A checklist for digital transformation success

Today's businesses must embrace digital technologies to survive. Use this checklist to assess your organization's readiness for digital transformation and create a strategy.

This checklist is adapted from the report "Gearing up for successful digital transformation," produced by the Advanced Practices Council of the Society of Information Management. To read the full report, click on the report image below.

Digital technology platforms have become the foundation for an increasing share of economic activity resulting in a changing business environment. Digital transformation -- the reinvention of a company's vision and strategy, organizational structure, processes, capabilities, and culture to match the evolving digital business context -- is not only changing companies but also redefining markets and industries.

Today, there is widespread recognition among executives of the need to transform their businesses for the digital world. These executives seek frameworks to guide their transformations. Through research sponsored by the Advanced Practices Council (APC), we developed such a framework. We designed it to be applicable across industries because industry boundaries are blurring. And because digital transformation often requires broad reinvention, a useful framework must encompass strategic, technological, human capital, and organizational culture considerations.

The framework consists of six dimensions that together comprise the factors for achieving successful digital transformation. They include a company's strategic vision, alignment of the vision and its investments in digital transformation, the suitability of the culture for innovation, possession of sufficient intellectual property assets and know-how, the strength of its digital talent, and its use of digital technologies.

Gearing up for successful digital transformation

Read the full report for more details on benchmarking digital transformation metrics.

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Based on our research, we computed a category score for each of the six dimensions and defined four levels of advancement: behind, on par, slightly ahead, and significantly ahead. You can use the checklist below to explore readiness for digital transformation success and then benchmark your company's scores against companies at each level. (Download the full report for details on how the benchmarks were calculated.)

How to use the digital transformation checklist

For each of the six dimensions below, review the list of attributes and rate your company on a scale of 0 (lowest) to 5 (highest) depending on the degree to which the company aligns with or reflects the attribute. Average the attributes for each dimension to arrive at a score. Then compare your company to the scores for the four types of companies revealed in the APC study.

Dimension 1: Strategic vision

Attribute Score (0-5)
A clearly defined strategic vision mapped to an understanding of digital needs
Company has a strategy for digital transformation
Senior executive team has a clear understanding of digital technology capabilities and how it will support business objectives
No problem with lack of digital leadership to define strategy
No difficulty developing company digital strategy
Calculate your average score

Strategic vision comparative scores
Behind: 3.00
On par: 3.20
Slightly ahead: 3.80
Significantly ahead: 4.67

Dimension 2: Culture of innovation

Attribute Score (0-5)
There is a culture of innovation and risk-taking
New ways of thinking and solutions from diverse perspectives are encouraged
Failure while taking a calculated risk is to be learned from; it is not a black mark on one's career
Innovators are rewarded
No problem with cultural resistance
Calculate your average score

Culture of innovation comparative scores
Behind: 3.60
On par: 3.80
Slightly ahead: 3.80
Significantly ahead: 4.40

Dimension 3: Knowhow and intellectual property

Attribute Score (0-5)
Increasingly using software to improve operations performance
Increasingly using software to improve customer understanding
Increasingly using software to improve product know-how
Sufficient intellectual property assets to implement strategic vision
Increasingly using software to improve supplier interactions
Calculate your average score

Know-how and IP comparative scores
Behind: 3.40
On par: 3.40
Slightly ahead: 3.80
Significantly ahead: 4.10

Dimension 4: Digital capabilities

Attribute Score (0-5)
Availability of digital expertise
Overall, there are necessary visionary/innovative skills within the company to define the right digital strategy
Grades assigned to individuals based on their level of digital transformation knowledge
Technical talent for innovation is already available in the company
No problem with lack of digital skills to execute strategy
Calculate your average score

Digital capabilities comparative scores

Behind: 2.90
On par: 3.20
Slightly ahead: 3.80
Significantly ahead: 4.30

Dimension 5: Strategic alignment

Attribute Score (0-5)
Company willing to fund strategic digital initiatives with uncertain returns
Willingness in the short run to cannibalize existing revenue streams and business models to gain profit in the long run
Collaboration and alignment between M&A, digital and business unit teams
No problem with lack of budget/resources assigned to digital transformation
Investment increase in new forms of software over past three years
Calculate your average score

Strategic alignment comparative scores
Behind: 2.90
On par: 2.80
Slightly ahead: 3.40
Significantly ahead: 4.00

Dimension 6: Technology assets

Attribute Score (0-5)
Technology in use: big data
Technology in use: data mining and analysis/data analytics
Technology in use: mobile technologies
Technology in use: cloud computing
Internet and wireless communications
Sufficient technology assets to implement strategic vision
Calculate your average score

Technology assets comparative scores

Behind: 3.10
On par: 3.50
Slightly ahead: 3.80
Significantly ahead: 4.30

Understanding your digital transformation scores

The scales associated with each dimension provide a useful way for a company to identify the strengths and weaknesses in achieving change in the organization. They can also be used to identify over time whether processes and procedures they initiate are achieving the intended goals. Those companies that are significantly ahead of their competitors score the highest on each of the six dimensions while those companies behind their competitors score much lower on each of the scales.

We see the biggest differences between high performing and low performing companies on the dimensions of strategic vision, digital capabilities, and technology assets. This suggests that companies that would like to progress with transformation should begin at the top. Companies that have a well-articulated strategic vision are more likely to make the investments in technology assets and talent.

Recommendations for success

Engage with your peers. Digital transformation is a company-wide effort. CIOs are the ideal executives to take a leading role in transformation given their expertise in many of its underlying dimensions. Of course, other domain leaders must be actively engaged.

Use the dimensions as a checklist for engagement. The six dimensions and the attributes that comprise each dimension can serve as an impetus for a comprehensive conversation among company executives about what it is going well and what must improve to better position the company for digital transformation.

Assess your progress. Complete the checklist so that you can compare your business to companies that are ahead of their competitors. Use the results to examine your competitive situation and plan your next steps to move forward.

About the authors

Vijay Gurbaxani is the founding director of the Center for Digital Transformation and Taco Bell Professor of Business and Computer Science at the Paul Merage School of Business, University of California, Irvine. Gurbaxani has extensive experience in management education and advisory services, authored the book, Managing Information Systems Costs and published numerous articles in premier academic journals. Gurbaxani received a master's degree in mathematics and computer science from the Indian Institute of Technology, Bombay, and his Ph.D. from the Simon School of Business, University of Rochester.

Debora Dunkle is director of research at the Center for Digital Transformation, University of California, Irvine. Her research focuses on the social and economic impacts of technology, and she has extensive experience in the design and implementation of surveys. Dunkle received a master's degree in political behavior from the University of Essex, U.K., and her Ph.D. from the State University of New York at Buffalo.

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