CWIN17 telford did we transform - alex smith bingham

2. CONTENTS Success Factors4 Types of Digital Transformation5 Journey to Change6 Problem Statement1 What is Digital?2 What is Digital Transformation?3 2

3. Problem Statement Mismatch of Ambition Is your organisation customer centric? 3

4. Problem Statement Mismatch of Ambition 75%of organisations agree 4

5. Problem Statement Mismatch of Ambition 30%of customers vs. 5

6. Problem Statement Mismatch of Ambition Have you transformed? 6

7. Problem Statement Mismatch of Ambition 40%of board execs agree 7

8. Problem Statement Mismatch of Ambition 27%of employees vs. 8

9. Problem Statement Mismatch of Ambition Company ambition 9

10. Problem Statement Mismatch of Ambition Customer and employee ambition Company ambition 10

11. Problem Statement Failure to Execute The top 3 challenges to IT executing on digital transformation: 45% 43% 39% Business and IT misalignment Time constraint Legacy infrastructure and systems 11

12. What is Digital? Transforming our clients by putting the customer, consumer, citizen or client at the heart of their business… enabled by digital technologies at a compelling pace Digital can enable or be the catalyst for the transformation of internal operations… through connectivity, collaboration and insight 12

13. WHAT CAN YOU TRANSFORM? What is Transformation? Business Outcomes Organisational Change Culture & ways of working Technology change WHAT ARE THE COMPONENTS? Purpose Proposition Ecosystem Capability Culture & ways of working Operational effectiveness Business Model 13

14. Success Factors: The Right Level Of Ambition Client ambition, are they getting it right? Your customers Your organisation You as a leader AMBITION AMBITION FOR RIGHTWRONG 14

15. Success Factors: Alignment For Change The board Employees Customers Suppliers Do they all feel the need for change? Typically need 8 to 10 stakeholders to set up a successful programme 15

16. Success Factors: Capacity For Change CREATIVITY RESOURCE CAPITAL 16

17. Success Factors: Pace 63% of employees said the pace of technology change in their organization is too slow[1] 40% of respondents say that lack of urgency/no sense of burning platform is the biggest single obstacle to digital transformation[3] In two years 65% of business leaders expect to see substantial impact from their digital technologies[4] 33% of companies are developing their plans for Digital Transformation, but won’t execute in the next 12 months[2] 17

18. Success Factors: Overcoming Risks and Barriers Regulatory Competition People Execution 18

19. Type of Digital Transformation Example organisations: 1. Innovation transformation What is it? Who is it for? What will it bring? A vision for the future that is needed to transform the client’s business into an innovative organisation to deliver accelerated growth Propositions, products and services to suit their future customer needs. New customer strategies, operating models, and business capabilities to operate at scale. Culture that will iterate to remain ahead If a client wants to use digital to become something completely new or break into new white space. Or clients where their proposition, their current service to their customers, and the current business model will not work anymore 19

20. Type of Digital Transformation Example organisations: An adjustment to the proposition, changing their ideas, changing the way they engage and all the new capabilities but won’t be something that is radically new Long-term differentiated engagement through innovative propositions. Client capability that fits their needs with best of breed solutions. Improved internal and external facing operations 2. Tailored Transformational Engagement What is it? Who is it for? Companies that still want to be in the same business but they want to be different, use digital to reach their customers better, faster, be more convenient than anyone else What will it bring? 20

21. Type of Digital Transformation 3. Digital Technology Platform Transformation with Innovation What is it? Who is it for? What will it bring? An upfront investment to help clients put the capabilities in place to de-risk or increase the pace of digital transformation as and when it is needed. This applies to clients who do not know what the business wants to do with its digital transformation right away but needs to ensure that it has the correct foundations in place for when it does World-class digital platforms inspired to meet future demand with greater programme and operational efficiency. Competitive edge for the client through technology innovation and cost efficiency 21

