all ages.
In order to engage this segment, Gucci is reinventing itself by launching a proactive strategy to adopt emerging technologies; digital and online tools, such as augmented and virtual reality; AI-based chatbots; mobile applications; as well as collaboration partnerships specialized in delivering digital products, services, and immersive experiences. Augmented reality (AR) in particular has garnered significant interest among the user base, and since the Covid-19 crisis started, many luxury brands have integrated virtual try-on technology into their digital channel offerings. The Gucci app virtual try-on technology enables customers to try products using their mobile device cameras. The AR technology simulates the customer's experience of entering and trying on products in a physical store. Customers are easily able to visualize the style, size, and fit of the product they are interested in, before making a purchase. The Gucci app users are also able to photograph the virtual products, share online, and get feedback from friends, further enhancing the digital shopping experience.
As a result, Gucci has become Kering Group's best performing brand due to incredible sales growth. According to Statista, in 2020 Kering's Gucci brand generated a global revenue of about €7.44 billion, despite the pandemic, due to integrating a strong digital approach with its in-store dominance for an omnichannel strategy that will be definitive for the success of luxury brands in the coming years.
As demonstrated by Gucci, digital transformation in the Customer Experience building block focuses on creating an integrated omnichannel strategy that connects, engages, and interacts with consumers in a unique and compelling way. In the overcrowded online world, it is getting harder for organizations to stand out. As products and services, particularly digital and online offerings, become increasingly commoditized, consumers are shifting away from focusing on products to looking for more meaningful experiences that create a more emotionally fulfilling sense of value.
This shift means companies and brands need to focus on identifying moments of truths in the customer journey to create lasting and deeper impressions. “Moments of truth” are instances or moments when a customer interacts with a brand, product, or service to form or change an impression about the company. Digital technologies and online tools today enable companies to create hyper-personalized and engaging experiences seamlessly across touchpoints, at scale, and at a fraction of the cost compared to physical touchpoints. Based on the Salesforce report State of the Connected Customer, over half of customers surveyed said that technology has significantly changed their expectations of how companies should interact with them. The research reports that 68% of customers responding to the survey expect brands to demonstrate empathy, while 66% of respondents expect companies to understand their unique needs and expectations.
Repetitive actions or interactions, such as payments and administration of the acquisition, can easily be moved to the background with automation. Uber is a great example of this automation. In the past, payment was a key part of the customer journey, but Uber flipped this by automating the function of payment to the background creating frictionless, effortless, and personalized experiences for customers.
The integration of digital capabilities to the existing physical elements and presences is also considered here. For example, the recently launched Amazon hair salon utilizes AR-powered mirrors in the physical store that allow customers to select from a range of the hair styles and colors. There are also many examples of brands utilizing AR features on printed marketing materials that allow customers to view additional information, live links, and interactive elements with their mobile devices.
Digital technologies and online platforms have also made it easy for companies to draw together large groups of people who share a common value or purpose, and leverage them as resources. Based on the Exponential Organization context (Ismail 2014), communities and crowds are an essential element of driving exponential properties of an organization. In this context, the community is made up of large groups of individuals who are passionate about the brand, while the crowd is made up of an even larger global group of individuals with some passive interest in the brand but who are not yet directly connected to the organization. Both the community and crowd may be leveraged to gain business value, for example, through peer-to-peer engagement, crowdsourcing ideas or problem-solving, testing product ideas, expanding brand reach, crowdfunding exploration initiatives, as well as creating a pilot group or ready market of initial consumers.
Lego offers a great example of how to utilize the power of the community and crowd through the Lego Ideas platform, where users can share ideas for new products, as well as vote for ideas presented by other users. Popular ideas are taken into production, which not only creates more engagement and loyalty amongst users, but also continuously generates new product ideas for the brand.
Building Block 2: Products & Services
Digitizing Product and Service Offerings
The coronavirus pandemic changed consumer behavior forever, and, in particular, the dramatic increase in online acquisition of products and services is set to stay. As reported in consulting firm PwC's Global Consumer's Insights Pulse Survey (December 2021), mobile or smartphone shopping is the most popular online shopping mode, even gaining ground on in-store shopping. The report also highlights that in order to succeed in a digital world, companies will need to take advantage of new technologies by investing in the differentiating capabilities that allow them to deliver on customers’ needs.
