The Digital Mastermind:A Holistic Framework for Navigating the Digital Transformation Journey
In this issue
The Digital Mastermind: A Holistic Framework for Navigating the Digital Transformation Journey 2
Research From Gartner: Digital Business Ambition: Transform or Optimize? 11
About Huawei 21
Logo lockup
Logo lockup with tagline
Logo
Palette
O P E N R O A D SP o w e r e d b y H u a w e i P o w e r e d b y H u a w e i
O P E N R O A D S
O P E N R O A D S
The Incubator for ICT Transformation
P o w e r e d b y H u a w e i
O P E N R O A D S
The Incubator for ICT Transformation
P o w e r e d b y H u a w e i
The Digital Mastermind: A Holistic Framework for Navigating the Digital Transformation Journey
INTRODUCTION
The Open ROADS Community brings business
leaders together across industries to collectively
address the challenges of digitally converting
their strategies, operations and culture to be
competitive, and customer-centric in all aspects.
The Community does so by leveraging the
lessons and tools developed through shared
experiences, and rigorously collecting digital
transformation best practices.
At the center of these efforts is the Digital
Mastermind, a holistic transformation
framework which integrates multiple best
practices, standards and tools to guide business
leaders through each development stage of their
organization’s transformation agenda, including:
■ defining an ambition for the organization
■ assessing gaps and framing opportunities
■ designing a roadmap which allows the
business to realize its transformation goals
and measure its key results
This paper briefly outlines the components
of the Digital Mastermind, and describes the
processes and exercises which transformation
team members should undertake in each stage
to make their shift to an all-digital business in a
comprehensive and continuous manner.
3
EXECUTIVE SUMMARY
The Digital Mastermind is a holistic framework which
provides a business with comprehensive blueprint
of all the processes in which it must engage during
a digital transformation journey. Business leaders
seeking to implement a comprehensive digital
transformation strategy will use the framework to
step their organization through a series of stages,
each using a discrete set of tools to define the entire
scope of transformation, and implement a plan to
address gaps and continuously improve progress.
The Digital Mastermind guides transformation
leaders through a series of stages through the
complete, and continuous, transformation journey.
There are four primary outcomes for firms using the
Digital Mastermind framework:
i. It codifies a vision and ambition, and which
serves as its foundational reference point to
ensure all activities drive the desired business
outcome.
ii. It identifies and defines the business’ Customer
Journeys, to enable the ROADS experience
across the entire customer journey.
iii. It links those Customer Journeys to Employee
Journeys tightly, to maximize internal and
external engagement.
iv. It quantifies the financial value of new
transformation opportunities created, and
allows for prioritization of investments with
clear accountability.
The framework begins with a business motivation
model to determine their transformation ambition:
where the business’s leaders want to take their
organization and what value they want to create, in
the context of business and brand realities.
Then, guided by the business ambition, its
leaders assess where they stand today and
identify the opportunities for the future, through a
transformation assessment framework.
Gaps are assessed by a rigorous digital business
readiness framework: The Open Digital Maturity
Model, or ODMM.
New empathy opportunities for the firm can be
imagined, articulated and prototyped and tested
through a ‘design thinking’ process that identifies
key moments of truth in both employee and
customer journeys as opportunities for further
engagement.
ROADS Principle Architecture Thinking is then used
combine legacy and digital capabilities, prioritize
investment along ROADS Principles, and identify
the potential value streams that will make up a
continuous transformation roadmap.
Finally, multi-mode operating models support the
execution of a continuous digital transformation
journey. Multi-mode operating models adapt with
the various existing and new activities which occur
at different speeds (such as change management
initiatives) and take into consideration objective
criteria such as risk, activation controls, and the
nature of change. The models maintain an “API first”
culture which drives innovation into existing systems
of record, and enable ubiquitous automation across
the application portfolio.
It sees all systems as capable of benefitting from
digital practices, tunes operational practices for
each application accordingly (as opposed to static
4
procedures) and seeks to continually improve existing
operational practices and tooling to remove friction and
further promote an all-digital future.
PRINCIPLES AND METHODOLOGY
The Digital Mastermind framework is comprised
of a series of interlocked steps that the digital
transformation leaders of any organization can
take to systematically and accurately plan their
path to move its business into an all-digital one—
operationally, strategically and culturally. A digital
business is ultimately one that is customer-centric
ready, with the ability to deliver ROADS customer
experiences: Customers can experience products and
services in Real-time and On-demand in the right time
and place. Customer service and operations must be
All-online, with the ability to answer customer demand
for Do-it-yourself services. All experiences should have
a Social and shareable nature.
