Since 2000, cyber-physical systems have created a need for organisations to digitalise or holistically digital transform (see below definition); and, since 2020, ongoing advancements in technology (predominantly AI) and societal transformation have triggered the notion of an emerging fifth industrial revolution that will foster the symbiosis between humans and machines/robots.
It is therefore critical for organisations, no matter how small or big, to update their business strategies so they can compete in the fourth/fifth industrial revolution to remain competitive in the digital age.
Over the last 300 years, humans have used technology to increase productivity and develop new products and services (Source: Marc K Peter & www.the-digital-transformation-canvas.com).
Digitalisation refers to a technical process in which analogue data or processes are converted into digital ones or automated. Many organisations are trying to communicate via communication platforms and automate work and production processes. However, access to a cloud and a user account for Microsoft Teams do not bring transformation. It is merely a digital representation of analogue business processes. Ideally, production costs are reduced, and quality and speed are increased. In digitalisation, the short form ‘digitisation’ refers to the process of converting analogue data into digital data; an example of which is the digital, paperless office.
Digital transformation, on the other hand, describes a further development. It affects the economy, the various functions within organisations, their business models and, indeed, society as a whole. If an organisation wants – or needs – to digitally transform, management should not primarily ask how it can digitise or digitalise existing processes, but rather what the organisation must do strategically to remain competitive in the digital age. Only then does the question of digitalisation arise and whether a process in its current form still makes sense.
(Source: Marc K Peter & www.the-digital-transformation-canvas.com).
Organisations can evaluate themselves or initiate a discussion about the need for change, and whether digitalisation or holistic digital transformation is required.
- Digital enablement: in the first phase, processes are optimised and digitised. Examples of this are the paperless office or the use of online platforms for meetings.
- Digital optimisation: in the second phase, technologies are assessed to determine their potential and actively used. A strategy based on digital technologies emerges. Examples are the automation of important business processes or internationalisation of an organisation via global e-commerce platforms.
- Digital transformation: in the third phase, a holistic renewal of the organisation takes place by planning and implementing promising technologies and business models in existing and new markets. An example of this is an existing SME in a traditional market that wants to enter a new, developing market with new strategic partnerships in an ecosystem.
Digital maturity and choice of strategic investments: from digital enablement (digitisation) and optimisation (digitalisation) to digital transformation (Source: Marc K Peter & www.the-digital-transformation-canvas.com).
The new book – The Digital Transformation Canvas – describes a practical digital strategy development approach based on the seven action fields of digital transformation in five steps:
Step 1: Digital maturity
The maturity analysis is used to determine the digital maturity of the organisation in order to define the most important topics for the transformation project immediately and engages all stakeholders (for instance, all managers and all employees). You can, for example, conduct a maturity analysis at www.digital-strategy-check.com. It allows an initial discussion and the determination of priorities.
Steps 2: Digital opportunities (workshop canvas)
In a second step, the seven action fields of digital transformation are discussed, and the first project opportunities are outlined. This is where the workshop canvas is used, which offers practical assistance for the design and implementation of workshops.
Step 3: Strategy development (extended ACT canvas)
The third step includes a more formal engagement with the most important strategic themes of digital transformation. As a guide and as a checklist with the most important strategic topics, the ACT method (analyse, create, transform) provides a structured workshop flow with 3 workshops and the practice-validated 24 topics/questions for strategy development in the digital age. SMEs often skip this step as the workshop canvas (as utilised in step 2) is often sufficient to identify digital initiatives and projects.
Step 4: Digital roadmap
The fourth step is to describe the digital vision and the unique value proposition. The resulting digital roadmap from steps 2 and 3 includes, in the traditional sense, the description of strategic (digital) initiatives and projects. It is a good idea to define a feasible project scope, to work with external partners and, where appropriate, to identify quick wins.
Step 5: Digital strategy/roadmap implementation
In the fifth step, the digital roadmap is successfully and sustainably implemented. For this purpose, the organisation uses project management to plan and achieve all initiatives, change management to actively communicate and guide the measures, and digital leadership to strengthen both the leadership and corporate culture of the organisation.
In five strategy steps, the workshop canvas and the ACT method can be used in combination to develop a business strategy/roadmap for the digital age (Source: Marc K Peter & www.the-digital-transformation-canvas.com).