There are several ways to approach digital transformation of products and services. A common approach is to make your existing products and services available on digital channels and online platforms. For example, creating an e-commerce presence online or making purchases possible via social media channels. Although this may seem like a logical step in business growth and expansion, I was truly surprised to see the number of organizations that scrambled to set up online acquisition channels and customer touchpoints during the early days of the coronavirus pandemic. This approach simply focuses on creating accessibility to purchase products and services, enabling customer interactions with the company across multiple channels, as well as business continuity.
Another approach is to digitally enable existing products and services. Here, the focus is on modifying existing products and services to make them more suitable for the digital channels and touchpoints. Typically, companies that take this approach want to avoid cannibalizing the existing market, but at the same time would like to generate a new wave of customers not currently purchasing physical products and services. This approach requires modification or customization of the existing products and services to fit the digital and online channels. The banking industry utilized this approach extensively in the early to mid-2000s by introducing online and mobile banking. The features that were being offered were in essence the same as at the physical branches, however modified to suit the online website and mobile phone capabilities.
Finally, new digital products and services can be developed, specifically intended for the digital economy or future of the business. In March 2020, Gucci created a collection of digital sneakers that consumers could try on using AR. Using the “Gucci Sneaker Garage” that is available on the Gucci app, customers are able to purchase and wear digital sneakers. The sneakers, called Gucci Virtual 25, cost $11.99 in the app and are designed with neon colors inspired from the 1980s. Users are also able to customize their sneakers in the Gucci Sneaker Garage to create unique versions that fit their individual styles. In exploring the increasingly popular metaverse, Gucci has developed virtual versions of its collections and other products for e-sports such as Tennis Clash, gaming platforms like Roblox and Drest, as well as virtual reality chat apps where users can dress up their avatars with Gucci products.
At the core of product and service digitization is identifying the real problem that your customer or market faces, and leveraging the capabilities of your organization to resolve it. Technology solutions enable organizations to solve the customer's problem faster, more efficiently, at lower cost, or even to eliminate it completely. A deep understanding of the customer base will enable organizations to quickly respond to growing trends or disruptions that may arise in the market. Stagekings offers a positive lesson for addressing such disruptions. The Australian company designs and fabricates temporary custom physical structures and installations of all sizes. When the coronavirus pandemic halted live events and festivals, drying up steady revenues streams, Stagekings recognized the opportunity to begin constructing home office furniture as a means of ensuring business continuity. Over two years later, the company has successfully pivoted its product and service offerings by launching a range of designer home furniture. Stagekings is worth the mention as it is one of the most successful Covid-19 pivot stories, having sold over 35,000 pieces of furniture since launching its IsoKing At Home product line, a new ultra-modern furniture range that is available online.
Building Block 3: People, Processes, & Operations
Optimize, Automate, and Upskill the Internal Organization
A critical element of digital transformation involves the changes that an organization and its people have to go through in order to achieve the required business outcomes. This is the most critical element, as success depends heavily on being able to leverage existing capabilities, while at the same time developing new capabilities that support the new environment. Although a critical piece of the transformation puzzle that enables sustainable success, the internal organization often does not receive the focus and prioritization that it should.
As organizations leverage technology to transform the front-of-stage interactions, including customer experiences, channels and touchpoints, as well as product and service offerings, the back-of-stage interactions and supporting processes also need to change to enable, support, and deliver the required interactions. Back-of-stage interactions refers to internal capabilities such as operations, processes, support functions, people, and capabilities. I like to use the analogy of a stage performance to illustrate the importance of internal organization transformation in this building block. The audience of a stage performance, the customer, sees the play on stage as the final product—actors, costumes, stage designs, dialogue or script, and music. However, what is not clearly visible is the backstage support that enables the entire performance to run smoothly, from one scene to the next. This involves clear processes, trained people, infrastructure and systems built to support the performance, as well as lots of practice. Similarly, the organization's back-of-stage capabilities need to be optimized to ensure that it can deliver efficient, cost-effective, and well-run front-of-stage interactions that customers will appreciate.
Addressing this building block can be daunting, particularly for incumbent organizations that may hold complex structures spanning functions, regional presences, and heavy legacy systems. Identifying what to tackle first, how much to change, and how quickly can seem like a mammoth task. A key guiding principle is to focus on empowering people to deliver their work effectively and efficiently, anywhere possible. This may involve embracing new ways of working, implementing technology solutions to increase collaboration or turnaround times of activities, optimizing processes and operations through digital and automation solutions, or even upskilling the workforce to increase productivity. During the coronavirus pandemic, for the first time in modern history, a global workforce was enabled through online platforms, including video conferencing, online and visual collaboration, workflow and task management, as well as knowledge and content sharing.
