Digital Transformation Framework: Overview, Features, and Benefits (2022)

It seems that, with every passing year, technology advances a little more, providing us with more extraordinary innovations and ways of doing things. The sheer volume of technological breakthroughs is often overwhelming, especially if you’re trying to run a business.

Consumers love the latest and the greatest, and if you’re not transforming your business and keeping up, then your competitors no doubt will, leaving you and your old-fashioned technology in the dust.

But that need not be the case. Companies that embrace digital transformation improve their processes, offering newer, better services to their customers. Digital transformation frameworks provide businesses with a roadmap of transformation strategies that take the guesswork out of the process.

Let’s look at digital transformation frameworks; what they are, why they’re essential, their advantages, and how to apply them. If your company is interested in keeping up with technology and the competition, read on!

What is a Digital Transformation Framework?

Before we define a digital transformation framework, we should first establish what digital transformation is. Digital transformation uses the latest technologies to improve and enhance current processes and provide new, improved products and services. Digital transformation creates value by altering how a business operates and delivers value to its customers.

(Video) Digital Transformation | What is Digital Transformation | Digital Transformation 2021 | Simplilearn

Digital transformation also represents a shift in business culture, requiring businesses to experiment often, challenge the established way of doing things, and accept occasional failure. This change in philosophy includes shedding procedures that have been around forever because “we’ve always done it that way.”

Digital transformation is a critical process for any company or organization regardless of size or industry (e.g., utilities, manufacturing, retail, banking).

Okay, so with that definition in mind, what’s a digital transformation framework? Simply put, it is a system of rules, a long-term strategy used to guide businesses through the tricky landscape of digital transformation. It’s a tool used chiefly by organizational leaders and consultants to analyze a company to help it reposition itself in today’s digital economy.

THese frameworks provide a blueprint, a formal plan that includes checklists, benchmarks, and standardized sequences to help a business become a more digital-friendly entity and continuously grow and evolve.

Why is a Digital Transformation Framework Important?

Digital transformation frameworks are essential for today’s businesses because it provides a strategy to help companies survive disruption by adapting to current technologies. Disruption refers to the rise of external developments that risk changing the way industries work. For instance, the advent of the automobile resulted in serious disruption of the horse and buggy industry, the development of long-haul trucks disrupted the railroad industry, and streaming video has disrupted the movie theater industry.

(Video) Digital Transformation Strategy

In other words, these are the go-to resource for protecting businesses from digital disruption.

What Makes a Good Digital Transformation Framework?

Digital transformation frameworks provide significant benefits for businesses functioning in the 21st century (or trying to catch up to it!).

  • Digitization’s proliferation rate is exceeding the speed at which industries can change. This disparity leaves leadership struggling to find ways of keeping up.
  • Consumers love new technology and seem keenly aware of new developments, things that they expect their favorite businesses to incorporate as soon as possible. If a business doesn’t adapt to the latest and greatest tech features, customers will find a company that will!
  • Many organizations don’t have a standardized digital transformation strategy. Businesses that do have them gain a significant competitive advantage (harkening back to the second point).
  • Digital advances aren’t just for the customers’ sake. New digital solutions stand to benefit businesses by helping them become more cost-effective, efficient, and secure.
  • Digital transformation frameworks facilitate digital adoption, which helps businesses deal with IT-related issues such as cloud computing, massive data flows, and diverse endpoints (e.g., tablets, smartphones, laptops, older desktops).
  • Digital transformation frameworks are reusable. Rather than spending time, effort, and expense formulating a transformation strategy every time a new form of technology happens, leadership only needs to refer to the established framework. The framework is a “one size fits all” tool, suitable for incorporating any innovations that present themselves.

What Are the Features of a Good Digital Transformation Framework?

A good digital transformation framework provides these benefits:

  • Provides efficiency and consistency by enhancing performance
  • Improves business process
  • Increases employees’ productivity
  • Facilitates constant communication across all the business departments
  • Meets the customers’ expectations
  • Creates coherent business strategies

There are many different types of frameworks to choose from, each offering a unique digital transformation approach. Here is a list of eleven features that an excellent framework should include.

