Leading successful Digital Transformation projects cannot be successful without a Strategy for their success.
This briefing shows how to develop and apply a Strategy for Program Success through clear and concise descriptions of the strategic outcomes, Measures of Effectiveness and Performances, and identification of Value needed to meet business goals in a timely manner for the needed budget.
Successful Digital Transformation Starts with a Well-Defined Strategy
1. +
Successful Digital Transformation Starts with a well
defined Executable Strategy for Success
Leading successful Digital Transformation projects can not be successful without a Strategy for their success.
This briefing shows how to develop and apply a Strategy for Program Success through clear and concise
descriptions of the strategic outcomes, Measures of Effectiveness and Performances, and identification of Value
needed to meet business goals in a timely manner for the needed budget.
1
11 July 2018
09:10 – 10:10
Glen B. Alleman
Niwot Ridge LLC
3. +
What is Digital Transformation?
3
Digital transformation is the profound transformation of
business and organizational activities, processes,
competencies and models to fully leverage the changes and
opportunities of a mix of digital technologies and their
accelerating impact across society in a strategic and
prioritized way, with present and future shifts in mind.
https://www.i-scoop.eu/
https://www.simplethread.com/what-is-digital-transformation/
“Digital transformation closes the gap between what digital
customers already expect and what analog businesses
actually deliver.”
“Digital transformation means Digital First
4. 4
Strategy
Strategy is creating fit between a firms business
elements that allow trade–offs to be made for
the benefit of its customers.
If no trade–offs are made, the resulting
decisions support operational effectiveness but
not strategy
5. +
A hypothesis requires a test of its validity
These tests require units of measure meaningful to the decision makers
Measures of Effectiveness
Measures of Performance
Technical Performance Measures
Key Performance Parameters
The strategy must address Risk created by Uncertainty
Reducible (Epistemic) Uncertainty
Irreducible (Aleatory) Uncertainty
In the presence of these uncertainties, estimates must be made of the
efficacy and impact of business and technical decisions.
The hypothesis is … Digital Transformation can measurably
improve the business and technical performance of the firm.
Strategy is a Hypothesis
5
6. +
Define the strategic direction toward the goal and vision of the
transformed business.
Align the Organization to each of the strategic initiatives.
Implement the Strategy according to a plan that produces measurable
outcomes.
Continuously improve the efficacy of the tactics that implement the
strategy.
Continuously measure and adapt the strategy to emerging business and
technical conditions from feedback of the measures of effectiveness and
performance.
Success of Digital Transformation starts with Strategy that is translated
into an executable project with tangible measures of progress to plan.
Five Steps to Digital Transformation
6
7. +
Some More Definitions
Strategy is the creation of a unique and valuable position, involving a
different set of activities.
Serving the few needs of the many ‒ Jiffy lube only provides auto lubricants
Serving the broad needs of the few ‒ Bessemer Trust only targets high end
clients
Serving the broad needs of the many ‒ Cinemark operates in cities of
200,000 population or more
Strategy requires you to make trade‒offs when competing ‒ to chose
what not to do
Gains in one area can only be made at the expense of another area
Strategy involves creating FIT among the companies activities
Strategy and leadership are inextricably linked
7
8. +
It must be flexible,
No credible Plan is written in stone
Environments change
The plan must change with it
Everyone involved in its creation, since the Plan impacts everyone in
the organization
Planning is not a once–a–year exercise, or a piece of paper that's
created and never looked at again
The Plan is actionable and relevant to the company's vision / mission
It's geared toward customers, not towards internal activities
The Plan is updated for every change to the strategy of the firm
Planning is a Continuous Improvement Process
Criteria for a Digital Transformation
Strategic Plan
8
9. + Step 1:
Determine Who We Are …
9
Start with who we are now?
Prospector
Analyzer
Defender
Reactor
… then who we want to be?
