Create a Successful Digital Transformation Framework

Simply put, a digital transformation framework is a blueprint for how an organization plans and embarks upon digital transformation. It provides a set of guiding principles and best practices to keep in mind through the process, with a particular focus on actionable steps over high-level theory.

At the beginning of the digital transformation process, a framework helps organizations identify and prioritize areas for digitalization, as well as provides an opportunity to assess how current systems and processes are functioning.

A digital transformation framework empowers organizations to implement digital solutions in a strategic and systematic way.

Once teams outline their goals and identify what’s required to achieve them, they can plan and execute the necessary steps to move forward.

Digital transformation is an ongoing process. Therefore, your digital transformation framework should stay flexible and open-ended to meet the evolving needs of your organization.

High-level outcomes to keep an eye on include:

• Greater efficiency: Digital technologies can automate labor-intensive manual processes and streamline workflows, allowing employees to focus their attention on more valuable tasks
• Optimized customer experience: Advanced technology solutions can be leveraged to create personalized, seamless customer experiences, leading to increased retention and referrals
• Enhanced resilience: With a digital-first mindset, organizations can navigate changing market conditions and customer needs with the agility needed to pivot in the face of disruptions and adapt accordingly
• Faster decision-making: By leveraging data and analytics, organizations can make more data-driven decisions and achieve better business outcomes
• Cost savings: Digital technologies can help organizations reduce costs by automating manual processes that inhibit efficiency and productivity

What a digital transformation framework helps you achieve

A digital transformation framework is a tool for making change. The key to a successful digital transformation framework is actionable steps.

It should guide teams through the more granular steps of the process while keeping larger goals top-of-mind.

Some benefits of a clear framework include:

• Development of a clear strategy for digital transformation
• Enhanced focus on customer behavior and needs
• Integration of the latest technologies for data-driven decision-making and better collaboration
• Driving a culture of adaptability and continuous improvement in the face of rapidly changing landscapes

By following a digital transformation framework, organizations can more effectively navigate the complex process of adopting and integrating digital technologies and position themselves for success.

An effective digital transformation framework should be driven by strategy.

Fortunately, because so many organizations are investing tremendous resources in digital transformation, developing a strong game plan doesn’t have to be reliant on guesswork.

Good digital transformation processes use data and evidence to develop better strategies. Consider these critical elements when determining the way forward:

Start with people

Data and analytics are all well and good. But at the end of the day, digital transformation should help two groups of people: employees and customers.

Empowering employees to engage in more valuable tasks, while outsourcing repetitive and error-prone business processes to digital assistants, will set them free to envision even more improvements. And exceeding customer expectations with improved service and greater value will, in turn, supercharge retention and referrals.

Collect data

Necessary data will look different depending on an organization’s industry. But regardless of the specific categories, all data should be as complete as possible and easily accessible to the stakeholders who need it.

Data should feature heavily at every step of a digital transformation framework, informing:

• What needs to be changed
• How it can be changed
• The results of each iteration

Without a complete grasp of actionable data, digital transformation decisions can get cumbersome and costly.

Build a narrative

Much like a natural resource, raw data is necessary for digital transformation. But data requires further refinement to reach its full usefulness.

Analytics and modeling can turn data into easily understandable stories, featuring a problem, proposed solution, and a recap of how it worked out or what to iterate on in the future.

Data narratives provide organizations with vital insights into how their initiatives are succeeding or failing, as well as where the opportunities for improvement lie.

Take action

After considering the stakeholders, gathering data, and gleaning insights, it’s time to start making changes.

Organizations can benefit from a Strategic Portfolio Management (SPM) solution to create and maintain alignment between company strategy and the work delivered. That way, they’re investing in initiatives that bring the most value to the company.

Evaluate impact and circle back

Digital transformation is an ongoing process, with continuous improvement to achieve better outcomes and meet customer and stakeholder needs.

Changes lead to evaluations, which become data that’s fed back into the process and is then used to build more insights and spark more changes. An effective digital transformation framework will reflect this always-improving mindset and maintain enough flexibility to adapt to changing business landscapes.

There’s no one-size-fits-all approach to digital transformation frameworks – what works best for one organization might not succeed for another. However, taking a peek at what other businesses are doing can spark ideas and provide the basic structure of a successful framework.

