Chris Boyd co-authored this article.
Companies today need to transform to develop new digital capabilities that will allow them to meet evolving customer preferences, grow recurring revenue, or become an AI-first organization. All these scenarios require coordinated efforts that traverse business units and functions, from product strategy to technology architecture and everything in between.
Planning these transformations requires understanding the changes needed across those functions, a process that usually results in an overwhelming list of deliverables with a price tag that makes even the most seasoned executive blush. Sound familiar?
When tackling large-scale, complex transformations, we advise leaders to plan with a wide-angle lens and execute with precision. Planning with a wide angle-lens means thinking about changes across several dimensions to ensure go-to-market motions and new capability deployments are cohesive. Executing with precision means focusing portfolio prioritization and execution on the delivery of capabilities that both create immediate value and lay the foundation for future initiatives.
If you are part of the 39% of CIOs that claim business and digital transformation as your top priority in the eyes of the CEO, consider these 5 steps to help ensure you capture the big-picture transformation needs and execute with precision.
Identify the catalyst for change
Digital transformation must have a clear linkage to business objectives. The more specific, the better. A global B2B technology client, for example, set a goal to grow subscription revenue to a percentage of total revenue over five years. A rapidly growing software client, on the other hand, targeted the build of key foundational capabilities in the HR and finance domain to enable scale in anticipation of an IPO. No matter the business driver, be deliberate about your major objectives, and spend time up front to get buy-in from key leaders.
Scope the transformation with a wide-angle lens
In photography, a wide-angle lens can be used to make foreground objects more prominent and striking while capturing expansive backgrounds. We find most enterprise transformation initiatives fail to capture the big picture – upstream and downstream dependencies – resulting in fragmented go-to-market motions. For example, a technology company that develops an innovative product without the corresponding lead-to-cash, fulfillment, and customer success capabilities may fall short of growth goals due to reasons other than the product itself.
To scope your transformation with a wide-angle lens and bridge the gap from strategy to execution, think about your objectives in the context of the following dimensions:
- Business model. Assess whether your transformation will fundamentally change your customer value proposition (why customers buy) and profit formula (how you achieve a profit). A company shifting to a subscription model, for example, will measure financial success differently than a one-time purchase model. If a fundamental change is required, a significant overhaul of business management systems and reporting mechanics will likely be needed. If you require partnerships in the form of co-selling agreements or joint ventures, new policies and procedures may be needed govern items such as sales commissions or pricing approvals.
- Product. If you are accountable for a top-line growth target, do not assume there is a bottom-up estimate that articulates how and when that goal will be achieved. Instead, define a realistic growth plan and take inventory of dependencies required to achieve that growth (e.g., feature development, new product releases, upstream or downstream processes). If you are working on a feature that complements an existing product, such as an ability to capture and contextualize product telemetry data, you will need tight integration with the product roadmap, and perhaps modifications to the product itself. If you are downstream from product, perhaps improving configure-price-quote (CPQ) capabilities, invest in understanding product roadmaps to deliver your enhancements in concert with product milestones.
- Customer experience. Customers can interact with you across digital properties such as your website and customer portal, through direct engagement with sales executives, and through partners. For each channel, consider what needs to change for each phase in the customer journey, from discovery to purchase, adoption, and renewal.
- Core business process. Consider the processes and systems that underpin both the customer and employee experience. There are rarely product or customer experience changes that do not correspond to changes in the CRM, CPQ, contracts and billing, or fulfillment processes and systems. Adding chatbots to support guided selling or executing metered billing, for example, will call for major changes in your CRM, CPQ, and billing systems. If you are driving a finance or HR transformation for internal capabilities (e.g., working with Phil Mickelson to implement Workday), most of your work will live here, and the key to success is managing change; both changes to systems themselves and the processes and human capital that make them tick.
