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Digital Transformation: building a strategic business case
Key drivers for digital
Identify key drivers for change, due to digital transformation. The internal change drivers may include:
- Improving customer satisfaction
- Efficiency savings
- An increase in demand for products and services
- Opportunities and issues with the current business
The external change drivers may include:
- Political, Economic, Social, Technological, Environmental
Review corporate digital strategy
- Is there an up-to-date digital strategy?
- Does the digital strategy still meet the leader’s aspirations?
- Does the digital strategy meet the external demands of the business?
- To what extent is the current business aligned to this digital strategy?
- Where are the greatest gaps between the current business and the digital strategy?
- Are current change initiatives aligned to this digital strategy?
Potential areas for change & customer experience
Identify potential areas for change:
- Keep the scope of transformation as wide as possible
- Break the boundaries between current services, functions, or organization units
- Think outside the current customer base and current service or product offerings
Identify strategic imperatives for digital
Leaders need to determine and agree upon the priorities: ‘Must Haves’ of business should be identified and expressed as business area imperative. These are business areas that MUST be changed if the defined customer experience and business drivers are to be met. ‘Must Dos’ – the most important business processes that each business area must focus upon should be identified and expressed as process imperatives. These will be business processes that MUST be changed and improved. Assess ambition for change. Ambition for change will be shaped by: Drivers for change. Customer experience. Business area and process imperatives. Determine strategic outcomes of digital. Define strategic outcomes.
At a high level, define the effect of transformational change on:
Customers: Perception of excellence by customers
Employees: Customer facing culture
Efficiency: Highly efficient operation
Assess capabilities: Identify gaps between key capabilities that exist now and what will need to be in place in the future in terms of business processes, organization structure, people, facilities, technology, etc. is the gap that needs to be addressed by the digital transformational change program.
Leaders should be able to answer:
- What is digital transformational change?
- What could be achieved?
- What is the likely impact?
- What is in it for me?
Develop a strategic business case for digital transformation
A high-level business case that articulates the strategic need and strategic outcomes and determines the strategic benefits versus indicative costs
Outline digital transformational scope: initial scope for digital transformation can be determined from early exploration of potential areas for change
Keep scope as broad as possible to enable true digital transformational thinking during the visioning
The strategic benefit is the ultimate difference the digital transformation will make to customers, the organization, employees, and stakeholders
- Benefits to customers (e.g. improvement in customer satisfaction)
- Benefits to employees (e.g. better working environment)
- Efficiency (e.g. cost reduction)
Strategic Business Case will be used as input to:
- Vision
- Future Operating Model
- Outline Business Case for Digital Transformation
Leadership review of the business case for digital transformation - Leadership will review the Strategic Business Case to determine:
- Whether it presents a strong case
- The potential scope of digital transformation
- Strategic outcomes versus the strategic need for digital transformation
- Strategic benefits versus indicative costs for the digital program
Why we do what we do at all?
The first step is a series of briefings by the Digital Transformation Leader or Sponsor that outline the need for change within the organization. Unlike process improvement, transformational change is not just ‘How can we do what we do better/cheaper/faster?’ It’s about asking a more fundamental question: ‘Why we do what we do, at all?’.
Understand customer experience
- Identify expectations of key customer groups and their measures of success
Strategic outcomes of digital transformation
- Strategic outcomes express the leader’s ambition for change to digital
The key inputs into defining strategic outcomes are the:
- Business drivers and
- Customer experience drivers