  • A set of goals for the transformation strategy. These goals are both long and short-term. There is a lot to do, so a step-by-step approach works best. Each completed step represents an achieved goal.
  • A digital transformation team. Digital transformation is a huge undertaking, so it’s best to have a team dedicated to the work. This team is a cross-functional body that guides the company through the digitization process and adopts new operating models. The transformation team can be drawn from in-house personnel or outsourced.
  • Dissect current operating models. The best way to understand how digitization can help your company is by becoming familiar with the current methods of doing things. Break down the current workflow into steps, then see how software and digitization can improve each one.
  • Incorporate a customer enhancement strategy. Companies undergo a digital transformation for two reasons: to streamline operations into a more cost-effective unit and improve customer expansion and retention. Businesses should increase their mobile and web presence, building stronger customer connections and encouraging feedback.
  • Explore growth opportunities. It’s time to brainstorm ideas for how to advance the business. With this step, anything goes. Are there new market opportunities or ways of reaching customers? Can any internal processes be reimagined?
  • Create a step-by-step guide for changing the business environment. Massive undertakings need structure. Develop a highly detailed plan to show how customer interactions and company workflows can be accomplished using appropriate software or other technical solutions.
  • Create a process improvement analysis. This step involves researching the current tech market and software offerings and seeing how they can enhance specific in-house tasks. Does your company’s workflow need tinkering, possibly removing unnecessary steps and automating tasks?
  • Define the business’s required technology. Browse through the many forms of current technology and see which ones are the best fit. These include:
    • Big Data
    • Cloud services
    • Mobile technology
    • The Internet of Things
    • Machine Learning/Artificial intelligence
    • Robotics
    • Additive manufacturing
    • Web technology
  • Create a timesheet and roadmap with key performance indicators (KPI). This step requires a clear timeline filled with specifics. Use KPIs to keep track of performance. This roadmap also covers what software the company will need and what departments get it, how the applications are interconnected, how the new data structure will look, etc.
  • Transformation plan execution. Time to get to work. You have your roadmap and your marching orders. However, be prepared for possible changes and course corrections.
  • Perpetual analysis going forward. Use data-driven insights to see how the transformation is progressing. This analysis is essential to keep the company growing.

If you want a “long story short” option, your framework should contain three elements:

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  • Define/explain the nature of the challenge
  • Create a guiding policy to address the challenge
  • Put actions into effect to carry out the policy

How Do You Choose the Right Framework for Your Business or Organization?

The answer to this is simple. The ideal digital framework for your company is the one that strikes a balance between something that is adaptable to your specific organization but is broken down into steps that are cohesive, logical, and whose progress can be easily verified.

Examples of Digital Transformation Frameworks

Here are a few sample frameworks, first, from AI Multiple.

Here’s a framework from Gartner.

And lastly, here’s a very comprehensive offering from CapGemini.

The ultimate, one-size-fits-all digital transformation framework doesn’t exist; instead, there is one ideal digital transformation for your unique situation. You need to explore your options and find the best fit.

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Do You Want to Master Digital Transformation?

Digital transformation is a hot issue in today’s business world, and it offers excellent career potential for anyone who wants to join this exciting and challenging process. Simplilearn provides a Post-Graduate Program in Digital Transformation that will give you the skills you need for a new career.

This course, held in collaboration with Purdue University, focuses on the critical aspects of building a digital-ready business. You will learn a host of skills related to digital transformation, from understanding and leveraging the drivers of transformation, building a digital business strategy, leading organizations, and helping them navigate through the perils of digital disruption.

Ziprecruiter reports that a Digital Transformation Specialist in the United States earns an average of USD 111,867 per year. Furthermore, Indeed shows that a Digital Transformation Consultant in India makes an annual average of ₹575,728.

Soon, even the most stubborn holdouts will realize the need for digital transformation. When that day comes, they will turn to experts who have made digital transformation their career and specialty. You could be one of those experts! Visit Simplilearn’s courses today, and embark on an exciting and rewarding new career!

FAQs

What is a digital transformation framework? ›

Simply put, it is a system of rules, a long-term strategy used to guide businesses through the tricky landscape of digital transformation. It's a tool used chiefly by organizational leaders and consultants to analyze a company to help it reposition itself in today's digital economy.

What are the 3 benefits of digital transformation? ›

What are the Key Benefits of Digital Transformation?
  • Increases Customer Satisfaction. ...
  • Drives Data-Based Insights. ...
  • Enables Software Monetization. ...
  • Enables High-Quality User Experience. ...
  • Encourages Collaboration & Improves Communication. ...
  • Increases Agility. ...
  • Limits Human Error. ...
  • Encourages an Environment of Employee Excellence.

What is the purpose of digital transformation? ›

Digital transformation puts technology at the core of business strategy. This approach can reduce operating expenses and inefficiency. It could even change the course of your business. With a unified model across business and technology, it's easier to achieve future ambitions.

What are the three 3 main components of digital transformation? ›

The three major building blocks with which companies are digitally transforming customer experience are customer understanding, top-line growth and customer touch points.
  • Customer Understanding. ...
  • Top-Line Growth. ...
  • Customer Touch Points. ...
  • Process Digitization. ...
  • Worker Enablement. ...
  • Performance Management.