10. + There are Four Organizational Strategies
Prospector’s continually
search for innovative
market opportunities and
experiment regularly with
new responses to
emerging trends
Analyzer’s operate
routinely and efficiently
through formal structures
and processes, while
simultaneously watching
competitors for promising
new ideas which they then
rapidly adopt
Defender’s given their
narrow product market
domains, are highly expert in
their organization's area of
operation but do little to seek
out new opportunities outside
their primary domain
Reactor’s are unable to
respond effectively to known
change and uncertainty in
their organization's
environment
† “The Balanced Scorecard: To Adopt or not to adopt?” Kevin Hendricks, Larry Menor and Christine Wiedman, Ivey Business Journal, Nov/Dec 2004
10
11. + Step 2:
Focus on the Mission and Vision
Mission Action
What is the organization
about?
‒ What do we do?
‒ Who do we do it for?
‒ What is the benefit?
Vision Results of Action
What does the organization want
to become?
‒ What are the results of our
actions?
‒ If we achieve our mission what
will the future look like?
Mission and Vision provide the anchors for developing a strategy.
Without a Mission and Vision, the underlying performance metrics have no
foundation on which to stand.
Why are we measuring this activity?
Ask the Mission and Vision for the answer.
11
12. + Creating Value Through Strategy
An unambiguous sense of direction
that permeates the organization.
Strategic and operational plans that
reinforce each other.
Decision–makers understand how
their roles contribute to the total
enterprise and their accountability is
clear.
There are no simplistic ideas about
how customers and competitors will
respond to actions of the enterprise.
Empowerment is throughout the
enterprise.
Conflict and differences of opinion are
not suppressed.
Interaction of market knowledge with
creative product ideas produces a
steady stream of innovation.
Existing and retired employees are the
most effective source of new employees.
Other companies want to do business
with us.
When asked “if the enterprise was a
school, would you pay tuition for your
children to attend?” The answer would
be “yes.”
“The Market–Based Adaptive Enterprise: Listening, Learning and Leading Through Systems Thinking, Vincent P. Barabba, in
Proceedings Russell L. Ackoff and The Advent of Systems Thinking, March 1999
It is VALUE we’re after with a Strategy that enables …
12
13. + Strategic Readiness
... (few) can assert with confidence that the
intangible assets of their organization are fully
activated, integrated with their corporate
objectives, and ready for effective deployment on
the competitive landscape
Intangible assets are only assets when they are
ready for deployment. If they cannot be used
effectively, their strategic readiness is reduced and
their value to the organization is impaired.
In order to deliver value we must first be
Ready to deliver value
13
14. + Success with Strategy means Managing the
Intangible Assets of the Firm
Managing Tangible assets is a straight forward infrastructure
management and control problem
It’s the Intangible assets that must be managed
Strategy converts Intangible assets into Tangible assets
Strategy, NOT Technology, drives Digital Transformation
14
15. + Stay Focused on the Outcomes
General Mission
Strategic Themes
Desired Outcomes
Metrics
Strategic
Initiatives
What do we do?
Why is it important?
What results do we want?
How will we know when we’ve
achieved these results?
What specific actions do we believe
will lead to these results?
Connecting specific actions with the strategy of the
firm is the role of a Balanced Scorecard
Identifying the strategic initiatives that support the organizational strategies is the
key beneficial outcome of deploying a Balanced Scorecard in Digital
Transformation
15
16. + Strategy is About Rearranging the
Tangible assets to improve the Value of
the Intangible assets
16
17. + An Example of this Intangible from
Tangible conversion
17
Walt Disney World has entirely aligned and integrated their
organizational capital and culture with their strategic goals of
delivering superior customer service to secure customer
loyalty, promote repeat purchase, and fulfill their corporate
mission.
Few who have visited Walt Disney World would dispute the
fact that the “cast” (the Disney name for employees who are
“on stage” doing their work) is entirely infused with serving
their customers. This is a prime example of organizational
capital alignment with strategic corporate goals.
18. + What are the Goals of Transforming Intangible
to Tangible Assets for Digital Transformation
Strategy?