The steps involved throughout the Digital Mastermind
are represented in Figure 1.
The initial stage—determining a firm’s Vision and
Ambition—gives its leaders the means to assess
its current business state and strategic aspirations
against the business landscape in which it operates.
This is defined by using the MIT Sloan Next
Generation Enterprise Model, which allows digital
strategy decision makers to plot their trajectory
in a matrix, based on its aspirations, on what the
business and brand ambition allows to achieve from
their current starting point.
Once its position in the Next Generation Enterprise
matrix is determined, the transformation team must
embark on two stages relatively simultaneously,
to both determine what empathy opportunities
are available for them as they achieve their
Source: Open ROADS Community
Figure 1. Digital Mastermind Transformation Framework
Version 1
5
transformation goals, and what maturity gaps—such
as the lack of such business capabilities as brand
innovation or customer value creation—need to be
addressed in order for them to realize them.
Opportunities are discovered and qualified using a
design thinking ideation methodology, which allows
digital team members to define meaningful and
actionable problem statements to be solved and
prioritised.
Design thinking inspires outside-in, human-
centric innovation, to allow the organization to
clearly understand the needs of its customers and
ecosystem peers in a digital world. After objectively
understanding human needs, the next step is to fully
plot out a digital transformation roadmap.
To complete this holistic assessment, the empathy
opportunities assessment is complemented with a
parallel analysis of the organization’s internal digital
capabilities to determine gaps.
Gaps are identified and quantified through a key
resource for the Open ROADS Community: the Open
Digital Maturity Model (ODMM). This assessment
tool enables telecoms operators and other
organizations to benchmark their current digital
status against their aspirations and other relevant
parties, and provides a comprehensive readiness
and ‘gap’ map, which paves the way for systematic
planning of the digital transformation processes
The maturity assessment of the ODMM builds a solid
foundation for design thinking and allows leaders to
quantify the business viability and technical feasibility
of their digital transformation objectives. Paired
together, the ODMM and Design Thinking allow for
a crisp assessment of the real, tangible business
transformation opportunities—and a realistic view of
how far the business has to go to achieve them.
An ODMM assessment provides measurable goals
that will help transformation leaders accelerate their
organization’s digital transformation progress to
become a Digital Service Provider (DSP). The ODMM
translates responses to qualitative questions about
current IT infrastructure and digital development
strategies into quantitative scores, and ranking
operational KPIs against established best practices.
This helps an organization determine:
Areas of focus: The specific technologies, business
strategies and cultural organization aspects to prioritize
needed to meet its digital transformation goals.
Size of business opportunity: The score created by
the assessment process compares the organization
with leading digital businesses. With appropriate
benchmark data on the profitability of digital
leaders, the ODDM provides an organization with a
specific measure of the incremental profitability that
can be achieved by closing the maturity gaps.
By identifying the capabilities and priorities, and
overlaying architecture thinking, a continuous
transformation journey can then be defined and
actioned. These insights for business capability
planning are generated through a process known as
ROADS Principle Architecture Thinking.
By combining this process with the last stage of the
framework, the value of the transformation process
is determined, thereby giving the organization
the means to gather and assess results as its
digital transformation strategy is executed. The
6
development of multi-mode operating models
through this process provides a continuous
feedback loop, allowing the organization’s leaders
to continuously re-assess its progress, based on
improvements made. It also develops ongoing
resources for them, such as Digital Service
Landscapes and new Business Models.
IMPLEMENTING THE DIGITAL MASTERMIND FRAMEWORK
Implementation of the Digital Mastermind
involves embarking on its stages in a coordinated,
systematic, and cross-discipline fashion, guided
by a team which involves senior executives, digital
transformation project decision-makers, and team
members responsible for business architecture
design, customer experience, digital asset and
human capital management, among others.
