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Establish Your Digital Transformation Governance

Leverage the infrastructural rigor of a digital transformation office to manage your transformation and maximize value creation.

Digital transformation offers tremendous value potential, but poorly managing the complexity of an organization-wide transformation can lead to:

  • Insufficient funding caused by a lack of prioritization and executive alignment.
  • Low confidence in the value potential of individual initiatives.
  • Little accountability resulting in poor execution.

Our Advice

Critical Insight

Establish a digital transformation office (DTO) that enables your organization to ensure value capture at scale and drive change.

  • A well-designed and well-run DTO functions as the heart of an organization’s digital transformation.
  • The DTO establishes the infrastructure to manage initiatives at scale, drives change management, and ensures value capture.

Impact and Result

Leverage a DTO and the infrastructural rigor it drives to manage your digital transformation and maximize value creation.


Establish Your Digital Transformation Governance Research & Tools

1. Establish Your Digital Transformation Governance Storyboard – Leverage a DTO and the infrastructural rigor it drives to manage your digital transformation and maximize value creation.

Understand the core pillars of a successful DTO, why each is critical to success, and what best-in-class looks like.

2. Digital Transformation Mandate Template – Build a clear and impactful mandate for your transformation.

A simple template that guides a leader through drafting the elements of a DTO mandate.

3. Digital Transformation Change Story Template – Create a clear, concise, and compelling change story.

A simple template that guides a leader through drafting the six components of a change story.

4. Assignment of Digital Transformation Office Key Roles Template – Build a well-staffed transformation office.

A simple template that guides a leader through the identification of the key roles to staff the DTO.

5. Digital Transformation Communication Plan Template – Build a communication plan for your transformation.

A simple template used to outline the major communication plan components of a digital transformation.

6. Digital Transformation Initiative Template – Build robust initiative plans that will drive value creation.

A robust set of templates that are used by a DTO to shepherd an initiative from ideation to execution.


Establish Your Digital Transformation Governance

Leverage a digital transformation office and the infrastructural rigor it drives to maximize value creation.

Introduction to Digital Transformation

What is digital transformation?

An at-scale change program – planned and executed over a finite time period – with the aspiration of creating material, sustainable improvement in the performance of an organization by deploying a programmatic approach to digital technology adoption and innovation.

Digital transformation can unlock significant value, but getting it right is tough

Digital transformation can unlock significant profits …

26%

… is the average increase in profitability for companies that prioritize digital transformation compared to their industry competitors.

Source: MIT, 2013.

… and will be the largest driver of economic growth…

70%

… of new value created in the economy over the next decade will be based on digitally enabled platform business models.

Source: World Economic Forum, 2023.

… however, most fail to achieve their objectives.

84%

… of companies that have undertaken initiatives have “failed” – they haven’t seen sustained and material performance improvement.

Source: Forbes, 2016.

Info-Tech has a comprehensive approach to help you beat the odds and deliver against your digital transformation aspirations

Digital journey framework

Digital journey framework: Establish your digital north star, Quantify the value of digital use cases, Create the digital roadmap, Deliver digital use cases and realize impact. Each step along journey moves from a starting state to a benefiting state.

Digital journey asset catalog

This document is part of Info-Tech’s digital journey asset catalog. The topics addressed within this document are part of the cross-cutting enablers of the digital journey framework: “Create the infrastructure to drive and sustain change.” Visit the Digital Transformation Research Center to find the full catalog of available materials.

Digital Transformation Research Center

Info-Tech’s approach and team can help irrespective of where you are in your transformation journey

Info-Tech’s approach and team can help irrespective of where you are in your transformation journey: Steps are: Establish your digital north star, Quantify the value of digital use cases, Create the digital roadmap, Deliver digital use cases and realize impact.

Executive Summary

Analyst Perspective

Transformations can be easier.


Many companies have a digital transformation story that starts with a bold vision but quickly encounters the complex reality that transformations require time, effort, resources, and investment. When done effectively, digital transformation offers tremendous value, however for most organizations that is not how the story ends, as around 85% of digital transformations fail to achieve those bold visions.

There are numerous reasons transformations fail, however the inherent complexity of the endeavor stands to blame as the root cause in many cases. Developing and deploying robust transformation infrastructure to manage the complexity by providing the resourcing, role clarity, and initiative governance to convert ideas into value-creating realities can address this. Properly developed digital transformation infrastructure will also help build momentum, provide a common language for the organization, encourage innovation, and drive accountability.

Robust digital transformation infrastructure can help you flip the odds and set up your story for a successful conclusion!


Oma Nwabudike Carlos Artavia

Oma Nwabudike

Senior Associate
Digital Transformation Consulting
Info-Tech Research Group

Carlos Artavia

Senior Analyst
Digital Transformation Consulting
Info-Tech Research Group


Establish Your Digital Transformation Governance: Leverage the infrastructural rigor of a digital transformation office to manage your transformation and maximize value creation.

Introduction

Document purpose

  1. Establish the need for and purpose of a DTO.
  2. Outline the key pillars needed for a successful DTO.
  3. For each pillar, outline the core components, including what they are, why they are important, and a high-level overview of how to execute on each component with basic templates to support execution.

This document is not …

  • A comprehensive overview of everything needed to drive a digital transformation.
  • A granular, step-by-step guide for executing on the core components within each DTO pillar.

Outcome

Establish a DTO and the associated supporting infrastructure.