22. Journey to Change Strategy and vision Innovation / proposition Test and learn Deployment 22

23. Conclusion PACE AMBITION ALIGNMENT CAPACITY 23

Notes de l'éditeur

This is a reflective view Should it be? And in how long?
https://www.capgemini-consulting.com/resource-file-access/resource/pdf/dti_dcx_research-diconnected-customer.pdf
[1] We found that while three-quarters (75%) of organizations believe themselves to be customer-centric, only 30% of consumers believe this to be the case - https://www.capgemini-consulting.com/resource-file-access/resource/pdf/dti_dcx_research-diconnected-customer.pdf [2] While 40% of senior executives believe their organization has a digital culture, only 27% of the employees felt the same way – https://www.capgemini-consulting.com/resource-file-access/resource/pdf/dti_digitalculture_report.pdf [3] The top three challenges to IT executing on digital transformation cited were business and IT misalignment (45 percent), time constraint (43 percent), and legacy infrastructure and systems (39 percent). - https://www.mulesoft.com/press-center/digital-transformation-strategy-benchmark [4] “45 percent of respondents feel their levels of customer centricity are good, if not high… while only 11 percent said that their customers would say customer centricity is ranked highly within their organization” - Mastering Adaptive Customer Engagements, Oct 6, 2014, http://www.fiercecmo.com/node/13856 Other stats “12 percent of respondents said that functional teams were strongly aligned around a holistic customer experience strategy” - Mastering Adaptive Customer Engagements, Oct 6, 2014, http://www.fiercecmo.com/node/13856 “Respondents view the flood of incoming data as part obstacle and part opportunity: 61% of CMOs and 60% of CIOs say so, admitting they have a long way to go still in using Big Data properly.” - Marketing and IT: Big Data an Obstacle, an Opportunity, and Key to Customer-Centricity, April 18, 2013, http://www.marketingprofs.com/charts/2013/10574/marketing-and-it-big-data-an-obstacle-an-opportunity-and-key-to-customer-centricity “The main challenge, according to 52% of marketers (and 45% of IT professionals), is that functional silos block aggregation of data from across the organization, making it difficult to truly achieve customer-centricity. Moreover, 39% of CMOs say the corporate culture is not aligned around the needs of customers.” - Marketing and IT: Big Data an Obstacle, an Opportunity, and Key to Customer-Centricity, April 18, 2013, http://www.marketingprofs.com/charts/2013/10574/marketing-and-it-big-data-an-obstacle-an-opportunity-and-key-to-customer-centricity “Marketers feel strategy is the hardest to master, with 40% admitting they’ve struggled to develop and find support for a cohesive plan for the future of their business” - Econsultancy’s 2017 Digital Trends Briefing, February 2, 2017, http://www.cmo.com/features/articles/2017/1/30/digital-trends-2017-seamless-cx-calls-for-changes-in-strategy-culture-and-ux-design.html#gs.zgYhhys “34% of respondents feel that cultural aspects of digital transformation are hard to master, only 34% feel that it is easy to master” - Econsultancy’s 2017 Digital Trends Briefing, February 2, 2017, http://www.cmo.com/features/articles/2017/1/30/digital-trends-2017-seamless-cx-calls-for-changes-in-strategy-culture-and-ux-design.html#gs.zgYhhys “62% Percentage of respondents consider culture as the top 1 hurdle to digital transformation” - The Digital Culture Challenge: Closing the Employee-Leadership Gap, 2017 “Only half (54%) of survey respondents have completely mapped out the customer journey within the last year or are in the process of doing so.” - The 2016 State of DIGITAL TRANSFORMATION, 2016, http://www.altimetergroup.com/pdf/reports/The-2016-State-of-Digital-Transformation-Altimeter.pdf “Just 29% of companies have a multi-year roadmap to guide digital transformation evolution” - The 2016 State of DIGITAL TRANSFORMATION, 2016, http://www.altimetergroup.com/pdf/reports/The-2016-State-of-Digital-Transformation-Altimeter.pdf