Look past the competitors
Ask the customer what they want to see from the Digital
Transformation
Use executive influence to avoid a technological solution as the
Strategy for Digital Transformation
Align the culture of the firm with the Strategy, not the other way around
18
19. +
What’s Next (1)
Maturity model of digital transformation
Building a strategy using Balanced Scorecard – moving beyond the
platitudes of strategy
Principles of the Balanced Scorecard
Why use the BSC
Examples of Strategies
Measures of Effectiveness and Measures of Performance
Connecting the strategy with execution ‒ both are needed
Technical Performance Measures
Key Performance Parameters
19
20. +
What’s Next (2)
Managing the execution connected with the Strategy ‒ measures of
performance connected to measures of strategic outcomes
Example connections between execution and strategy
KH IT
Other ITR scorecards
Baltimore Public School
Building the strategy of digital transformation
Beyond the obvious
Show the mechanics
Show the measure of success
20
21. + Increasing Maturity of
Transformation Strategy
21
Ad Hoc
Opportunistic
Repeatable
Managed
Optimized
Digital RESISTER
Business and IT digital
initiatives are
disconnected and
poorly aligned with
Enterprise Strategy,
and not focused on
customer experiences
Outcomes
Business is a laggard,
providing weak
customer experiences
and using Digital
technology only to
counter threats
Digital EXPLORER
Business has
identified a need to
develop a digitally
enhanced,
customer‒driven
business strategy, but
execution is on a
project basis.
Progress not
predictable or
repeatable
Outcomes
Digitally enabled
customer experiences
and products are
inconsistent and
poorly integrated
Digital PLAYER
Business‒IT goals
are aligned at
Enterprise level
around the creation
of digital products
and experiences, but
not yet focused on
the disruptive
potential of digital
initiatives
Outcomes
Business provides
consistent but not
truly innovative
products, services,
and experiences
Digital
TRANSFORMER
Integrated,
synergistic
business‒IT
management
disciplines deliver
digitally enabled
product / service
experiences on a
continuous
Outcomes
Business is a leader
in its markets,
providing world‒class
products, services,
and experiences
Digital DISRUPTER
Enterprise is
aggressively
disruptive in the use
of new digital
technologies and
business models to
affect markets.
Ecosystem
awareness and
feedback is a
constant input to
business innovation
Outcomes
Business remakes
exiting markets and
creates new ones to
its own advantage
and is a fast‒moving
target for competition
IDC Digital Transformation Maturity Model, 2015
22. + Strategy is Actually Just Good
Systems Engineering
22
Used with Permission, from The System Value Cycle (SVC) view expressed as a Problem Suppression System (PSS) by Ring (1998)
23. +
Strategy tells us where we are, where we are going and when we arrive what will be
the tangible beneficial outcome in units of measure meaningful to the decision makers
Balanced Scorecard is a Powerful
Mechanism for Defining Strategy
23
24. + What Does a Balanced Scorecard
Do?
A Balanced Scorecard defines an organization’s performance and
measures whether management is achieving desired results.
The Balanced Scorecard translates Mission and Vision
Statements into a comprehensive set of objectives and performance
measures that can be quantified and appraised.
24
25. +
A Generic IT Balanced Scorecard
25
Budget Perspective
Budget
Management
Resource
Management
Internal Processes Perspective
Stakeholder Perspective
Application Quality Time to Delivery System Capabilities
Stakeholder
Relations
Recognition
of Value
Service Attributes Relationships
Operations
Management
Stakeholder
Management
Innovation
Processes
Regulatory
Processes
Human Capital
Information Capital
Organizational Capital
Learnings & Growth Perspective
Image
Project
Performance
Culture Leadership Alignment Teamwork
26. +
Getting to a Balanced Scorecard
26
Develop
Strategic Goals
Mission VisionClarify mission &
Vision statement
Strategic Goals
Derive
Sub–GoalsSub–Goals
Map Sub-Goals to
each quadrant of the
Balanced Score Card
Apply GQ(I)M to:
– Identify measurement areas
– Develop measurement goals