With some organizations, I observed employees and teams struggle to pick up the digital skills that were previously not a necessity for their daily business. Many organizations had underestimated the value of digitizing and automating their business environment, and had to quickly implement patch-work tools to ensure business continuity. The CEO of one company in particular, a technology manufacturer of industrial products, announced proudly that the company had finally implemented Microsoft 365 due to the demands during the pandemic lockdown. There are, however, many organizations that took the opportunity to push boundaries and explore new ways of operating. As a contrasting example, Gucci frequently leverages a “shadow committee” of millennial advisors below the age of 30, that has been established as part of the brand's “bottom-up” management approach. Employees in the committee provide insights and ideas considered outside of the scope of knowledge and awareness of the older generation staff.
For example, in order to keep employees safe and to ensure that travel restrictions were adhered to during the Covid-19 pandemic, food and drink conglomerate Nestlé expanded its use of AR technology for remote support of its production and R&D sites, as well as to connect with suppliers. Utilizing AR capabilities helped prevent needless physical interactions during the Covid-19 crisis to set up and repair production lines, carry out vital maintenance with suppliers, and conduct employee training sessions. Augmented reality-based solutions offer significant cost savings and diagnosing issues remotely allows companies to prioritize operations and reserve their expert resources for AR-assisted service to new technicians and more complex in-person repairs. Augmented reality has been shown to reduce mistakes and unnecessary calls by 90%, achieve 50% faster task performance, and serve as a compliance tool that logs activity in real time, ensuring service calls are properly performed. Going forward, remote assistance will become a new way of working at Nestlé.
Optimizing the operating model and process landscape of business functions are also critical elements that closely align with workforce enablement and leveraging technology solutions. Focusing on deploying technology solutions and upskilling staff brings returns in the mid-term, although sustainable outcomes from digital business transformation are only achieved once the operations and processes have been optimized. In this context, we look beyond typical process improvement efforts that tweak the existing process landscape to achieve a better result, to focus on reengineering. Business process reengineering (BPR) involves remodeling current or As-Is state processes completely to achieve different results and improve the system entirely, to get to the future or To-Be state processes. Typically, the BPR initiative follows the target operating model design stage that addresses how the transformed organization will function.
CIM Financial Services Ltd, a client that I have been advising on digital business transformation since 2019, offers a good example of this effort. Following the development of the company's digital business transformation strategy, I supported the leadership team in developing a target operating model that would meet the future needs of the business. Each element of the target operating model was meticulously redesigned and developed for implementation, including the internal operational landscape which is set to be transformed into a shared services structure. The operating model canvas, as illustrated in Figure 5.5, is an effective way to define the elements of the target operating model.
Based on the operating model canvas, a target or To-Be blueprint for each element was defined and taken into further development as part of the implementation roadmap. The process landscape was assessed in detail to identify opportunities for reengineering and optimization, sampled in the summary Figure 5.6.
Building Block 4: Business Models
Enabling New Revenue Potential with Technology Capabilities
Technologies have triggered significant changes and disruption in the global business landscape. However, technology solutions alone do not transform entire industries. Rather than offer a competitive advantage, technology solutions may be quickly replicated by industry players and even newcomers. Sustainable competitive advantage comes from developing business models that are able to leverage the capabilities of technology to create a compelling value proposition for customers. This is a fine balance between understanding the evolving market needs, leveraging the existing capabilities of the organization, as well as utilizing new capabilities enabled by digital technologies, to create new business models and revenue opportunities (see Figure 5.7).
Figure 5.5 Operating model canvas aligns with the business model.
SOURCE: Campbell, A. et al., 2017 / Van Haren Publishing
Figure 5.6 Summary business process reengineering, part of the target operating model.
SOURCE: Kamales Lardi, 2019
Figure 5.7 Develop business models that link technology capabilities to emerging market needs to achieve transformation.
SOURCE: Kamales Lardi, 2016
Emerging technologies have enabled a range of new business models and revenue streams for companies. Many digital native companies have been able to leverage these digital-first business models to rapidly displace incumbent organizations. For example, Netflix has completely redefined the way viewers access and consume movies and films. In addition, Netflix benefited during the coronavirus pandemic because consumers turned to online streaming as an alternative to cinema and television viewing. However, Netflix's subscription-based business model proved more sustainable than some other newer streaming offerings, such as Quibi, which has been forced to shut down in recent months.