People with high ambition People with false ambition People with conservative ambition Find examples B2B and B2C example Which organisations changed their ambition Durex moved from safe sex to love sex – bold ambition GE successful – ambitious and succeeded GE is a great example of a successful digital transformation. Here we would like to focus on how it successfully launched new business models. GE historically made most of its revenues by selling industrial hardware and repair services, but with the pace of advances in digital technology, GE was at risk of losing out to competitors. In 2011, GE launched its Industrial Internet initiative to move toward an outcome-based business model focused on optimizing asset performance and operations with the help of big data and analytics. Digitally enabled and outcomes-based approaches helped GE generate more than $800 million in incremental income in 2013. In 2015, GE made the next step, with dramatic changes to its strategy and operations, to emphasize and capitalize on its digital capabilities with the creation of GE Digital. This move has helped GE bring together all the digital capabilities from across the company into one organization with a bold ambition to create a digital show site and grow software and analytics enterprise from $6 billion in 2015 to become a top 10 software company by 2020. - http://reports.weforum.org/digital-transformation/wp-content/blogs.dir/94/mp/files/pages/files/digital-enterprise-narrative-final-january-2016.pdf BBC failure – not ambitious enough In 2013 £100m was written off BBC’s Failed digital transformation Project and their technology chief was suspended. This transformation was supposed to ‘improve production efficiency by enabling staff to develop, create, share and manage video and audio content and programming on their desktop’. The technology chief was held responsible for the loss, even though successful products such as the BBC iPlayer were created as part of this failed transformation project. Subsequently, PwC conducted an audit of the failure and heavily criticised BBC for “serious weakness in project management and reporting, as well as a crippling lack of focus on business change”. This audit highlighted that the BBC assumed digital transformation was all about technology or a technological problem whilst failing to realise that a cultural, behavioural, and capability transformation was also required - https://blog.kurtosys.com/5-lessons-failed-digital-projects/
Need to align CEO, CFO, CMO, head of sales, supply chain, CIO, CTO, head of operations Example: Haier CEO Zhang Ruimin turned a state-owned fridge maker on the verge of bankruptcy into the world’s largest manufacturer. Haier uses digital trends and technologies to diversify its products, optimize business processes, reduce the distance to the consumer and develop new products. The company created a community management system (called HOPE), which is an open-innovation ecosystem in which 670,000 users communicate with suppliers and other customers searching for new business opportunities. Employees are encouraged to bring fresh ideas and rewarded for innovative thinking. Haier reorganized employees into 2,000 ZZJYTs – a Chinese acronym for independent, self-managed units, each with their own profit and loss – to create an organizational structure that emphasizes autonomy. These operational changes have paid off with Haier Group’s global turnover growing by 11% and profits increasing by 39% from a year earlier. - http://reports.weforum.org/digital-transformation/wp-content/blogs.dir/94/mp/files/pages/files/digital-enterprise-narrative-final-january-2016.pdf Marriot Marriott have implemented a digital transformation strategy based on the concept of sharing. This fundamental aspect of digital transformation involves networks and collaboration. To make this transformation comprehensive, key executives at Marriott came up with a shared vision centered on collaboration and mobile. Next, Marriott adopted Work Patterns to bring the sharing of best practices into its company culture. This ultimately improves Marriott's business practices and increases customer satisfaction. Sharing also extends beyond the company. Through collaboration with vendors on project requirements, Marriott has reduced the time of issue resolution. Having successfully adopted these measures, Marriott is agile and ahead, ready to handle future challenges. - http://www.zdnet.com/article/digital-transformation-part-6-examples-of-digital-transformation-done-right/