Deliverables

  1. Transformation mandate
  2. Change story
  3. DTO and workstream role assignments
  4. Initiative owners meeting cadence
  5. Communications plan
  6. Initiative requirements by development phase

Measure the value of this document

Document objective

  • Establish a DTO and the associated supporting infrastructure.

Measuring your success against that objective

Although measuring the success of a DTO can feel qualitative, there are relevant direct and indirect metrics for which you can establish a baseline and measure progress against (list not exhaustive):

  • Improvement in digital maturity assessment score
  • All executive team members with their own change story
  • All transformation roles filled vs. outlined
  • Effectiveness of DTO vs. past project management offices (PMOs) based on initiative milestone adherence (on-time delivery)
  • Confidence level in value of initiatives identified and advanced through the initiative funnel (confidence is a product of transparency, business case quality, and adherence to DTO’s valuation/approval principles)
  • Time saved from leveraging appropriate technology tools to run transformation

Quantifying the value of this research

The total value of initiatives before and after establishing a DTO and advancing digital initiatives through at least Gate 3 of the initiative lifecycle.1

1. See slides 53 to 83 for an explanation of the initiative lifecycle.

Applicable Info-Tech support models

DIY Toolkit

“Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.”

Consulting

“Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.”

Digital Transformation Office Overview

Digital Transformation Office Summary

Your Challenge

Digital transformation offers tremendous value potential, however poorly managing the complexity of an organization-wide transformation can lead to …

  • Insufficient funding due to a lack of prioritization and executive alignment.
  • Low confidence in the value potential of individual initiatives.
  • Little accountability resulting in poor execution.

Ultimately, this results in significant value leakage for the organization.

Common Obstacles

Most organizations find their steady state capabilities, processes, and tools are ill-equipped to handle large-scale change and initiative management programs.

  • Capabilities – Narrow focus on project tracking vs. business outcomes and change management.
  • Processes – Inconsistent processes to manage/value initiatives.
  • Tools – Traditional desktop tools are insufficient to manage a robust portfolio of initiatives from across the organization.

The typical response is to launch a PMO, however the traditional PMO focus on status tracking isn’t enough.

Info-Tech’s Approach

Establish a DTO that enables your organization to ensure value capture at scale and drive change.

  • A well-designed and run DTO functions as the heart of an organization’s digital transformation.
  • The DTO establishes the infrastructure to manage initiatives at scale, drives change management, and ensures value capture.

Choose to invest in the infrastructure to make your digital transformation a success.

Info-Tech Insight

Leverage a DTO and the infrastructural rigor it drives to manage your digital transformation and maximize value creation.

Your challenge

Manage the complexity of an organization-wide digital transformation.

The potential breadth (every BU/function) and depth (redesign of core processes) of digital transformation means tremendous value and competitive advantage can be created. However, that same depth and breadth introduces tremendous complexity that must be accounted for and managed from day one.

  • How will you align leadership on the prioritization of a large pipeline of initiatives from across the organization and the funding needed to execute?
  • How will you measure and create confidence in the value your digital transformation initiatives seek to achieve?
  • How will you ensure accountability for delivery, including change management, and true transparency into progress?

Although these are intuitive principles, getting them right is not easy, and the consequence is significant value leakage.

Common obstacles

Common barriers make managing transformation complexity difficult for most organizations:

  • Capability gaps – Accustomed to running a PMO that is focused on status tracking, not holding leaders accountable for business outcomes and value delivery.
  • Process gaps – The consistency and structure required to manage the initiative funnel across the organization, from business cases to approval requirements, is rarely a business as usual (BAU) activity.
  • Technology gaps – Traditional desktop tools fail to provide the single source of truth, real time insights, and automated reporting needs to support transparency, prioritization, and decision making.

Establish a DTO that enables your organization to overcome these obstacles and achieve your digital aspirations.

The DTO is central to all phases of the transformation

The DTO is central to all phases of the transformation in the Digital Journey Framework.

A well-run DTO creates value in multiple ways

Hallmarks of an effective DTO:

  • Forces a disciplined and consistent execution approach that enables measurement and tracking.
  • Drives impact and minimizes value leakage by focusing on delivering value through initiatives vs. simply tracking progress.
  • Serves as a coordination mechanism across BUs/functions to drive collaboration and action.
  • Builds organizational capabilities by enabling shared learnings across initiatives, workstreams, and the broader organization.

Leveraging a DTO drives a 50% increase in value realization compared to digital transformations without one.

Source: BCG, 2001.

The DTO is not a PMO.

Project Management Office

Digital Transformation Office

Mandate

Tracking progress Driving actions

Operating goal

Process efficiency – Are we on track with the project? Business outcomes – Are we maximizing potential?

Impact

Projects delivered on time and on budget Sustainable, measurable business value from initiatives

Stakeholder communication

One-way communication around progress Two-way communication with stakeholders providing input and feedback on transformation goals and values

Skills required

Communications, project management, change management Strategic problem solving, industry and company knowledge, organizational health, financial analysis, communication, project management, change management

A successful DTO is built on three pillars that support the transformation

Digital transformation office pillars

Robust organization and communications

Infrastructure to ensure that everyone knows what is happening and what is expected of them

Structured initiative management

Clear methodology for designing and executing initiatives to ensure value capture

Fit-for-purpose technology tools

Leveraging technology to maximize the impact of processes and structure driven by the DTO

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Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.

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Authors

Oma Nwabudike

Carlos Artavia

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