UNIT 5 DSMM

What is a digital transformation framework?

A digital transformation framework is the blueprint for how an
organisation moves through a period of significant change because of
the current evolving business conditions.
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The framework is a tool, used across an organisation, that guides all
levels of the organisation through the journey. It ensures that no area
of the business is left unattended during the period of change.
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It provides a common reference point that can be evolved as the
organisation changes – thus, the digital transformation framework is
central to success. The framework enables the strategy and roadmap
that allows organisations, of all sizes, to evolve and success in the
rapidly changing market conditions that now exist.
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What is digital transformation?

While digital technology pervades daily life in many countries, it is not
technology that is the driver behind the need for an organisation to
digitally transform. The driver is people – customers and employees,
and what they expect from companies.
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The more people embrace technology, the greater their expectation
that every company they work for or, buy products and services from,
will also embrace technology. People love technology.
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They change their behaviours due to the technology. They expect
companies to be different because of technology. And, there’s always
new technology. Does that sound like a circular argument? Perhaps it
is. But the cycle goes something like this: People invent technology.
People adapt to the technology. It changes their life. More new
technology is invented. People adapt to this technology. It changes
their life. … you get the picture. It is a circular argument for the simple
reason that technology evolves.
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As a result, people – customers and employees – constantly change
their expectations. In the last decade, people have embraced and
demanded new technology faster than ever before. It’s this
environment that is forcing organisations to rapidly transform.
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Disruption, innovation and digital transformation

A core function with any business is to continually advance and
improve its operations, products and services. All businesses must
continually improve to increase margins and, decrease costs.
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Organisations that successfully follow a digital transformation
framework are equipped not only to improve, but also to drive
innovation and disruption strategies.
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These strategies allow the company to compete in the rapidly evolving
market conditions that are being driven by customer expectations,
new technologies and, new commercial models.
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What is a disruption?
Disruption refers to the confluence of external factors that are
currently undergoing change:

 What customers expect from companies

 What employees expect from companies

 What is technically possible

 What commercial models are successful

 What strategies work

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It is this current convergence of events that drives organisations to
embed a digital transformation framework and embed innovation into
the fundamental DNA of the business.
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Why do organisations need to digitally

transform?
Most organisations have a long and proud history. Long-standing
organisations tend to have an established way of operating that has
enabled decades of success.
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These ways of operating are usually responsible for the organisation’s
survival to a point in time; the company kept doing what was working
and it prospered. The reality is that most companies are optimised for
the environment where they already operate.
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When anything in that environment changes, be it quickly or over time,
they are not equipped to adapt and changes. Now, enter all the
external factors that are driving disruption – customer expectations,
employee expectations, new technology, new business models and
new, rapidly growing startups.

Suddenly, the established ways of working may no longer be

delivering the same results. As the impetus for change increases,
caused by falling revenues and other negative pressures, the
leadership of the organisation needs to formulate a strategic
response.
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Some choose to tweak the existing ways to increase efficiency; but
this is rarely enough to tilt the organisation back on to a long term,
sustainable path. The need for a revolutionary approach, one that
revitalises the organisation and returns it to viability becomes obvious.

This is when digital transformation frameworks will help the leaders

steer the organisation back onto a path that propels the business
forward, not backwards. The reality is, it’s not the largest nor the most
currently successful companies that succeed. Successful companies
are the ones that are the most adaptable.
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Does your organisation need to digitally

transform?
The short answer is yes. The long answer is yes unless your
organisation is at its peak, where it has a deep understanding of
customers, employee engagement is sky high and, all technology
systems are modern, up-to-date and being used to deliver innovative
products and services.

Regardless of the industry in which an organisation exists, common

pressures from profit margins, competitor activity, employee
expectations, customer expectation and technology drive the decision
to commence a digital transformation. Your organisation may have
already begun its digital transformation – officially or, unofficially.
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If this is the case, it is imperative that a digital transformation
framework is established to ensure that the transformation is
successful. Why? The digital transformation of any organisation is not
easy. It’s not a matter of following a checklist and, after all, boxes are
ticked, the organisation is transformed.
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A digital transformation framework highlights the overlapping areas of
the organisation that must change. It will also be the basis of a multi-
faceted program of work to deliver results.
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The right digital transformation framework provides a guide in a time
of organised chaos. Have no doubt that an organisation undergoing
this metamorphosis is in a state of flux; a constant state of turbulence.
The framework will be the guiding beacon that provides everyone in
the organisation, from the Board down, a sense of progress toward
the end goal – a revitalised, successful organisation.
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Without a sense of progress, the organisation is at risk of suffering
from change fatigue. This can cripple an organisation, making it lose
momentum and, if t the business was already teetering on the edge of
financial viability, it could be what tips it beyond a point of return.
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Change fatigue – the emotional response of employees caught in a
cycle of endless change, with no positive end in sight – can be
avoided by implementing a digital transformation framework.
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The benefits of a digital transformation

framework
All organisations exist as a finely tuned mix of separate functions,
working together to deliver products and services to customers. The
right digital transformation framework will provide scaffolding to guide
the organisation through this period of intense change.
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It will ensure that no areas of the business are misunderstood or left
behind in the process. It will provide a way to create tangible
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benchmarks, meaningful metrics and, clear indications of progress
and, areas where more attention is required.
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The most important things