A key principle for successful business model development is to focus the value that can be delivered to the customer and market. Emerging technologies have triggered changes in customer behavior, demanding new business models that meet these needs. Another principle is to understand that business models may be applied in a variety of ways. Many successful companies combine several types of business model and use different models for different parts of their companies. Traditional business models are far less durable in the current environment of rapid technological development, which has transformed the basic rules of creating and capturing economic value. Today, business models are subject to rapid displacement, disruption, and, in extreme cases, outright destruction.
For incumbent organizations, business model transformation is notoriously hard, as some companies struggle to recognize the potential opportunities, while others hesitate in fear of cannibalizing existing profit streams. However, innovative business leaders will be able to trigger this process by identifying and reframing the basic and foremost industry beliefs about value creation, capture, and delivery (de Jong and van Dijk 2015). By reframing these traditional beliefs, business rules, and assumptions, particularly in relation to new capabilities enabled by emerging technologies and disruptive trends, organizations will be able to develop new mechanisms for creating value in a sustainable way for the future.
Widiba Bank offers a great example of this approach (see Figure 5.8). The Italian bank recognized the increasing demand from consumers for a more personalized relationships with financial service providers. As customers’ financial sophistication grew, with broader access to financial knowledge and information across the market, customers not only wanted more control of their personal finances, but also personalized interactions via online channels as they would experience in the physical locations.
Figure 5.8 Business model innovation—Widiba Bank example.
SOURCE: Kamales Lardi, 2021
In an effort to take the banking relationship back to the customer, Widiba Home was designed to offer the same level of personal touch that customers experience at the physical branches, while at the same time fitting into their busy lifestyles. The virtual reality solution, where customers simply download the Widiba app and wear a pair of virtual reality glasses, offers anytime, anywhere access to a virtual branch. Customers are able to carry out transactions, check their account or card balances, as well as talk to an advisor, a real agent tasked to respond to customers on this platform, see Figure 5.9.
In my eyes, business model transformation is both a science and an art, combining the value of insights gained from data and information analysis, with creativity and open-mindedness that trigger innovation. In his book Gamechangers, Peter Fisk describes a range of disruptive and innovative companies that are reshaping the world. These start-ups and corporates capture their higher purpose that resonates with their target audiences, enabled by data and technology, empathetic design, and rich human experiences. Gamechangers, from Alibaba to Zipcars, Ashmei to Zidisha, Azuri, and Zynga, think and act differently, innovating every aspect of their strategy and business model, brand and marketing, process and leadership. This enables Gamechangers to achieve exponential transformation and truly change the game.
Figure 5.9 Widiba Bank virtual reality branch.
SOURCE: Widiba Bank Italy, 2021
Starting Point for Transformation Journey
At its core, digital business transformation is about changing the way your business operates and delivers value to the customer to survive and thrive in the fast-changing world. Failing to transform, or to transform quickly enough, raises existential challenges for any organization. However, as we have observed, many organizations have failed to make sufficient progress in their transformation journey, and end up stalled or running in circles as initiatives do not achieve the intended purpose.
Digital business transformation is a journey, not an end-state design. Often, organizations fail in their transformation effort because it is positioned and managed as a typical implementation project, with a focus on executing a specific tangible element such as a technology solution or channel to market. This limits the scope and potential gain from a true transformation effort due to a poor understanding of the full scope of digital transformation.
Research conducted by Boston Consulting Group (September 2020), shows that while digital transformation had already been a priority in recent years, more than 80% of companies plan to accelerate their efforts and 65% plan to increase investments in this direction. There is overwhelming evidence to support these efforts, as digital leaders demonstrate 1.8 times higher earnings growth than digital laggards. Successful digital business transformations set organizations up for sustained returns that are visible in productivity improvements, better customer experiences, new growth opportunities, as well as business model innovation. However, according to the same research, only 30% of transformations succeed in achieving their intended objectives because it involves delivering fundamental changes at scale in large, complex organizations.
