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

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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.

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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

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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

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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

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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

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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

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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

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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.

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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

enquiries@OpenROADScommunity.com

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.

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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.

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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)

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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

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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

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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)

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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.

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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?

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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

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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

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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.

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