The document outlines five critical building blocks for successful digital transformation: operational backbone, shared customer insights, digital platform, accountability framework, and external developer platform. It emphasizes the importance of clear goals, supportive infrastructure, and a culture conducive to change to avoid the high failure rate in digital initiatives. Additionally, it highlights the necessity of understanding customer demands and leveraging technology to create meaningful impact in traditional business models.

1. 5 building blocks of
Digital Transformation
Time
ChangeManagementEffort

2. https://www.forbes.com/sites/blakemorgan/2019/09/30/companies-that-failed-at-digital-transformation-and-what-we-can-learn-from-them/#55492f36603c
https://www.linkedin.com/pulse/readiness-assessment-how-organisations-can-better-prepare-ebrahimi
Two thirds of digital transformations fail
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• Unclear goals
• Unsupportive operational backbone
• Processes
• Data
• Technology
• Applications
• Inability to implement the changes necessary
for digital success
• Governance of Change
• Cultural and Structural issues
Few reasons:

3. Customer Expectations
Ubiquitous Data
Competitive Pressure
ApproachDrivers
A closer look at Digital Transformation cases
Examples
Scattered initiatives
Cost optimization and
Operational efficiency
Independent digital units
Unlimited processing
power
Massive connectivity

4. A well established business

5. Creates a stand alone
digital unit, invests millions
into it and make a digital
solution

6. The independent product may succeed but can not not have a
meaningful impact on the core business.

7. Source: Modified version from Driving Digital Strategy: A Guide to Reimagining Your Business, Sunil Gupta, Harvard Business Review Press
A: We want to digitally transform our business.
B: Thanks, where to?
7
Same Products Multiple Products
Same Customers
Multiple Customers
Automobiles
Manufacturing
Consumer Products
Financial Services
Nike Shoes
Amazon Echo and e-commerce
Kindle and e-Books
iPod and iTunes
iPhone + App Store
HP Printers + Toner
Protos M5 + OEE booster
WhatsApp
Facebook
Uber
WeChat
Amazon
Schneider Electric's Exchange
Network effects
Create virtuous circle
Network effects and
Compliments
Traditional Strategy:
Make it cheaper or better
Complements:
Razor-Blade strategy
If you don't know
where you're going,
you'll probably end up
somewhere else.
David P. Campbell
Operational Excellence
The transformation enhances traditional
products and customer service
Digitization
Rapid Business Innovation
The transformation delivers a new
customer value proposition
Digitalization

8. Digital Transformation Readiness Assessment for Regulated Industries
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People and
Culture
Governance
and
Commitment
Technology
and Data
Regulation Market
Internal
External
Organizational Technical
Organizational
Technical
Computerization
Digitization
Digitalization
Ecosystem
Partners
Source:
Readiness Assessment: How Organisations can Better Prepare for Digital Transformation
https://www.linkedin.com/pulse/readiness-assessment-how-organisations-can-better-prepare-ebrahimi/
Three Types of Digital Transformation https://www.linkedin.com/pulse/three-types-digital-transformation-simon-allen/

9. ApproachDrivers
A closer look at Digital Transformation cases
Examples
Scattered initiatives
Cost optimization and
Operational efficiency
Independent digital units
Customer Expectations
Ubiquitous Data
Competitive Pressure
Unlimited processing
power
Massive connectivity

10. 1- Building an operational backbone
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20% 36% 30% 14%
Not started Investment in progress Committed and rolling out Value asset
Sources: Enterprise Architecture as Strategy: Creating a Foundation for Business Execution. J.Ross P. Well, D Robertson, HBS Presss 2006
Ross, Jeanne W., Cynthia M. Beath, and Martin Mocker. 2019. Designed for Digital: How to Architect Your Business for Sustained Success. Cambridge, MA: MIT Press
MIT CISR Survey of 150 established companies, Aug 2018
Operational Backbone:
A coherent set of standardized business processes along with supporting infrastructure,
applications, and data intended to ensure the quality and predictability of core business operations

11. Digitally inspired solutions that customers pay for
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Customer
Desires
Digitally
inspired
solutions
Digital
Offering
• High-level vision
• Integrated cross-functional teams
• Cocreation of digital offerings with
customers
• Building shared customer insights from
a portfolio of experiments

12. 2- Make shared customer insight in the test and learn cycles
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Design Thinking techniques that can be used to surface the
different types of knowledge.
https://uxdesign.cc/the-knowns-and-unknowns-framework-for-design-thinking-6537787de2c5

13. 3- Creating a componentized digital platform
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26% 33% 36% 5%
Not started Investment in progress Committed and rolling out Value asset
Source: MIT CISR Survey of 150 established companies, Aug 2018
Status of companies' digital platform

14. 4- Accountability framework versus hierarchy
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Component owners
not project managers
Mission not structure
Metrics not directives
Experiments not
major launches
Fully resourced not
matrixed
Collaboration not
hierarchy
Trust not control
Continuous release
not scheduled releases
Source: Ross, Jeanne W., Cynthia M. Beath, and Martin Mocker. 2019. Designed for Digital: How to Architect Your Business for Sustained Success. Cambridge, MA: MIT Press
Spotify's Engineering Culture : https://www.youtube.com/watch?v=_qIh2sYXcQc
Tone at the top determines the tune in the middle and the beat of the feet at the bottom.
Mervyn E. King (Judge)

15. Cultural Transformation – Where to and how to?
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Flexibility
Stability
InterdependenceIndependence
Purpose
Caring
OrderResults
Authority Safety
Enjoyment
Learning
Dominant
culture
Emergent
culture
https://hbr.org/2018/01/the-culture-factor
Create Self-Sustaining Culture Hacks by Applying Nudging Techniques : https://www.gartner.com/en/documents/3992190

16. 5- External Developer Platforms
16
Analyze Design Develop Monetize Maintain
-Understand how
the platform
works
-Browse existing
listed solutions /
libraries
-Design the
solution
-Make use of
existing
components
-Write the code -List the solution
in a marketplace
-Sell the solution
and get paid
-Provide support
for the solution
-Maintaining and
versioning
Search
Communities
Developer Resources
News Room Marketplace

17. Source: Ross, Jeanne W., Cynthia M. Beath, and Martin Mocker. 2019. Designed for Digital: How to Architect Your Business for Sustained Success. Cambridge, MA: MIT Press
5 building blocks of Digital Transformation
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Time
ChangeManagementEffort
Operational Backbone
A coherent set of standardized, integrated systems, processes
and data supporting a company's core operation
Shared customer insights
Organizational learning about what customers will pay for and
how digital technologies can deliver to their demand
Digital Platform
Repository of business, data and infrastructure components
used to rapidly configure digital offerings
Accountability Framework
Distribution of responsibilities for digital offerings and
components that balances autonomy and alignment
External Developer Platform
A managed repository of digital components open to external
partners and developers

18. Book Suggestions
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