According to Westerman, Bonnet, and McAfee (2014), it is not just what the digital leaders or masters invest in, but also how they lead change that makes these companies stand out in successful digital business transformation execution. In my conversation with Didier Bonnet, Professor of Strategy and Digital Transformation at IMD and thought leader in global digital transformation, he described how Digital Masters excel in two critical dimensions—digital capabilities and leadership capabilities—each of which are distinct dimensions of digital mastery. It is critical to know where and how to invest in transformative opportunities that leverage technology to unlock new ways of doing business, get closer to customers, empower employees, and optimize internal processes. Strong, committed leadership capabilities create a clear and broad vision of the future and stay continuously involved to build out the vision over time.
As Bonnet pointed out, although Digital Masters tend to stand out in both these dimensions, many organizations may excel in either digital capabilities, leadership capabilities, or neither dimension, which means they are only at the beginning of their transformation journey. As a logical starting point, it is critical to conduct a digital maturity assessment to understand what your organization's capabilities are, where your business stands out, and what are the biggest gap areas that need to be addressed to achieve sustained success in digital business transformation.
What Is a Digital Maturity Assessment?
Back in 2011, I was staffed on a consulting project that was engaged to increase employee engagement through the application of a digital collaboration platform. The client, one of the world's largest reinsurance companies, based in Zurich, Switzerland, was responding to the workforce requests for a more structured way to engage, interact, and collaborate across organizational units. A key trigger that raised leadership team awareness of the challenges faced across the organization was the result of a free-form feedback collection initiative that allowed employees to anonymously provide opinions and reflections on their experiences in their daily work environment. A digital forum was set up to allow the approximately 12,000 employees to share their points of view, based on several questions posed on the platform. The forum was left open for a limited period, after which text and data analysis produced specific results on the commonalities in the feedback content. Some of the major outcomes identified were the difficulties in collaborating across teams; lack of shared information, content, and knowledge in the organization; as well as few opportunities to engage outside of formal work meetings. The company, known for its focus on people and talent management, prioritized addressing this feedback through the consulting engagement.
As a first step, a special task force was assembled, consisting of several key people from the Marketing and Communications, HR, and IT departments. I was the only external consultant on the task force, engaged to provide advice, guidance, and insights on project approach and solution development. We were immediately confronted with over 300 pages of feedback, content that was extracted from the open forum. Although the data and keyword analysis was helpful in providing direction on key themes to focus on, the depth of information required to take any useful action was missing (note that we were working with still rudimentary analytics capabilities from over a decade ago).
Over the years, I have developed and worked with maturity models on numerous occasions. It is a great way to measure the capabilities of an organization for continuous improvement in a particular area of focus. Maturity models could be developed pretty much for any discipline—people, process, or technology—providing there is clarity on themes or dimensions to assess against. The maturity model approach had the appropriate characteristics that would prove beneficial for the reinsurance project engagement. Based on data and keyword analysis, I was able identify four common themes or dimensions that set the foundation for building the maturity model. Each of these dimensions was further broken down into specific sub-dimensions to be measured, and definitions for each developed across maturity levels—basic, advanced, excellent, and visionary (see Figures 5.10 and 5.11).
Find
- People / Experts
- Content / Information
- Interlinking of Various Information (people, content & organization wide)
Share
- Learning (formal, on-the-job, e-learning, on-boarding material)
- Document & Content Sharing
- Experiences / Lessons Learnt / Opinions (informal, personal level)
Organize
- Communities (informal, e.g. knowledge networks)
- Workgroups (formal structure & ad-hoc, cross-organizational, e.g. deal / project team, line organization, underwriting)
- Culture & behaviour / Performance Management (measure & reward behaviour change)
Communicate (including real-time & time delayed)
- Leadership (1 – many)
- Peer-to-peer (internal & external peers, 1 – 1)
- Team (internal & external team members, incl. virtual teams, 1 – many)
- External (both sharing static information)
Figure 5.10 Maturity model dimensions (example).
