The five types of digital transformation
Digital transformation is a disruptive process, and although almost every IT department across every industry will be undergoing it to some degree, the way digital transformation manifests itself and impacts businesses are not always one and the same.
As the digital transformation movement continues to take hold some several years after coming to life, the Information Services Group (ISG) has identified five digital transformation ‘archetypes’. These represent various approaches to digital transformation, addressing different challenges. But, at the same time, each can come with their own set of opportunities and challenges themselves.
According to the report, an awareness of what type of digital transformation an organization is in can help IT departments to plot their needs and opportunities. With that in mind, here are the ISG’s five digital transformation archetypes, to help IT leaders identify which situation their business is in, and how they can best approach their continued digital transformation journey.
#1 | Legacy transformers
The name is self-explanatory as legacy transformers are heavy on setting up legacy IT systems. Usually, these companies face technology and organizational silos previously built in, but face pressure to transform due to situations such as mergers, actions of their competition, or adopting new tech.
A change of mindset is a fundamental part of this group’s digital transformation success, while business outcome-based prototyping in consultation with an external specialist is recommended.
#2 | Strategic transformers
This group isn’t blindly walking into digital transformation. They have planned a roadmap and are moving in phases with strong consideration to the partners and solutions they onboard. Strategic transformers will be seasoned in outsourcing and will be well on their way to shifting their business operations to the cloud.
However, it’s important that this group don’t just rely on IT implementation, but ensure they are also involving leadership and support from across the enterprise to drive the changes required, whether that’s in HR, marketing, branding, operations, or otherwise.
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#3 | Cloud-first transformers
With cloud already an ingrained part of their business, cloud-first transformers see digital transformation as a further extension. With small and agile IT departments, they see technology as a driver of change and growth within the organization. That said, IT considered to be ‘disruptive’ may be used only after rigorous testing.
When working with providers, cloud transformers are advised to check whether they can use data within the cloud-first solutions for other purposes, or whether there are additional costs or data privacy issues associated.
#4 | Digital enterprise natives
New technologies sit at the heart of these companies’ customer-centric culture and competitive strategy. IT is considered a revenue generator, rather than a department to be tentatively budgeted. Digital enterprise natives are set on boosting revenue, being more flexible for their customers and getting ahead of competitors.
While investment in new technology is all good and well, this group should be cautious not to overspend, and still plan a ‘traditional’ and phased IT roadmap— comprehensive and accessible to the whole business— that considers unexpected changes to the business or market. Mind should also be given the thorough testing and piloting of solutions for end users before rolling out.
#5 | Disruption embracers
These businesses, with advanced but stable IT operations, are those that are open to the disruptive potential of new IT solutions. Experimental by nature, new methods and technology will be embraced and put to the test, but quickly rejected if pilots or proofs-of-concept turn back poor results.
Disruption embracers should strive to enable their entire business to be agile, not just the IT department. New methods, solutions, and organization can contribute to this.
Whichever direction you take, or whichever of these archetypes your current strategy most resembles, bear in mind that a recent YouGov survey in the UK found that 57 percent of employees don’t understand the meaning of digital transformation. In order to succeed with your objectives, communicating the reasons for change to the wider organization is vital— not having the full support of the people on the ground (the people enacting the transition) will severely scupper plans.
1 December 2022
1 December 2022