Add time and collective time Managing dependencies between existing initiatives and new digital ones Capital GE underwent its largest corporate restructure to help fund transformation, reducing the size of GE Capital by more than US$300b. GE’s CFO Jeff Bornstein explains: “We made a commitment on April 10 of 2015 that in a three-year window we would reduce the size of the company by almost US$300b and re-establish the purpose of GE Capital. We would do it in an investor-friendly way, meaning that we would exit those assets … and the excess capital that that freed up – roughly US$35b we’d return to the company and then onward return it to shareholders through buybacks.” - http://www.ey.com/gl/en/services/transactions/ey-capital-insights-17-the-cost-of-digital-transformation Thinking/creativity At the start of their digital transformation initiative, McDonald’s hired Atif Rafiq straight from Amazon’s Kindle division to be their new CDO. The digital innovation team at McDonald’s grew from 3 to 130 employees within just 18 months as they geared up to reinvent the customer journey. Zaki Fasihuddin was recruited to open a McDonald’s office in Silicon Valley, making use of local expertise there to “create an internet company inside this company”. - https://centricdigital.com/blog/digital-transformation/mcdonalds-cdo-is-guiding-their-digital-transformation/ Walmart has been working on building a team of senior leaders with established credentials in leading digital enterprises. Current President and CEO of Global eCommerce division at Walmart, Neil Ashe, is former President of CBS Interactive. Fernando Madeira, current President and CEO of Walmart.com, is former CEO of Terra, the largest internet portal in Latin America. Similarly, Walmart’s board includes Marissa Mayer, President and CEO of Yahoo! Inc and Kevin Systrom, CEO and co-founder of Instagram. All of them and other leaders have played a key role in shaping Walmart’s digital strategy. - http://ebooks.capgemini-consulting.com/dm/Walmart.pdf Resource Xiaomi promotes an entrepreneurial culture, fostering a family-like setup, focused on mentoring, collaborations and adhocracy. Xiaomi’s flat structures consist of its core founders, department leaders and 4,300 employees with an intense focus on performance and quality. The company engages with customers in an informal way by involving fans in discussions on product design, product development and promotions. - http://reports.weforum.org/digital-transformation/wp-content/blogs.dir/94/mp/files/pages/files/digital-enterprise-narrative-final-january-2016.pdf
[1] 63% [of respondents] said the pace of technology change in their organization is too slow - https://www.capgemini-consulting.com/resource-file-access/resource/pdf/embracing_digital_technology_a_new_strategic_imperative.pdf [2] 33% of companies are developing their plans for Digital Transformation, but won’t execute in the next 12 months.-https://www.progress.com/papers/state-of-digital-business-2016-report [3] Complacency affects more companies than any other organizational barrier cited in our survey, with almost 40% of respondents saying that lack of urgency/no sense of burning platform is the biggest single obstacle to digital transformation - https://www.capgemini-consulting.com/resource-file-access/resource/pdf/embracing_digital_technology_a_new_strategic_imperative.pdf [4] In two years, according to the survey’s forecast, 65 percent of business leaders will expect to see substantial impact from their digital technologies - https://centricdigital.com/blog/digital-transformation/digital-transformation-and-the-pace-of-change/ 55% of companies without an existing Digital Transformation program say the timeframe to adopt one is a year or less - https://www.progress.com/papers/state-of-digital-business-2016-report A third of C-level executives and board members think the pace of change is about right, and another 10% think it is fast, or even very fast. CEOs are particularly bullish — 53% think the pace is right, fast, or very fast, the highest of any category (see Figure 6, p.8). CEOs might know something their colleagues don’t, of course. Or it could be that as one gets into the trenches of transformation, conditions change. Only 25% of managers think the pace is right, and a mere 22% of staff agree. - https://www.capgemini-consulting.com/resource-file-access/resource/pdf/embracing_digital_technology_a_new_strategic_imperative.pdf
