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DBS2016: The Digital Journey
1.
© 2016 Information
Services Group, Inc. All Rights Reserved.
2.
© 2016 Information
Services Group, Inc. All Rights Reserved. William S. McNee November 17, 2016 Greenwich, CT The Digital Journey Keys to Success
3.
© 2016 Information
Services Group, Inc. All Rights Reserved. Pace of Digital Business adoption is quickening, shifting from a Board Room debate just a couple of years ago – to a core operational mandate at many firms today This suggests that as a “strategic priority” – Digital is beyond the inflection point. With mainstream adoption, we shift to the hard work of making it a reality in the business In this sense, there is a growing recognition that Digital Business is just the future of business With greater experience / maturity comes a richer appreciation of what it takes to succeed and win in the new era Taking the Pulse
4.
© 2016 Information
Services Group, Inc. All Rights Reserved. Digital Business: Key Signposts 68% 73% Digital Business is a strategic / corporate priority at my company, with defined business goals. 2015 2016 46% 54% Data Science is at the heart of our Digital Business Strategy. 2015 2016 76% 68% My company has budget set aside specifically for Digital Business initiatives. 2015 2016 Source: Saugatuck Technology, an ISG business “Digital Business” Survey, Nov. 2015, N=129 & Sept. 2016, N=141 “C-level” Bus/IT Leaders
5.
© 2016 Information
Services Group, Inc. All Rights Reserved. Digital Business: Key Signposts 52% 58% We are having difficulty finding the right talent to support our emerging Digital Business initiatives. 2015 2016 24% 55% My company has, or is currently evaluating the need for a Chief Digital Officer or Chief Digital Strategist. 2015 2016 34% 55% Our digital offerings are contributing more to our growth than our traditional products and services. 2015 2016 Source: Saugatuck Technology, an ISG business “Digital Business” Survey, Nov. 2015, N=129 & Sept. 2016, N=141 “C-level” Bus/IT Leaders Big Jump Big Jump
6.
© 2016 Information
Services Group, Inc. All Rights Reserved. Key Trends Recognition for and emergence of the CDO / CDS reflects strategic importance of Digital Much deeper understanding that unlocking insights from myriad internal and external data sources through the use of Data Science is central to Digital Business success Budgets for Digital initiatives are increasingly being consolidated into ongoing operations – as firms get beyond the early stages and are fully engaged and committed Recognition that Digital Business demands new skills and resources, and a fundamental rethinking of critical business processes / workflows (internally and externally) Evidence that Digital is now beginning to truly contribute to the top and bottom line . . .
7.
© 2016 Information
Services Group, Inc. All Rights Reserved. Digital Business – Five Key Stages The Train Has Left The Station Source: Saugatuck Technology, an ISG business “Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2016 2018 2020 No Digital Footprint Experimental / Learning Committed / In Process Engaged / Ongoing Established / Improving 60% 88% US Europe (UK + DACH) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2016 2018 2020 54% 79%
8.
© 2016 Information
Services Group, Inc. All Rights Reserved. Top Business Drivers / Pressures Causing Digital Business Adoption Top Business Drivers / Pressures UK DACH US Global Need for greater operational agility and flexibility 56% 42% 55% 52% Increased competition – from existing competitors within my Industry 59% 42% 35% 43% Expand share of wallet from existing customers 32% 61% 34% 40% Grow profits / EBITDA, Return on Assets or Return on Equity 41% 18% 45% 38% Expand share of market from new business 35% 36% 34% 35% Increased competition - from new competitors outside my industry 29% 33% 31% 31% Need to introduce new operating model (s) 24% 30% 31% 29% Respond to segment disintermediation 21% 36% 16% 22% Changing expectations in the workplace 3% 0% 19% 11% Source: Saugatuck Technology, an ISG business “Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders
9.