SOURCE: Kamales Lardi, 2011
| Dimensions | Basic | Advanced | Excellent | Visionary |
| People / Experts | I have an individual personal network & individual knowledge of contacts. Basic contact information (e.g. telephone directory). | I have an individual personal network & knowledge of contacts, plus extended network within my contact group. Contact information & skill base made publicly known. | I am able to proactively use a profile directory to create an organization wide network. Leverage on social networks to identify relevant contacts. Integrated into processes / workflow. | I am able to easily find trusted contacts. Leveraging opinions and unstructured information about contacts. Information about contacts is automatically generated. Internal & external contacts are all combined in one network. |
| Content / Information | I find things in repositories/sources I typically use. I may need to search multiple times to get information from various sources. | I find things in repositories / sources I typically don't use, but I don't understand the context of the documents. I am able to search through multiple sources in one go. | I am able to find articles / information that are helpful and categorize them for myself. I understand the context of the documents. I am able to subscribe for notifications about new / changed material in sources. I am able to search all sources of information from one single point. | I am able to see which articles/information are helpful to others and how other users categorize articles. I know immediately which documents will answer my issue /question. I do not differentiate between my own documents and those from others. There is a sophisticated key-word based search, as well as workflow and governance built to support (and encourage) this environment. |
| Interlinking of Various Information | I am not able to identify the owner / origins of each content. | I am able to identify the owners / origins of each content. | I am able to identify the owner / origin of each content (org unit, location) I am able to understand the context of the person/content because its structure is readily visible. When I search for a person, I immediately see which content he/she recently created. | I immediately know which documents/people will answer my issue/question. I am familiar with the structure of the content/organization and use it actively when identifying people/categorizing content. I can immediately identify subject matter experts in topics interesting for me and see which content they trust/have created. |
Figure 5.11 Maturity model sub-dimensions (example).
SOURCE: Kamales Lardi, 2011
Figure 5.12 Maturity model current and target levels (example).
SOURCE: Kamales Lardi, 2011
Once the dimensions and maturity levels were validated and agreed with internal stakeholders, an assessment or survey was carried out with selected employees from across the organizations to further corroborate the current and target maturity levels (see Figure 5.12). This was used as a basis to define and develop an employee collaboration and knowledge management strategy for the organizations.
The approach not only provided a structured frame over the subjective content that was gathered through the open forum, but also gave the task force a firm foundation to build on. The gap areas, particularly the areas with the largest distance between current and target maturity levels, were used to define specific initiatives and actions that would close the gaps. One key outcome from this assessment was the need for an internal employee collaboration platform. The dimensions and sub-dimensions of the maturity model also provided the basic requirements to assess technology solutions that would be used to build the collaboration platform. The platform was developed and launched, with the aim to foster communication, interaction, and information sharing across geographic and functional locations, increasing productivity and engagement by up to 40% within the first six months of launch. The platform is still in use at the organization.
Digital Maturity & Readiness Assessment
Based on the practical experience of applying maturity models, I realized that this would be a good starting point for digital business transformation as well. The digital maturity model can be used in each phase of the digital business transformation process to help identify where there are gaps, establish key areas to focus on, and define where to start. Although the maturity assessment does not replace the overarching framework, it does serve as a reference guide throughout the transformation process. Several maturity models exist in the market with a range of scope. However, I decided to develop a proprietary model that works in close alignment with the custom-designed Digital Business Transformation Strategy© framework.
The Digital Maturity & Readiness Model©, as illustrated in Figure 5.13, is a pan-organizational maturity framework that covers six core dimensions of business:
Figure 5.13 Digital Maturity & Readiness Model©.
SOURCE: Kamales Lardi, 2015
- Leadership The leadership dimension assesses the digital mindset and readiness of the leadership team that have been tasked to drive the digital agenda in an organization. This dimension could also be applied to board members or owners of an organization to gauge their readiness for transformation and understanding of what is required to achieve change.
- People, culture, and organization This dimension assesses the ways of working, capabilities and skillsets, as well as organization structures that are available to drive the digital agenda at all levels of the organization.
- Customer centricity Many organizations utilize the term customer-centric, but few live this term in daily business. This dimension assesses the depth at which customer behaviors, preferences, and needs are taken into consideration across the value offerings, services, and operations of the organization.
- Business model Sustainable returns from digital business transformation efforts are visible when the business model of the organization shifts in alignment with the organization-wide change that occurs. This dimension assesses the level of flexibility and sustainability of the business model value proposition and product or service offering for the digital age.
- Processes and operations In alignment with value creation and capture transformation, the organization's internal value delivery capabilities also need to change ensuring business continuity and resilience. This dimension assesses the level of streamlining, automation, and digitizing that has been applied to optimize the organization's operations and business functions.
- Technology Technology is a key enabler for transformation and can be leveraged to enable unprecedented scale and growth across value creation, capture, and delivery capabilities. This dimension assesses the level of exploration, investment and implementation of new or emerging technology solutions that have been embedded in the organization's digital strategy to support the future business activities.
