Getting to the bottom of the digital transformation process

New guide breaks down how to become more agile, competitive and innovative in a digital economy.

Digital transformation is vital when it comes to how companies work, market and innovate, but up until now little has been offered by way of a maturity model showing how companies actually go through the process.

Altimeter Group principal analyst, author and influencer, Brian Solis, recently released a new maturity model for digital transformation in his new report, The Race Against Digital Darwinism: Six Stages of Digital Transformation.

“There was a time when technology was a luxury only businesses could afford,” Solis told CMO. “But as technology advanced, especially with Moore’s law, consumers not only had access to capable devices and networks, but in many cases they outpaced business understanding and adoption of the latest trends.

“Technology and its impact on business and society is only going to progress and accelerate. The more advanced businesses in digital transformation, however, recognise this reality and build teams and infrastructures to not only intelligently react but also lead consumers to more relevant and meaningful experiences.”

According to Solis, the new model was informed through individual interviews with some of the world’s leading brands including Dell, Discover, GM, Harvard, Lego, Metropolitan Museum of Art, Nestlé, Novartis, Sephora, Starbucks and Target.

“One of the reasons for spending over a year-and-a-half building this maturity model is to help businesses realise that no matter how far they've come or how far they have to go, there are steps of which to benchmark and roadmap to help them compete,” he said. “Digital transformation is continuous. It’s not a state. There’s always work to do. What I’ve seen consistently in more nascent companies is a sense of awe, not knowing exactly where to start and where to end. In more mature companies, they haven't done enough.”

The report defines Altimeter’s definition of digital transformation as the realignment of, or new investment in, technology, business models and processes to drive new value for customers and employees and more effectively compete in an ever-changing digital economy. It identifies a series of patterns, processes and models that form a consistent foundation for change. They’re organised into six progressive stages:

Although the maturity model is presented in a linear format, Solis noted research shows that companies may span multiple stages at once depending on their goals, resources, and overlapping initiatives.

The maturity model also can be a foundation from which to gain insights into new behaviours and trends, create alignment, prioritise initiatives, set a new vision for leadership and develop new models, processes, and a purpose for technology and the future of work. By following this model, Solis expected all aspects of business evolve, including management perspectives, roles and responsibilities, operations, work, and, ultimately, culture.

Interestingly, the report also found CMOs are now outspending CIOs in technology investments in an effort to drive the digital transformation process. On top of this, Solis found customer experience is a primary catalyst for driving change, with CMOs, CIOs and sometimes CDOs forming new models to jointly lead common efforts.

In order for CMOs to better embrace digital transformation to enhance the customer journey, Solis recommended taking on-board the report’s ‘OPPOSITE’ framework:

“Digital transformation isn't easy but it is among the most effective ways to future proof an organisation while building an infrastructure to be more agile and innovative,” Solis concluded. “But make no mistake, this is the long road, not the short cut. To disrupt markets, you have to start by disrupting yourself.”

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