Digital Transformation Ashley Friedlein CEO Econsultancy

Digital Transformation:
what it is & how to get there
Ashley Friedlein, CEO, Econsultancy
@AshleyFriedlein

| 2013 | Digital Transformation
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| 2
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Editable PowerPoint version of this presentation, with commentary in the notes, and
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| 2013 | Digital Transformation| 3
Ashley is the CEO and Co-founder of Econsultancy, a
research and training group with over 200,000 subscribers.
Econsultancy provides access to data, best practice guides,
trends, training and events - all focused on improving digital
skills and digital marketing and ecommerce effectiveness.
Econsultancy was founded in 1999 and has offices in
London, New York and Singapore.
Ashley has written two books on digital marketing which
have sold over 40,000 copies. He is a columnist for
Marketing Week magazine and guest contributor to
numerous other digital media and marketing publications. He
writes for Econsultancy’s own award-winning blog and
speaks at events internationally, actively promoting
Econsultancy’s brand and content as well as the interests of
digital and marketing professionals more generally.
About the author
Interested in Ashley
presenting to you?
Please see contact details on
final slide

Contents
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 Digital Transformation
 Strategy
 Technology
 People
 Process
 Business Transformation

Digital
Transformation

What is Digital Transformation?
| 6
 Digital Transformation is the journey from where
a
company is, to where it aspires to be digitally.

What is a ‘digital’ organisation?
| 7
A digital organisation is one that:
1. Focuses on customer experience irrespective of channel
2. Has a ‘digital’ culture

Net-a-Porter is a successful digital
business. What do they obsess about?
| 8
Customer
Service
Packaging
“EIP”s

Who is better at digital based on the
packaging / unboxing experience?
| 9

Amazon’s relentless focus on
improving the customer experience
| 10
Sources: Amazon, Oracle

What is most impressive about Amazon?
The digital part of the customer
experience? Or the delivery?
| 11

Perhaps most ‘transformative’ is where
digital meets physical to enrich the
customer experience
| 12

*The* strapline for a digital
organisation?
| 13

What is a digital culture?
| 14
7. Empowered
8. Data-driven
9. Passion
10. Innovative
11. Agile
Suggestion: Hire for culture /
personality and not (just) digital
skills. The latter can be taught.
1. Commercial
2. Customer-centric
3. Transparent
4. Collaborative
5. Environment
6. “Growth hacker”

Perhaps you know you are digital /
digitally transformed when…
| 15
 No-one in your company has ‘digital, online, e-,
interactive…’ in their job title
 There is no separate ‘digital strategy’
 Real-time retargeted dynamic
online ads based on social
profile data #whatever
 Posters in the underground
#howcoolisthat

Econsultancy’s Digital Maturity
Framework: roadmap to digital excellence
| 16
Digital
Excellence

Success is down to leadership…
| 17
Source: McKinsey Global Survey, August 2013

..and organisational alignment
| 18
Source: Econsultancy User Survey, Sept 2013

But only 1 in 10 marketing and IT
executives believe collaboration between
CMOs and CIOs is at the right level
| 19
Source: The CMO-CIO disconnect: Bridging the gap to seize the digital opportunity,
Accenture Interactive

33% see Digital Transformation as a
‘huge challenge’
| 20
Source: Econsultancy User Survey, Sept 2013

27% of execs rate digital transformation
as already “A Matter of Survival”
| 21
Source: MIT Sloan Management/Capgmini, “Embracing Digital Technology”, 2013

“Executives estimate that at
best, their companies are
25% of the way toward
realizing the end-state vision
for their digital programs”
Source: McKinsey Global Survey, Aug 2013

How do you actually make it happen at
scale, across the whole organisation?
| 23
1. Create the right environment for ‘osmotic’ digital
transformation
 Incentivising the right behaviours
 New blood/digital natives
 Show/prove the value of digital to all
 Digital culture
2. LEAD the transformation
 CEO should own/drive this

"Demand is growing for insight
into digital business, particularly
among CEOs”
Source: Diane Morello, managing vice president, Gartner, 2013

"31% say their CEOs
personally sponsor these
[digital] initiatives, up from 23%
who said so in 2012.
[...] the CEO is the only
executive who has the mandate
and ability to drive such a
cross-cutting program.”
Source: McKinsey Global Survey, Aug 2013

Jez Frampton, Global CEO, Interbrand, on x-channel experiences +
importance of executive/CEO support (00:46 - 01:20)