© 2016 Information
Services Group, Inc. All Rights Reserved. In 2000 our company's revenue was $1.3B and we distributed 8 million printed classifieds magazines per week. We will print our last magazine this year. Our entire business model will then be digitally based. – CIO, Publishing, Large (US) Our commitment to growth is driving our digital agenda – EVP, FinSvcs, Very Large (Global) Projects take a long time at large companies like ours. Things are implemented by region. Nationwide rollouts are too risky. – COO, Media, Very Large (UK) We have implemented many of the early digital technologies to make us more competitive. Now we need to focus on some key process changes. – CTO, Pharma, Very Large (Germany) This year we are totally re-platforming for deployment in 2017. We are very committed to digital strategies as a brand. – CMO, Retail, Very Large (US) What Large Enterprise Leaders Have to Day: Stages of Digitization
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Services Group, Inc. All Rights Reserved. Success and the Fast Growers Digital now seen as the growth engine for the future of business across many industries Firms furthest along in their Digital journey are the fast growers (5% +), followed by firms experiencing contracting revenue growth (-2% +) For the fast growers, Digital Business is all about being nimble, agile and flexible to changing market demands. No other business driver comes close With markets moving rapidly, firms with flat to modest revenue growth may be the most challenged and exposed as they take up the Digital Business mandate Organizational willingness to change, along with cultural transformation issues, remain among the most difficult challenges to overcome for most of the Global 2000
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Services Group, Inc. All Rights Reserved. Mind the Gaps: US Importance and Success of Factors Driving Digital Business Growth (Very + Extremely Important / Successful responses only) Source: Saugatuck Technology, an ISG business “Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders US Importance Success Gap Enhanced user experience 75% 33% -42% Digital engagement of suppliers / business partners 71% 30% -41% Launching digital add-ons to traditional products / services 66% 30% -37% Deploying innovative business / operating models 62% 26% -36% Advanced customer targeting (using analytics/big data) 70% 34% -36% Channel expansion 63% 35% -28% Launching innovative new digital products / services / apps 68% 41% -27% Establishing a “Mobile First” solutions policy 55% 30% -25% Proactive customer engagement through social media channels 57% 35% -22% Deploying new monetization platforms for Digital Business 50% 35% -15%
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Services Group, Inc. All Rights Reserved. Mind the Gaps: Europe Importance & Success of Factors Driving Digital Business Growth (Very + Extremely Important / Successful responses only) Europe Importance Success Gap Launching innovative new digital products / services / apps 75% 41% -34% Digital engagement of suppliers / business partners 64% 35% -29% Deploying new monetization platforms for Digital Business 61% 37% -24% Launching digital add-ons to traditional products / services 58% 41% -17% Deploying innovative business / operating models 65% 49% -16% Proactive customer engagement through social media channels 52% 39% -13% Channel expansion 55% 42% -13% Advanced customer targeting (using analytics/big data/location-based svcs) 54% 42% -12% Enhanced user experience 59% 52% -6% Establishing a “Mobile First” solutions policy 49% 43% -6% Source: Saugatuck Technology, an ISG business “Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders
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Services Group, Inc. All Rights Reserved. Overall, the research reinforces the fact that Digital Business is really hard to do Earlier-generation digital marketing initiatives are giving way to newer models of customer and partner engagement, and a fundamental rethinking of business models, value chains, and operating principals Success demands strong executive leadership, organizational alignment and a culture willing to evolve / change Launching innovative new digital products and services, and implementing technologies and strategies to effectively monetize them, remain the most illusive thus far Where’s the Success?
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Services Group, Inc. All Rights Reserved. Top Challenges: Global (Question: Pick top 3) 4% 4% 10% 21% 24% 25% 28% 28% 28% 30% 31% 34% Partner engagement Client engagement Functional staffing / talent Technology – Tools / IT… Organizational alignment /… Business model evolution Data quality IT staffing / talent Budget Senior executive leadership Company culture Organizational willingness to… 0% 10% 20% 30% 40% As with prior global CXO studies, the top challenges to successfully develop and deploy winning Digital Business initiatives are all non-IT issues The top three challenges in the US: 1) Organizational Willingness to Change 2) Budget 3) Company Culture “Senior Executive Leadership” support tops key challenges in Europe, whereas is ranked 6th in the USSource: Saugatuck Technology, an ISG business “Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders
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Services Group, Inc. All Rights Reserved. Digital engagement. Customers expect a seamless, personalized experience that spans across physical and virtual worlds Digital insights. Data is at the heart of Digital Business; building strong data science skills will be critical for next-generation insights Digital backbone. A platform that can continuously and flexibly adapt will be a critical for Digital Business success Three Key Imperatives to Invest Around and Focus On Processes Cloud Customer Analytics Collaborative Product Innovation Business Insights Customer Experience Product Analytics IoT Automation Platforms Access Channels Social Media Collaboration @ @ Partners Customers Enterprise
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