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How micro transformation can change the way companies solve problems

Companies need to make an impact as they pursue digital transformation, targeting KPIs that help scale innovation and drive growth.

In brief
  • Micro transformation is a methodical way of creating alignment between a company’s digital ambitions and its strategic priorities.
  • KPIs can inform strategic decision-making and give executives confidence that teams are addressing the right areas to leverage growth opportunities.

As the economic pendulum shifts to cost control with the possibility of a recession looming, chief information officers (CIOs) seek ways to continue achieving the same results but with less margin for error. They’ll need to balance the value of continuing technology investment against the need for fiscal prudence. Executives will be under more scrutiny to show results when investments are made, and to demonstrate impact on a regular basis to give C-suite leaders confidence that there is value in the operational strategy they are following. Micro transformation can help companies advance technology at speed, innovation at scale, and leverage that momentum to better support the needs of the market and their customers. Micro transformation is a methodological approach that articulates a business’s core aspirations, identifies the key performance indicators (KPIs) affecting that aspiration, and prioritizes interventions that most effectively target and influence the KPIs. Rather than traditional projects, micro transformation helps surface some of the fundamental blockers to a broader digital transformation and identify growth drivers hidden beneath existing practices. With each execution, themes will surface across these targeted efforts and allow leaders to see a pattern emerging of common challenges hindering organizational growth. Consider micro transformation as a tool in the toolbox, because it is scalable and quick, to unlock value while learning and diagnosing larger strategic pivot points. As the pace of technology continues to accelerate, this approach offers substantial value to CIOs and tech executives under pressure to generate a meaningful return on their company’s investments in that technology.

Rather than trying to execute large and often cumbersome initiatives, micro transformation shifts away from the idea that an organization can solve for digital disruption in a single, large scale transformation. It prioritizes multiple incremental, yet powerful, coordinated interventions across people, process and technology. The multidisciplinary approach creates material impact on KPIs that the business has identified as most valuable. Micro transformation allows automation teams to find the middle ground between implementing discrete tool-led solutions and implementing a full-scale transformation.

Digitize a single line of business, roll out a targeted new feature that enables a very specific function, address a recurring pain point a customer is experiencing with a new platform. These types of quick wins linked to a specific outcome can create immediate value for the business, while also laying the groundwork for more ambitious digital transformation projects down the road that can create an even bigger impact.

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Chapter 1

Mitigate digital transformation fatigue

Micro transformation targets KPIs that would be most impacted by a new system or process

One of the benefits of micro transformation is that it can help companies manage digital transformation fatigue. Instead of launching new initiatives that offer early promise but fail to deliver lasting results, micro transformation targets and focuses on KPIs that would be most impacted by a new system or process, accelerating time to value delivery. KPIs are identified, the value that can be gained is clearly defined and a strong business case can be made to pursue the effort. This is what we want to do, this is what it will take and this is what will mean for our business when it’s done. When that message is conveyed, it can unlock a series of operational efficiencies, risk mitigation benefits and resource optimization opportunities. These steps help digital transformation move beyond middle managers to align with the strategic priorities of the organization, focusing on specific KPIs that can enable those strategic priorities.

For example, a manufacturer that has struggled to digitally transform operations on its shop floor embarks on a new strategy. It involves dialogue with frontline workers who share the challenges they face in doing their jobs. It’s a chance to share perspective that is informed by their work each day. Management hears these insights and shares the KPIs that matter most to the company’s financial performance. The needs of the customers are woven into the dialogue as well and fairly quickly, the seeds of a new strategy are planted. The buy-in that is gained from these initial conversations with key stakeholders is an essential component to building a plan that makes sense for the business.

What goes into micro transformation is a lot more than the solution and the actual delivery of the work. There can be deep process design and process improvement work that goes beyond simply driving transformation and implementing automated solutions. It’s about an organization challenging its team to think bigger, and then building a smart, scalable plan to make it happen. Why do we operate this way? Where can we find opportunities to improve? In some cases, it’s reinventing how a company does a task, even if it’s been done that way for generations. Micro transformation is about helping companies and their people set aside their fear of trying new things. But it’s doing it with a clear sense of purpose. It’s tackling change with a methodical approach that is informed by insight from frontline personnel and is consistently backed by KPIs.

