A digital transformation checklist
Originally published on LinkedIn
The market is filled with great insights on successful digital transformations. A recent report from McKinsey weighs the risks and benefits. Another, from MIT Sloan Management Review, compares digitally mature organisations with those still digitally adolescent. As with most adolescents, those less mature are noisier and messier, with the promise of better things to come!
Where should you start when assessing the opportunities and risks for your organisation? In particular, what are the balance points, for and against, digital transformation? What is the expected speed of any such change? How do you plan? (Can you plan?)
Here’s a high-level checklist — factors that influence success when driving a digital transformation:
Complexity v. Benefits:
Be clear about what you seek from a digital transformation for your organisation. Consider what such a transformation needs. Define the return on the investment and the effort you will expend in the transformation. Factor in how you might scale as you transform (and arrive at your end-state), and the infrastructure you need to deliver.
Architecture Speed v. Architecture Integrity:
Does it make sense that your organisation adopts the speed of a start-up? (Many seek to do exactly this when considering digital transformations, according to McKinsey). But can your organisation even consider this option? How should you balance system robustness and speed to market? Which is more important? What’s your appetite for risk, and how do you define what risk your organisation is prepared to consider in its systems architecture?
Predictability v. Flexibility:
From which perspective do you wish to build your system architecture or data centre infrastructure? Do you want structured IT processes and systems that you own and manage, or a scalable public cloud that allows you to throttle up or down? Or a hybrid? What role will hyperconvergence and software-defined virtualisation play?
What to Keep v. What to Replace:
Audit your existing IT infrastructure. Again, is it in-house, a “pure” cloud, or a hybrid? More-importantly, assess whether the cost and complexity of your existing infrastructure outweigh the benefits it delivers. Check how you quantify those benefits. Assess how much you spend simply on running hardware in data centres. (According to IDC, this can be as high as 80% of an IT budget.) If existing IT infrastructure has ended up in multiple silos, you’re ready for a digital transformation.
Accountability, Clarity & Visibility:
How do you make the transformation team accountable for the project’s success? Include senior management, which is collectively accountable for the clarity of the vision, strategy and business case. Make everyone on the broader team accountable for the visibility of the project within the organisation (and therefore how well it’s understood and accepted).
None of this is simple, so don’t seek a simplistic set of measurements. Reflect the complexity of the transformation in how you measure the project’s progress and success. Channel that complexity to track progress, highlight bottlenecks, test assumptions and benchmark performance. Be clear on how each of these interact with each other.
Finally, explicitly link your digital transformation projects to revenues and profits. Be clear about how you expect to grow revenues, reduce costs, or enter new markets.
The primary goal of any digital transformation strategy should be the business benefits you seek to gain. Digital transformation should make your organisation faster in responding to opportunities or threats. Once established and clearly communicated, the readiness of your organisation to start and finish the transformation will follow.