Vision and Ambition
To anchor the business properly as it develops
its digital transformation path, this team must
answer several questions about how its enterprise is
connected to its customers and channels, and how
it used digital tools, skills and processes to increase
business value:
Source: Open ROADS Community
Figure 2. Connecting customer, the enterprise and employees and channels to achieve the vision and ambitions
7
These answers are derived through an assessment
process developed by MIT’s Sloan School of
Business: its Next-Generation Business Model
asks decision-makers to assess their knowledge
of their customers and their business design, as
they consider what an achievable ambition for their
digital business is over the next three years. Based
on its assessment, the leaders can plot the distance
between their current position and possible future
state on the following matrix:
Gap Assessment
Armed with this perspective, the digital
transformation leaders of an organization can
then proceed to determine exactly (and in every
facet of the business) where they need to make
improvements in order to achieve its desired future
state. This assessment process is conducted using
the aforementioned ODMM: a secure scoring tool
that allows an accredited assessor to score the
assessed organization across metrics and generate
an assessment against its own aspirations, and other
benchmarks. The ODMM uses six domains, known as
Categories, to benchmark an organization’s current
digital status:
Figure 3. Next Generation Enterprise Model
Source: Open ROADS Community
8
Figure 4. Open Digital Maturity Model
Source: Open ROADS Community
Open Digital Maturity Model
Based on the outcome of an ODMM assessment,
the assessed organization can then define a pathway
to become a digital service provider, guided by its
strategy and aspirations. It also provides a basis
for further capability mapping and transformation
implementation projects which, although these fall
outside the remit of the ODMM, are extensions which
can accelerate digital transformation initiatives.
More information on the ODMM can be had in
the white paper: “Introduction to the Open Digital
Maturity Model: The Open ROADS Community’s
digital maturity assessment tool.”
Opportunities
A business defined by all-digital principles is, by
definition, a customer-centric one. Therefore, a
comprehensive audit of possible opportunities that
can be achieved by executing a digital transformation
must be developed from the perspective of the
business’ customers and their journeys. Design
thinking methodology allows a firm to analyze and
synthesize learnings and observations, use those
learnings to frame the transformation problem
statements, and then subsequently design customer
and employee journeys and identify the moments of
truth for engagement.
Design is not just what it looks like or feels like,
design is how it works.
V2R13
9
Figure 5. Design Thinking
Source: Open ROADS Community
Realization
Connecting the assessment of an organization’s
digital maturity gaps with empathy-driven,
actionable and measurable opportunities requires a
capability mapping and prioritization process known
as ROADS Principle Architecture Thinking. It starts
with articulating challenges and values goals through
a review of the organization’s business motivation,
digital maturity gaps and desired customer and
employee journeys. This applies a business architect
lens to define value-driven business activities—called
value streams—and maps those to enabling business
capabilities and associated KPIs.
Architecting value steam involves identifying new
capabilities, gaps and opportunities across the
enterprise and linking them to business outcomes.
It provides a way of linking business capabilities to
different value streams, stakeholders and business
outcomes. This provides a strong foundation for
defining the continuous transformation roadmap
that directly aligns with the business drivers. It
also delivers measurable and continuous business
outcomes (KPIs), optimizes investment and enables
engagement within desired customer and employee
journeys.
10
Figure 6. Digital Operations Realization
Source: Open ROADS Community
Architecting value streams involves the combination
of capabilities and ways of working to deliver
against specific gaps and opportunities. This then
lays out a specific path of discrete stages to close
the gaps through improving, redeveloping or refining
the organization’s specific capabilities.
Results
The Digital Mastermind uses a series of KPIs
to continuously assess a businesses’ maturity,
operational and systems performance as it
progresses. These are drawn from metrics and
other data developed through the prior assessment
processes, including the ODMM. This, combined
with the progress the firm is making its achieving its
desired improvements in the value of its customer
and employee experiences allows its digital leaders
to assess outcome KPIs. These are then used to
refine and improve the process—again, leveraging
the other components of the framework in an
efficient, iterative process to continuously move it
towards its goals.
What makes the Digital Mastermind unique as a
digital transformation framework?
a. It is practical: Its processes are based on best
practices and designed to produce specific
business outcomes, from all job functions and all
industries
b. It is inclusive: It provides guidelines for
leveraging the experience and capabilities of all
various digital transformation practitioners and
perspectives, from the likes of DevOps, business
architectures, and agile business processes such
as scrum
c. It is holistic: it integrates the customer and
employee experience views
For more information, please contact
Source: Open ROADS Community
zROADS Principle Architecture Thinking
Business Driver Business capability required for the overall business
DesignThinking
Business Motivation
Model
Open Digital Maturity Model
Challenge
Value Goals
• Core capabilities• High value
capabilities
Define Prioritize SynchronizeInter-dependent Business Capabilities as groups to enable whole value streams
Value Stream
• Customer/Employee Challenges• Customer/Employee Journeys
• Maturity Gaps
Value Stream
Research From Gartner:
Digital Business Ambition: Transform or Optimize?
