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How to Develop a Digital Transformation Strategy

“So when do we get all the cool digital stuff?”

We’ve often heard this type of question from clients, but it is putting the cart before the horse. There is not a one-size-fits-all blueprint for Digital Transformation, and the initiatives by different organizations can vary immensely. Fortunately, I believe we can use a consistent method to create an individualized plan: the Digital Strategy Articulation Framework (DSAF).



This framework has a lot in common with methods presented in Playing to Win: How Strategy Really Works. The DSAF helps build the portfolio of digital initiatives by translating an organizational vision into a strategic roadmap. The framework’s greatest benefit is to combat the shotgun approach by rationalizing the initiatives to pursue. By doing so, the DSAF will help optimize investment in the Digital Transformation and maintain internal stakeholder support.

The first step is to define the business problem that needs to be solved. An important point to remember is that Digital Transformation is not being done for digital’s sake, it is being done to improve business results. The initial steps of the DSAF thus provide clarity around the business problem and strategic objectives. Before even using the word “digital,” an organization needs to establish that a significant opportunity exists.

Objectives (Grey Section)

Next, a vision statement is created that describes an optimized future state in which the business problem is solved. The vision statement provides the overall goal towards which all strategies should drive. Throughout the Digital Transformation, the vision will serve as the North Star reference point for answering questions about which actions are most appropriate towards achieving objectives.
Moving down the pyramid, metrics measure progress against the vision and guiding principles clarify what is in scope and out of scope for the vision. As the name “strategic imperatives” indicates, they are the outcomes that are imperative to happen, and should yield a list of prioritized business goals.
 
If you look back, you will notice the word “digital” was not needed in creating this grey portion of the pyramid.
 
Here is how a large investment services provider (Investco) completed these sections:



Solution (Blue Section)

Now that organizational objectives have been defined, I am going to describe how to use Digital Transformation as a means of meeting those objectives.
 
The next step is to determine what digital capabilities will help achieve these strategies. These should be both existing capabilities that need to be changed, and new ones that need to be developed. Digital enablers are then the means (investments) to achieve these digital capabilities. I like to group digital enablers into people, process, and technology.
The final step of the DSAF is to create the Digital Transformation Roadmap, which is a sequence of the identified digital initiatives. The sequencing process could be its own blog post, but in short, initiatives are prioritized based on benefits, costs, dependencies, complexity, and the overall implementation timeline.

To illustrate this portion of the pyramid, I’ve provided an extremely abridged version of what was developed by Investco:



If your organization follows a similar methodology, it will yield a strategic and clear blueprint that answers the question of, “When do we get all the cool digital stuff?”

About the author

Jon Kelman
Jon Kelman
Jon is a Senior Consultant for Capgemini Consulting North America. He has advised clients across a variety of industries, including financial services, airline, consumer packaged goods, and pharmaceutical in the areas of Digital Transformation, marketing strategy, and organizational redesign. Jon holds an MBA from the University of Michigan’s Ross School of Business and a BS in Economics from Haverford College.

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