Digital industrialization 2016 - International version

Digital industrialization 2016 - International version
INDUSTRIALIZATION
TABLE OF CONTENTS
1 : Customer relationship, data and new players: the 3 battles for digital in 2016 p. The level of digital disruption varies according to sectors p. 2 : Faced with market standards set by pure plays, companies adapt by redoubling initiatives p. Inertial forces still hinder traditional companies' scale-ups and their digital innovation is less advanced than pure plays and customer expectations p. 3 : Accelerationg scale-up, the IBM approach p. The Data-Driven Company, or the overall improvement in competitiveness thanks to internal and external data p. Digital IT: a more agile and flexible IT architecture for surviving market change p. Collaboration is a competitive lever: breaking internal silos and embracing open innovation p. The BCG approach: An analytic framework for guiding transformation p. A new chart of skills and job roles p. More agile governance to transform the company p.
INTRO- DUC- TION
THE DIGITAL MARKET, A MODEL FOR THE ECONOMY AT LARGE. delivery (AlloResto, TakeEatEasy), taxi/VTC hire..... he explosion of the internet bubble in 2001 seems like a distant memory: since then, the digital economy has seen unprecedented growth and seems to be immune to the crisis. In 2015, 83% of European households had access to high-speed internet and 90% of French under-35's owned a smartphone. We have also seen an explosion in the number of connected devices per person: the amount of French people using a minimum of 3 devices rose by 25% in 2015. This has directly resulted in an unparalleled abundance of equipment and ecommerce is going mobile, with the boom of increasingly connected consumers. In Europe, 3G mobile networks now have a 90% coverage rate. E-CONSUMERS MORE AND MORE ON THE MOVE Online mobile usage is skyrocketing. Online sales from smartphones and tablets in France, which accounts for 6 billion Euros or 10% of national online sales, rose by 29% in 2015. This growth is greater than the total French online sales market, which saw a 14.3% rise in the same period! In 2015, almost 47% of French people connected to the internet with the same frequency on their smartphone as their computer, against only 37% in 2014. This figure should continue to grow, given the potential of connected devices. Geo-localized mobile devices make new local services possible: home food The connected customer no longer simply buys products, but increasingly exchanges services across platforms. These services, following the Uber model, can provoke polemics by disintermediating entire sectors of the economy. "Disintermediation": the word signifies great upheavals for certain long-standing professions, but also promises great opportunities with the radical reconfiguration of the economic landscape. FROM TRANSFORMATION TO DIGITAL INDUSTRIALIZATION The range of disruptions at work creates untold new business opportunities, for the keen eyes who can seize them. "We can view digital as a threat, because it upsets the established model and can weaken traditional powers in the market", explains Séverin Cabannes, Chief Operating Officer of Société Générale. "However, it is primarily an opportunity, which we welcome openly today". And there are plenty of opportunities: today, digital accounts for 5% of GDP in France, and 6% on average, in OECD countries. European countries can expect to see a 2.1% rise in their GDP as a result of the digital economy. Digital is paving the way for new levers of growth. Big Data helps to customize off ers and services, enabling greater proximity with the end customer. As the Internet of Things creates new levels of interactivity, they pave the way for new business models. These changes directly impact traditional players. Should the old guard choose to perish or simply surrender? There is another choice: "Disrupt yourself, or be disrupted", warned John Chambers, then CEO of Cisco in 2015. PIndustrialization
METHODOLOGY OF THE GUIDE hat is the situational analysis of the digital transformation of the economy in 2016? Prepared by the EBG in collaboration with the Bos- ton Consulting Group and IBM, the 2016 Guide answers this question by drawing on 65 interviews with top decision-makers (Chief Executive Officers, Chief Digital Officers, Chief Operating Officers, etc.) of French and international companies, including traditional, but also pure plays. The areas of activity have been arranged into 5 groups: • Transport, Travel and Hotels, • Telecom, Media, Energy, Gaming, • Fashion, Distribution and Consumer Goods, • Insurance, • Banking. By surveying these different B2C or B2B2C sectors, a more global image of digital industrialization emerges, beyond pilot programs. Several analytic tools used by the Boston Consulting Group were applied to the analyses of this work: The matrix of the digital disruption of the BCG economic environment allows us to evaluate the intensity of the disruption that affects these different sectors