When building and expanding a digital business,
CIOs will benefit from being more specific about
the ambition of the digital business strategy. Is
the goal to transform the business model or to
optimize the existing one? This document guides
CIOs through this decision.
Key Findings
Digital business transformation is a type of
digital journey that has the ambition of pursuing
net-new revenue streams, product/services and
business models. It is favored by enterprises that
must adapt to an industry in disruption, or ones
that want to disrupt their industries.
Digital business optimization is a type of digital
journey that has the ambition of significantly
improving existing business models through
improved productivity, greater revenue generation
of existing streams and improved customer
experience. It is favored by enterprises whose
industries are not going through disruption in the
near term.
Enterprises will tend to minimize the amount
of change and risk by favoring optimization
over transformation. This can be a risky course,
as there have been some major misreads on
industries being disrupted in recent years.
Between the Internet of Things, platform
business models and blockchain, almost any
industry has the potential to be disrupted.
12
Recommendations
CIOs who are building or expanding a digital
business:
Determine your enterprise’s mix of digital business
optimization and transformation by looking outside
your enterprise first. If your industry (or an adjacent
industry) is going through disruptive changes, then
you will have no choice but to set a transformation
course yourselves. If your industry is not undergoing
a transformation, then you have the option of
pursuing a business optimization course — unless
you want to be the disruptor and force the industry
to transform.
Set a budget and planning horizon that reflects your
chosen digital ambition. This problem is especially
pertinent to enterprises choosing a transformation
course. Many times we see enterprises claim that
they are pursuing transformation, but then rely on a
small innovation team and budget to pursue these
ends. If you are truly pursuing digital business
transformation, you should plan on starting new
business units, adding/shifting manufacturing
capacity, adding new products to your pipeline and/
or making mergers and acquisitions.
Analysis
Digital transformation and digital business
optimization — what do these terms mean to your
enterprise? Many CIOs and digital business leaders
are at a stage where they need to get more specific
about how far their enterprise will pursue digital
business.
Should the digital business journey aim to optimize
the existing business model and/or introduce new
business models and revenue sources?
Said another way, what is the digital ambition
of the enterprise? The answer to this question
fundamentally changes the scope of work and
roadmap in becoming a digital business.
The transformational aspects of digital business
receive the most attention. Everyone has heard about
the phenomenal growth of Uber and the potential
of the Internet of Things (IoT). However, most
companies do not aim at digital transformation,
at least for now. According to the 2017 Gartner
CEO survey, 42% of enterprises plan to use digital
technology to optimize the current business, not
for transformation, while 17% have no ambition for
digital business at all. Both paths carry risks. If the
enterprise goes for transformation but the market
or organization is not ready, the results are below
expectations. Money is made, but just not enough to
satisfy the growth expectations of the investment.
If the enterprise focuses on optimization while the
market and competitors are transforming, it may
never be able to catch up. CEOs and boards will
often consult the digital business leader about which
direction their digital business strategy should take.
CIOs and digital business leaders can formulate a
recommendation by taking three steps:
1. Consider the options for digital ambition:
business optimization and/or transformation?
2. Look at the timing of transformation in your
industry and adjacent industries.
3. Consider your competitive stance when choosing
a digital ambition.
13
Consider the Options for Digital Ambition: Business Optimization and/or Transformation?
Start by considering whether the enterprise should
optimize the existing business model or introduce
new business models and revenue sources (see
Figure 1). The answer to this question determines
the scope of work in becoming a digital business.
Each option in turn offers further choices to narrow
the focus of the enterprise’s digital business
strategy.
Digital Business Optimization
Digital business technologies and approaches can
be used to improve the enterprise without changing its
business model (represented on the left side of Figure
1). Specifically, an enterprise can:
Improve productivity by removing cost, improving
productivity of machines and employees. The IoT
can improve asset productivity. Robotic process
automation can improve employee productivity, and
so can a digital workplace. These are all examples
of types of initiatives that lead to improved
productivity without changing the business model.
Improve existing revenue by leveraging analytics
and AI to better forecast demand/supply and
optimize prices and promotions. Digital marketing
and sales technologies and approaches will also
increase spend by customers while customer service
initiatives can improve retention.