How has regulatory stopped a bank How has competition invalidated etc Regulatory For example, electronic signatures, although accepted by most regulators, are not considered to be sufficiently user-friendly or convenient for the customer. Likewise, a few banks have trialed mobile data capture to verify the customer by taking a photo of the signature, an ID card or the customer themselves, but concerns about security outweigh the added convenience. After all, the signed original still has to be delivered by mail, which fundamentally reduces the benefits of a straight-through process. - http://www.ey.com/Publication/vwLUAssets/EY-managing-change-and-risk-in-the-age-of-digital-transformation/$FILE/EY-managing-change-and-risk-in-the-age-of-digital-transformation.pdf Execution Co-op Bank: In 2013 the bank cancelled a major transformation programme, resulting in £300 million of investment being written off, adding to its already crippling capital shortfall. An independant report cited “destabilising changes to leadership, a lack of appropriate capability, poor co-ordination, over-complexity, underdeveloped plans in continual flux and poor budgeting.” Managing large scale change is a tough task, one that many organisations struggle with. Competition Some banks believe that fintechs are competitors that will ultimately take a large slice of the financial services ‘cake’ These banks feel that customers might prefer the solutions provided by fintechs because they are able to move more rapidly than banks can at the moment. As a result, banks could lose the customer relationship on the Internet to the fintechs. - http://www.oracle.com/us/industries/financial-services/efma-digital-transformation-wp-2904165.pdf 74% of companies responded to digital disruptions only after the second year of their occurance. Over 38% only responded after the 4th year - https://www.slideshare.net/capgemini/digital-disruption-44929928 People In the BBC failed digital transformation project example, the independent audit highlighted that the BBC assumed digital transformation was all about technology or a technological problem whilst failing to realise that a cultural, behavioural, and capability transformation was also required. The affect the transformation had on the people involved, internal and external was not considered and thus was a large factor to why the project failed - https://blog.kurtosys.com/5-lessons-failed-digital-projects/
Add burning platform wording Examples Banks ITV (?) Capital One Dominos In 2009, Domino’s pizzas ranked last in consumer taste surveys . At that point, its share price also hovered at historic lows. Fast-forward to 2017 and the Domino’s of today bears little resemblance to that stuttering firm. 50% of the 800 people working at Domino’s headquarters work in software and analytics. 60% of the company’s sales come from digital channels compared to 25% in 2010. Domino’s has become a successful digital organization. The company’s “Anyware” platform allows consumers to order from a wide variety of digital platforms. Domino’s was the first in the industry to allow ordering via innovative channels such as Google Home . The company was also amongst the very first players in the restaurant industry to experiment with pizza delivery through drones. - https://www.capgemini-consulting.com/resource-file-access/resource/pdf/dti_dominos_pizza_masters_series_final.pdf Lego After a period of expansion (1970-1991) LEGO suffered a steady decline (1992-2004) and by 2004 LEGO was close to bankruptcy. Reaching a tipping point, LEGO started restructuring and a digital transformation programme focused on new revenue sources coming from movies, mobile games and mobile applications. LEGO’s design capabilities have been increasingly handed over to their fans e.g. through the Digital Designer (a web-based 3D design tool to create own designs). It’s USP towards learning and development differentiates it from competitors and convinces parents from millennial generation about the usefulness. Due to this LEGO achieved an EBITDA margin of 37.1% in 2014, an increase of 15% since 2007. Revenues for LEGO have grown at a CAGR of 20% from €1.6 billion in 2009 to €3.8 billion in 2014. In 2014, the first LEGO movie achieved revenues of approximately $468 million with a production budget of only $60 million. LEGO has recovered steadily post 2005 and it is now seen as “the Apple of toys”. - http://reports.weforum.org/digital-transformation/lego-group/ Walmart - In early 2011, Walmart was struggling to break new ground with its online business. Its e-commerce site was basic, lacking in intuitive search and unable to connect seamlessly with stores or supply chain. Fast-forward to today, and Walmart is accelerating its digital transformation. Between 2011 and 2014, Walmart’s e-commerce sales grew nearly 150% from $4.9 billion to $12.2 billion. In 2014, it surpassed Staples’ $10.9 billion in FY 2014 online sales, becoming the largest online retailer after Amazon and Apple - http://ebooks.capgemini-consulting.com/dm/Walmart.pdf
