The need to drive a digital transformation is on the agenda for all companies. And from now on, it is no longer so-called ‘digital natives’ that will be setting the pace. We’re seeing more and more traditional companies reinventing themselves and challenging tech-only companies for digital dominance. These reinventions are enabled by technology trends that are disrupting companies in every industry sector – from mobility, social, and data analytics to connectivity, the internet of things and digital manufacturing. But while all companies have incorporated at least some of these technologies into their customer relationships and operations, that doesn’t mean they’ve become digital businesses. Digital transformation takes time and every company undertakes this journey at its own pace.

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FOCUS - THE DIGITAL IMPERATIVE
The need to drive a digital transformation is on the agenda
for all companies. And from now on, it is no longer the so-
called ‘digital natives’ that will be setting the pace. We are seeing
more and more traditional companies reinventing themselves
and challenging tech-only companies for digital dominance.
These reinventions are enabled by technology trends
that are disrupting companies in every industry sector – from
mobility, social and data analytics to connectivity, the internet
of things and digital manufacturing. But while all companies
have incorporated at least some of these technologies into
their customer relationships and operations, that doesn’t mean
they have become digital businesses. Digital transformation
takes time and every company undertakes this journey at its
own pace.
The journey to digital maturity
In order for organisations to understand their progress, they
need to develop a robust digital maturity framework that sets
out the four key stages through which all companies progress
during digital transformation.
1. Discovery and adoption
In this earliest phase, organisations have not yet begun to
structure their digital transformation programme. That does not
mean, however, that there’s any shortage of activity. Individual
areas of the business have often launched multiple digital
projects – perhaps by launching a new customer facing website
or introducing BYOD mobile policies – but these initiatives are
generally uncoordinated. For obvious reasons, the lack of any
joined-up digital approach is often most prevalent in companies
that have decentralised governance.
2. ‘Structuration’
This phase begins when companies recognise the need for a
structured and coordinated approach to digital transformation.
At this point, they have to define their ambition, set objectives
for a programme that will enable them to achieve it, establish
governance and start to acquire the capabilities they will need
to drive it forward. In many ways, this structuration phase, which
usually lasts around a year, is a honeymoon period. Everything
looks possible. But then real challenges start to appear.
Digital transformation:
managing
the journey
Pierre Péladeau, Partner at PwC Strategy& Digital, gives
an overview of the stages of digital transformation that
every company has to – or is – going through
3. Industrialisation
With their digital action plans clearly defined, companies launch
into implementation. This is when they realise that they have not
always put the right enablers in place to allow them to achieve
their goals. In this phase companies need to industrialise their
digital capabilities throughout the organisation.
Three key industrial enablers need to be put into place:
a. A governance and supporting organisation to drive the
digital transformation across the company
b. An articulated talent and cultural change programme:
to acquire and retain the right digital talents, to train all
employees to the new digital tools and methodologies and
a cultural change approach to embed the new ways of
working
c.AtransformedITarchitectureandcapabilitiestoenableagile
digital developments (service design, mobile first, etc.) and a
data management approach that includes infrastructure,
data governance and analytics capabilities.
4. Digital is the norm
For digital natives, this phase is already business as usual.
For any other company, it is the destination for their digital
transformation. With digital in the organisation’s DNA, there is
no need for a Chief Digital Officer. The entire business – across
the workforce, its partnerships and its customer relationships
– uses digital to deliver products and services in new ways. We
will soon start to see traditional companies reaching this point.
None have yet, however.
Key challenges en route
Organisations face a number of common challenges on the
road to becoming more digitally mature – and particularly so
in the ‘Industrialisation’ stage when they’re attempting to drive
digital transformation across the business.
Having recently analysed over 60 companies to track best
practices in digital transformation, we have identified three
building blocks that are fundamental to a successful outcome:
• IT architecture and data management – under this banner
lies the infrastructure to separate the core IT from the fast IT
through the use of standardised APIs (Application Programing
Interface), outlined below, in order to allow for agile digital
development while protecting the core IT. This brick also
requires the build-up of data analytics capabilities and data
infrastructure. Organisations must develop clear policies for
data governance, spanning open data and data that is not
shared outside the business. And clarity over who assumes
responsibility for data usage is essential (whether this is the
CIO, CMO, Chief Digital Officer or Chief Data Officer).
• Organisation and governance – achieving a higher level
of maturity requires some level of centralised governance.
Because digital is inherently transversal, responsibilities and
interfaces need to be clearly defined, particularly in large
decentralised companies with multiple Business Units having
separate P&Ls. Without a more shared/centralised approach,
such companies lack the scalability that is inherent in digital. It
is in direct contrast to the way in which a digital native would
rapidly and simultaneously launch a new OTT service.
• Culture and change management – critically important,
but often overlooked, this can make or break any digital
transformation. Companies need to use a wide range of
levers and tools to change their cultures (see graphic below).
This includes adopting a strategic approach to hiring scarce
digital talent, centralising these critical skills, and leveraging
them enterprise-wide.
What next?
By following a structured approach to digital transformation,
organisations will accelerate their progress towards
breakthrough benefits. Massive improvements in flexibility,
agility and scalability are all within reach.
For most traditional companies, these capabilities are still
some way off. For digital natives, they are already second nature.
That’s why digital transformations must start now. I