Minimize complexity, add connectivity

An EY team worked with a client that develops safety products, a market that has elevated expectations when it comes to performance and reliability. There is complex coordination with different legal and compliance teams, as well as managing through data sets, that comes into play to ensure the product delivers for the customer. In this case, the company was looking for a better way to manage all the complexity.

A traditional digital transformation effort would apply mission-learning, gain insight, prioritize information and develop an action plan to manage incidents. Typically, this would include a collaboration platform, a workflow capability plan and a feedback mechanism as information comes in. There would also be siloed initiatives, analytics and workflow tools and several initiatives that manage different data flows. It’s a lot to manage, which creates more opportunity for breakdowns in communication.

Micro transformation takes a different approach. It creates an entire process orchestration in terms of how data comes in and triggers workflows and queues, based on the priority of the risk associated with the incident. Details are automatically driven to the teams that need to be focused on the incident and everyone is working off the same plan. Knowledge is fed into the insights engine as it comes in so it can become more intelligent and keep everyone apprised about what’s happening. It creates a level of connectivity that would be difficult to achieve through standard practices. The ability to respond to incidents, manage risk and maintain product flow are critical KPIs for any business. Micro transformation can address these KPIs by helping an organization streamline important processes to mitigate the organization’s risk and convey confidence that the organization is prepared to respond when needed.

As companies think about their digital journey, micro transformation provides an opportunity to leverage capabilities that can drive business value without committing to a massive undertaking within uncharted space. Immediate value realization is not something companies have to wait months and years to get benefit out of, which is a big part of leveraging this approach. These can be a series of phased MVPs or “minimum viable products” that can generate meaningful ROI. It’s a way to break down silos, test out hypotheses and learn more with less risk and lower technical debt than a full transformation. In this scenario, end-to-end digital automated capabilities enabled through micro transformation can help companies get to value more quickly without disrupting core operations.

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Chapter 2

Key elements of micro transformation

It’s a multidisciplinary approach that creates material impact

Breaking down micro transformation

How it can be used holistically to solve business problems:

The final two steps are implementation and change management. There will be challenges such as developing an effective communication strategy, addressing different team priorities and successful onboarding of new technologies into the ecosystem. The key is creating a strong partnership across the company’s enterprise resource planning (ERP) and IT organizations, as well as middleware teams. It also helps to have an agile project management platform that can keep everything moving effectively.

Develop and execute a change management roadmap that aligns leadership, engages key stakeholders, assesses impact, provides timely communication and equips people with the knowledge and skills they need to do their job. The roadmap should also be able to assess stakeholder readiness for change and adoption at the appropriate times.

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Chapter 3

How to get started with micro transformation

Key things to think about when considering your approach

As we said at the top, micro transformation is not a project management technique. It’s a multidisciplinary approach that creates material impact on the KPIs the business has identified as most valuable. And it often triggers conversation that leads to more questions, and more opportunities to strengthen a company’s operating model in a logical way.

Here are some final takeaways to think about with micro transformation:

  • Choose your project carefully – Identify a project within your organization that addresses a specific need and will have a measurable impact on your business.
  • Pinpoint the right KPIs – Select the metrics that directly relate to a strategic value of your organization. This can help with stakeholder alignment and overall buy-in. Identifying the KPIs to go after, understanding how that KPI manifests itself across the value chain, and doing the process mining or analytics associated with that is critical.
  • Where possible, find projects that center your focus on the customer – While operational efficiencies are critical, projects that have revenue impact are likely to catch the attention of your stakeholders. Make the customer experience a North Star when feasible. Think about features and/or technology you can implement that will improve their experience.


The most powerful thing about a micro transformation project isn't the immediate results. It's the way it can position your team across the organization and shift your stakeholder’s mindset positively toward digital transformation.

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