– Pose relevant questions
– Postulate indicators
– Identify data elements
For each BSC Quadrant
Performance Data
Elements
Module
TroubleReports
Indicators
Balanced Scorecard
Strategy Map
Derived from
“Developing Enterprise–Wide
Measures for Tracking
Performance,” Software
Engineering Institute
GQ(I)M
Goal
Question
Indicator
Measure
Budget Perspective
Budget
Management
Resource
Management
Internal Processes Perspective
Stakeholder Perspective
Application Quality Time to Delivery System Capabilities
Stakeholder
Relations
Recognition
of Value
Service Attributes Relationships
Operations
Management
Stakeholder
Management
Innovation
Processes
Regulatory
Processes
Human Capital
Information Capital
Organizational Capital
Learnings & Growth Perspective
Image
Project
Performance
Culture Leadership Alignment Teamwork
KPI’s, Targets,
CSF’s for each
Objective
27. + An Actual Digital Transformation
Balanced Scorecard
27
InternalProcessesProject
Expectations
CompetencyCompetency ContributionContributionCredibility
Operational ExcellenceOperational Excellence Project / IT AlignmentProject / IT Alignment Solutions LeadershipSolutions Leadership
Business
Results
Provide appropriate technology to
enable success - P2
Provide appropriate technology to
enable success - P2
…enable firm to accelerate
market deployment - R3
…enable firm to accelerate
market deployment - R3
…enable profitable
operations - R1
…enable profitable
operations - R1
……reduce overall
operating costs - R2
……reduce overall
operating costs - R2
“Keep my
systems running”
- E1
“Keep my
systems running”
- E1
Deliver solutions
on schedule - P6
Deliver solutions
on schedule - P6
Manage
requirements - P7
Manage
requirements - P7
“Understand my
operation” - E3
“Understand my
operation” - E3
Improve
processes for
efficiency
and quality -
P4
Improve
processes for
efficiency
and quality -
P4
Strategically deploy services - P8Strategically deploy services - P8
Reduce the cost of
providing services - P1
Reduce the cost of
providing services - P1
Centralize IT
resources - P5
Centralize IT
resources - P5
Enhance customer
relationships - P9
Enhance customer
relationships - P9
Provide innovative
solutions - P3
Provide innovative
solutions - P3
“Implement timely and cost-
effective solutions” - E4
“Implement timely and cost-
effective solutions” - E4
“Manage to
corporate goals”
- E2
“Manage to
corporate goals”
- E2
Peopleand
Tools
Provide employees with
the tools and knowledge
they need - S4
Provide employees with
the tools and knowledge
they need - S4
Develop and
retain critical
skills - S1
Develop and
retain critical
skills - S1
Recognize team
and individual
performance - S3
Recognize team
and individual
performance - S3
Build a high performance
culture - S2
Build a high performance
culture - S2
Leverage
knowledge and
best practices - P10
Leverage
knowledge and
best practices - P10
“Do the right things, do them well, do them with less, to…”
InternalProcessesProject
Expectations
CompetencyCompetency ContributionContributionCredibility
Operational ExcellenceOperational Excellence Project / IT AlignmentProject / IT Alignment Solutions LeadershipSolutions Leadership
Business
Results
Provide appropriate technology to
enable success - P2
Provide appropriate technology to
enable success - P2
…enable firm to accelerate
market deployment - R3
…enable firm to accelerate
market deployment - R3
…enable profitable
operations - R1
…enable profitable
operations - R1
……reduce overall
operating costs - R2
……reduce overall
operating costs - R2
“Keep my
systems running”
- E1
“Keep my
systems running”
- E1
Deliver solutions
on schedule - P6
Deliver solutions
on schedule - P6
Manage
requirements - P7
Manage
requirements - P7
“Understand my
operation” - E3
“Understand my
operation” - E3
Improve
processes for
efficiency
and quality -
P4
Improve
processes for
efficiency
and quality -
P4
Strategically deploy services - P8Strategically deploy services - P8
Reduce the cost of
providing services - P1
Reduce the cost of
providing services - P1
Centralize IT
resources - P5
Centralize IT
resources - P5
Enhance customer
relationships - P9
Enhance customer
relationships - P9
Provide innovative
solutions - P3
Provide innovative
solutions - P3
