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Digital Transformation: Step-by-step Implementation Guide

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Digital Transformation: Step-by-step Implementation Guide

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  1. DIGITAL TRANSFORMATION Step-By-Step Implementation Guide © Operational Excellence Consulting © Operational Excellence Consulting. All rights reserved.

  2. NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg ABOUT THIS DOCUMENT This presentation is specially targeted at organizational leaders who are interested in using digital to gain competitive advantage. What this guide will focus is not technology implementation, but a company-wide approach to digital transformation. This document provides step-by-step practical guidance for leaders of most industries to digitally transform their organizations by showing where to invest in digital capabilities and how to lead the transformation. The digital transformation framework presented consists of four key phases and twelve detailed steps and practical tips for leaders to fundamentally improve business performance. 2 © Operational Excellence Consulting

  3. LEARNING OBJECTIVES Acquire knowledge and the key concepts of digital transformation Describe the digital transformation framework, phases and step-by-step process Conduct a self- assessment of your digital mastery 3 © Operational Excellence Consulting

  4. CONTENTS 02 03 01 INTRODUCTION & KEY CONCEPTS OF DIGITAL TRANSFORMATION DIGITAL DITIAL MASTERY SELF-ASSESSMENT TRANSFORMATION FRAMEWORK, PHASES & STEP-BY-STEP PROCESS 4 © Operational Excellence Consulting

  5. THE ERA OF DIGITAL DARWINISM —WHERE TECHNOLOGY & SOCIETY ARE EVOLVING FASTER THAN BUSINESSES CAN NATURALLY ADAPT CUSTOMER RELATIONSHIP DIGITAL TECHNOLOGY CUSTOMER EXPERIENCE Customers are increasingly in control of the relationship Digital devices change the ways customer transact and buy Bring expectations of “the best” to all their customer experiences 5 Source: Adapted from Hinshaw & Kasanoff, 2012 © Operational Excellence Consulting

  6. DRIVEN BY TECHNOLOGY, DIGITAL IS THE NEW WAY OF THINKING AND DOING THINGS Companies now are increasingly inclined toward altering their business models to accommodate the changing customer demands. 6 © Operational Excellence Consulting

  7. “ company’s processes, data and information onto a digital platform.” To be clear, digital transformation is not a series of generational changes in information technology or simply the migration of a BRIAN SOLIS Altimeter Group 7 © Operational Excellence Consulting

  8. WHAT STRATEGIES CAN ORGANIZATIONS APPLY TO PREPARE FOR THE LOOMING DIGITAL TSUNAMI? DIGITAL TSUNAMI Traditional business 8 Source: Adapted from Lewrick et al., 2018 © Operational Excellence Consulting

  9. DIGITAL TRANSFORMATION DEFINED “Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance.” George Westerman MIT principal research scientist and author of Leading Digital: Turning Technology Into Business Transformation 9 © Operational Excellence Consulting

  10. COMPANIES THAT HAVE SUCCEEDED IN DIGITAL TRANSFORMATION Before Digital Transformation: Set up only as a hardware store. Before Digital Transformation: Sluggish and outdated-looking shoes and athletic clothing. Before Digital Transformation: Lagging stock prices and increased competition. What Changed: Combined physical and online shopping to create seamless experience across channels and use of data to better understand customers. What Changed: Direct selling to customers, partnership with Amazon and using consumer data to connect with customers. What Changed: Moved focus from traditional software to cloud-based system for personal and enterprise use. After Digital Transformation: Revenue grew from $93 billion to $110 billion within 2 years. After Digital Transformation: Revenue increased by $5.6 billion from 2017 to 2019. After Digital Transformation: Became 3rdcompany to achieve $1 trillion market cap in 2019. 10 © Operational Excellence Consulting

  11. CHARTING THE PATH OF DIGITAL TRANSFORMATION STARTS WITH A SHARED VISION Tomorrow’s Culture Today’s Culture Strategy Values 11 © Operational Excellence Consulting

  12. “ be committed to them.” We go mission first, then focus on the pieces we need and go deep on them, and MARK ZUCKERBERG 12 © Operational Excellence Consulting

  13. TRANSFORMING THE CUSTOMER EXPERIENCE IS THE HEART OF DIGITAL TRANSFORMATION To achieve this goal, organizational leaders require two key skills – digital capabilities and leadership capabilities. 13 © Operational Excellence Consulting

