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CIOs are learning, often painfully, that digital transformation is an extensive domain, requiring a multi-faceted approach that goes beyond the application of emerging technologies.  CIOs responded to the burning platform crises of the COVID Pandemic by accelerating their technology modernisation – especially through moving essential platform services to the Cloud and enabling new digital capabilities with Seas.  The next step, Digital transformation 2.x however now becomes more about process innovation, client experience, business model transformation, and organizational culture transformation. 

Today’s theme, therefore, is that digital transformation 2 demands a new role for the CIO, because digital transformation not only disrupts business, but it must equally transform leadership.  Hence the CIO v2 is no longer a traditional technologist, but rather an architect of an enterprise transformation, whose contribution to value growth and competitiveness includes the design of digital business models.  This means seeing digitalization as a business model innovation opportunity, more than just technology-driven change.  Digital transformation disrupts both the way people work - the ability and ambition of employees to work digitally - and the products, services, and customer value an industry offers.  A key element is customer centricity - continual improvements to customer value propositions and customer-focused outcomes.

Firstly, build a Business Architecture 2.0 competency, using the jargon-free language of Business Capabilities and Value Streams for an actionable, lightweight strategic canvas. CIO v2s do not waste resources creating voluminous blueprints that focus on governance rather than business outcomes, nor need the abstract, unwieldy methodologies of traditional Enterprise Architecture.  Business Architecture v2 importantly adds ecosystem models, to address new market reach opportunities.  Customer journey mapping takes priority as a critical requirement to design improved interactions, understand the problems to solve, and how to remove friction and add value.  Customer-driven value streams show where value is genuinely created, validating the Roe of investing in the enabling technology capabilities to support each value event.

To orchestrate this journey, dust off your copy of the Business Model Canvas: use this famed model by Osterwalder to create a clear alignment and visibility of the nine key elements at the heart of every business model.  It remains especially relevant to today’s digital ambitions because at its heart is the customer value proposition, the pains you aim to resolve from the perspective of targeted customer segments using v2 digital channels.  This canvas articulates What you are transforming into, and Why?  Our v2 includes the “platform economy” – the interplay of key partners, alliances, and industry ecosystem offerings.  The canvas will highlight the inevitable ripple effects and interdependencies which complicate all digital transformation initiatives.  More than just investing in the right technologies, the challenge is orchestrating the operational changes needed to enable these to be adopted effectively. 

  ​ The next step, Digital transformation 2.x however now becomes more about process innovation, client experience, business model transformation, and organizational culture transformation   

Digital transformation gives fresh relevance to IT’s established stalwarts: Agile and Lean.  There has never been a better time for CIOs to evangelise Agile Business, and have Agile practices move beyond software development to take centre stage across the entire business.  To prevent transformation stalling, decision-making must become more responsive and decentralised, where empowered fusion teams must make decisions quickly, with a strong focus on business outcomes and delivering measurable value, not project outputs.  An Agile mindset encourages the delivery of value in a continuous flow. Transformation v2 is never a discrete project, the moving parts, both technological and organisational, will be aligned in Agile’s iterative, incremental, and adaptive fashion. 

Re-read your copy of The Lean Start-Up (Eric Ries).  Where established corporations were previously dismissive of the MVP “hacks” of start-up cultures, today’s need for rapid digital experimentation, learning and innovation suggests that all companies should recognise the value of start-up lessons, for the new elements being added to their business.  Adopt the “Build – Measure – Learn” mantra for new digital business models.  These v2 frameworks are rooted in accepting that any new model is never perfect on Day 1, but evolves from iterative refinements, starting with MVPs and driven by real-world customer testing to improve the value proposition.  An MVP should be designed to begin a learning process.  Borrowing from Lean v2, avoid wasted effort: remove any feature that does not contribute directly to a “validated learning” goal. 

My advice, therefore, is that CIOs revisit core frameworks that will provide guiding principles for an extensive journey.  Whilst these are tools we previously used extensively, our CIO v2 should now refresh them to successfully align the organisation for multiple objectives.  These tools, plus a pragmatic combination of both Systems Thinking and Design Thinking, can craft the holistic process for a customer-centric digital strategy (solving real customer needs); shared data and platforms for new partnerships and ecosystems; articulating a leadership vision to change the company culture (“where are we going, and why does it matter?”); and creating “future business capabilities” through the modernisation of legacy platforms.  These transformation tools offer an updated roadmap to explain your destination and provide navigation through a set of waypoints along the (long) road.