“Implement timely and cost-
effective solutions” - E4
“Implement timely and cost-
effective solutions” - E4
“Manage to
corporate goals”
- E2
“Manage to
corporate goals”
- E2
Peopleand
Tools
Provide employees with
the tools and knowledge
they need - S4
Provide employees with
the tools and knowledge
they need - S4
Develop and
retain critical
skills - S1
Develop and
retain critical
skills - S1
Recognize team
and individual
performance - S3
Recognize team
and individual
performance - S3
Build a high performance
culture - S2
Build a high performance
culture - S2
Leverage
knowledge and
best practices - P10
Leverage
knowledge and
best practices - P10
“Do the right things, do them well, do them with less, to…”
28. + To Construct and Implement a Strategy
with Balanced Scorecard, we need to …
Articulate the business’s vision and strategy
Identify the performance categories that best link the business’s vision and
strategy to its results (such as financial performance, operations, innovation,
employee performance)
Establish objectives that support the business’s vision and strategy
Develop effective measures and meaningful standards, establishing both short-
term milestones and long-term targets
Ensure companywide acceptance of the measures
Create appropriate budgeting, tracking, communication and reward systems
Collect and analyze performance data and compare actual results with desired
performance
Take action to close unfavorable gaps
28
30. +
Only 5% of the workforce
understands the strategy
Informed action is virtually impossible
without sound knowledge of the
organizations strategy
Only 25% of managers have
incentives linked to strategy
Incentives linked to short-term
financial targets, leads to less than
rational decision making at the
expense of long term sustainable
success
85% of executive teams spend less
than one hour per month discussing
strategy
Without a clear and concise
blueprint for success – the strategy
– manage will focus on financial
and operational details
60% of organizations don’t link
budget to strategy
Based on strategy, what initiatives
distinguish us from our
competition?
Vision Barrier Management Barrier
Why Strategies Fail†
30
People Barrier
† Norton and Kaplan and, in Balanced Scorecard Diagnostics: Maintaining Maximum Performance, Paul R. Niven, John Wiley &
Sons and Strategy Safari, Mintzbert, Ahlstrand and Lampel, The Free Press, 1998.
Resource Barrier
31. +
All Five Components Needed for True Success
Five Components of Strategy
Deployment
31
SuccessVision Action PlanResourcesSkills Incentives
ConfusionAction PlanResourcesSkills IncentivesVision
AnxietyVision Action PlanResourcesIncentivesSkills
Gradual
Change
Vision Action PlanResourcesSkills Incentives
FrustrationVision Action PlanSkills Incentives Resources
Vision ResourcesSkills Incentives Action Plan False Start
32. +
Tell what Done looks like in any units of measure meaningful to the
decision makers
See progress to plan in units of measure meaningful to the business
The stakeholder point of view
The internal process perspective
The Learnings and Growth Perspective
The budget perspective
Without a Strategy for Digital Transformation, we can’t …
Just a Reminder Why we need a
Strategy
32
33. + Considerations for a Successful
Digital Transformation Strategy
33
Identify market,
evolutions, and
pain points
Access and
Benchmark where
you are
Analyze and
prioritize
significant
evolutions
Map current status
with major
evolutions and
opportunities
Assess skillset,
culture, and
readiness to
transform
Focus on Core
intangible assets
Base strategies on
where you want to
go
Include external
and internal help
Develop a
Roadmap to the
destination
Design for
Innovation,
optimization,
agility, and scale
Optimize
Information and
Data Maturity
Connect
technologies and
data in function of
the strategy
Get clear
leadership buy in
Gap bridges with
customers and
stakeholder
Set goals and
performance
measures
Build Ecosystem
and Platform
Focus on long
terms with
intermediate goals
Start where it
makes sense
Learn, Measure,
re‒assess, scale
Repeat and
Innovate
Hyper
Awareness
Informed
Decision
Making
Fast
Execution
3 Core
Capabilities
for Success
34. +
Moving from Strategy to Tactics
34
