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Designing end-to-end solutions that are fit for purpose

How do transformation programs design end-to-end solutions that maximise value for customers and the business?

Contributors: Maria Aunsholt Storgaard, Maya Kousholt Schmitt, and Annie Gisslen

Transformation is a critical enterprise capability for organisations to be able to navigate in their industries. However, many are failing to realise the expected value, especially when the transformation is enabled by technology. In previous articles, we have outlined the importance of having a business-led approach to digital transformation, the criticality of aligning on a clear transformation vision and ambition, and how to apply the capability model as a decision management tool to configure the transformation roadmap. This is the fourth article in a miniseries that goes through the key topics to ensure a lasting, positive impact when pursuing a business-led digital transformation. This article provides an approach to designing end-to-end solutions that are fit for customer and business purpose.

Business-Led Digital Transformation one-page summary

KEY TAKEAWAYS

  • Successful business-led digital transformations are underpinned by robust end-to-end solution designs across both the digital components and business components (processes, people, and governance)
  • Organisations can mitigate risks of their digital implementation by integrating business-led activities in the technology implementation lifecycle, and by creating joint ownership of the digital solution by business and IT departments
  • Several concrete business-led activities should be performed in the ‘Imagine’ and ‘Deliver’ phases of the digital transformation lifecycle to ensure solutions are designed to maximise business value and are fit-for-purpose: definition of business design principles, value stream, and customer journey mapping, process taxonomy definition and capability and operating model design

INVESTING IN END-TO-END BUSINESS DESIGN ALONGSIDE DIGITAL SOLUTION DESIGN 
Successful business-led digital transformations require equal focus and investment on the end-to-end business design (processes, people, and governance dimensions of the capabilities) as well as the digital solution design (technology and insights dimensions of the capabilities). 

 


Figure 1: Capability Hexagon highlighting business and digital solution design components

This is emphasised in a recent report published by Deloitte where over 300 Chief Transformation Officers (CTrOs) were interviewed. The report highlights that the distribution of financial investment, throughout the digital implementation lifecycle, can predict the success of the transformation. Specifically, the report reveals that underinvestment in talent and process changes often lead to downstream challenges that affect both the delivery and realisation phase of the transformation.

 

Figure 2: Investments in process and talent changes during transformations

BUSINESS-LED DIGITAL TRANSFORMATION TO IMAGINE, DELIVER, AND REALISE BUSINESS VALUE
From our experience, transformation programs generally tend to follow a lifecycle similar to Figure 3. Starting with an ‘Imagine’ phase, where the transformation evolves from an idea into a high-level design. This is followed by the ‘Deliver’ phase, where the transformation is implemented, and finally, a ‘Realise’ phase where changes from the transformation are embedded in the organisation and value is realised. A business-led approach to digital transformation requires an inherent set of business-driven activities and artifacts to be delivered throughout the lifecycle in parallel to the digital solution.


Figure 3: Transformation lifecycle

From our observations, organisations that can successfully deliver digital transformations, undertake the following business-led activities, at a minimum, to ensure digital solutions are fit for purpose and deliver value to the business.

  1. Value stream and customer journey mapping 

    Organisations should start by articulating the core end-to-end value streams (also referred to as end-to-end processes) which exist across the organisation. The overall purpose is to quickly gain an understanding of the different high-level processes that are delivered across the organisation and different variations to those processes, without having to do detailed process design. It is critical to outline the core variations across the value streams and have discussions around whether the organisation wants to be able to continue delivering on those variations in the target state or if there is room for harmonisation. The most common variations across value streams are often driven by customer segments, geographies, and products and services. Value streams should subsequently be used as a supplement to the Business Capability Model to articulate the scope of the digital transformation, as well as to outline the initial high-level business requirements for the digital solution. An example of high-level commercial value streams is depicted in Figure 4.
     

Figure 4: Example Commercial Value Streams (Level 2)

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Lesson learned: Failing to understand the value streams and variations across the organisation increases the risk of developing digital solutions without having made conscious decisions about how alternative value streams are enabled in the target state. Consequently, organisations may end up with solutions that are not fully fit for purpose.

