Digital Transformation: A Framework for Auditing Where You Stand Today

May 22, 2018 Scott Rhodes

I’m going to bring up a term that might score if you’re playing buzzword bingo: “digital transformation.”

The term has become ubiquitous enough that most companies are at least pretending to worry about it—and amorphous enough that no two “gurus” will give you the same working definition of what it actually means.

I offer this: It’s simply organizational change. When done right, it’s a methodical evolution of your vision, strategy, technology, operations and capabilities—all focused on delivering an exceptional experience that anticipates a customer’s unmet needs. The intimacy of sophisticated consumer-facing technology within our lives fuels our rising expectations that brands “know” us and deliver value at each touchpoint. We as consumers have zero patience for seemingly uninformed or insincere marketing.     

I say “organizational” change because digital transformation is holistic and involves every layer of your company, from vision to operations to technology. This can be daunting, as having one lagging element will compromise your entire initiative. The complexity of transformation drives not only confusion around what digital transformation is, but also feeds the anxiety that leadership feels about where to even begin.

This can’t be solved by hastily plugging in the latest technology. With 1.5 million new technology companies entering the market last year (that’s about 75 an hour), it’s difficult for companies to stay abreast of it all. Look at the size of the ongoing explosion in our user, data and company universes:

The stakes are high, with internal and external pressures to transform quickly and meet customer demands. Look at the carnage across the retail space: nearly 7,000 US store closure announcements in 2017; that's up more than 200 percent from a year ago.  

There is no silver bullet. This shift demands strategic, coordinated change across the organization, from your vision all the way down to your systems. The current explosion of technology will impact every facet of your business: how you view your customers, model their behavior and engage them across the digital ecosystem.  

This brings us to the question with which many of our clients struggle: “What does digital transformation mean for my organization?” 

First, Understand Where You Are Now

The first step to crafting your unique path to transformation is embracing the fact that your company is a special snowflake—no two organizations or transformation plans will be the same. Then you start down the path to change by clearly answering this question: "Where are we today?" 

While the plan is never the same, the methodology to define your organizational maturity offers a welcome constant. We have shown leaders at companies who are trying to make sense of transformation how to apply a heuristic enterprise-wide scoring methodology for evaluating organizations and quantifiably plotting each contributing facet so we can align to the true current state.

To get started, assess where you stand in context of these five maturity stages:

You'll need to assess several categories and sub-categories of your organization against these stages, including, but not limited to:

1. Corporate Readiness: Gauge your readiness in context of the corporate vision, organization structure, commitment to making the necessary changes and investments for their customers.

2. Data: Data is the lifeblood of an organization, giving you an understanding of your customers to model against transformation opportunities and enabling the intelligence to fuel marketing programs.

3. Customer Understanding: How well do you truly understand your markets, segments, personas and the unique journeys your customers take? By bringing a balance of data science and research-driven approaches, you can truly understand your customers and anticipate their unmet needs.

4. Measurement & Analytics: Building efficiency of your customer understanding through prescriptive modeling brings your data to life and delivers scalable, in-the-moment relevance.

5. Messaging & Content: Engaging with customers in their preferred channel in a natural and empathetic manner (the importance of this cannot be overstressed) is the culmination of all these elements and demands a scalable content strategy and engine to power it.

6. Systems & Marketing Technology: Technology is the enabler, not the strategy. This demands methodical evolution of your marketing stack, integrating revolutionary technologies in alignment with other organizational capabilities.

Your organization may by fairly advanced in some categories and lagging in others. Your digital transformation will only be as strong as your weakest link—you will not achieve meaningful progress toward effectively serving the customer without advancing all categories in orchestration.

Second, Plan Where You Need to Go

You cannot articulate where you’re going if you don’t know where you are. Using an established framework allows you to assess, score and plot each aspect of your company to define “current state.” From there, you are able to architect a phased roadmap designed to align lagging organizational elements and implement controlled phases of innovation—giving you an actionable foundation for managing budgets, investments and senior leadership’s expectations with a clear vision, plan and timeline.

Once you have measured your maturity stage and readiness in terms of the key capabilities above, it's time to make a plan. Check out the next post for how to put your plan together. I'll share a “laboratory approach” for creating a company blueprint for innovation that can be executed without excessive disruption. 

About the Author

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