What should be in a Digital Strategy? (1)
| 28
Strategy
•Make it clear how the digital strategy supports the overall business
strategy.
•Business plan/P&L for digital as necessary.
•Articulate short, medium and long term plan/vision for digital. For example it
may well be that in the long term the objective is that ‘digital’ will dissolve
back into the business so structures, roles, P&Ls etc will change over time.
•Define digital principles and digital design principles. Focus should be user-
centred design and customer experience
•Define “what good looks like” for digital: KPIs, success metrics, what
analytics/reporting are planned

| 29
People/Process
•Digital governance: who makes decisions and how? Who are the
leaders for digital?
•Structure: organisational design, teams, roles and responsibilities for
digital
•Culture for digital: define how you plan to work (agile, iterative), your
planned environment, your values e.g. sharing, transparency,
collaboration
•Training, education, empowerment, integration of digital across the
business. Articulate how you plan to bring digital to the whole business,
break down knowledge, and other, silos.

| 30
Tech/Ops
•Your plans around content, community, commerce
•Digital tech: infrastructure, architecture and ecosystem inc. points of
integration across business
•Data: metadata, taxonomy, integration with rest of business and systems
e.g. CRM, sales
•Tech Standards: standards/protocols you intend to use/comply with
•Legal: data protection, privacy, IP/rights policies, licences etc.
•Procurement: define who is in charge of digital tech and agency
procurement/selection (should be digital specialists)
•Define tools/environment the digital team will require to do their jobs
effectively

| 31
Marketing/Sales
•Plans/resourcing around customer lifecycle: customer acquisition,
conversion, retention (including online customer service)
•Address plans around digital marketing fundamentals: advertising,
email / eCRM, content marketing, social, mobile, search marketing,
customer experience, analytics/optimisation

Source: Tate website
Tate’s digital strategy evolution

GOV.UK digital & design principles

Technology

Even politics has experienced the rise
of tech
• Obama’s 2008 presidential campaign
team had 4 engineers working on it
• Obama’s 2012 campaign team had a
team of how many engineers?
40!

By 2017 the CMO will spend
more on IT than the CIO
Source: Gartner, 2013

66% strongly agree that:
Marketing is becoming
increasingly
technology-driven
Source: Econsultancy User Survey, 2013

Source: McKinsey Institute, “Disruptive technologies: Advances that will transform life,
business, and the global economy”
Most future disruptive technology relates
directly to digital business transformation

However… although 90% of professionals
say tech impacts their job, only 20% have
the right skills
Source: Research for Digital Domination Summit 2012
(2,000 professional respondents)

*Which* technology is much less important than organisational alignment with IT
“Marry the
technologists”

People

Structure

Source: Econsultancy’s Digital Marketing: Organisational Structures and Resourcing
Best Practice Guide
Stage 1: Let many digital flowers bloom…
BBC
1997-2001

Stage 2: Dedicated Digital Team / CoE
BBC
2001-2006
Best Practice Guide

Stage 3: Hub & Spoke
BBC
2007-2012
Best Practice Guide

Stage 4: Multiple Hub & Spoke
BBC
2012
Best Practice Guide

Digital Enlightenment = “Honeycomb”

Culture

Culture is one of the most significant
barriers to digital transformation
| 49
Source: MIT Sloan Management/Capgmini, “Embracing Digital Technology”, 2013

What is a digital culture? (recap)
| 50
7. Empowered
8. Data-driven
9. Passion
10. Innovative
11. Agile
1. Commercial
2. Customer-centric
3. Transparent
4. Collaborative
5. Environment
6. “Growth hacker”

Nordstrom: “What we want in a teammate”
“Customer-driven”
“Constantly changing”
“Collaborative”
“Curiosity”
“Passion”
“Always learning”

Roles &
Responsibilities

“Pi-shaped” people: broad skills but
depth in creative / marketing AND tech /
data (left and right brain)
T

Growth Hacker
• From Silicon Valley
• Combines marketing with
product development
• About getting to points of
sustainable growth with new
products/services
• AirBnB case study: Growth
Hacker is the new VP
Marketing

Product Manager
Source: Mind the Product

One way to do it... from CIO to CMO
Ali Hine
CIO CMO, IG Group

To CDO or not to CDO?
Source: Econsultancy
“30% of respondents have a
CDO. [those with a CDO]
indicate significantly more
progress toward their digital
vision than those without one”
McKinsey Global Survey, 2013
Suggestion:
CDO should be an interim role.
CDO should report to CEO.