Performance Goal Key Performance
Indicator (KPI)
Critical Success
Factor (CSF)
Strategic Objective
Be The Preferred
Supplier Of Business
Applications
Traceable to
Increased Customer
Revenue
Provide on-time, on-
budget, on-
specification for our
enterprise applications
Budget Variance
Schedule Variance
% Requirements
Variance
BPI ≥ 0.95
CPI ≥ 0.97
Function Points
Delivered ≥ 90%
Target
Provide scalable
platform for
acquisition and
growth of our
customer base
Cost of Delivery
Impact
Performance Impact
Global Operational
Baseline
Declining Cost per
Customer
SLA Compliance ≥
0.98
24/7/365 Non-Stop
Operations
What How Measures
Vision
Positively Impact
Financial
Performance
Why
Top Down
Making the effect-and-cause connection between
Strategy and Key Performance Indicators is the role of
an Balanced Scorecard automation system
Flow Down from Strategy to KPIs
35. +
Strategy Tactics = Line of Sight
35
Budget Perspective
Budget
Management
Resource
Management
Internal Processes Perspective
Stakeholder Perspective
Application Quality Time to Delivery System Capabilities
Stakeholder
Relations
Recognition
of Value
Service Attributes Relationships
Operations
Management
Stakeholder
Management
Innovation
Processes
Regulatory
Processes
Human Capital
Information Capital
Organizational Capital
Learnings & Growth Perspective
Image
Project
Performance
Culture Leadership Alignment Teamwork
Performance Goal Key Performance
Indicator (KPI)
Critical Success Factor
(CSF)
Strategic Objective
Be The Preferred
Supplier Of Business
Applications Traceable
to Increased Customer
Revenue
Provide on-time, on-
budget, on-specification
for our enterprise
applications
Budget Variance
Schedule Variance
% Requirements
Variance
BPI ≥ 0.95
CPI ≥ 0.97
Function Points
Delivered ≥ 90% Target
Provide scalable
platform for acquisition
and growth of our
customer base
Cost of Delivery Impact
Performance Impact
Global Operational
Baseline
Declining Cost per
Customer
SLA Compliance ≥ 0.98
24/7/365 Non-Stop
Operations
What How Measures
Vision
Positively Impact
Financial Performance
Why
Bottom Up
Making the cause-and-effect connection between Key
Performance Indicators and Strategy is the role of an
Balanced Scorecard automation system
Flow Up from KPIs to Strategy
The Strategy Map describes the
cause and effect connection
between each Strategic
Objective
The Metrics Map describes the
relationships between the Key
Performance Indicators, Critical
Success Factors, and
Performance Goals in support
of a Strategic Objective
Bi-directional
traceability
between
tactics and
strategy
36. Strategy without Tactics
is the Slowest Route to
Victory
Tactics without Strategy
is the Noise before
Defeat
‒ Sun Tzu
36
37. + Each Organization Must Seek Its
Own Path to Digital Transformation
37
https://www.trisotech.com/wp-content/uploads/Trisotech-Poster-Strategy-to-Operations.pdf
38. +
Golden Circle (GC)
Business Motivation Model (BMM)
Value Proposition Canvas (VPC)
Business Model Canvas (BMC)
Strengths, Weaknesses,
Opportunities, Threats (SWOT)
Brulton Hexagon
Empathy Map (EM)
Customer Journey Map (CJM)
Capability Map (CM)
How, Who, Why, What, Where,
When (HWS)
Balanced Scorecard (BSC)
Input, Guide, Output, Enable
(IGOE)
Suppliers, Inputs, Process, Outputs,
Customers (SIPOC)
Value Map (VM)
Responsibility, Accountability,
Consulted, Informed (RACI)
Case Management Model and
Notation (CMMN)
Business Process Model and
Notation (BPMN)
Decision Model and Notation
(DMN)
Modeling Digital Transformation
38
39. +
Why Strategies Fail
It’s not about Vision
It’s about …
Commitment to perform
Failure to link money to a
strategic outcome
EXECUTION
39
40. +
Vision Barrier
Only 5% of the workforce
understands the strategy.
Informed action is virtually
impossible without sound
knowledge of the organizations
strategy.
People Barrier
Only 25% of managers have
incentives linked to strategy.
Incentives linked to short-term
financial targets, leads to less than
rational decision making at the
expense of long term sustainable
success.
Management Barrier
85% of executive teams spend
less than one hour per month
discussing strategy.
Without a clear and concise
blueprint for success – the
strategy – manage will focus on
financial and operational details.