Improve the customer experience: Digital channels
often add both a self-serve and improved experience.
Using IoT to track the length of queues, ETA of
Figure 1. What Is Your Digital Ambition?
Source: Gartner (June 2017)
14
vehicles and inventory status of tanks or shelves also
improves the customer experience, providing more
visibility to statuses they care about. AI in the form
of virtual assistants can also improve the customer
experience. These are all examples of initiatives
that don’t change the business model, yet improve
the enterprise’s ability to serve its customers and
constituents.
The combination of these three goals lead to a type
of digital ambition that is best described as digital
business optimization.
A more detailed perspective of the options of
pursuing digital business optimization is highlighted
in Figure 2. Use this graphic to identify the possible
areas of business optimization.
Digital Business Transformation
In contrast to digital business optimization, there are
digital business initiatives that result in net-new revenue
streams, products/services and even new business
units with a new business model:
■ Launch net-new digitally enabled products
and services: The IoT enables manufacturers
of products to sell a brand-new class of their
product (e.g., a connected lamp or a connected
industrial dryer). Once connected, connected
services (e.g., monitoring services) can also
generate new revenue. Even new revenue-
generating services can be borne out of digital
approaches and technologies:
■ New loan products are being created for
individuals and small businesses who don’t
have formal credit bureaus/scores. Fintechs
(e.g., Kabbage) and companies like Alibaba
use new data sources coming from digital
ecosystems (e.g., payment, reputation
scores, social networks) and new risk
algorithms to assess credit worthiness. The
end result is a class of loan products that
serve a market that has never been served by
formal financial services institutions.
■ Pursue new business models: New business
models that are made financially viable and
technically possible by digital technologies and
approaches include platform businesses such as:
■ Multisided markets (e.g., Uber)
■ New insurance models that leverage P2P
approaches (e.g., Friendsurance)
■ Metered and as-a-service models such as pay
as you drive insurance
■ Commerce-that-comes-to-you models such
as Booster Fuels, which delivers fuel to your
vehicle instead you going to a gas station
Large enterprises can create new business
units or acquire startups to pursue these
new business models. Sometimes the
new business models lead to ventures in
adjacent or new industries. For example,
utility companies may get into battery
storage, car companies may get into public
transportation or wealth management may
get into health insurance.
The combination of these two goals leads to a type
of digital ambition that is best described as digital
business transformation. A more detailed perspective
of the options for pursuing Digital Business
Transformation is highlighted in Figure 3. Use this
graphic to identify the possible areas of business
transformation. You can also reference “Six Ways to
15
Figure 2. Digital Business Optimization Adds Significant Value Without Changing Business Model
Source: Gartner (June 2017)
Source: Gartner (June 2017)
Figure 3. Digital Business Transformation Leads to Net-New Revenue and Business Models
16
Earn New Digital Revenue” for detailed explanations
and examples.
Look at the Timing of Transformation in Your Industry and Adjacent Industries
Even CIOs and digital business leaders who
recommend an optimization approach should pay
attention to digital transformation in their industry.
Digital transformation creates a new paradigm
that makes the old business model obsolete.
Consequently, an optimization strategy leaves the
enterprise in a weaker competitive position. In other
words, optimization works only for so long; then it
becomes a liability.
Digital transformations come at the apex of an
S-curve (see Figure 4). In the digital world it’s
often a technology that emerges to make possible
a new product or business model. It grows until
it dominates the industry. At the height of its
dominance, an even newer technology can appear,
along with new products and business models. This
takes revenue from the old model and transforms the
industry:
■ During the growth period, along the rising slope
of the S-curve, an optimization strategy makes
sense.
■ When the industry nears the apex, a
transformation strategy makes sense.
An industry can undergo a series of transformations.
Take the example in Figure 4. Physical a sold in
record stores dominated the music industry well into
the 1990s. Then music pirate sites such as Napster
changed listeners’ habits. In the mid-2000s, digital
download services such as Apple’s iTunes became
popular. Streaming music services such as Pandora
and Spotify changed the industry again.
The cadence of transformation will vary, depending
on the nature of the industry and technology
developments. The music industry has undergone
Figure 4. Technology-Driven Transformation in the Music Industry
Source: Gartner (June 2017)
17
rapid transformations. Other industries have
resisted transformation for a long time. The hotel
industry, dominated by global brands, looked the
same for decades until Airbnb changed the terms
of competition. Thus, an optimization strategy
can work for a long time, but even the most stable
industry is liable to transform at some point.