New job descriptions for HR to understand
| 58
Source: Econsultancy

How do you attract top digital talent?
| 59
 Digital vision – a clear strategy and the
opportunity “to make a difference”
 Product – the chance to create a beautiful
product / experience
 Talent begets talent - get to work with other talent,
digital ‘craft’
 Culture - you have a digital culture (see earlier)

Environment

BBC W1 – tech + editorial together

BBC Salford, Google London – open /
collaborative / ‘ad hoc’ spaces
Space echoes working practices:
small, rounded teams; fluid / agile;
mixing disciplines; no hierarchy.

Process

Four big challenges for digital / process
| 64
1. Multi-disciplinary
2. Speed / Agility
3. Complexity
4. Innovation

How we need to work
“A successful digital culture is reliant on innovation,
openness and responsiveness.”
Rachel Neaman, Department of Health, Deputy Director, Digital, Channel
Strategy and Publishing
“Being able to change at speed is very important. We
know government can move quickly because we built the
new e-petitions system in less than 2 months.”
Sharon Cooper, Government Digital Service, Cabinet Office, Deputy Director
“Transformation means a change in culture and process in
order to deliver change and make sure that we are seen
by our customers to be innovating and moving forward.”
Simon Shorey, Barclays, Head of Development, UK Retail and Business Banking

Multi-disciplinary: Amazon’s “two pizza” teams
+ co-located
+ manage by objectives / “freedom within
boundaries”

How do we deal with the need to
operate at SPEED?!
Real time
On demand
Agile
Automation
Responsive

Agile – for software development
Manifesto for Agile Software
Development
We are uncovering better ways of developing
software by doing it and helping others do it.
Through this work we have come to value:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
That is, while there is value in the items on
the right, we value the items on the left more.

Agile – for marketing

Nordstrom Innovation Lab

| 71
Speed is a vital source of
competitive advantage in digital

| 72
Google’s USP has always been speed?

| 73
From mere fast to Now. Predictive. Push.

| 74
iOS7’s “background refresh” –
improving the speed / responsiveness
of the user experience
“more recent information... content
fresh and ready... no need to wait...
massive improvement in customer
experience”
Eventbrite, Yplan, Realmac

1-3 days: if a video is to go viral
| 75
Source: Unruly “Science of Sharing”, July 2013

< 6 hrs: half your email opens occur
| 76
Source: Mailer Mailer

< 3hrs: 50% of clicks on shared links
| 77
Source: bit.ly

| 78
00:01 – Twitter is ‘Marketing in the Moment’

The Stalagmite vs. the Conductor
| 79

The rate of change is accelerating at a business level too
“The average lifespan of an S&P
500 company has decreased by
more than 50 years in the last
century, from 67 years in the
1920s to just 15 years today”
Source: Professor Richard Foster, Yale University

“By 2020, more than three-
quarters of the S&P 500 will be
companies that we have not
heard of yet.”
Source: Professor Richard Foster, Yale University

The journey towards digital excellence
Source: Econsultancy Digital Maturity Framework

Burberry – doing well because of
‘digital transformation’?
| 84
Source: The Digital Advantage: How digital leaders outperform
their peers in every industry, CapGemini / MIT Sloan Management

Digitally-transformed busineses
outperform their peers in every industry
| 85
Source: The Digital Advantage: How digital leaders outperform their peers in every
industry, CapGemini / MIT Sloan Management
Profitability

Digital Transformation
is actually
Business Transformation

Digital Transformation
with Econsultancy
We can measure your organisation’s digital
capabilities so you know where you are. This is the
baseline against which improvement can be measured
and benchmarked, both internally and versus the
market.
We help organisations build their digital capability
roadmap outlining how they are going to achieve their
digital transformation in terms of people skills.
We deliver digital capability programs via training
and workshops both face to face and online. These
accelerate the adoption and integration of the digital
skills needed to deliver on digital transformation.
We can provide certification and CPD for the digital
capability programs we deliver
Editable PowerPoint version of
this presentation, with
commentary in the notes, and
including builds, is available to
Econsultancy subscribers on
the Econsultancy site.
Call us on +44 (0)20 7269
1450 (UK) or +1 212 971-
0630 (US) or email
transformation@econsultan
cy.com

Digital Transformation Ashley Friedlein CEO Econsultancy

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