One of the key reasons holding the company back from broader progress in digital transformation (DT) is the lack of a clear roadmap. What we tried to emphasize is that this comes as a direct consequence of not understanding the process nature of DT. Here we are going to add some more details to Telco’s user case introduced in our second blog post. We believe that Jim and his DT team, unlike the Alice from the Wonderland, want to be pretty sure where they want to get to, so they picked TMForum’s Digital Maturity Model framework as an effective and proven tool within the telecommunication industry to provide guidelines for a clear path. The DMM is a tool to help organizations understand enterprise areas, called dimensions in the model, that enable digital maturity and make an assessment against the key aspects of these dimensions:
- The Culture dimension evaluates the ability of an organization to create an environment where everyone is willing and able to create business value.
- The Strategy dimension evaluates how well the business plans to increase its competitive advantage through a comprehensive digital strategy and designs a set of initiatives that support the overall business strategy.
- The Operations dimension evaluates the organization’s performance of day-to-day activities that support the execution of the digital strategy.
- The Data dimension evaluates the organization’s ability both strategically and operationally to ethically and effectively use data and information assets to maximize business value.
- The Technology dimension evaluates the technology capabilities of the organization to establish, maintain, and continually transform an environment that supports the delivery of business objectives.
- The Customer dimension evaluates the provision of an engaging experience where customers view the organization as their digital partner using their preferred channels of interaction.
In order to assess realistically Telco’s position related to the digital enterprise, the DT team has conducted an initial DMM assessment. Practically they asked Telco’s top and middle management to fill in the prepared DMM questionnaire, which led not only to have the insight of current position on their transformation journey but also raised awareness about digital enterprise features across all six dimensions. This was a huge help to executives in crafting the vision for Telco as a truly digital enterprise. There is an excerpt from Jim’s filled in DMM questionnaire bellow with Operations, Customer and Technology sub-dimensions, and criteria with current maturity level assessment.
DT team has collected questionnaire results and presented them on a digital maturity radar diagram (Figure 1). The insight the DT team got from the results of the initial DMM assessment helped in the creation of goals and plans, both short and long term. Practically, strategic goals and corresponding planned transformational projects portfolio and initiatives are based on the need to improve the company’s digital maturity level related to DMM dimensions, and associated sub-dimensions and criteria.
We have to have in mind that the results we read from the DMM radar diagram could help in determining WHAT needs to be done to achieve the next maturity level. Six sub-dimensions represent Company subsystems as a bigger and more complex system needed to change in a balanced way. Different sub-dimensions should move in sync with each other within the larger strategic framework of change.
Defining the way HOW to implement digital transformation takes a bit more knowledge and experience and is related to the way we define and prioritize a transformational project portfolio. Also, I guess we all have heard the famous Peter Drucker quote: “Culture eats strategy for breakfast.” If employees are not passionate about the company’s vision and if the company structure does not support the wanted behavior, there are all chances that resistance to change will be so high that any initiated change is doomed to fail, and strategy stands no chance. This is the main reason to have DT project implementation in mind while planning the project portfolio streamlined with the digital strategic goals. Or say it in other words, the DT team should identify main project implementation risks and related risk mitigation activities then define and prioritize projects on the roadmap. For example, if we start a complex DT project with traditional “waterfall” instead of an agile approach, we are running a risk of implementing a solution that could be a potential mismatch with the needs of end-users and therefore face rejection at the outset of the project. Or maybe the project implementation team has chosen an agile approach, but company procedures and business rules are set up to support and sustain “command and control” instead of a “trust and collaborate” culture? In that case, we would have an agile project team operating in a non-agile environment, which is a very tough situation. What if Telco’s PMO (Project Management Office) has established a traditional metric to measure project success instead of one adapted to the nature of digital transformation? Being fully aware of the risks above, the DT team has decided to start a transformation journey with a management training program and with adapting Telco’s procedures and business rules targeting the Culture, Operations, and Strategy dimensions as presented on the roadmap bellow (Figure 2).
As Jim presented the results of the initial DMM assessment to the Telco’s board of directors they agreed to accept the DT team proposal to set customer experience and satisfaction as strategic goals to be improved by the end of the current year. In order to achieve the strategic goal, the DT team has considered DMM sub-dimension criteria and defined projects and corresponding value hypotheses with key performance indicators as shown in the table below.
For many companies, the “value hypothesis” and the appropriate metric would be an entirely new concept and type of reality check if the management is ready to support comprehensive company transformation. To manage key stakeholder’s expectations, this needs to be validated at the beginning of the DT endeavor. DT team has done it by prioritizing management training and system adaptation before any other transformational project. Luckily this also has been validated “on the field” after eleven months since both project hypotheses proved to be false. However, the board of directors still continued to support DT team activities. It turned out, after eleven months of implementation, that number of customers using online self-service was way below the target percentage. DT team conducted a new DMM assessment (Figure 2), and results (Figure 1) have shown that there is still a need to improve the Customer dimension. DT team analyzed results and realized that many users still preferred personal contact and physical customer centers. As a result of this insight, a new hypothesis has been created to achieve the desired strategic goal. DT project portfolio has been updated with new projects presented in Figure 2 and the following table.
Of course, we presented a hypothetical company case of transformation in a simplified way to understand the essence of the DT process. There are many more parameters to involve during the management of the DT project portfolio, but presented are the key ones related to complex DT project implementation we will consider in our next blog. See you there!