Novarica released a 6-step checklist to prepare for the digital transformation. Read the steps on the following slides.

1. Identify key trends and business processes that will be affected

Numerous trends will be game changers. Do you know what they are?

• The Internet of Things (PC360: "The Internet of Things: What the heck is a thing?")
• Social media
• Big data (PC360: "What is big data and how should you use it?")
• Cloud services
• Mobile
• Security

Take a step back from the hype (no, not everyone will have a self-driving car in 2015) and understand what business benefits will arise. For example, collecting additional data from social media may not be worthwhile if there are restrictions on how that data can be used, Novarica says.

2. Identify strengths, weaknesses, opportunities and threats

• Strengths include tech capabilities, organizational structure and company culture.
• Weaknesses arise around organizational blockers, legacy restrictions and lack of vision.
• Opportunities must be communicated to ensure organizational buy-in and investment. Typical opportunities are related to new markets, customer retention, greater efficiency and higher business flexibility.
• Understand threats to how they relate to new and non-traditional competitors, such as Google. Also weigh how threats impact cost structure and product flexibility.

3. Understand maturity of key practice areas (business & application architecture)

• Learn if business architecture exists and whether there is an underlying business capacity model supporting the area.
• Application architecture includes a target or reference. Governance process must be in place to ensure that the solutions being built fit into the long-term strategic vision.
• Security is a differentiator in a digital organization. What types of security processes are in place, are they funded and how mature are they? Data leakage prevention, threat assessment and investigations are key elements to a successful program. 

4. Conceptualize future business capabilities and needs

Find ways to focus on what matters to the organization:

• What does the company want to do or need to do?
• What is the business' mission statement and what are its goals?
• How does the enterprise want to modify its interaction with customers, business partners and regulators?
• What are the competitors doing and when will their solutions hit the market?

It may be helpful to keep a legacy policy administration system and slowly decouple key functionality from it, such as document delivery, underwriting rules, rating engines or business analytics to achieve incremental business changes. 

All business drivers, including speed to market, project delivery excellence, target operating models, compliance, multi-channel distribution, direct growth, customer centricity, pricing, efficiency and data should be reviewed and then mapped to tech drivers.

5. Optimize project prioritization process

Understand how projects are prioritized and how scope, time and budget are factored into this process. Differentiate between "business as usual" projects, projects to update old technology, new business propositions and investments made for reusable assets.

Determine whether the business case supports digital transformation and what percentage of projects is related to this. The Novarica report authors say CIOs should ask themselves, "How are investments between a digital future and keeping the lights on balanced?"

6. Adopt a test-and-learn culture for digital transformation

Know the difference between core IT systems and fast IT environment.

Core IT uses traditional waterfall methodologies and takes a long time to evolve. Fast IT can be evolved through agile processes and are disposable. 

In digital, we need a fast IT that can be deployed and tested quickly, and determined to either work well or not work at all and discarded. This does not mean to evoke the anything-goes Wild West, the authors caution, because even fast IT has rules to follow.