By Jibility Co-Founder Chuen Seet
If you already know what digital transformation is and why you’d want to undertake it, then the next step is to learn how.
There are plenty of articles out there with generic advice about everything you need to consider, but much of it is common sense to the seasoned strategist. You’ve got the bones, but no meat.
So, with help of example company RedYabber, we’re going to take you through the step-by-step process and delve into the nitty-gritty in this digital transformation roadmap example.
The process involves answering six fundamental questions, each of which flows logically into the next:
Why do we need a digital transformation?
What must we achieve in order to transform?
What exactly do we need to transform?
What changes are required in order to transform?
What packages of change should we form to execute the transformation?
How do we sequence the packages of change over a transformation time horizon?
Meet the Company of Our Digital Transformation Roadmap Example
RedYabber is a traditional wooden toy company that sells its products through local and global retail outlets. With the advent of online markets, such as eBay, and manufacturing and supply chain automation, RedYabber has begun to struggle to rival its competitors on price, speed of delivery, reach and quality.
Its vision hasn’t changed – but the business goals have. The leadership team has decided that it’s time to embrace digital ways of working and undertake a digital transformation.
They have set out with four clear goals, to be achieved in the next three years:
Automate manufacturing and warehousing for just-in- time delivery to reduce inventory and product cost.
Decision making based on data, not intuition.
Market and sell online – reduce dependency on traditional retailers.
Develop innovative wooden toys that provide children and parents with an alternative to digital devices.
Why do we need digital transformation?
Firstly, here’s a quick recap of some of the common reasons for pursuing digital transformation:
- To improve customer experience
- To improve efficiency
- To improve decision-making
- To outstrip the competition
These are all pretty relevant to RedYabber, and most likely to your own organization too.
The starting point of a strategy roadmap for digital transformation is to articulate the challenges faced by your organization. A clear list of challenges will keep you aligned with your strategic vision or goals and heading in the right direction.
Keep in mind that a challenge is not just a problem; it can also be an opportunity.
What must we achieve in order to transform?
For each challenge, identify at least one objective.
An objective will specify what must be achieved within the time horizon (three years for RedYabber) in order for digital transformation to be successful.
To demonstrate what we mean, the image below shows RedYabber’s nine objectives, linked back to their six challenges.
What do we need to transform?
Digital transformation is about creating capabilities, not just products and definitely not just projects. Capabilities are simply the building blocks of a business that enable it to do what it does.
To understand what capabilities are needed for digital transformation, start by creating a capability map.
As the word ‘map’ suggests, this is a visual that displays all of the capability building blocks that make up the business (or an area of it). It’s a core technique in capability-based planning.
With this in hand, review each capability and determine:
a) Does the capability deliver or help us to meet our objectives?
b) What level of change is required in order to meet our objectives?
c) What is the priority for implementing the change?
Remember to consider each capability from people, process and physical perspectives, i.e. what changes would be required to each of these aspects of the business. In the case of digital transformation, ‘physical’ is often replaced with ‘technology’.
You should then develop the visual to communicate the answers to these questions.
This means using colour coding and simple labelling systems to indicate the relationship of the capabilities to each other and to the digital transformation objectives.
In the RedYabber example, they have used colour coding as described in our capability mapping article, i.e. red to delineate a high level of change required, orange for medium, yellow for low, blue for none.
They have also applied two types of label: numbers circles, which link a capability to one of the nine objectives; and stars with letters, indicating if the priority is high, medium or low.
What changes are required to transform?
Once you’ve established the current state of your capabilities and the required future state, you need to plan how to get from one to the other.
For each capability, list the actions which must be completed in order to meet the linked objective. Your focus should of course be on the capabilities that are a priority, meet objectives and require change.
Courses of action should consider the people, process and physical (or technological) changes required to a capability.
What packages of change should we form to
execute the transformation?
You’ll end up with quite a large number of courses of action, so the next step is to group them into logical packages, which we’ll refer to as initiatives.
Depending on the level of granularity defined, an initiative can be a project or a program.
Here’s a sample of six initiatives from RedYabber:
How do we sequence the packages of change
over a transformation time horizon?
Your list of initiatives feeds directly into a roadmap for the digital transformation strategy.
For RedYabber, the initiatives must be sequenced across the three-year time horizon that they have set themselves for digital transformation. In their roadmap, the columns signify five time-boxed stages to ensure that everything is spread logically and attainably over the three years.
The rows split up strategic themes, e.g. the initiatives relating to marketing are positioned within one row. This makes sense since initiatives that are similar may be reliant on each other or may be natural progressions of each other.
Below you can see the final outcome of our digital transformation roadmap example.
Summarizing and communicating your roadmap
After completing the six steps, you have the answers to the why, what and how of digital transformation.
There are many tools out there for building and presenting strategy roadmaps, but they generally fall into one of three categories: generic desktop tools, specialized business architecture tools, and dedicated lightweight tools. Our preference is for the latter type, due to the efficiency and ease of communication that’s usually inherent.
Whatever tool you use, ensure that your approach has these key features, and you’ll be well on your way.