For CIOs and other IT leaders setting and executing digital transformation, collaboration and storytelling are nonnegotiable.
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The CIO’s Guide to Digital Transformation
Digital transformation success: Best practices in strategy and execution
Just 48% of digital initiatives enterprisewide meet or exceed business outcome targets, according to the Gartner 2025 CIO Survey. How are successful CIOs able to manage technology investments and digital opportunities? By becoming Digital Vanguards. Download the 2025 CIO Agenda to learn:
The meaning of Digital Vanguard.
How Digital Vanguards are up to twice as likely to meet or exceed objectives, as compared to counterparts.
Four key innovative leadership actions to execute your digital transformation initiatives.
See Gartner’s latest research on digital transformation in action at our CIO Conferences and Events 2025.
How to plan and execute digital transformation
“Digital Vanguards” partner with fellow CXOs to consistently achieve excellent results from digital investments. Here’s how.
Digital Transformation Operating Model
Tell the Transformation Story
Digital Business Models
Digital Execution
IT must transition from a “support and service” role to an enterprise asset and integral business partner
For some organizations, this means shifting from a service-optimized to a value-optimized operating model. A value-optimized IT operating model (ITOM) fuses business and IT strategic partnerships that drive continuous strategy, innovation, governance and execution, while enabling enterprise agility.
The first step for CIOs is to find a willing business partner who will commit to designing and executing a pilot project to demonstrate the value of ITOM. CIOs who try to undergo this transformation without establishing business partners will fail.
Phase 1: Design a compelling pilot
Identify partners who will gain value from the new operating model and who have an open mind to operating differently to attain that value. Together, scope an important business priority that can deliver successful outcomes within a year with dedicated resources. Potential business outcomes include:
Increased speed, such as to solve a complex problem or achieve a strategic outcome through new ways of working.
Increased revenue by adopting new methods, such as applying design thinking to a customer journey.
Increased employee engagement by applying design thinking to the employee journey.
Increased innovation enabled by multidisciplinary strategy and opportunity teams.
Finally, identify success metrics with the goal of achieving more than one benefit (i.e. improved customer experience will improve innovation, speed and revenue.)
Phase 2: Execute the pilot
Create a dedicated group of high-performers to ensure the best chance of success for the project.
These teams can include a project manager, business and IT roles for delivery execution, human resources and subject matter experts. These teams should conduct formal business reviews every four to eight weeks alongside a product manager who can reallocate resources or resolve team issues.
Phase 3: Sell the next steps
Review how the pilot performed against expected benefits. If a pilot fails to achieve objectives, determine any benefits it did produce despite the shortfalls. Typically, both team members and sponsors will see the advantages of working in multidisciplinary business-IT teams, which include innovation and speed.
The results of the pilot will highlight the benefits of this operating model and drive larger organizational change. Before proposing next steps, consider potential options such as expanding the operating model across a single line of business or the enterprise. The larger goal should be organizational transformation, but that requires four to 10 years to come to fruition.
Articulate your technical roadmap to a wider audience
While the technical roadmap behind an organization’s digital transformation is key, CIOs must explain the key pieces of the transformation story to a wide variety of technical and nontechnical audiences.
To test whether the transformation story is ready for its public debut, ensure you have answers to these questions:
What are you transforming into, why and when?
Can you articulate your vision and destination in under two minutes?
Can you explain without using any corporate jargon?
Is your story understandable and motivational?
Can you measure impact and progress in a valuable and relatable way?
If not, it’s time to revisit your narrative. Without a clear and compelling story, CIOs will be plagued by disengagement and disinterest.
If you do, determine:
Step 1: What story are you telling?
The story of transformation will evolve as your organization does. In the beginning, focus on the purpose of the transformation, what it will look like when finished, the steps to be taken and the value to be created. As the transformation progresses, focus updates on milestones achieved, any incremental value, what’s next in the process and a timeline for getting there. Sometimes, this will mean including things that went wrong and need fixing. The overall goal is to feature a single consistent storyline that flexes a little depending on the stage.
Step 2: Do you know your audience?
Hyper focus on what the audience will gain, not the technology. Keep in mind this might change depending on who is in a meeting. For example, legal will be concerned about risk, finance will care about cost and sales will care about speed.
Step 3: How do you know that you are successful?
Think about the key outcomes the digital transformation will achieve. For example, if the organization is focused on differentiation, hyperpersonalization might be a digitally redefined value proposition. Outcome-driven metrics (ODMs) will sharpen the story and highlight the value of the transformation efforts.
With a long-term project like digital transformation, it’s important to have “waypoints” that break down a 20-year transformation into shorter, more understandable components. For example, over the next three months, the organization will prioritize smart factory use cases.
Step 4: How is your story structured?
It takes less than 30 minutes for an audience to confirm and make lasting judgments about the storyteller, the story and the value of the messages. The key is to continue to focus on the benefits and create the story based on the recognizable “from–to–because” structure. This means using phrases like, “from X to X” that highlight the growth and transformation of an organization.
Digital business models aim to capture novel value opportunities
Seventy-nine percent of strategy leaders expect their business models to fundamentally change as a result of digital technologies. Digital business models reflect how an organization creates, delivers and captures value based on four key dimensions:
Value proposition. The value customers derive from a product or service.
Customers. The customer segment served by the product or service.