When Will Your Industry Hit Its Tipping Point?
The triple tipping point consists of three variables
that determine the moment of transformation:
■ Culture — Technology tests our cultural and
social boundaries. CIOs and digital business
leaders will have to make judgment calls about
when cultural tipping points will happen — there
are no simple demographics or mathematical
calculations for it. The rate of cultural change is
not the same across countries, communities and
social groups.
■ Regulation — New regulations and tax changes
can create new business opportunities. More
often, regulation will hold back digital business
innovation; however, the lack of regulatory
certainty also can be an enabler. New technology
can be positioned in a way that circumvents
existing regulation.
■ Technology — Don’t underestimate the
nonlinear pace of change. Previously, technology
companies mainly had to wrestle with
information technology tipping points. Now, all
companies do because the next generation of
everyday products will include digital capability.
A digital business leader focused on internal
systems and ERP will quickly fall behind the
curve.
When these variables align, transformation occurs
rapidly.
CIOs and digital business leaders pursuing
optimization can use the triple tipping point to
determine how long their strategy will remain valid.
Those pursuing transformation can use the triple
tipping point to assess when is the right time to
move.
Enterprises also need to consider whether society
is ready for the new paradigm, and whether laws
and regulations permit it. The variables will seldom
mature at the same rate and converge perfectly
at the same time. Thus, CIOs and digital business
leaders will need to make judgment calls about when
to urge the enterprise to invest.
Consider Your Competitive Stance When Choosing a Digital Ambition
Once CIOs, digital business leaders and their
enterprises understand when/if their industry will
hit a tipping point, they are in a position to choose a
digital ambition. At a simplistic level, if the industry
is about to tip, then the enterprise should pursue a
transformation path. If it is not about to tip, then
they can choose a digital business optimization path.
However, the industry dynamics are not the only
determinant. The competitive or enterprise culture
profile also determines the chosen path. More
aggressive companies often choose to follow a digital
transformation path no matter how far the tipping
point is — they want to be early adopters. Some even
plan on being the disruptor that will cause the rest of
the industry to tip.
18
Combining the industry’s tipping point with an
enterprise’s chosen competitive stance or culture
results in Figure 5. At a point in time (noted by
the vertical line), a more aggressive company may
be pursuing a transformation path well before the
tipping point. An average company may pursue
an optimization path. Late-adopter companies
may actually be pursuing neither of these paths.
They may be implementing digital technologies
such as using more cloud or adding more digital
channels (e.g., mobile) — but the enterprise is not
going any further to improve the business in the
ways listed in Figure 1. We call this state digital
technology enablement. Often, a digital technology
enablement path is not one that is deliberately
chosen by the enterprise. It is a situation that can
occur when IT wants to push digital technologies and
concepts forward, but the rest of the organization
does not have the same aspirations to use these
to improve the business. What they end up with
is a more digitally capable IT (think cloud, SaaS,
mobile, application programming interfaces [APIs],
digital channels), but not a digitally optimized or
transformed business.
The Path to Becoming a Digital Business Is Nonsequential
A digital business leader can take their enterprise
from digital technology enablement, to digital
business optimization, to digital business
transformation. Yet, we have found that this is
usually not the chosen approach. Enterprises will
tend to pursue a combination of these paths in
parallel (see Figure 6).
Transformation class — These enterprises adopt
emerging technologies and approaches rapidly in
order to gain a competitive advantage. They will invest
early on in digital business transformation. They also
look for ways to accelerate it, such as by:
Source: Gartner (June 2017)
Figure 5. When to Transform, Optimize or Enable?
19
Source: Gartner (June 2017)
Figure 6. Planning Your Digital Journey
■ Lobbying the government for favorable
regulations
■ Launching marketing campaigns to get people
used to a new technology
Transformation-class enterprises see digital
transformation occurring within their planning
horizon, meaning that they dedicate significant
funding and head count to transformation in the
current (and future) fiscal year. They place the
greatest strategic importance on investments
to exploit the coming transformation and less
importance on optimizing current business
models. They give attention to digital technologies
as a foundation for their enablement of their
transformation and optimization goals.
Optimization class — These enterprises view
industry tipping points as occurring beyond their
planning horizon. Most of their funding and head
count will go into optimizing their core businesses.
