This often results in companies discontinuing important digitalization initiatives after a short period of time. The hoped-for potentials of digital transformation are not realized to the desired extent, investments evaporate into grandly announced flagship projects – and employees' motivation and commitment to achieve successful digitalization dwindles.

The core problem of many digitalization initiatives is that the individual projects they are made up of are each planned and executed in isolation. The responsible parties generally do not adequately consider the time- and content-related dependencies and modes of action involved. Furthermore, the company strategy is often unclear, resulting in a lack of an overarching framework for structuring a holistic approach to digital transformation.

This is where the Horváth & Partners Digital Strategy Framework comes in. It provides the framework for a structured and agile process to define an individual, comprehensive digitalization strategy, and it has already been successfully applied in numerous digital transformation projects.

The success of a digital strategy depends primarily on its integration across the entire organization. An effective digital strategy specifically needs to address three levels: The business level, the function level and the process level.

1. Business strategy: Aligning the digital strategy with the business strategy ensures a comprehensive and top-down-driven transformation. Centralized management – along with the optimized use of resources it enables – creates significant opportunities, especially when implementing radical innovations.
   When creating this it is important to account for the early identification of potentially conflicting control factors, as these must first be resolved.
    
2. Functions: Anchoring the digital strategy at the functional level enables an iterative change process in which corporate functions act as decisive drivers. Particularly where the degree of digitalization is low, this means that the first demonstrable effects can be achieved quickly by means of high engagement within the functions.
   The challenge here is to avoid the formation of digital silos, varied digital mindsets and doubled-up investments.
    
3. Processes: Implementing digital strategy at end-to-end process level, with a focus on the digital customer perspective, facilitates comprehensive process optimization along the value chain and leads to simplified cross-functional collaboration.
   It should be noted that the digitalization of the secondary value chain can recede into the background. Allocation of budget and responsibilities is also a challenge that needs to be managed.
    

A decisive part of setting up a sustainable digital strategy is ensuring a precise understanding of the status quo with regard to the current business model and the digital maturity level of your own company. To create an overall target structure for the future business model and the potential to be leveraged by digitalization, the essential first step is an in-depth analysis and resulting clarity with regard to the starting situation. Companies must understand the digital strategy as an integral component for supporting the future business model.

It is useful to analyze value-added as a whole, to identify where value is generated and where process complexity is high. This allows organizations to more closely align the service portfolio with individual customer needs and to derive potential levers for streamlining and outsourcing. New opportunities can be opened up through the intensification of partnerships along the total value chain and the composition of ecosystems in particular.

These processes must not be approached by stakeholders as a one-off task, and instead must be established as a continuous and iterative process used to identify, evaluate and make adjustments on an ongoing basis.

Comprehensive integration of the digital strategy across all levels of the company enables integrated digitalization with comprehensive transformation as the goal. A dynamically managed approach to digitalization enables lower transaction costs and optimization of the overall portfolio to be aligned to individual customer needs.

Companies can optimize decision-making processes by using artificial intelligence to identify potential savings that have not previously been recognized. They can also develop their business model further, as scope for increased customization and flexibility of products and services enables them to focus on actual customer needs and tap into new customer groups. The development of scalable business models based on digital ecosystems also leads to an increase in market share via new products, markets and target groups. Products and services can be further tailored by means of prediction modeling, for an improved service portfolio. In addition, the establishment of digital labs, start-ups and innovation hubs within the company, as well as the development of a partner ecosystem, creates targeted structures for stronger innovation. Digitalization and automation can also significantly improve processes, on the basis of machine learning and robotics.

We would be happy to support you in the comprehensive consideration and implementation of your company's digital transformation – just get in touch!