As the maturity model indicates (Figure 5.14), transformation is a gradual process that unfolds across the organization over time, and companies at different stages of maturity can continue to grow and adapt in order to reach a higher level of maturity.
Figure 5.14 Levels of Digital Maturity & Readiness Model©.
SOURCE: Kamales Lardi, 2015
Across the dimension, maturity levels are defined to indicate the overall state of the organization in terms of capabilities and readiness for transformation. The levels are defined as follows:
- Minimal The current business strategy and vision does not sufficiently take into consideration digital as part of its main agenda. The leadership team may be aware of the potential impact of digital technologies in the business, but are not fully aware of its business potential. Few or no digital initiatives are planned and leadership teams are less active users of emerging technologies. Minimal investments are allocated to digital initiatives and efforts are concentrated on traditional IT investments. There are only minimal attempts to explore emerging technologies or how digital solutions might benefit the organization and customers. As a next step, organizations in the Minimal maturity stage are encouraged to focus on understanding the latest disruptive trends and how digital technologies create opportunities for business and revenue generation.
- Reactive The current business strategy and vision takes digital into account in reaction to external drivers, for example, technology trends or evolving competitive landscape. Leadership teams recognize the potential value of digital technologies through exposure from various sources, for example, industry news, expert analysis, peers, or media. Digital solutions are planned or implemented within functional areas that deliver specific technologies. Selected digital initiatives have been planned or will be implemented in response to market trends or competitive landscape. Investment in exploration is limited to selected business areas or functions (e.g., launching a mobile app or exploring a new technology such as blockchain). Additionally, there are some efforts to change the way the business operates due to competitive or business pressures, but still little change to the core business and traditional ways of doing things. As a next step, organizations in the Reactive maturity stage are encouraged to explore the benefits of digital transformation across the entire organization and develop a roadmap of initiatives that span across operations, processes, products and services, as well as business models.
- Customer-Driven The current business strategy and vision includes some digital initiatives in response to customer demands, emerging consumer behavior trends, or increase in adoption of specific technologies. The leadership team may not be using digital technologies themselves, but support or drive the use of digital technologies to engage customers and drive business activities. Digital initiatives are planned or implemented in response to external pressures to transform some areas of business, but this is limited to external-facing functions. Investments in exploration are limited to service offering development and customer feedback may be actively sought to design and develop better service offerings, as well as prototype new products, services, or revenue opportunities. External-facing functions (e.g., sales, marketing, customer support, and service) utilize digital technologies to improve engagement and are trained to access external digital channels. As a next step, organizations in the Customer-Driven maturity stage are encouraged to explore the benefits of digital transformation across the entire organization and develop a roadmap of initiatives that span across operations, processes, products and services, as well as business models.
- Transformational Digital is deeply embedded as part of strategy and the potential benefits or impact are considered in all strategic initiatives defined. There may already be a clear vision in place for how to bring the company to the digital future. Leadership teams may be digitally savvy and use technology to stay connected and informed, support use of technology to engage customers, and drive business activities. The customer needs and expectations drive transformation in service offerings and delivery, including products and engagement. Core processes in the organization are reviewed, streamlined, and optimized, while digital channels and technologies are integrated. There is a clear investment strategy in exploration, as well as digital skills development, to support the understanding and exploitation of digital technologies for business. Additionally, proactive efforts are made to change the way the business operates and develop new ways to transform the core business operations. As a next step, organizations in the Transformative maturity stage are encouraged to refine the transformation roadmap, as well as define digital business models that can create alternative revenue potential.
Based on the maturity model, an online rapid assessment tool was developed to help assess where you are before developing strategies on where you want to get to, effectively providing an assessment of your organization's strengths, shortcomings, pain points, and barriers that could arise when embarking on the digital business transformation journey. The six dimensions of the maturity and readiness model are further divided into 30 sub-dimensions against which organizations are assessed, as described in Figure 5.15.
Figure 5.15 Sub-dimensions of Digital Maturity & Readiness Model©
SOURCE: Kamales Lardi, 2015
The assessment tool can be completed within minutes, providing a way for organizations to identify gaps in the current business environment across the six core dimensions and determine the best way to move forward as quickly as possible. This uncovering of existing capabilities in the organization is the key to defining a competitive digital business transformation strategy and roadmap.
