How to develop a digital transformation framework

In today’s fast-paced business world, digital transformation has become an essential component for organizations to stay competitive and relevant. The adoption of digital technologies and processes can improve efficiency, enhance customer experience, and drive innovation. 

In this article, we will explore the key steps involved in creating a comprehensive digital transformation framework that can help organizations navigate the transformation journey successfully.

Digital transformation vs. digital innovation

Are digital transformation and digital innovation the same? These are two terms that are often used interchangeably in the tech industry, but they refer to different concepts. 

Digital transformation is the process of using digital technology to change how a business operates, with the goal of making it more efficient, effective, and competitive. It involves rethinking business models, processes, and strategies and often involves a large-scale organizational change. 

On the other hand, digital innovation refers to the development and implementation of new digital products, services, or processes that create value for customers and stakeholders. Digital innovation can be a key driver of digital transformation, but it can also be a standalone initiative.

Both digital transformation and digital innovation are critical for organizations that want to remain competitive in today’s rapidly changing digital landscape. However, while digital transformation involves a holistic, organization-wide approach to change, digital innovation can be more focused and incremental. 

To successfully navigate these concepts, organizations need to have a clear understanding of their goals and objectives, and the resources and capabilities needed to achieve them. This is why creating a framework for transformation is key to be the most successful in adapting to the digital age.

What is a digital transformation framework?

Think about frameworks for digital transformation as the blueprint for businesses to design, test and launch their digital transformation strategies. It’s a tool commonly employed by consultants and organizational leaders to aid businesses in their shift towards the digital economy is referred to as a digital transformation framework.

Compared to older management consulting frameworks, modern digital transformation frameworks are driven by data and are less subjective in nature. The aim of implementing a digital transformation framework is to establish a consistent and replicable method or process for planning and overseeing a digital transformation.

In the context of business and/or organizations of all kinds, a digital transformation framework, entails repositioning an organization in the digital economy.  It utilizes technology to optimize opportunities and provide superior service to existing and potential customers, citizens, donors, voters… 

Why develop a framework?

Applying a framework empowers the digital transformation teams, to have command over the necessary components for attaining a state of transformed business, and the emphasis surpasses technology. Instead of being swayed by the dazzle of technology, the framework focuses on significant factors such as:

• Customer value
• Market position
• Competitors

In the process of business transformation, technology plays the role of a facilitator rather than the ultimate objective. Therefore, it is vital to define the desired outcome of business transformation. In the absence of a clear definition, it is recommended to utilize frameworks and models to guide thinking, planning, communication, innovation, and technology selection.

How to create a digital transformation framework

Though there is not a universally accepted “source of truth” on how to properly step into transformation, there are recent studies that seek to establish best practices in this field. According to the recent findings of McKinsey, there are three steps that are vital to promote and make digital transformation happen:

Defining value

For a company to embark on a successful digital transformation, it is crucial to prioritize it as a top agenda item and recognize the significant impact it can have. While the endeavor may seem daunting, CEOs are moving in the right direction if they fully comprehend the critical role of strong management commitment, are prepared to make substantial investments, and establish precise and ambitious objectives.

How to make it possible

• Ensure senior management commitment
• Set clear and ambitious targets
• Secure investment

Launch and acceleration

Initiating change initiatives is often the easy part, but sustaining them and generating further initiatives is a challenge. Despite investing in multiple initiatives, companies typically struggle to make progress, leading executives to wrongly believe that there is no pressing need to change as the market is not yet ready. 

To avoid this, companies must carefully choose which projects to initiate and provide the necessary resources to support them. This includes assembling a high-performing launch team, which is often headed by a chief digital officer (CDO), assessing the organizational structure, and fostering a digital culture to maintain momentum.

How to make it possible

• Start with lighthouse projects 
• Appoint a high-caliber launch team 
• Organize to promote new, agile ways of working 
• Nurture a digital culture

Scaling up

By the 18-month mark, companies should have made significant strides in their digital transformation efforts. They should have implemented several initiatives and started to see the benefits. However, this is also the ideal time to accelerate the transformation and increase the scale of the effort. It is critical to carefully sequence subsequent initiatives to ensure a smooth transition. 

Additionally, building additional capabilities is essential to maximize the benefits of the transformation. Ultimately, a complete overhaul of the operating model may be necessary to fully realize the rewards of the transformation.

How to make it possible

• Sequence initiatives for quick returns 
• Build capabilities 
• Adopt a new operating model

Creating a framework for digital transformation is not only possible but key to making sure your company is ready and set to stay ahead of the curve within its niche.