  14. THE DNA OF DIGITAL MASTERS DIGITAL LEADERSHIP + CAPABILITIES CAPABILITIES Digital Masters excel in two critical dimensions: the what of technology (digital capabilities) and the how of leading change (leadership capabilities). 14 © Operational Excellence Consulting

  15. WHAT IS YOUR LEVEL OF DIGITAL MASTERY? Fashionistas Digital Masters Many advanced digital features (such as social, mobile) in silos No overarching vision Underdeveloped coordination Digital culture may exist in silos Strong overarching digital vision Good governance Many digital initiatives generating business value in measurable ways Strong digital culture § § § § § § § Digital Capability § Beginners Conservatives Management skeptical of the business value of advanced digital technologies May carry out some experimentation Immature digital culture Overarching digital vision exists, but may be underdeveloped Few advanced digital features, though traditional digital capabilities may be mature Strong digital governance across silos Taking active steps to build digital skills and culture § § § § § § § Leadership Capability 15 Source: Adapted from Westerman et al. © Operational Excellence Consulting

  16. SEAMLESSLY MESH YOUR DIGITAL & PHYSICAL EXPERIENCE IN NEW WAYS TO CREATE A COMPELLING CUSTOMER EXPEREINCE Kiosk Call Center e-Commerce OMNI- CHANNEL Social Web Portal Delivering these omni-channel experiences requires envisioning and implementing change across both front-end and operational processes. Retailer Mobile Web Chat 16 © Operational Excellence Consulting

  17. OPERATIONAL PARADOXES OF THE PREDIGITAL AGE Standardizing Empowering Controlling Innovating Orchestrating Unleashing Consider how each of the six levers may help you improve operations. If you can’t address both sides of a paradox at once, start with standardization or control. This may open up possibilities to address other levers. 17 © Operational Excellence Consulting

  18. REINVENTING BUSINESS MODELS Consider whether it is time to replace products and services with newer versions if your present offerings are under digital threats Constantly challenge your business model with your top team Monitor the symptoms that drive business model change in your industry Consider how you might transform your industry before others do it Consider reconfiguring your delivery model by connecting your products, services, and data in innovative ways to create extra value Consider reinforcing your presence in your current market by rethinking your value proposition to meet new needs Consider creating brand- new digital businesses using your core skills and assets Experiment and iterate your new business model ideas 18 © Operational Excellence Consulting

  19. COMMITTED LEADERSHIP IS THE LEVER THAT TURNS TECHNOLOGY INTO TRANSFORMATION Executives in every Digital Master steered the transformation through strong top-down leadership: setting direction, building momentum, and ensuring that the company follows through. 19 Source: Adapted from Westerman et al. © Operational Excellence Consulting

  20. CRAFTING YOUR DIGITAL VISION Identify bottlenecks or headaches – in your company and in your customers – that resulted from the limits of old technologies Familiarize yourself with new digital practices that can be an opportunity or a threat to your industry and company Consider which of your strategic assets will remain valuable in the digital era Craft a compelling and transformative digital vision Make your digital vision specific enough to give employees a clear direction, while giving them the flexibility to build on it Constantly be looking to extend your vision using the capabilities you have created Ensure that the vision specifies both intent and outcome 20 © Operational Excellence Consulting

  21. THE 4 KEY PHASES OF A DIGITAL TRANSFORMATION JOURNEY Build the necessary foundational skills. Align reward structures to overcome traditional organizational barriers. Monitor and measure the progress of the transformation, and iterate when necessary. Build awareness of digital opportunities and threats. Know your starting point, and assess your digital maturity. Craft a vision, and ensure that your top team is aligned around it. FRAMING THE DIGITAL CHALLENGE SUSTAINING THE DIGITAL TRANSITION Send unambiguous signals about your ambitions and the change needed now. Build momentum and engage the workforce. Set new behaviors and start evolving the organization toward a more innovative culture. MOBILIZING THE ORGANIZATION FOCUSING INVESTMENT Translate your vision into an actionable roadmap. Build cross- silo governance structures. Put in place the funding for your transformation. 21 Source: Adapted from Westerman et al., 2014 © Operational Excellence Consulting

