FOUNDATION OF DIGITAL BUSINESS

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Prof. Surojit Mookherjee
Vinod Gupta School of Management
Indian Institute of Technology Kharagpur

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Module 04: Building Digital Mastery and Transformation Roadmap

Lecture 01 : Overview of Digital Transformation

✓ Digital Transformation – Defined.

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✓ Factors for the Failure or Success of Digital Transformation

✓ Roadmap for Digital Transformation

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Digital Transformation - Overview
Failure to transform is fatal. Every year, digital technologies have a deeper impact on
business in every industry. The COVID-19 pandemic accelerated many of these shifts,
compressing several years of change into weeks in areas like telemedicine, streaming
media, online learning, e-commerce, and remote work.

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These shifts are not slowing down. They are continuing and accelerating. As shown by a
global study of senior executives, today’s leaders know that digital transformation is no
longer a question of “if ” but of “how fast?”

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DX (Digital Transformation) is on the agenda for every board in every industry. We cannot
afford to keep getting it wrong.

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- David L Rogers , Columbia University
 Digital Transformation - Defined

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digital strategy you develop. But any DX effort should be framed around your business, your
employees, and your customers—not around a list of
technologies to adopt.

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, DX is about changing an existing organization, not creating a start-up. DX is fundamentally
about changing an organization that is already in motion.

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, DX is a continuous process. The digital revolution is an ongoing acceleration of
change being driven by successive waves of new technologies. It will continue
to reinvent customer behaviours, business models, and economic systems far
into the future.
 How DX Goes Complex….
Let’s start by recognizing that DX is hard. In many ways, it involves a kind of balancing act. DX cannot
simply be an effort to “digitize” the legacy business—that is, to upgrade existing technology, cut costs,
and improve the customer experience of your current offerings.

To stay relevant, survive, and grow in the digital economy, every business must be ready to digitize
its core and grow beyond it, to maximize its current cash flow and invest for the future, to pursue both

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incremental innovations and more radical ones.

But you cannot rebuild your current business and build your next business with the same people,

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processes, and organizational structures.

The DX challenge is particularly hard for complex organizations. Today, organizational complexity is

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driven by three primary factors: the number of employees (measured in head count), lines of
business (with different offerings to different customers), and geographies of operation
(each with different regulations imposed).
As any of these factors increases, the complexity of managing the organization
compounds dramatically.
 Top Barriers to DX Success….
1. No shared vision:
Leaders rely on generic “digital maturity” metrics to guide their efforts because they have no
clear business metrics to judge their DX progress.

2. No growth priorities:

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• This lack may arise because the company is focused only on “digitizing” its past business and
not looking beyond it.
• Rather than focusing on business problems, DX is defined by technologies (AI, cloud

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computing, blockchain, etc.) and is easily hijacked by the latest shiny new thing. Without a
growth focus, DX focuses only on cutting costs and optimizing the current business.
• Digital efforts are run by technology specialists as the rest of the organization continues its

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work unchanged. As a result, DX grows disconnected from business needs and loses support
over time.
 Top Barriers to DX Success
3. No Focus on Experimentation:
Meticulous Planning and Execution approach stands in direct opposition to the model of rapid
experimentation that guides digital-native businesses.
Agile software teams and Design Thinking iterative methods are often mistakenly put into a planning-
heavy management model.

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4. No Flexibility in Governance:
Traditional silos, reporting lines, and budgeting dominate, stifling efforts at growth.
Functional silos impede team collaboration and slow innovation. Resources are trapped in annual

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budgeting cycles, hampering efforts to scale innovation.

5. No Change in Capabilities:
Legacy talent remains undeveloped, with little investment in digital skills or in the workforce and

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leadership who were hired and trained for the needs of the past. Legacy culture remains unchanged,
with mindsets and behaviors that are rooted in top-down, command-and-control leadership.
 How DX Goes Right….
The Walt Disney Co.—The legacy media business has stood up to tech titans (Netflix, Apple, Amazon) by
expanding its library of content and launching its fast-growing streaming services Disney+, ESPN+, and Hulu.
Within three years of launching Disney+, the company’s total number of streaming subscriptions had
surpassed those of Netflix.10

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Mastercard Inc.—The credit card processing company is now one of the world’s biggest Fintechs.
Leveraging its tremendous data and global business network, Mastercard has built a growing business in

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digital commerce. The
company runs one of the top accelerators for fintech start-ups, and its own innovation labs are building
and scaling new business models around cybersecurity, digital identity, and analytics—while selling
digital services to business
customers around the world.
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 The DX Roadmap….

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The DX Roadmap….
1. Vision: define a shared vision: goal is to define a shared vision of the digital future for your organization.
This starts with describing the future landscape of your industry, shaped by digital forces.

2. Priorities: pick the problems that matter most: goal is to define the strategic priorities that will guide

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your digital growth agenda. This starts with looking at strategy through the twin lenses of problems to solve
and opportunities to pursue. This step uses a variety of tools to identify the most valuable problems and
opportunities for your business.

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3. Experimentation: validate new ventures : goal is to rapidly test new digital ventures in order to validate
which ones will create value for your customers and the firm. The step starts with thinking like a scientist:
defining your hypotheses and designing experiments to test your business assumptions. It uses iterative
metrics to gather data directly from customers. It uses iterative prototypes and minimum viable products

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(MVPs), each designed to answer a specific question.
The DX Roadmap
4. Governance: manage growth at scale: goal is to design governance models to scale digital
growth across the enterprise. Defining rules and decision rights for small, multifunctional teams;
creating structures
(like labs and hackathons) that provide flexible pools of resources.

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5. Capabilities: grow tech, talent, and culture : goal is to invest in the Technology, Talent, and
Culture that will be critical to the digital future. Growing digital skills by managing the talent

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lifecycle from hiring to training, exiting, and beyond. It means defining the culture—shared
mindsets and norms of behaviour—that will support the digital strategy.

This is one of the most crucial step of the Roadmap as Talent and Technology are the two most
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essential things which will help achieve the Vision. Of the two, the significance of Talent is
Often ignored and also there is a scarcity of the right type. Talent will also influence the
Digital Culture that is being targeted.
Some Symptoms of Success in the Five Steps of the DX
Roadmap ….
Step 1: Vision
• Employees at every level understand the digital agenda and push it forward.
• Support for digital investments is strong from investors, CFOs, and P&L heads.

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• Only digital initiatives with a competitive advantage receive investment

Step 2: Priorities

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• Digital is focused on future growth as well as improving the current business.
• Every department is pursuing its own digital ventures, with a backlog of ideas to
try next.

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• Transformation is linked to the needs of the business and gains support over time.

Table 1.1.
Some Symptoms of Success in the Five Steps of the DX
Roadmap ….
Step 3: Experimentation
• Innovation is focused on testing many ideas to learn which work best.
• Decisions are made based on experimentation and learning from the customer.

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Step 4: Governance
• New ventures move fast, led by highly independent, multifunctional teams.

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• Resource allocation happens quickly through iterative funding.

Step 5: Capabilities
• Modular IT systems integrate across the organization and with outside partners.
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• Data provides a single source of truth to managers across the company.
• IT governance provides oversight while keeping innovation in the hands of the
business.
CONCLUSION

Continued in next class…..

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REFERENCES
Text Book
1. The Digital Transformation Roadmap - David L. Rogers , Columbia Business School
Reference books
1. Digital Business Models - Bernd W. Wirtz , Springer

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2. The Digital Transformation Playbook, David [Link], Columbia Business School.
3. Leading Digital, George Westermann, Didier Bonnet and Andrew McAfee , Harvard Business Review

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Press

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