How does ROUNDMAP™ relate to Digitalization?
“The sustainable success of digital transformation comes from a carefully planned organizational change management process that meets two key objectives, one being the company culture, and the other one is empowering its employees” ―Enamul Haque
Gartner: “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.”
Simplicable: “Digitalization is the process of transforming an organization using new possibilities offered by digital technologies, exerted onto the business model, business processes, data, cost structure, marketing, knowledge, and communication.”
Many models are supporting this idea of business transformation through digitalization, but the following by Laserfiche is pretty self-explanatory:
Another good representation is the maturity model of Digital Transformation by Altimeter, now a subsidiary of Prophet company; found on Brian Solis’s website, a former partner of Altimeter:
First, in its traditional meaning of Information and Communication Technology, we must acknowledge that ICT was mostly about automating business processes within the functional silos.
- Marketing used Content Management Systems (CMS) to communicate the narrative.
- Sales used Customer Relation Management (CRM) systems to further the activation process.
- Operations used Enterprise Resource Planning (ERP) systems to plan production.
In short, traditional ICT led to the development of systems along vertical (functional) lines. Data was stored in separate databases, creating a vast amount of disconnected data silos. Similar to how the division of labor and specialization created disconnected functional silos (verticals).
Then the world wide web emerged, followed by online commerce, social networks, and mobile devices, creating new digital channels, giving rise to a 24/7 global economy.
The late Clayton Christensen argued: “As companies tend to innovate faster than their customers’ needs evolve, most organizations eventually end up producing products or services that are actually too sophisticated, too expensive, and too complicated for many customers in their market. However, by doing so, companies unwittingly open the door to “disruptive innovations” at the bottom of the market. A disruptive innovation allows a whole new population of consumers at the bottom of a market with access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.”
This process of disruptive innovation not only gave rise to a new generation of digital-first startups but also forced incumbents to radically streamline their systems and business processes to lower their cost structure, rethink their business model, redefine the value streams, refine the perception of customer value, and redesign customer experiences. Digital Transformation initiatives boomed.
However, according to a recent McKinsey study, 70% of Digital Transformation (DT) initiatives failed in 2017. Indicating a humongous amount of money and time wasted (900 billion out of 1.3 trillion USD), let alone the opportunity cost.
The lessons learned are that digital transformation isn’t just about applying digital technology. Instead, it is about developing a (digital) vision, propagated by capable digital leadership, driving a digital-first, people-centric company culture, from which to develop identifiable, unsurpassable, and highly personalized customer experiences, to gain a strategic advantage enabled by digital technology, integrated systems, customer feedback, and data analyses.
So how does this relate to the cross-functional aspects of ROUNDMAP?
Harvard’s Heidi Gardner has found that firms with more cross-boundary collaboration achieve greater customer loyalty and higher margins: “As innovation hinges more and more on interdisciplinary cooperation, digitalization transforms business at a breakneck pace, and globalization increasingly requires people to work across national borders, the demand for executives who can lead projects at interfaces keeps rising.”
“When asked: Which relationships are most important for creating value for customers? Professionals prioritize horizontal relationships. Today, most innovation and business-development opportunities lie in the interfaces between functions, offices, or organizations. In short, the integrated solutions that most customers want, but companies wrestle with developing, require horizontal collaboration (across the functional silos).”
Can you see where this goes?
Furthermore, a study by CapGemini and MIT Digital, documented in the best-seller ‘Leading Digital‘ by George Westerman, Didier Bonnet, and Andrew McAfee, found that so-called Digital Masters, firms that outperform their peers by 26% on profit, don’t just have the right digital capabilities to succeed in digital, but the right leadership capabilities as well.
There you have it!
ROUNDMAP™ is to encourage leaders to strengthen horizontal collaboration from which to redesign, redevelop, and redirect the creation and delivery of customer value by seeking collaboration, even beyond the corporate borders (value streams; coopetition), allowing the firm to achieve sustained growth while capturing an EQuitable share of that value as profit.
Without horizontal collaboration, digitalization will only reinforce the silos, leading to separate digital initiatives, thereby restraining the company from creating meaningful customer value and customer experiences that are personalized, connected, consistent, identifiable, desirable, smooth, and remarkable.
Horizontal = Integrated
Every part of the integrated business framework has its distinct use in this respect:
- The Customer Roundtable Blueprint aims for leaders to design and develop customer touchpoints across the entire frontline to create an integrated experience, not a series of separated instances.
- The Business (Model) Roadmap aims for leaders to consider every aspect of the value chain/stream as part of an integrated effort, not a series of separated processes.
- The Venture Wheel aims for leaders to perceive the venture’s design, development, and direction as a series of integrated lifecycles, not separated departments.
- The four Carousels aims for leaders to regard the dynamics of business development, product development, customer development, and sustained growth as a continuous spiral, not a series of layers in a hierarchy.
- The Business Model Matrix™ explains the four key directions that a business model can develop into.
Following the creation of ROUNDMAP™, we believe ICT should stand for Insights (Data), Collaboration (CoOpetition), and Transcendence (Moving Beyond Technology and Profit).
Why move beyond profit? For a business to achieve sustained growth, digitalization isn’t a miracle cure. The business needs to consider the interests of all of its stakeholders. And it needs to progress: please read what we had to say on this topic.