A digital transformation roadmap is a visual representation of the current state, desired end-state, interim milestones, and key performance indicators (KPIs) for an organization's digital transformation.
A digital transformation roadmap is a multi-year document that presents the current state of the enterprise (business, technology, people) along with corresponding metrics. It then describes how an enterprise can evolve over time to achieve its future desired state.
A digital transformation roadmap should detail the steps to be taken by the enterprise in order to realize its future desired state. This includes specific initiatives within each area: business model change, technological enablers (which can include both internal and external capabilities), and organizational structure changes that are needed to realize the future desired state.
Digital transformation roadmap is one of the most important activities in the digital transformation process.
Key elements of the digital transformation roadmap
A digital transformation roadmap should include the following key elements:
- Current state including business process flow, maturity of existing infrastructure, and current state of technology.
- Future vision, including the desired end-state (Target Operating Model - TpN), target conditions such as business performance/strategy alignment.
- Major Initiatives to achieve the future vision or major milestones for a digital transformation journey. The initiatives list could include digitalization/ automation efforts as well as business domain and functional initiatives. Each initiative should have a detailed roadmap of its own, that includes major KPIs to measure the success of each initiative.
- KPIs and metrics for business and IT to measure progress against the strategy.
- Risks and mitigation plans: Key risks and mitigation strategies for each initiative
- The list of enablers that are required for successful digitalization efforts. For example, analytics enabler would include toolsets for data preparation, visualization, and insight extraction/machine learning
- Key resources required for business, IT and infrastructure initiatives. Enabler list could also include subject matter experts (SMEs) required to support the transformation efforts along with their roles.
- Financial/capital investment plan that includes costs for each initiative as well as forecasted sources of funding. Also includes major KPIs which can be used to measure ROI
- Details about major technology/tools required, to support these initiatives. For example, cloud platform for a specific initiative, IoT toolsets for a different initiative, analytics toolset for yet another initiative, etc.
- Details about major data sets required, to support these initiatives. For example, customer information system (CIS) for a specific initiative, databases with integrated transactional and analytical functionality for a different initiative.
- List of external providers/vendors required for each initiative
The importance of digital transformation roadmap
It is important to have a common understanding of what transformation means for different stakeholders, with regard to all aspects of the business including technology, functional responsibilities, organizational structure changes.
The digital transformation roadmap should be based on a deep understanding of business goals, functional requirements, and the technology landscape in the organization.
It should also be consistent with overall enterprise strategies, including the business strategy, and should document the details about the initiatives, enablers, resources, financial investments. Each digitalization effort within the roadmap should have its own digitalization roadmap document with key milestones listed to achieve execution success.
Why do businesses need a digital transformation roadmap
A digital transformation roadmap can help to achieve the following goals:
- Improve collaboration between different areas of business, technology and organization.
- Align individual initiatives with overall enterprise strategies
- Allocate resources in a more strategic manner to have maximum impact on business performance/business objectives.
Digitalization roadmaps: the benefits for different types of businesses
Every business domain, including manufacturing and healthcare, has its own unique characteristics that need to be understood in order to build a digitalization roadmap that can deliver value. Here are some examples for reference:
- Healthcare: Digital transformation in healthcare is not just about automating parts of existing workflows with robotics and AI. It's also about making patient care more collaborative, affordable and accessible.
- Manufacturing: Digitalization in manufacturing is less about automation of manual tasks for robotics or AI, but more about creating predictive models that can help with lean operations.
- Banking & Financial Services: Digital transformation in banking involves using digital technologies to address customer needs for everything including personal loans, credit cards, mortgages, wealth management services, etc.
- Transportation & Logistics: Digital transformation in transportation/logistics involves using technology to address customer needs for everything including ride sharing, package tracking.
- Retail: The focus of digital transformation in retail is not just about omni-channel experience or automating retail store management tasks but also about making the entire value chain more efficient, including automation of inventory management.
- Public dector: Digital transformation in public sector focuses on how to better engage citizens through technology and improved services.