To supplement value stream mapping, organisations should consider defining the target state customer journeys to be delivered on. Customer journeys help define how and where value is delivered to customers and end-users across the value chain. Additionally, customer journeys secure that solution design takes offset from customer and user-centric requirements. An example of a customer journey is depicted in Figure 5.

Figure 5: Example of a High-Level Customer Experience/Journey

2. Design principles

From experience, a clear set of design principles must be established from the onset of the digital transformation journey. They should be aligned with the overall transformation ambition and vision and should be the cornerstones upon which subsequent design decisions are taken. Organisations will often have design principles already defined, for instance by the Enterprise Architecture team. In relation to business-led digital transformation, it is necessary to complement the existing design principles with guiding principles in the following three areas. The capability model and capability segmentation can be used as an underlying framework for making these decisions as outlined in the previous article “Configuring the transformation roadmap using the capability model”:

  • Where/when to standardise versus customise
  • Where/when to globalise versus localise
  • Where/when to be ‘best-in-class' versus ‘best-in-cost’

Lesson learned: A common misconception is that if Business stakeholders take the lead in designing the business solution, organisations will end up with heavily customised technology solutions. Clearly defined design principles at the start of the transformation, aligned with leadership from both Business and IT, will mitigate this risk.

3. Process Taxonomy

Following the definition of value streams and alignment on design principles, organisations should ensure that there is a clearly defined enterprise process taxonomy in place. A process taxonomy helps provide the foundational architecture from which the solution design can be done. An example of a process taxonomy is depicted in Figure 6. Whereas business capabilities define the ‘what’, business processes define the ‘how’.

From our experience, a well-understood process taxonomy is an enabler for bridging gaps between business and IT departments as it promotes a common language and consequently facilitates scope and design discussions. Furthermore, structuring a process taxonomy to align with value streams helps ensure that subsequent detailed designs are not defined in silos, but rather that the holistic end-to-end context and ‘flows’ across the organisation are considered. Finally, if the same taxonomy is used across all digital implementations across the organisation, it supports the development of integrated solutions enabling efficient execution of value streams. It is from the process taxonomy that the detailed end-to-end business processes for the new solution are designed.
 

 

Figure 6: Example of Order to Cash L1 – L3 Process Taxonomy

Lesson learned: As part of all digital/technology implementations, organisations will map out the IT architecture including surrounding systems and interfaces to the new digital solution. On the other hand, not every organisation will ensure that the same exists for the end-to-end processes which are executed across the technology landscape. As a result, digital solutions are often implemented without having the full business context in which the new solutions are implemented. This increases the risk of the solution not fully supporting processes and the subsequent low adoption of the digital solution by end users.

4. Capability & Operating Model Design

Finally, a detailed design of all capabilities in scope for the business-led digital transformation illustrated in Figure 6 must be done. This includes detailed design of the end-to-end processes, governance procedures, organisation design, data/insights, and technical solution design. Value streams, customer journeys, design principles, the overall capability model, and process taxonomy should serve as input for the detailed design across these dimensions.
 


Figure 7: Capability Hexagon Framework

Lesson learned: Business cases for digital transformations often rely on efficiencies and improvements across processes through, for instance, automation. Unless you streamline your processes and structure your organisation around the new processes, the benefits from the new digital solutions will not be realized – this emphasises the importance of considering all dimensions in the design. Furthermore, organisations are often stuck in the as-is and struggle to truly challenge the status quo needed to develop future-proof solutions. It is important for leaders to design their business for a shifting end-state, taking into consideration alternate market scenarios.

ORCHESTRATING COMPLEX TRANSFORMATIONS

This article presents important business-led activities to perform in the initial phase of the digital transformation to design the solutions implemented in a way that maximise business value and are fit-for-purpose from a business and customer journey perspective.

In the next article, we will address how to ensure successful execution of the transformation by establishing a transformation office and robust governance structures - two elements that are particularly important for a business-led digital transformation.

Read the remaining articles in our series on business-led digital transformation:

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