Digital business transformation tools are the digital-age equivalent of the traditional tools that have served technology leaders well over the last two decades. ITIL, CMMI, COBIT, TOGAF, PMBoK and others have been invaluable helping organisations adopt standards to work consistently, and in accordance with international good practices.
As executives strive to remain competitive in a world increasingly dominated by technology and transformation, they will spend more on innovation, technology and transformation capabilities, and embrace new digital business transformation tools.
Using the ‘Transformation and Innovation Framework’ below, the Business Transformation Academy and SAP illustrated how various models can be adopted by organisations embarking upon their transformation journeys.
In the remainder of this post, starting at the top, we will visit each layer and component in the model, with links to additional resources on each.
Business models define who a company’s target customers are, what the organisation’s value proposition is, how the business works and why the business is financially viable. Many companies have grown on the trusty old business models that are rooted in history and bound by process and culture. But to avoid becoming irrelevant in an increasingly changing world, they need to dust off antiquated models and make them fit for purpose in todays digitised environment.
The authors of “The Business Model Navigator” suggest that in future, competition will take place between business models, and not just between products and technologies. They also explain how a company’s business model consists of four dimensions, which are: the customer (who?), the value proposition (What?), the value chain (How?), and the profit mechanism (Why?) – and that a business model innovation requires significant modification of at least two of the four components.
Discover more about the Business Model Navigator
Core Capabilities and Digital Use Cases
The Digital Capability Framework describes the core capabilities and digital use cases that companies need to consider if they are to approach their digital transformation holistically. Digital marketing and sales channels are the tip of the transformation iceberg, but beneath the surface are other considerations involving the workforce and operational excellence.
The Digital Capability Framework is made up of four building blocks, which are:
- Digital Capabilities
- Digital Capability Maturity Models
- Digital Use Cases
- Digital Transformation Roadmaps
Making up building block 1 (Digital Capabilities) are three “Digital Enablers” and three “Digital Goals”.
- Innovation Capability,
- Transformation Capability
- IT Excellence
- Customer Centricity
- Operational Excellence
- Effective Knowledge Worker
Discover more about the Digital Capability Framework
Implementing digital solutions without innovation is not highly transformational. At best, such endeavours often serve to cut costs and introduce efficiencies for existing ways of working. Which is why innovation needs to be at the heart of every company’s digital business transformation journey and should be among a leader’s digital business transformation tools.
While many innovation methods exist, the illustration above suggests considering four fundamental innovation approaches. These include:
Open Innovation where companies use both internal and external ideas to advance technology with a willingness to consider both internal and external paths to commercialise the company’s offerings. Visit OpenInnovation.net
Customer Co-Creation enables new products and services to be enhanced through an active, creative and social collaboration process between companies and customers – superseding the Schumpeterian model where the lone entrepreneur would bring innovations to markets. Read How to Engage Customers in Co-Creation
Innovation Scouting sees specialists tasked with identifying new opportunities for partnership, co-development, licensing, or acquisition. Commercially relevant technologies are more likely to be found if the scouting team comprises a combination of marketing and technical functions.. Read how scouting can be part of open innovation
Design Thinking involves a human-centred approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success (Tim Brown – IDEO).
Listen to the father of open innovation Henry Chesbrough
Business Transformation Management
While innovation helps us leverage new digital solutions, the planned outcomes cannot be achieved without effective business transformation management. The BBC’s failed £100 Million Digital Media Initiative is an example of how big budgets and technology expertise is useless without the right level of business transformation management capability.
The Business Transformation Management Methodology (BTM²) is the world’s first holistic and integrated approach to transformation, which is also integrated with the Digital Capability Framework introduced above. It is fundamental to any leader’s digital business transformation tools, and consists of four phases and nine transformation management disciplines.
Four Phases of Business Transformation Management
Nine Disciplines of Business Transformation Management
- Meta Management
- Strategy Management
- Value Management
- Risk Management
- Project and Programme Management
- Business Process Management
- IT Transformation Management
- Organisational Change Management
- Competence and Training Management
Learn more about the Business Transformation Management Methodology
Digital Business Transformation Tools Conclusion
Disruptive business models enabled by the latest technologies are already transforming industries and markets. This calls for executives to respond more rapidly than ever before, and before they are forced to by the unknown competition which they can’t see coming until it suddenly hits them and their bottom line. The Dollar Shave Club did it to Gillette and there are countless other examples.
The companies that are prepared to approach innovation, digitisation and business transformation in a proper manner will do so by engaging transformation leaders that are adept in every area of the Transformation and Innovation Framework illustration shown at the top of this page.
These leaders need to be prepared with a well equipped toolbox of strategic digital business transformation tools that can guide their organisations along every step of the journey. Tools that bring consistency, a common language and effective ways of working into the organisation. While these tools can come in many shapes and sizes, one thing for certain is that if the tools are out of date and blunt, the journey and outcomes will disappoint.