Examples Co-op Unilever Pick out other (non Cap) examples McDonalds McDonalds is cultivating a digital platform through mobile ordering. By partnering with global leader in e-payment services Worldline, McDonald’s has created a new shopping experience to make happy meals even happier. Customers can now order meals through any of their preferred online channels on any device, either mobile or from the comfort of their own home. They have also developed their Experience of the Future (EOTF) service, an in-store technological overhaul most conspicuous through kiosk ordering and table delivery. The fast food chain's stock hit an all-time high after it reported earnings earlier this year, up 5 percent on the day. Shares are up 31 percent on the year, a stark improvement from bleak outlooks McDonald's faced the past few years. - https://www.cnbc.com/2017/06/20/mcdonalds-hits-all-time-high-as-wall-street-cheers-replacement-of-cashiers-with-kiosks.html Disney In 2014, Disney launched multi-coloured RFID wristbands – Magic Bands – for guests visiting the Disney World resort that link to the company’s guest management system, MyMagic+. MagicBands allow guests to manage their entire customer experience using the band; it enables them to make payments, manage reservations, access hotel rooms and enables staff to deliver a highly personalized experience. The app allows guests to link their hotel reservations, credit cards, park tickets and personal details to their wristband. The MagicBands initiatives increased footfalls from unique personalized digital experience throughout the period of stay. 20% increase in Q4 2014 profits, driven at least partly by higher customer spending. As of Feb. 2015, over 10 million visitors had used the bands with approval ratings in excess of 90%. Access to direct user data allows Disney to make efficiency and process improvements, as well as develop customized experiences. - http://reports.weforum.org/digital-transformation/disneys-magic-bands/
Examples Royal Mail Group BBVA - BBVA is focused on providing its customers with a new, enhanced customer experience with the help of knowledge-driven personalization and communication in clear, concise language. The bank has been recognized as a digital leader, setting up a big-data technology platform and fully re-engineered processes, promoting a change-driven culture and developing a leaner organization. BBVA is striving to become the best knowledge-based bank, using data analytics to develop customer insights and meet their needs. Result - BBVA is ranked number one in customer satisfaction in Spain, both in mobile and online banking. Active digital customers grew from 5 million in December 2011 to more than 13.3 million in mid-2015; active mobile technology users increased from 0.3 million to over 6.7 million over the same period. BBVA achieved an 8% reduction in costs, saving €340 million, for its corporate center in Spain. Its digital platform has enabled it to increase the transactions it process, from 90 million a day in 2006 to 250 a day in 2013. - http://reports.weforum.org/digital-transformation/bbva/ Nespresso - The desire to win new customers, gain a deeper understanding of its customers, and manage complex buying processes triggered Nespresso's transformation. Its initiatives are supported by a modern customer engagement solution based in the cloud, complete with network capability. Its cloud solution serves as an innovation platform with a full-fledged sales solution capable of handling the entire buying cycle: pricing, quotes, and orders. With the help of these networks, Nespresso pulls information about its customers from external sources like social media. Nespresso now can also engage directly with its customers, a market that the industry calls “a segment of one.” Nespresso's digital initiatives have proven fruitful. Benefits include greater penetration into new markets, higher sales and user adoption, better sales productivity, and better visibility across the entire engagement cycle. Business processes are faster than ever thanks to its new capabilities, with delivery and innovation cycles now as short as four weeks. - http://www.zdnet.com/article/digital-transformation-part-6-examples-of-digital-transformation-done-right/

CWIN17 telford did we transform - alex smith bingham

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CWIN17 telford did we transform - alex smith bingham

Notes de l'éditeur