When people say they are doing “digital transformation”, did you ever stop to think about what was missing in their statement? That there was a lot of smoke being generated? Perhaps, like me, you think to yourself, “Digital Transformation, hmmm.” What precisely are they transforming to, and why? Where is the opportunity?

This question is too often buried under vendors’ promises of nirvana if only a new piece of software was installed. Or buried under consultants’ promises of better efficiency or higher ROI. Instead, before the actual transformation exercise is even defined, this fundamental question must be answered: Where is the opportunity?

While there are many ways to uncover opportunity, one method is Issues and Trends Analysis. It seeks to answer the following questions:

• What might the industry look like in the next 3-5 years?
• What are the issues that others might be planning for?
• What longer-term issues keep a typical CEO in the industry up at night?

The idea is that if you can define a number of probable future scenarios, then you can proactively begin building a path towards one of those futures today.

Issues and Trends Analysis starts with the industry, and identifies key participants, new entrants, suppliers, clients, competitors, and substitutes. Against these entities, one analyzes the bottom-up impact of projected changes in each of these 14 factors:

• Supply Chain
• Channel Analysis
• People and Job Market
• Political Issues, both domestic and global
• Industry Key Success Factors
• Legal and Regulatory
• International Developments
• Technology and Data
• Non-business Infrastructure
• Socio-economic Changes
• Intellectual Property
• Network Effects of Scale
• Financial Markets
• Consumer trends

While Issues and Trends analysis may not perfectly identify the future, it will improve the odds of being right significantly. Transform to what? At least you’ll have a good idea.

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