Capabilities. The physical and digital assets, people, culture, information sources and strategic partners that deliver the value proposition
- Finance. The revenue and cost models that capture economic value.
Yet few organizations perform business model assessments as a regular management exercise. Instead, they wait until major economic changes or disruptive competitors force change. In the context of digital transformation, it’s better to conduct a business model analysis to identify strengths, weaknesses and opportunities, and from them explore more effective strategies to create value.
As part of the analysis, assess gaps in the existing business model in core and noncore markets; assess environmental shifts likely to drive major industry changes; prioritize the most promising opportunities to develop future capabilities, leverage firm assets or to build technological capabilities.
Twelve digital business value model:
Examples of digital business models that may enable the organization to capture identified sources of value include the following:
Subscription model
Build a repeat customer base by charging a subscription fee for continued access to a product or service that is traditionally purchased ad hoc (e.g.,, Netflix, Ipsy, Dollar Shave Club).
Razor and blades model
Sell the base product at low cost while selling add-on or complementary components at a higher margin (e.g., Amazon Kindle, Nespresso, Sony PlayStation).
Ecosystem model
Sell an interconnected and interdependent suite of products and services that increase in value as more participants (buyers and sellers) engage with them (e.g., Apple, Google, Samsung and their app developer communities).
Access-over-ownership model
Provide temporary access to goods or services for participants in the rental and sharing economy (e.g., Airbnb, Spinlister).
Free model
Provide a product or service to users for free and earn revenue by monetizing user data through advertisements and insights (e.g., Facebook, Google, Snap Inc.).
Freemium model
Provide the basic version of a product or service for free and charge users for advanced features (e.g., LinkedIn, Dropbox, Hootsuite, AWS).
Digitalization model
Offer a traditionally physical product in a digital form (e.g., Spotify, Wikipedia).
Servitization model
Transform the product into a service and/or sell ongoing services in addition to the core product (e.g., Salesforce, Microsoft).
Online retailer model
Sell products or services directly to customers through a digital-only channel (e.g., Shutterfly, Ally Bank, Asos, Shopify).
Marketplace model
Bring buyers and sellers together in return for a transaction fee or commission (e.g., Amazon, Uber, Airbnb).
Custom supplier model
Design, produce and distribute customized products and services (e.g., Shutterfly, Skin Inc.).
Gamification model
Use game mechanics and experience design to digitally engage with customers (e.g., Fitbit)
Ensure minimum viable outcomes with agile digital execution
Success with digital business transformation demands a more agile mindset, since more traditional models often smother digital initiatives. An adaptive program management framework allows execution teams to deliver transformation-level planning and control while prioritizing speed and adaptability.
Six steps to digital business execution
Envision the end state of the program by developing a shared vision, establishing sponsorship, communicating a transformation message and preparing a blueprint of the end state.
Sequence the priority initiatives and the order in which they will get done. Include how far and how fast your enterprise can move by understanding the environment, establishing program support, defining a program governance framework, determining financial delegation authority (FDA) structure for transformation.
Create/build the transformation or complete the initiative through a set of iterations led by program officers and project leaders who conduct program risk assessments, review program oversight and initiative assessments and review predictive measures.
Engrain change in the organization with each create/build iteration in order to ensure adoption and overall success of the program. To do so, review the organizational change management strategy and plans, monitor enterprise performance and transition services to new service providers, where relevant.
Evaluate results to assess whether the results appropriately support the original vision. The results may begin a new cycle of execution that should begin by validating that the digital strategic vision is still appropriate for the needs of the organization. The evaluation should include program portfolio progression, program investment (financial), program objectives and program performance (e.g., value realization, end-state metrics).
Learn what has worked and what needs adjustment. Change plans or outcomes accordingly. Capture new opportunities for development and improvement and establish targets for them.
How digital should your enterprise be?
Gartner Distinguished Vice President Analyst Hung LeHong sets the record straight: It’s seldom necessary for your enterprise to be 100% digital.
Digital Transformation resources for industry CIOs
Related Digital Transformation resources
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Frequently asked questions on digitalization
What is digital?
Digital is the representation of physical items or activities through binary code. When used as an adjective, it describes the dominant use of the latest digital technologies to improve organizational processes, improve interactions between people, organizations and things, or make new business models possible.
What is digitization?
Digitization (vs. digitalization) is the process of changing from analog to digital form, also known as digital enablement. In short, digitization takes an analog process and changes it to a digital form without any different-in-kind changes to the process itself.
What is digitalization?
Digitalization (vs. digitization) is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.
What is digital optimization?
Digital optimization is the process of using digital technology to improve existing operating processes and business models.
What is digital business?
Digital business is the creation of new business designs by blurring the digital and physical worlds.
What is digital transformation?
Digital transformation can refer to anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models. In public-sector organizations, digital transformation is often used to refer to modest initiatives such as putting services online or legacy modernization in a move toward digital government.” (This is more like “digitization” or “digital optimization” than “digital business transformation.”)
What is digital business transformation?
Digital business transformation is the process of exploiting digital technologies and supporting capabilities to create a robust new digital business model.
What is digital commerce?
Digital commerce enables customers to purchase goods and services through an interactive and self-service experience. It includes the people, processes and technologies to execute the offering of development content, analytics, promotion, pricing, customer acquisition and retention, and customer experience at all touchpoints throughout the customer buying journey.
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