For example, wealth management firms face a variety of digital transformation opportunities and challenges, especially as customer expectations and behaviors change with emerging technologies. Here’s what a digital transformation framework for this industry might look like:

• Identify areas for improvement: Start by analyzing the current state of the wealth management industry and identify areas where digital technologies can result in improved processes and enhance customer experiences. This might include processes such as client onboarding, portfolio management, risk management, and client communication
• Define success: Next, outline a clear vision and set of goals for digital transformation. This might include enhancing efficiency, improving customer satisfaction, or increasing revenue
• Develop a roadmap: Develop a roadmap for implementing digital technologies based on your enterprise’s vision and goals. This might include a timeline for implementing specific technologies, budget estimates, and Objectives and Key Results (OKRs) / Key Performance Indicators (KPIs) to measure progress
• Implement and iterate: Begin implementing digital transformation, taking care to ensure that new technologies are integrated smoothly into the existing business processes. Throughout this process, be prepared to iterate and adjust the roadmap as needed
• Evaluate and optimize: Regularly revisit and evaluate the progress of your digital transformation, using KPIs to measure success and identify areas for improvement. Continuously optimize processes and technologies to ensure the desired results

McKinsey created a simpler digital transformation framework, which they refer to as “the 4Ds of a digital transformation.”

• Discover: Develop your business strategy based on your goals and insights
• Design: Focus on the customer journey to identify ways to build breakthrough customer experiences
• Deliver: Establish a network of partners who can help you scale your ambitions
• De-risk: Minimize risk by focusing on quick wins that create momentum and generate cost savings

Building your own digital transformation framework might seem intimidating – and that’s not an irrational response. After all, digital transformation is a significant undertaking.

And many third-party partners are eager to help the process along. Companies investing in their digital transformation efforts spent an estimated $1.8 trillion in 2022, an increase of almost 18% of what was spent in 2021.

You can expect that your competitors will be spending heavily on digital solutions, as they evolve to meet changing customer needs.

Digital transformation is a process that almost every business has either started already or will start soon, as consumer behavior evolves to expect increasingly digital products and services. Approximately 70% of organizations either have a digital transformation strategy or are currently developing one.

While it’s not possible to build a specific framework that will suit every single organization, you can start out with some digital transformation framework basics that you can adapt to suit your own needs. Here are some actionable tips for implementing digital transformation. Here’s how:

Clearly define the digital transformation mission statement

Develop a clear understanding of what you want to achieve through your digital transformation efforts — whether that’s increased efficiency, better customer retention, higher revenue, or all of the above and more — and align those goals with the overall business strategy.

Engage stakeholders at every level

Digital transformation affects all aspects of an organization, so it’s vital to involve employees, customers, partners, and other stakeholders in the process. This can help ensure buy-in and support for the changes being implemented.

Take a critical look at the organization’s current technologies

To effectively plan for digital transformation, it’s important to understand the organization’s current capabilities and limitations, as well as the systems and processes that will need to be updated or replaced. Additionally, look for opportunities to integrate several disparate systems into one platform, which will reduce errors and processing times.

Identify areas for digital improvement

Once you have a handle on the current state of affairs, you can identify the areas where digital technologies can be most effectively implemented to enhance value and drive revenue. This might be a good point to start scoping out vendors to see if you can apply one solution to several problem areas.

Develop a roadmap

A roadmap will help you plan and execute the necessary changes with a structured, phased approach that helps your digital transformation framework succeed. It should include specific goals, milestones, and timelines for each phase of the transformation, as well as opportunities to reassess and readjust as needed.

Invest in the right technology

Digital transformation requires a solid foundation of technology infrastructure and platforms. This includes things like cloud computing, data management systems, and cybersecurity measures. Ensure that your organization is investing in the correct tools on the front end, instead of trying to retrofit your system later.

Prioritize reskilling employees

The best tech tools in the world are useless in the hands of employees who don’t know how to use them, and rehiring is expensive. Instead, make sure you’re partnering with employees to retrain and reskill them to wield digital transformation tools to their maximum potential.

Främja en innovationskultur

To be successful in a rapidly changing digital landscape, organizations need to foster a culture of innovation and continuous learning. Encourage employees to embrace new technologies and invite them to share feedback and ideas. You might find your best plans for improvement come from the people who interact with your tools on a daily basis.

Maintain an adaptable mindset

Digital transformation is an ongoing process, and it’s important to be able to pivot and adapt as needed. Prioritize speed and iterative work over perfection.

By starting with these steps, you can build a digital transformation framework that’s tailored to your organization. Begin with a strong foundation of intentional planning, but allow for the flexibility to quickly adapt and make changes in an ever-changing digital environment.

The world of business is constantly changing, but successful digital transformation doesn’t have to be daunting.

With a strong digital transformation framework, you can stay on track and empower your organization to transform and inspire innovation. This will equip your enterprise with the tools necessary to meet customer demands in a fast-changing professional landscape, while driving value faster than their competitors.

Discover how you can make your digital transformation goals a reality. Enable your organization to connect your strategy to delivery, while reducing your time to market. Access the Deliver Digital Transformation at Speed eBook to get started.