The most important thing for any digital transformation framework is its
adaptability. Plus, the most important thing for any Board, CEO or
leadership team to understand is that everything will change,
constantly.
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As a result, the single most important thing that needs to change at all
levels of the organisation is mindset. People need to think differently
and be resilient in the face of continuous change.
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Having a digital transformation framework is one tool that will assist
with the change, but it too needs to be adaptable to whatever the
organisation and its people encounter along the way. For any digital
transformation framework to work, the leaders of the organisation
need to have the right mindset to adapt and adjust as the journey
unfolds.
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Organisational wide benefits

Each part of an organisation has a vital role to play. The digital
transformation framework is the tool that binds the organisation
together and, provides a common starting point for all teams.
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The benefits of the digital transformation will be both universal and,
also have specific applications in different team functions. The
framework will provide:
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‍Leadership

 An agreed, organisational-wide approach

 A template to lead through the period of change

 An organisation-wide visible program for reference

 A working straw-man of risks, benefits and progress towards the

goal

 The opportunity to redefine what success looks like for the

company

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The Board

 An agreed approach with the leadership team

 A template that provides governance insights

 A working straw-man to determine progress towards the goal

 The opportunity to redefine what success looks like for the

company

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Employees
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 A template that provides all employees with an understanding of
what’s ahead

 An understanding of the change and how they will be involved

 An understanding of the change and what it means for

customers

 The opportunity to work in cross-functional teams across the

organisation to achieve the desired end state goals

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Operations

 A template to understand what will be required during the period

of change

 A blueprint that maps current state and the goal end state

 An understanding of the cross-organisational flow-on effects of

the change

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Finance

 A template to understand what will be required during the period

of change

 The mandate to map the current state and the future state

 The opportunity to develop a new, iterative way of working and

solving problems

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Marketing & Product

 A template to understand what will be required during the period

of change

 The mandate to reposition the brand, protect it during the state of

change

 A guide to engaging with customers to make them a part of the

ongoing journey and transformation of the organisation

 The mandate to assess current product/service performance

against the expectations of customers leveraging new
technologies

 The opportunity to develop a new, iterative way of working and

solving problems

Technology

 A template to understand what will be required during the period

of change

 The mandate to assess current systems and skills versus the

required future state systems and skills – eg. Cloud, social
media, Internet of Things (IoT), Big Data, Mobile

 The opportunity to develop a new, iterative way of working and

solving problems

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Internal Communications
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 A template to understand what will be required during the period
of change

 A mandate to engage with employees, listen to their concerns,

celebrate successes

 The opportunity to redefine all communication with employees

leveraging new technologies

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Investor Relations

 A template to understand what will be required during the period

of change

 The opportunity to redefine all communication with shareholders

leveraging new technologies

 The opportunity to communicate the ongoing story of the

transformation of the organisation from the old state to the
transformed business

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Legal

 A template to understand what will be required during the period

of change

 The opportunity to develop a new, iterative way of working and

solving problems

 The mandate to assess current systems and skills versus the

required future state systems and skills – eg. Cloud, social
media, Internet of Things (IoT), Big Data, Mobile
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 The opportunity to develop a new, iterative way of working and
solving problems

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Human Resources (HR)

 A template to understand what will be required during the period

of change

 A mandate to engage with employees, listen to their concerns,

celebrate successes

 A mandate to assess the current corporate culture and design a

pathway to a transformed culture

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Customers

 A clear understanding of what the organisation is doing and, how

it may affect them as customers

 An opportunity to engage and support the organisation, celebrate

its successes as it transforms

How to choose the right digital

transformation framework
The right digital framework is one that is adaptable to an organisation
yet can be phased into logical, cohesive steps that will show tangible
progress. The initial phases ensure the organisation knows what it is
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doing and, why it needs to do it. The following phases are about
execution and ongoing operational environment.

1. Discover
Vision
The organisation needs to have a vision of the future for the company,
its staff, its customers and, the overall marketplace in which it
operates.