How do I create a digital framework? ›

How to create a digital transformation framework
  1. Define the course of action. Every plan starts with an idea. ...
  2. Build the strategy. The first thing to do is select a transformation management team. ...
  3. Things to avoid. Don't confine your changes to technology only. ...
  4. 5 Digital Adoption Tips For Small Businesses. May 25, 2022.

What is digital transformation examples? ›

Some digital transformation examples include implementing tangible, customer-centric digital tools like mobile applications or websites that improve the customer journey. And others involve machine learning algorithms that transform a traditional business into a digital business.

What are the 3 approaches of digital transformation? ›

Types of Digital Transformation
  • Process Transformation. Companies can revise internal processes to lower costs, improve quality and reduce cycle times. ...
  • Business Model Transformation. ...
  • Domain Transformation. ...
  • Cultural/Organizational Transformation.
20 Jan 2022

What are the most important elements of digital transformation? ›

Leaders have to be creative and agile with their leadership style while finding ways that work best for an evolving workplace. The GetSmarter survey finds that the two most crucial ingredients for digital transformation success are strong leadership and effective change management.

What is the impact of digital transformation? ›

Digital transformation has a profound effect not only on individual industries but also on value perception as a whole. An economy is driven by data no longer emphasizes specific features of a tangible product. Efficiency, convenience, and ease of use are the new currency.

What is the main benefit of considering digital transformation as an ongoing process? ›

The key benefits of digital transformation include improved customer experience, increased productivity, improved business models, improved agility and innovation, better collaboration, and increased transparency.

What is the value of digital transformation? ›

For the commercial engagement of customers, the digital transformation brings greater transparency, less information asymmetry, and new customer benefits such as new products and services, greater convenience, more choice, new experiences, and lower prices.

How important is digital technology nowadays? ›

Digital technologies have advanced more rapidly than any innovation in our history – reaching around 50 per cent of the developing world's population in only two decades and transforming societies. By enhancing connectivity, financial inclusion, access to trade and public services, technology can be a great equaliser.

Why is digital transformation essential for business growth? ›

Digital transformation provides a valuable opportunity for core business functions, such as finance and HR, to move away from manual processes and work to automate key areas like payroll. The time saved by installing proper automation can enable leaders to focus on wider business opportunities.

How is digital transformation implemented? ›

Recognize that your business model needs to transform. Introduce technology to begin delivering your products or services digitally. Further develop your digital offering by introducing additional products or services. Modify your business model by emphasizing your digital portfolio.

How can digital transformation be improved? ›

Digital transformation means using modern technologies to improve business operations, systems, processes and customer experience.
...
Top 5 Strategies For Accelerating Digital Transformation
  1. Finding the right technology. ...
  2. Helping workers through the transformation. ...
  3. Adjusting the culture. ...
  4. Expanding the customer base.
21 Apr 2022

What are the pillars of digital transformation? ›

The framework outlines the four pillars of digital transformation we see today: IT uplift, digitizing operations, digital marketing, and digital businesses. All four are part of most companies digital transformation journey.

What are the key trends in digital transformation in 2022? ›

The new trends in digital transformation include hybrid work, intelligent search, AIOps and machine learning, customer data platforms (CDPs), and integrated Agile, DevOps, and ITSM platforms.

How do you measure transformation? ›

10 KPIs to Measure Digital Transformation Success
  1. Return on Digital Investments. ...
  2. Employee Productivity. ...
  3. Adoption & Performance Metrics. ...
  4. Customer Experience Metrics. ...
  5. Percentage of AI-Enabled Business. ...
  6. Reliability & Availability. ...
  7. Cost-Benefit Analysis. ...
  8. Revenue from Digital Technology.
5 May 2022

What is a digital transformation roadmap? ›

A Digital Transformation Roadmap is a set of steps that organizations can follow to achieve short-term and long-term business goals with the use of digital technology. The roadmap begins by understanding business needs and finding gaps in the existing system to build a strategy that avoids these gaps.

What is the best example of digital transformation? ›

A great example of digital transformation is UPS. The American shipping and supply chain management company used digital tools to synchronize its operations and logistics strategy to better meet customer demand.

What is another word for digital transformation? ›

Digital transformation is frequently thought of as synonymous with 'digitization' and 'digitalization'.

What is a digital strategy? ›

What is digital strategy? In essence, the term refers to a plan that employs digital initiatives to achieve company goals. Seemingly simple, a digital business strategy is anything but, and requires expertise and experience to implement successfully.