- Technology and architecture. Consider this the dimension where the digital magic happens. From tuning your cloud infrastructure to provide elastic storage and compute; delivering a data platform that allows you to ingest, contextualize, and egress data from across the enterprise to make processes and experiences more intelligent; or building the integration layer that allows you to harness the power of reusable and modular application programming interfaces (APIs) to enable rapid development of AI applications across the enterprise. Work in this dimension can often carry large price tags, multi-year implementation timelines, and seem distant from the shiny customer-facing use cases. However, if overlooked, it often becomes the limiting factor to your organization’s agility, scalability, and competitive positioning. Push relentlessly for funding in this domain to ensure you are shoring up your digital foundation to support both immediate and long terms strategies.
Align a sponsor and execution lead with each dimension. Senior leaders directly reporting to the CEO are best suited for sponsorship roles, as they have strategic context and the positioning to drive prioritization and funding decisions. Execution leaders are typically one or two levels below sponsors and drive scoping, resource planning and execution oversight once the transformation is under way.
Group, prioritize, and sequence the work
After you have gathered a wide-angle assessment of your transformation needs, group related work into capabilities that represent what the organization will be able to do once the work is completed. For example, a capability may be to deliver a dynamic guided selling experience on an eCommerce portal. That is the culmination of several interdependent tasks: modifying the eCommerce portal to provide the correct user interface, developing new algorithms to develop personalized product suggestions based on similar customer purchase behavior, and creating new integrations to facilitate data flow, among other tasks.
Prioritize work based on the value it will deliver in the context of your stated objectives. If your goal is to expand market penetration by enhancing digital capabilities, say, then a capability that removes the need for customers to interact with humans during the purchase processes may be one of the most important.
As you prioritize, do not overlook foundational investments. They may not deliver wins in the short term but will be critical for the long-term scale and agility. For example, an organization with a siloed data landscape may prioritize investing in an enterprise-wide data warehouse to break down data silos and move toward a 360-degree view of the customer. Although alternative capabilities may present more value in the short term, removing the barriers created by a siloed data environment can improve competitive positioning in the long term.
Once work is prioritized, sequence it based on established priorities and the inherent execution dependencies. We recommend creating an integrated roadmap with swim lanes to represent each dimension of the transformation and creating milestones along the continuum to represent capabilities that will be established because of cross-dimensional work efforts. Initially plan for a one-year execution horizon with quarterly deliverables identified to ensure a continuous value stream.
Frame three investment scenarios
The integrated roadmap developed during the prioritizing and sequencing phase represents the “do everything” scenario or, in finance parlance, the bull case. It includes the holistic set of work that will allow you to achieve the stated objective in the shortest amount of time. This option is generally the most expensive and may be selected by leadership if the work is believed to be the highest priority relative to other alternatives. However, given the uncertain economic environment and multiple initiatives competing for limited dollars, framing less expensive investment scenarios may prove useful.
The second case is the base case. Roughly half the cost of the bull case, it represents funding for the highest priority items within the holistic set of work. Work closely with sponsors and execution leads from each dimension of the transformation to determine what lands above and below the investment line for this scenario.
The final case is the “do nothing” scenario, or the bear case. It represents what can be accomplished with no incremental funding, and instead working on transformation tasks at the expense of other ongoing initiatives.
Frame these three scenarios – bull, base, and bear – side by side on a single page for your steering committee. Articulate the cost, likelihood of achieving target objectives (risk), and inherent tradeoffs with each scenario.
Execute with precision
With funding secured and expectations managed, begin executing on those deliverables slated for the first quarter. Meet with your executive counterparts monthly to measure progress against the agreed-upon quarterly deliverables, examine targeted business KPIs, and discuss organizational and market forces that may lead to revisions in the plan. At a minimum, revisit the annual roadmap on a quarterly basis to ensure the deliverables set forth at the beginning are still the most valuable, or if there are alternative investments that have jumped the line due to organizational or market dynamics. Before you know it, it will be time to start planning for the next year. To that end, do not forget to allocate resources to support parallel execution and planning for the subsequent year.