How to Apply the Digital Maturity Assessment
As I engage with leadership teams, I often ask if they are in alignment in understanding the capabilities of the organization and where to focus transformation efforts. The responses usually contain strong conviction that there is alignment in thinking, priorities, and improvement areas. In 2019, I was invited to conduct an executive briefing for the leadership team at Victorinox AG, a Swiss consumer business organization that is globally recognized. In addition to being the sole supplier of multi-purpose knives to the Swiss army, the brand is the largest manufacturer of pocket knives in the world, and includes watches, apparel, and travel gear in their product portfolio. Participating in their annual leadership strategy session, I conducted a workshop on digital disruption in their market, trends and developments in the industry, evolving customer needs, and transformation the organization may need to compete in the digital future. As part of the workshop, the leadership team was asked to complete the Digital Maturity & Readiness assessment.
The result of the online assessment was a surprise to the leadership team. A family-owned business, Victorinox pride themselves on their people-focused approach to people management. The leadership team are a tight-knit group, each member of the team an essential part of the Victorinox extended family. Still, the results of the maturity and readiness assessment illustrated how dispersed the perspectives of the leadership team were. There were some commonly expected patterns, for example, results from the control functions tended to be more conservative, while sales and market-facing functions appeared overly optimistic. However, across the core dimensions, there was a lack of clarity on where to focus transformation efforts. The session proved to be an eye-opener for the CEO, Carl Elsener, who in his own words agreed that the digital business transformation strategy needs to be clearly defined with the leadership team as a priority:
[T]he Digital Maturity Assessment, or the picture that emerged from our assessments, was very impressive. Without a common understanding of the questions, the different images are not surprising. Nevertheless, it has shown that it is imperative that we start activities to first get a common understanding on this topic and then jointly start the ‘Digital Business Transformation Journey’ for our company.
Carl Elsener, CEO Victorinox AG
A critical prerequisite for the successful execution of digital business transformation is the buy-in and commitment of leadership team members. The management team must take the time to make sure that all stakeholders are committed—from board members to interns—or risk jeopardizing company culture and long-term transformation success. However, aligning mindsets and perspectives is not easy, even in organizations with the most open and agile culture. The maturity and readiness assessment offers a structured way to bring people together towards a common understanding for the direction and purpose of transformation. It also highlights misconceptions and differences in perspectives, which can be addressed in an open and objective way.
Maturity and readiness assessments are applied in several ways during the digital business transformation process. At the start of the transformation journey, the maturity assessment offers a snapshot of the current capabilities that your organization could leverage, or helps identify improvement opportunities and actions in the form of key gap areas. In addition, conducting the assessment from two distinct perspectives—current and target—offers organizations a benchmark to work towards. During the transformation process, the maturity assessment offers a methodical way to check the progress of the digital business transformation journey. As you progress along the journey, the direction and goals of the transformation effort may evolve and could look different from where you started. The maturity assessment provides a tangible compass to help stay the course, as well as reset the direction if required. The maturity assessment could also be used to demonstrate the value and impact of initiatives, and gain buy-in, support, or additional investments to continue steering in the right direction of transformation.
The maturity and readiness tool was designed to be versatile, applicable by companies at any stage of the digital transformation journey. For companies at the beginning of the journey or still trying to figure out where to start, the assessment highlights clear gap areas to focus on. For example, a very low maturity in Customer Centricity could mean that executives should focus on transformation initiatives that relate to digitalizing customer access points, improving engagement through online channels, or utilize digital technologies to gain more insights regarding customer behavior and preferences.
Conversely, this maturity tool offers companies already embarking on their digital transformation journey a great way to take stock of their progress and determine if their planned or implemented initiatives are aligned with the strategic direction. The tool not only assesses maturity levels across each sub-category for a company, but also offers an average score or benchmark against other companies.
Leadership teams may choose to deploy the maturity and readiness assessment in several ways, depending on the type and size of the organization. For example, heads of departments could be asked to complete the assessment tool to determine alignment and understanding of the digital business transformation direction. For large organizations spanning various regional locations, each country or location should complete the assessment tool to highlight regional differences and gap areas that may be unique to them. In smaller organizations, all employees or key stakeholders could complete the assessment tool to take into consideration all voices that impact the organization transformation. The maturity and readiness assessment should not be viewed as a standalone, but in combination with existing initiatives, culture, industry, and emerging trends impacting the organization.
In Chapter 6, we will delve deeper into the step-by-step approach to implementing sustainable digital business transformation for organizations.