Resource Barrier
60% of organizations don’t link
budget to strategy.
Based on strategy, what
initiatives distinguish us from our
competition?
Why Strategies Fail
40
The four primary barriers that lay the seed of strategy failure ...
41. +
Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Robert Kaplan and
David Norton, Harvard University Press
Balanced Scorecard Diagnostics: Maintaining Maximum Performance, Paul Niven, John
Wiley & Sons
Rethinking Performance Measurement: Beyond Balanced Scorecard, Marshall Meyer,
Cambridge University Press
Implementing the IT Balanced Scorecard, Jessica Keyes, Auerbach Publications
Strategic Performance Management: Leveraging and Measuring Your Intangible Value
Drivers, Bernard Marr, Butterworth‒Heinemann
Strategy: Beyond the Hockey Stick, Sven Smit, Martin Hirt, and Chris Bradley, John Wiley
& Sons, 2018
Knowledge is of two kinds. We know a subject ourselves, or we know where we can find
information upon it.
When we enquire into any subject, the first thing we have to do is to know what books
have treated of it.
This leads us to look at catalogues, and at the backs of books in libraries.
— Samuel Johnson (Boswell's Life of Johnson)
Resources
41
42. +
Resources
“Systems Engineering in a context of systemic cooperation (SCOOPs); Development
and Implications,” Mike Yearworth, Janet Willis Singer, et al, 2015 Conference on
Systems Engineering Research, Procedia Computer Science 44 (2015), pp. 214‒223.
”Strategy, Not Technology, Drives Digital Transformation,” Gerald Kane, et. al, Sloan
Management Review, July 14, 2015
Execution The Discipline of Getting Things Done, Larry Bossidy and Ram Charan,
Crown Business
Business Process Improvement Workbook ‒ Documentation, Analysis, Design and
Management of Business Process Improvement, James Harrington, Erik Esseling, and
Harm Nimwegen, McGraw Hill
Digital transformation strategy: the bridges to build, i‒scoop, https://www.i-
scoop.eu/digital-transformation/digital-transformation-strategy/
“Maturity model for assessing Industry 4.0 readiness and maturity of manufacturing
enterprises,” Andreas Schumacher, Selim Erol, Wilfried Sihn, Procedia CIRP 52 ( 2016 )
161 – 166.
Performance‒Based Project Management ‒ Increasing the Probability of Project
Success, Glen B. Alleman, American Management Association.
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Editor's Notes
The widely accepted view that strategy and execution are separable activities sets companies up for failure in a fast-paced world.
When a firm embarks on a Digital Transformation, Strategy and Executive must be connected.
Strategy must be in tune with the execution processes of value creation in the real world of Digital Transformation, marked by volatility, uncertainty, complexity, and ambiguity (VUCA).
This means Strategy must be conceived as a hypothesis rather than a plan.
Like all hypotheses, it starts with situation assessment and analysis — strategy’s classic tools.
Also like all hypotheses, it must be tested through action.
“Your Strategy Should Be a Hypothesis You Constantly Adjust,” Amy C. Edmondson and Paul J. Verdin, Harvard Business Review, 9 November 2018
First, Digital Transformation is driven by rapidly-changing technologies.
Its successful adoption depends on a sound strategy.
Businesses that have successfully embraced Digital Transformation do not adopt individual technologies to solve their individual problems.
They have a defined strategy and clear objectives for digitalization in place that aim to guide the transformation of their overall business, instead of ad hoc functions.
The ability to digitally reimagine the business is determined by a clear strategy supported by leaders who foster a culture able to change and invent the new.
While these insights are consistent with prior technology evolutions, what is unique to digital transformation is that risk taking is becoming a cultural norm as more digitally advanced companies seek new levels of competitive advantage.
A hypothesis is a supposition or proposed explanation made on the basis of limited evidence as a starting point for further investigation.
Strategy is built on a chain of hypotheses, because Strategy is all about the future.
As progress is made, the same thing is done when the Strategy is translated into the Strategic Plan used to execute the Strategy.
