By Paula Ziehr
As digital transformation takes center stage in many organizations, IT teams are challenged to fully leverage digital business models to ensure the most agile and competitive business environment possible. With a variety of new tools and platforms available, IT must find the best strategy to create a smooth transition into the digital business world.
With the proper steps, enterprises can make the leap to turn their organization into a digital business that aligns with future business goals. In fact, a recent Harvard Business Review report, The Digital Transformation of Business, found businesses adopting digital transformation are yielding more benefits than ever before.
Several steps guide enterprises in taking their businesses digital.
Addressing the Organization’s Digital Needs
Before a digital transformation can take place in an organization, its digital needs must be assessed. Using a business capability map, the organization can identify which area would benefit the organization most by being digitized. These are usually customer-facing activities or differentiating capabilities.
IT teams need to ask questions about the business. Does the organization need a digital customer experience? Consider agile application development technology. How about all around faster and better decisions? Implementing Internet of Things (IoT) analytics can help. Knowing what the digitalization requirement is will make it easier to focus efforts on where it matters—and to understand what digitization technologies are appropriate.
Validating the Business Strategy
Business strategy tends to be a little cloudy in most organizations due to the many various initiatives coming from top executives, business units, and technology teams. Because of this, initiatives must be fully vetted against strategy to ensure each one is truly targeting the company strategy.
The strategy should also be validated by the capabilities that are needed to achieve it. Do the capabilities have the right applications supporting them and do those applications have the right technologies supporting them? If so, then that strategy can be achieved. In the context of digitalization, it is necessary to assess the required digitization of the capability and the current level of digitization of the capability to arrive at the digitization gap and know what needs to be changed.
To existing business demands that already address the organization’s needs, new demands can be added for IT change for digitization. Next the project plans need to be created—from choosing a timeline to a budget. Once decided, the digital transformation can be executed.
Ensuring Strategy Achievement
As digital technology is implemented to help drive business strategy, IT needs to ensure that all is running properly and is effective for the organization. With application and service monitoring, IT teams can oversee where technology is performing well in supporting the business and where it is not. This helps to monitor if IT is running only those solutions that are effective for the organization.
Analyzing the Operating Model
The next step is to analyze the operating model. As businesses become more and more dependent on IT for even their core business processes—or, more importantly, when IT is the core of the business process—IT needs to understand and be involved in business planning to ensure the enterprise is using technology to its greatest potential. IT planners and strategists need to dive deep into business operations to help set a foundation for maximum business efficiency.
The ability to work at this level of enterprise planning helps planners and strategists respond appropriately to business needs for maximum efficiency, through effective integration and standardization of processes and resources.
Reap the Benefits
For digital transformation, it is essential that IT collaborates with business on planning business strategy and proactively advise the business on digital business issues. There must be a mutual understanding of the business model, business strategy, and the business capabilities needed for achieving strategy.
Business strategy validation provides a framework for systematically deriving IT initiatives from business strategies. It is used to define business strategy down to a level that can be translated into specific changes to the architecture and, thus, ensure business validity of enterprise architecture actions.
Underlining this is business capability management that provides the common semantics needed for business-IT communication. A business capability map provides a stable platform for mapping IT support to business needs. Using the map, businesses evaluate current IT support for each capability and strategize on which type of support is appropriate, for example, analyzing if the priority is low cost or high agility. Such evaluations and strategizing leads to a heat map to focus IT activity so that it can deliver solutions faster.
By taking a business digital and fully leveraging digital business models, companies see continuous improvement in a variety of business processes that are beneficial to the company as a whole. SW
Paula Ziehr is a marketing manager at Software AG.
Feb2017, Software Magazine