Why
It is not enough for an organisation to change because of commercial
pressures. The organisation needs to define a belief of why it needs to
change that all employees can embrace; one that means something to
its customers as well.

Insights
The organisation needs to leverage internal insights and knowledge to
determine the desired future state.
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2. Design
Leadership
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The importance and scale of a digital transformation are so great that
a single executive is usually appointed to lead the transformation, with
the full support of the Board, CEO and the rest of the leadership team.

Strategy
The strategy should include a complete market, legislative, regulatory
and competitor review. It should provide a detailed assessment of the
current state of the organisation, the desired end state, detailed
metrics that will determine when success has been achieved at each
stage, what will be done differently and how it will happen.
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How it will happen is more important than what will happen – the
mindset change of doing things differently is what success is hinged
upon. Metrics play a vital role in tracking how things are changing.
These are two of the most important factors in a digital transformation
strategy.

Roadmap
A roadmap that defines the stages to progress through the
transformation is devised, with the knowledge that it will change and
adapt as required.
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3. Initiate
Language
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The single most effective component of a digital transformation
framework is that it provides the organisation with one, unifying
language.

Streams
Distinct streams for each of the core areas of the organisation should
be established for: people, customers, process, product, technology

Culture
A dedicated, overarching program that ensures the organisational
culture evolves and adapts to the changes. Dedicated communication,
workshops and other initiatives to put the change process, outcomes
and progress in perspective for all levels of the organisation.
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4. Refine
Assess
Constant evaluation of the metrics to determine progress towards the
end state is undertaken. This informs the Board and Leadership and,
forms the basis of the culture and communications program.

Benchmarks
Establishing new benchmarks begins at the start of the transformation.
New ways of doing things cannot be measured effectively against the
old methods.
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Pivots
When a change from the initial plan and framework is required, pivots
occur. These are informed by the assessment and benchmarking
process. The purpose of the transformation is to progress toward the
end-state, and changes in direction without changing the end goal will
be required.
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Things to avoid
The three most common mistakes that organisations undertaking a
transformation make are enough to derail the program. While any of
these three mistakes can occur at any time, they are all interrelated.

Focusing only on technology

The most common mistake is that organisations focus on the
technology component of a digital transformation framework. This is
often done because it is the most widely understood trigger for
commencing the program of work.
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While technology is a vital component, overlooking the other streams
in the Initiate step will derail the transformation rapidly. The upside is if
this does occur, the program can be returned to the right path by
viewing the organisation and the pressures upon it as a whole.
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Then, by increasing effort in the other streams to ensure the whole
organisation moves together, at the right speed.
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Creating silos
Similarly, even if all streams are working towards the common goal, if
they are not collaborating, the program will falter. Working in silos will
mean insights are not shared, duplication will occur and, progress will
diminish. Silos commonly materialise due to people or teams trying to
feel in control and manage their workload through a period of dramatic
change. It’s a natural, human response to being overwhelmed and
fearing a new and uncertain future.
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The resolution is to ensure that there are regular communication
forums, at all levels of the organisation, for those leading the
transformation as well as those who are dealing with the program day
to day. Working through the fear and magnitude of the path ahead is
essential to ensure silos of isolation do not form.
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This method of regular communication and engagement with teams
also reflects a different way of working for many organisations. Yet
ultimately, working collaboratively is one of the desired outcomes of
any digital transformation framework. The sooner this way of working
becomes part of the organisational culture, the more rapidly the
company will progress in its transformation.
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Not investing in culture change and

communication
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Even if every group is working collaboratively toward a common goal
and that technology is not the only focus, an organisation’s digital
transformation can falter if there is not an adequate investment in the
cultural change stream of the digital transformation framework. An
organisation is made up of its people; if they are not kept informed
throughout the change – of both the good and the bad – the program
will not succeed.
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The same feelings of fear and being overwhelmed can consume entire
teams rapidly in times of high pressured change. Investing in the
culture and internal communication stream is vital to the organisation
riding the ups and downs of the turbulence. Successful cultural
change programs are a collaboration between HR and internal
communication teams. Usually, a dedicated, cross-functional team is
created to lead the culture stream throughout the change.
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What’s the return?

Organisational change at this scale is complex, even with a digital
transformation framework. However, the payback is significant. An
organisation that can adapt and respond to the needs of customers,
deliver innovative products and services and, disrupt market is one
that has longevity.
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While the investment is significant, so is the payback. Organisations
that have digitally transformed and have repositioned as innovative
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organisations outperform competitors on the core metrics of CAGR,
EBITDA and Market Capitalisation Growth.

Similarly, organisations that have the culture, processes and

technology in place from following a successful digital transformation
framework are faster to break even on the new products and services
that are launched to market.