  22. THE 12 STEPS FOR STEERING THE COURSE OF A DIGITAL TRANSFORMATION JOURNEY Measure, monitor and iterate Build awareness Align Know your starting point incentives and rewards Build foundation skills Craft a vision and align top team Sustain Sustain Frame Frame Set new behaviors and evolve culture Translate your vision into action Mobilize Mobilize Focus Focus Build your governance Earn the right to engage Signal your ambitions Fund the transformation 22 Source: Adapted from Westerman et al., 2014 © Operational Excellence Consulting

  23. DIGITAL TRANSFORMATION PROCESS –PHASE 1 OVERVIEW Phase 1: Framing the Digital Challenge 1 2 3 Build awareness Know your starting point Craft a vision and align top team 1.1 Put digital transformation at the top of your agenda now 2.1 Assess your digital mastery 3.1 Craft your transformation vision 2.2 Chart your transformation journey 3.2 Align your top team 1.2 Understand the scale and pace of the digital impact 2.3 Assess your strategic assets 1.3. Make the awareness process experiential 2.4. Challenge your business model 1.4. Build a coalition of believers 23 © Operational Excellence Consulting

  24. DIGITAL TRANSFORMATION PROCESS –PHASE 3 OVERVIEW Phase 3: Mobilizing the Organization 7 8 9 Set new behaviors and evolve culture Signal your ambitions Earn the right to engage 7.1 Send signals 8.1 Walk the talk 9.1. Make visible changes to work practices 7.2 Explain benefits clearly 8.2 Co-create your transformation 9.2 Encourage adoption, not deployment 7.3 Use all available communication channels 8.3 Identify your digital champions 9.3 Learn to fail 8.4 Identify quick wins 9.4. Institutionalize new work practices 24 © Operational Excellence Consulting

  25. PHASE 1 –FRAMING THE DIGITAL CHALLENGE Defining your starting point Creating a shared vision Building awareness § How mature are your digital competencies, and which current strategic assets will help you to excel? § Have you aligned your top leadership team around a vision of the company’s digital future? § Do top leaders in your organization understand the potential threats and opportunities from digital technologies and the need for transformation? § Have you digitally challenged your current business model? 25 © Operational Excellence Consulting

  26. “ the slave of your model.” Do not quench your inspiration and your imagination; do not become VINCENT VAN GOGH 26 © Operational Excellence Consulting

  27. STEP 1 –BUILD AWARENESS Step 1.1 – Put digital transformation at the top of your agenda now Engage senior leaders in the debate about the implications of digital technologies for your current and future business ● As the most senior leader in the organization, the CEO is responsible for ensuring that the framing phase is successful ● You need to ensure that other leaders in your organization visualize the profound change at hand and understand the business possibilities that technology can already enable today ● Look to practical examples of companies and industries that have been helped or hurt by digital change ● 27 © Operational Excellence Consulting

  28. STEP 4 –TRANSLATE YOUR VISION INTO ACTION Step 4.1 – Define what good looks like Translate your digital vision into top-down strategic goals that point to what an achieved vision would look like ● Articulate top-level goals only; specific KPIs will come later, once you have a detailed program ● The goals that you are trying to achieve must be balanced – they should not just be about financials, but should also be expressed in terms of customer experience and operations as well as the organizational capabilities you need to build ● This strategic scorecard will provide a basic template for your entire digital transformation efforts, and will also provide a point of reference with which to navigate your digital transformation ● 28 © Operational Excellence Consulting

  29. HOW WELL IS YOUR ORGANIZATION BUILDING LEADERSHIP CAPABILITIES? (1/2) Answer each question, using a scale from 1 to 7, where 1 = strongly disagree; 4 = neutral; and 7 = strongly agree, and then total your digital capability score. Score 1 Senior executives have a transformative vision of the digital future of our company. 2 Senior executives and middle managers share a common vision of digital transformation. 3 There are possibilities for everyone in the company to take part in the conversation around digital transformation. 4 The company is promoting the necessary culture changes for digital transformation. 5 The company is investing in the necessary digital skills. (Continued on next slide) 29 © Operational Excellence Consulting

  30. ABOUT OPERATIONAL EXCELLENCE CONSULTING Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg 30 © Operational Excellence Consulting

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