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The TOP Framework: a New Integrated Model for Digital Transformation (Technology, Organization, People)

Context:

Digital transformation is not just about technology, it has strategic relevance for businesses and is a fundamental focus for management. Finding the right positioning for a company in this new scenario can only be done by understanding the level of change (or “disruption”) that digital technologies are bringing to all industrial districts and understanding the new “ecosystems” that are forming.

In this scenario, it is essential that every company has the time and clarity to understand what these changes mean for their business and what new positioning they should have in the new ecosystems. Along the value chain, new flows of information and new forms of influence and power will arise: companies must understand how to use the new flows and new relationships to avoid being downsized and to seize the opportunities associated with them.

Under the push of technological innovations, we are in a phase of turbulence. Established positions of relative stability in the past decades are no longer valid, and old models of interpreting reality must be adapted. New roles are constantly emerging, and repositioning companies is essential to ensure their success in this phase.

The initial phase of digitization has an impact on increasing business productivity by speeding up business processes. In the second phase, digitization open up new sales channels and created business development opportunities.

The third phase of digitization is pushing for changes in business and relationship models within new ecosystems. It is no longer just about technology, but about a company’s strategic choices. The attention is no longer that of the CIO but of the CEO.

Digital transformation is no longer an option but a necessity, as digitization has already changed and will increasingly change the expectations and habits of customers and partners, who will seek new needs and new ways to satisfy them, thus new products and new references.

Many of the new realities that dominate the market do so not so much for the services they provide but for the fact of being digital. Being digital does not mean being a little better than before; it means changing the rules of the game. It is not even so much about which technology to use but how to use it, understanding the new rules, and winning in the market.

An enterprise that faces digital transformation first needs to understand the level and depth of change that new technologies allow for in the market and internally. Creating its vision allows it to identify its roadmap and areas of focus towards the implementation of new business capabilities.

Technologies themselves are not enough to guarantee the success of a company.

The business model and organizational model must be revised and enabled to meet new business objectives. The organization, in particular, must be able to generate innovation at the speed that the market requires. 

La Leadership:

A strong and effective leader is crucial for the success of any digital transformation initiative. They must not only understand the technology and its implications but also be able to communicate the vision, strategy, and goals to their teams and stakeholders.

In addition, the leader must be willing to lead by example and “live the message” of digital transformation. This means embracing new technologies, processes, and ways of working, and being open to experimentation, risk-taking, and continuous learning.

Leaders must also be able to inspire and empower their teams, creating a culture of innovation, collaboration, and agility. They must be able to identify and develop talent, align incentives, and foster a sense of purpose and meaning for all members of the organization.

In short, the role of the leader in digital transformation is critical, and requires a unique combination of technical knowledge, communication skills, and people management expertise.

The TOP Framework:

The TOP Framework proposes an integrated approach that considers three fundamental aspects of digital transformation: Technology, Organization, and People. This approach ensures a comprehensive view of the transformations that companies need to implement, overcoming the silos of traditional approaches that often focus on just one aspect.

Technology: Technology is a crucial enabler of digital transformation. However, it is not just about adopting the latest technological solutions, but also about understanding how to use them effectively to achieve business objectives. The framework proposes an analysis of the entire technological ecosystem that the company operates in, including the technology itself, data, processes, and the infrastructure necessary to support them.

Organization: The organizational model is a critical aspect of digital transformation. It needs to be redesigned to be able to innovate continuously and respond promptly to market demands. The framework proposes an analysis of the organization’s culture, structure, and governance to identify areas of improvement and define new roles and responsibilities.

People: People are the key to digital transformation, and their skills and knowledge are essential to the success of the process. The framework proposes an analysis of the organization’s talent.

The Framework describes a step-by-step implementation method.

The first part of the Framework focus on understanding emerging technologies that will impact the next 5-10 years.

The first fundamental step is scouting for emerging technologies, which requires developing the right sensitivity to pick up weak signals. Examples of emerging technologies include IoT, big data analytics, AI, cloud computing, and blockchain.

To fully understand the emerging technologies, it is essential to understand the methods by which these technologies spread. The main reference models for this are the diffusion of innovation theory, the dynamics of innovation theory, and the disruptive innovation theory.

The next step is disruption analysis, which is necessary to understand the new ecosystem that will arise due to the digital transformation. Disruption analysis occurs when several events occur simultaneously, including new technology, new actors entering the business scenario, customers adopting new habits, and new business models emerging. Sequential backcasting is a method of forecasting that starts with a desired vision of the future and then identifies the necessary steps to achieve it. This method can be used to explore alternative scenarios and stimulate creativity and innovation.

After creating a new vision and positioning for the company within the ecosystem that has been generated by the disruption, the next step is to create a map of the value network. The value network map is analyzed to see the power relationships within the network and the new areas of opportunity that arise. A positioning target is identified that corresponds to the company’s strengths and opportunities, and a new business model is developed that leverages the emerging technologies and the new ecosystem.

These initial considerations are necessary before moving to the implementation plan of new technology solutions.