How to Jump-Start a Digital Transformation

How to Jump-Start a Digital Transformation

          
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How to Jump-Start a Digital Transformation

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    Scaling Up Successful Initiatives

    Once the company has identified its most important digital priorities and launched some quick wins, it faces the challenge of scaling up the most promising ventures. Several levers are available to accomplish this. The right one depends on the company’s level of ambition, the strength of its existing digital capabilities, and external market factors (primarily, the degree of disruption posed by new digital competitors).

    The fastest way to scale up digital initiatives is to acquire digital talent on a temporary basis and then bring it in-house over time. As the company embeds talent, it can create digital units that serve as a center of excellence and an internal repository of its current thinking on technology. This is an iterative and incremental model that allows the company to develop digital capabilities organically. Redesigning business processes in this fashion takes time, but it allows the company to develop its own expertise. Critically, success often requires new leadership positions, such as a chief digital officer.

    A second, and bolder, approach is to create an internal incubator to leverage capabilities already developed by another company—preferably, an entrepreneurial one. This can be done through early-stage funding of start-ups (the corporate venture-capital model), a joint venture, or an outright acquisition. (See “An Insurer Creates a Joint Venture to Enter a Challenging Market.”) Regardless of the ownership structure, the company takes an active role by investing in and developing the new entity, with the goal of cultivating digital capabilities that it can harness—and potentially bring in-house. This approach allows the company to move quickly into digital and build a start-up mentality while limiting the risk of failure and the impact on existing operations. However, it requires capital, the willingness to act like an investor, and the right degree of oversight.