What are the key components of digital strategy? ›

Key components of a digital strategy
  • Online presence. Your online presence refers to how and where the community and other businesses see your business online. ...
  • Digital marketing and advertising. ...
  • Selling online. ...
  • Digital communications. ...
  • Cyber security. ...
  • Supplier interaction. ...
  • Digital solutions for efficiency. ...
  • Cloud computing.
10 May 2022

What are the 4 types of digital business models? ›

Digital business models have 4 characteristics
  • The value is created using digital technologies. ...
  • Digital business models are new to the market. ...
  • Digital customer acquisition and distribution. ...
  • USP is created digitally. ...
  • Free-Model (Ad-supported Model) ...
  • Freemium Model. ...
  • On-Demand Model. ...
  • E-Commerce Model.
20 Apr 2021

What is the difference between digitalization and digital transformation? ›

Digitalization deals with information processing, or how digitized data can be used to improve workflows through automating existing processes. Finally, digital transformation is all about leveraging knowledge and integrating it in all business areas to enhance engagement and create new value.

Who leads digital transformation? ›

Intersections. One common thread I've seen with successful digital transformation initiatives is that the CIO becomes a champion for the needs of the business. The CIO regularly meets with each line of business group on a regular basis to determine how to help them make their business processes more effective.

How does digital transformation affect the society? ›

Digital transformation is generating a fierce debate among policy-makers, economists and industry leaders about its societal impact. As digitalization disrupts society ever more profoundly, concern is growing about how it is affecting issues such as jobs, wages, inequality, health, resource efficiency and security.

How does digital transformation affect industry? ›

Role of Digital Transformation in Manufacturing

Changing customer expectations and cut-throat competition are the main drivers of digital transformation in manufacturing. Manufacturers can improve speed, and efficiency, decrease costs and offer elevated customer experiences by leveraging digital technology.

What are the benefits of quality transformation? ›

Quality transformation gives promising results in productivity improvement, defect reduction, cost optimisation and better customer experience.

Does digital culture bring benefits to us? ›

Encourages innovation – Digital culture enables organizations to foster a workplace that motivates employees to try new things whilst enhancing the learning of your workforce. Attracts new age talent and retains current workforce – Millennials and GenZs no longer want to work in a 9-5 environment.

Why is digitalization the best method for the transmission of information? ›

Digital transmission has very significant advantages compared with analog transmission because the possibility of signal corruption during transmission is greatly reduced. Many different protocols exist for digital signal transmission.

What are the four types of digital transformation? ›

There are four different types of digital transformation, including process transformation, business model transformation, domain transformation, and cultural/organizational transformation.

How do you identify digital transformation opportunities? ›

Here are five steps to help IT professionals spot digital opportunities, generate realistic ideas and transform their company.
  1. Find a partner on the business side. IT can't do it alone. ...
  2. Walk the floor. ...
  3. Develop a data strategy. ...
  4. Invest in use cases, not just technology. ...
  5. Go beyond traditional ROI calculations.
30 Nov 2020

What are the three 3 main components of digital transformation? ›

There are three essential components of a digital transformation: the overhaul of processes. the overhaul of operations, and. the overhaul of relationships with customers.

What are the pillars of digital transformation? ›

The framework outlines the four pillars of digital transformation we see today: IT uplift, digitizing operations, digital marketing, and digital businesses. All four are part of most companies digital transformation journey.

What's the most important part of a digital transformation? ›

As we have seen in traditional change efforts, clear communication is critical during a digital transformation. More specifically, one key to success is communicating a change story, which helps employees understand where the organization is headed, why it is changing, and why the changes are important.

What are the key trends in digital transformation in 2022? ›

The new trends in digital transformation include hybrid work, intelligent search, AIOps and machine learning, customer data platforms (CDPs), and integrated Agile, DevOps, and ITSM platforms.

What are the key components of digital strategy? ›

Key components of a digital strategy
  • Online presence. Your online presence refers to how and where the community and other businesses see your business online. ...
  • Digital marketing and advertising. ...
  • Selling online. ...
  • Digital communications. ...
  • Cyber security. ...
  • Supplier interaction. ...
  • Digital solutions for efficiency. ...
  • Cloud computing.
10 May 2022

What are the 3 approaches of digital transformation? ›

Types of Digital Transformation
  • Process Transformation. Companies can revise internal processes to lower costs, improve quality and reduce cycle times. ...
  • Business Model Transformation. ...
  • Domain Transformation. ...
  • Cultural/Organizational Transformation.
20 Jan 2022

What makes a transformation successful? ›

Transformation is not about short-term cures, but long-term healing. Without ignoring short-term challenges, a successful transformation anticipates how to clear bigger-picture barriers and hurdles, how to achieve solutions that build sustainable advantage, while building momentum from the outset.

How can digital transformation be improved? ›

Digital transformation ROI: 7 ways to improve
  1. 7 tips for increasing digital transformation ROI. ...
  2. Find a focus. ...
  3. Ask (and answer) the right questions. ...
  4. Assemble a dream team. ...
  5. Don't over-rely on DIY. ...
  6. Consider agile bursts. ...
  7. Call out the bright spots. ...
  8. Pay attention to what matters most.
20 Jul 2020

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