SPP Digital Transformation Strategy 5 — Questions and Answers
Question 1: A company's digital strategy is described as 'omnichannel.' What does this specifically require beyond simply having both digital and physical channels?
- Higher digital marketing spend than traditional advertising
- Seamless, consistent customer data and experience continuity across all channels (Correct answer)
- Identical product assortment in online and physical stores
- A single technology vendor for all customer-facing systems
Correct answer: Seamless, consistent customer data and experience continuity across all channels
Omnichannel requires unified customer data and consistent experience continuity so customers can move fluidly between channels without friction or context loss.
Question 2: In strategic planning for digital transformation, 'digital adjacency' refers to:
- Placing digital teams physically near business unit leaders
- Expanding into new markets or offerings that are enabled by, and closely related to, existing digital capabilities (Correct answer)
- Partnering with adjacent industry competitors on shared platforms
- The geographic proximity of cloud data centers to end users
Correct answer: Expanding into new markets or offerings that are enabled by, and closely related to, existing digital capabilities
Digital adjacency is a growth strategy of leveraging existing digital assets and capabilities to enter closely related new spaces with lower risk than unrelated diversification.
Question 3: Which governance structure is most appropriate when a company's digital transformation spans multiple independent business units with different maturity levels?
- Centralized command structure with uniform rollout mandated by the CEO
- Federal governance with a central digital office setting standards and units executing with autonomy (Correct answer)
- Fully decentralized model where each unit independently defines its transformation
- A joint venture with a technology partner to govern all digital initiatives
Correct answer: Federal governance with a central digital office setting standards and units executing with autonomy
A federal model balances enterprise consistency (standards, shared platforms) with business unit autonomy, accommodating different maturity levels without imposing a one-size-fits-all pace.
Question 4: A strategic planner notices that a competitor has launched a digital marketplace that connects the company's current suppliers directly with end customers. This is an example of which digital threat?
- Platform envelopment
- Disintermediation (Correct answer)
- Digital commoditization
- Ecosystem lock-in
Correct answer: Disintermediation
Disintermediation occurs when a digital platform removes an intermediary (here, the company) by connecting suppliers and customers directly, cutting out the middleman.
Question 5: When measuring digital transformation progress using OKRs, which type of key result is most strategically informative at the portfolio level?
- Number of digital projects launched per quarter
- Percentage of revenue attributable to digitally-enabled products and services (Correct answer)
- Total IT budget allocated to transformation initiatives
- Number of employees who completed digital literacy training
Correct answer: Percentage of revenue attributable to digitally-enabled products and services
Revenue from digitally-enabled offerings directly measures business impact and transformation success at the portfolio level, unlike activity-based or input metrics.
Question 6: A firm adopts a 'digital first' design principle for all new processes. The core implication of this principle is:
- All customer interactions must be exclusively digital with no human option
- Digital channels and automation are the default design choice, with non-digital as the deliberate exception (Correct answer)
- The IT department leads all process design decisions
- Mobile applications take priority over web-based interfaces in development
Correct answer: Digital channels and automation are the default design choice, with non-digital as the deliberate exception
'Digital first' means designing for digital delivery by default while allowing non-digital exceptions where justified, embedding digital thinking into every new process.
Question 7: Which scenario best exemplifies a 'born digital' competitive advantage that legacy firms struggle to replicate?
- A startup that replicates a traditional firm's service catalog online
- A platform company whose entire operating model, data assets, and culture were designed around digital from inception (Correct answer)
- An incumbent that digitizes all paper-based processes within two years
- A retailer that launches a mobile app for its existing loyalty program
Correct answer: A platform company whose entire operating model, data assets, and culture were designed around digital from inception
Born-digital firms have data architectures, culture, and business models built from the ground up for digital — an integrated advantage that incumbents cannot easily replicate by bolting digital onto legacy structures.
SPP Digital Transformation Strategy 5
A company's digital strategy is described as 'omnichannel.' What does this specifically require beyond simply having both digital and physical channels?