There are various concepts of IT strategies (Teubner 2013), that define the current and the future operational activities, the application systems and infrastructures, and the organizational and financial framework for providing IT to fulfill business operations within a company.
Digital transformation focus on transformation of products, processes, and organizational aspects owing from new technologies.
Their scope is broadly designed and includes digital activities at the interface with or fully on the side of customers.
Independent of the domain, digital transformation strategies have certain elements in common. These elements can be ascribed to five activities across four. dimensions:
Use of technologies
Changes in value creation
Structural changes
Financial aspects
Here’s some more background on strategy
The emphasis is on creating Fit between the activities and assets of the firm.
For Digital Transformation this means that fit must include the customers experience as well.
When down right, Planning is a process of continuous improvement, with the Plans and the Strategy they represents kept current.
The strategic planning framework used for this work contains:
A Vision
A Mission defined short term and long terms strategic timeframes
5 to 7 strategic objectives
3 to 5 optional key characteristics of the organization
The strategic objectives and key characteristic are derived from the Vision, the Mission, and essential characteristics
The strategic objective and key characteristics are used to assess the entities in each of the strategic timeframes.
Once the Strategic Framework is established, it is a simple matter to assess the work activities of the organization against the framework and determine what, if any, changes need to be made to the current work portfolio.
Each significant work initiative/project, either product or process, should be assessed periodically against all of the strategic initiatives and key characteristics.
The assessment determines how the work initiative align with each strategic objective and key characteristic.
The assessment does not assess progress toward completion of the work initiative.
This progress assessment takes place through the Measures of Effectiveness, Measures of Performance, Technical Performance Measures, and Key Performance Parameters of the initiatives implementing the strategy
In one paradigm there are four types of firms
Determining which type of firm you are is critical to identifying what strategies will be needed for the Digital Transformation.
It may be you’re one or more if these types.
Depending on the market, there is no right or wrong type to be.
But determining who you are must take place before a strategy can be determined
This maturity follows the SEI Capability Maturity Model Integrated (CMM). This approach can be universally applied to other domains outside of software development as it is here.
Ad Hoc ‒ processes are usually ad hoc and chaotic. The organization usually does not provide a stable environment. Success in these organizations depends on the competence and heroics of the people in the organization and not on the use of proven processes.
Opportunistic ‒ processes are designed an deployed to meet an immediate need, without an overarching framework
Repeatable ‒ processes are well characterized and understood, and are described in standards, procedures, tools, and methods.
Managed ‒ Quantitative objectives for quality and process performance are established and used as criteria in managing processes. Quantitative objectives are based on the needs of the customer, end users, organization, and process implementers. Quality and process performance are understood in statistical terms and are managed throughout the life of the processes.
Optimized ‒ Processes are continually improved based on a quantitative understanding of the common causes of variation inherent in processes.
This chart comes for Jack Ring, who is a Systems Engineering thought leader.
In the end, everything we do from development to strategy is about systems and the engineering of those systems.
Much can be learned from the principles of Systems Engineering.
In many cases the principles of Systems Engineering are missing. The missing practices and processes can be traced to the Rot Causes of many project failures.
It is worth investing in learning about and practicing Systems Engineering.
One starting point is the professional society for systems engineers
www.incose.org
There are many way of building strategies.
One is Balanced Scorecard
Here's an example of a Balanced Scorecard for an Enterprise IT organization that supported a large environmental cleanup project.
Digitizing the site was a critical success factor for the closure of the plant.
Determining what processes, services, and technologies needed to be transformed was started by taking a customer centric view of the role of IT.
The work of the customers was to clean up the nuclear waste at Rocky Flats Environmental Technology Site (RFETS), adhere to the Federal, State, and Local laws, assure Environmental Health and Safety regulations were followed, show up on time and on budget for the closure.
A digital transformation was needed, since the site was operate in a legacy manner prior to our arrival.
Center IT, hardwired everything, no personal devices, no automation, no instrumentation.
In the end a wireless umbrella captured all data, provided mobile voice and security and real time monitoring of all the work activities as well as the electronics collection, storage, and use of petabytes of data.
Here are the steps to developing a Strategy for a Digital Transformation using Balanced Scorecard