They believe that digital business can super-charge
their existing business model — even while they wait
for the transformation stage. Most current efforts go
into areas such as:
■ Productivity improvements
■ Better customer and employee experiences
■ Better utilization of assets and inventory
Although they focus on optimization, these
enterprises also have a modest effort in exploring
and monitoring upcoming transformative and
20
disruptive opportunities (represented by the thin
blue line in Figure 6). For example, there may
be a small innovation group looking ahead and
experimenting. They calculate that they will deal
with transformation when it actually occurs in future
planning horizons.
Enablement class — CIOs and digital business
leaders in these enterprises may not be able to win
support for either a digital business optimization or
transformation strategy. Instead, they can lay some
of the groundwork by implementing cloud services,
mobile computing or other conventional IT projects
that digital business often uses. Enablement-class
enterprises believe that digital transformation will
occur far in the future (or in different regions — not
theirs). They put their current efforts into enabling
digital technologies and hold off on pursuing
optimization or transformation-class journeys.
Risks of Choosing the Wrong Digital Ambition
Enterprises can choose to pursue any mix of digital
ambitions but choosing the wrong ones will cause
problems:
■ Transformation-class enterprises can waste a
lot of time and money on a transformation that
doesn’t materialize. In some cases, they make
“bet the enterprise” commitments to digital
transformation. If they succeed, though, they
can set the terms of competition for the whole
industry. The best performers learn how to drive
transformation as standard practice.
■ Optimization-class enterprises will not invest
on digital transformation, but they also deny
themselves the chance to change the competitive
dynamics in their market. Enterprises choosing
optimization should not allow the industry
tipping point to take them by surprise. This risk
is pronounced in industries that have a fast pace
of change.
■ Enablement-class enterprises bet that their
market will endure and look the same as it has
always looked. If they are right, they will continue
with minor improvements. If a transformation
does occur, they may be so far behind that they
cannot compete anymore.
Recommendations:
CIOs and digital business leaders:
■ Determine your enterprise’s mix of digital
business optimization and transformation by
looking outside your enterprise first. If your
industry (or an adjacent industry) is going through
disruptive changes, then you will have no choice
but to set a transformation course yourselves. If
your industry is not undergoing a transformation,
you have the option of pursuing a business
optimization course — unless you want to be the
disruptor and force the industry to transform.
■ Set a budget and planning horizon that reflects
your chosen digital ambition. This problem is
especially pertinent to enterprises choosing
a transformation course. Many times we
see enterprises claim that they are pursuing
transformation, but then rely on a small
innovation team and budget to pursue these ends.
If truly pursuing digital business transformation,
you should plan on starting new business units,
adding/shifting manufacturing capacity, adding
new products to your pipeline, and/or making
mergers and acquisitions.
Source: Gartner Research Note G00333254, Hung LeHong, Graham Waller, 30 June 2017
The Digital Mastermind: is published by Open ROADS Community. Editorial content supplied by Open ROADS Community is independent of Gartner analysis. All Gartner research is used with Gartner’s permission, and was originally published as part of Gartner’s syndicated research service available to all entitled Gartner clients. © 2017 Gartner, Inc. and/or its affiliates. All rights reserved. The use of Gartner research in this publication does not indicate Gartner’s endorsement of Open ROADS Community’s products and/or strategies. Reproduction or distribution of this publication in any form without Gartner’s prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner’s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see “Guiding Principles on Independence and Objectivity” on its website.
About Open ROADS Community
The Open ROADS Community is a forum dedicated
to accelerating digital business transformation. The
Community’s core constituents are digital service
providers, joined by digital industry participants
and all firms which grow their businesses from an
internet-based ecosystem.
The Community achieves its goal by serving as
a cross-industry incubator for identifying new
digital business models and revenue opportunities,
including creating, sharing and implementing best
practices for addressing those opportunities.
The ROADS acronym stands for five tenets which
define the deep levels of personalization and quick
service delivery expected by digital consumers today.
Logo lockup
Logo lockup with tagline
Logo
Palette
O P E N R O A D SP o w e r e d b y H u a w e i P o w e r e d b y H u a w e i
O P E N R O A D S
O P E N R O A D S
The Incubator for ICT Transformation
P o w e r e d b y H u a w e i
O P E N R O A D S
The Incubator for ICT Transformation
P o w e r e d b y H u a w e i