A Strategic Value Framework for Digital Transformation

Observations

Digital transformation (DX) is an organisation-wide strategy and culture shift that aims to leverage digital technologies to reform key business processes, introduce new services, enhance customer engagement, support employees, and improve operations to drive value to the bottom line. When executed effectively, DX becomes an integral part of the enterprise strategy, embraced by the CEO, COO, CFO, CIO, executive team, and the entire workforce as an ongoing reinvention essential to success.

DX which seeks to harness rapidly evolving AI, offers organisations significant opportunities for long-term strategic value capture and immediate tactical options to counter competitive threats.

To realise these objectives, a robust method and approach are needed for defining and capturing full value over time. This method must focus cooperative efforts on what must be true for desirable key objectives to be realised, and it must secure accountable commitments to the actions necessary for strategic success.

Innovative technology adoption often begins with organisational enthusiasm for specific use cases without considering the broader strategy. With generative AI (GenAI), organisations launched pilots without a long-term strategy, and agentic AI now faces a similar rush to deploy AI agents for isolated use cases, e. g., patient engagement in healthcare, without integrating the technology into a comprehensive agenda for value creation and value capture. On the other hand, superior value capture outcomes are evident in world-leading airports where AI is integral to key operating platforms and border protection objectives across crowd management, security screening, and passport control.

Agentic AI fragmentation limits scalability, undermining the organisation’s realisation of AI’s longer-term strategic value potential. In addition to the hype cycle rush, other factors that may cause permanent opportunity loss or worse include:

• Change orchestration³ is complicated due to key differences between where and when DX dollars are spent and how and when DX’s full value may be realised. This can obscure choices between small, incremental improvements and step-function change.
• Headwinds limiting the long-term view may cause decision paralysis, e.g:
  • Indirect yet material return on investment (ROI) benefits are difficult to frame and compare against direct revenue growth and cost-cutting actions.
  • DX necessitates organisations to adapt their processes and capabilities, which is challenging.
  • Strict accounting rules governing technology spend require careful planning to maximise options for deferring or capitalising the costs of implementation and change and match them with the timing of benefits.
  • Nascent standards, fear of missing out (FOMO), and vendor obfuscation cause fear, uncertainty, and doubt about the future – the FUD factor. Together these muddy the waters when organisations need to compare their choices.

The SVR^TM framework provides a methodical approach to defining and capturing value, which facilitates coordination and buy-in across the C-suite, the executive team, and the management line.

Borrowing from championship sports, we structure SVR into winning value capture⁴ plays from all the medals on the winners’ podium:

• Bronze: improvements that directly reduce the cost of doing business.
• Silver: enablement that enhances operational processes and financial results.
• Gold: outcomes that increase value capture for the organisation’s stakeholders, its customers, and society.

The SVR methodology clarifies and strengthens buy-in to the SVR business case through commitments to the value capture OKRs, which set executive accountability and guide benefits realisation management.

SVR’s simple approach delivers a clear and simple statement of mutual OKRs that ties together (i) what will be done, (ii) what that enables, and (iii) its full value. In essence, SVR brings structure and clarity to enable the targeting of impactful outcomes from DX, supporting success for the CEO, the executive team, and their teams over both the short- and long-term.

SVR’s mutual OKRs bring life to three elements representing a common purpose that binds key stakeholders to the initiative – securing their commitments towards a clear and simple definition of success through mutual accountability for the value capture OKRs:

• What we will do e. g., establish a new online presence and access global markets.
• How we will do that e. g., design, build, and implement AI-enabled sales and customer service channels on relevant social platforms and online markets.
• Value Capture OKRs e. g., Bronze medal wins from a simpler business model, lower costs of doing business, and increased throughputs; silver medal wins from greater automation, improved customer acquisition and retention; and gold medal wins through tangible, superior, competitive positioning.

SVRs Key Steps

1. SVR assessment begins by articulating the situation’s relevant fundamentals and context, such as:
   • The problem statement
   • The definition of value
   • Who the decision-makers are
   • Process, history, SWOT analysis
   • Opinions and inclinations of key stakeholders, etc.
2. Then, working with and across the business leadership, in the context of your strategy, identify bronze, silver and gold value opportunities and their requirements for success.
3. Tie these SVR elements to stakeholders’ known or perceived strategic value objectives, and validate value against stakeholders’ views of what it is worth.
4. Prepare consolidated SVR business case and initiate action plans.

Footnotes

1. Together with big data, Cloud, and blockchain, AI is a core technology for realising DX value. Microsoft CEO, Satya Nadella, clarifies that today’s apps mostly just store and change data whereas in the future Software-as-a-Service (SaaS) will be supplanted by AI services that let us simply tell the system what to do, like ‘file a claim’ or ‘track my order,’ and it’ll handle the rest. (https://www.youtube.com/watch?v=a_RjOhCkhvQ)
2. © Copyright Barta Global Services 2014–2025.
3. In this context, think of change orchestration as the process of making sure all the promised actions by top executives, in different areas and locations, are aligned and coordinated to achieve the big goals.
4. Source: www.everestgrp.com, cio.com, Barta Global Services analysis.