and their level of transformation. This is supplemented by zooming in on the sectors with BCG experts and examining the intensity of the 5 disruptive forces: legislation, technology, the rising power of data, changing customer behaviour and ultimately new business models. The Guide also calls upon figures taken from IBM's "Digital Industrialization" study, an investigation into 1100 executives across 15 countries, as well as analyses taken from the recent C-Suite Study, published in late 2015. This study, which draws on over 5000 interviews across 70 countries, reveals insights from the viewpoint of 6 principal activities in 18 different sectors, with spe- cial emphasis on the digital transformation they must undertake. IBM identifies 4 key factors to understand this "scaling up": -platforms, -co-creation, -delivery, -change management. industrialization
CHAP- TER 1
1 : 1.1 Customer relationship, data and new players: The 3 battles for Digital in 2016 1.1.1 Consumer relationships upset by new channels of communication and distribution p. 1.1.2 Data leads to a tenfold increase in a company’s competitiveness p. 1.1.3 Services and products disrupted by GAFA and new entrants p. 1.2 The Level of Digital Disruption Varies According to Sectors p. 1.2.1 The 5 criteria for the digitization of a sector: data, legal and regulatory, new customer behavior, new entrants. p. 1.2.2 The transportation and hotel sectors : Victims of disruption p. 1.2.3 Telecom, Media, Energy, Gaming Sectors: Technological progress is breaking established models p. 1.2.4 Fashion, Retail and Consumer Products sectors: A comparative lull, but for how long? p. 1.2.5 Insurance Sector : When regulatory inertia maintains disruption p. 1.2.6 Banking Sector : A sector that remains protected from regulation p.
Not all companies will die, but they were all hit. What does digital ultimately mean: is it a complete cataclysm or the perfect opportunity for digital industrialization ? In an economy undergoing complete digital transformation, the rules have changed through relentless technological advances, the growing power of online sales, increasing competitive threats from 100% digital new players… Flung into the great ocean of digital, the activities of all sectors are being re-confi gured at breakneck pace, and must adapt to consumers whose practices and expectations have changed. Some common trends emerge, such as omnichannel, which help to simplify the customer experience, while Big Data opens the way for personalized offers. The functional economy also encourages companies to move from selling products to selling services. The development of platforms also helps to combat disintermediation. The quality of customer relations and satisfaction has now become a crucial issue. That said, not all economic sectors are affected to the same degree. 01. The digitization of companies in 2016: the new rules
ith the advent of online trading, purchasing practices have changed dramatically. Bet- ter equipped and better connected, today’s customers are overloaded with information. For 56% of customers the internet is the primary source of pre-purchase information. Information outlets are multiplying, through blogs and social networks, but most important- ly aggregators and online comparison tools, that make exhaustive comparisons possible at the click of a mouse. Online reputation has become the critical issue for companies! THE RISE OF MOBILE Parallel to this evolution - or revolution- purchasing practices and customer interaction channels have ex- panded with the unstoppable rise of mobile. 40% of Euro- pean traffic measured on ecommerce sites already comes from mobile devices. 90% of mobile users now stay within a meter of their phone 100% of the time. Applications are booming. 46% of French people used them in 2015, against just 22% in 2011. Web retailers must adapt to this change, or risk losing their market share. " " says ffi . For technical teams, the challenge is to respond to customer needs in a uniform way, across each of their connected devices. OMNICHANNEL: THE BEST OF BOTH WORLDS Omnichannel and cross-channel refer to a revolution in the customer relationship, in both the physical and digital domains. Multi-channel orders had previously been possible (for example both on the internet and in store), but without the ability to move between them in mid-stream. Omnichannel now allows for seamless transitions between the real and virtual worlds, while taking advantage of all existing channels for communication and distribution. This might seem a dizzying prospect, but companies are on the right track: this approach has considerable potential for sales growth. " ," confirms ffi . THE DIGITAL WAVE ALSO IMPACTS THE PHYSICAL NETWORK It seems that the irrepressible advance of digital is transcending its conventional channels, and the environment is now a cross-cut of the world of atoms and the world of bytes. Digital enriches, without being a substi- tute for, the physical relationship, as vendors and consul- tants are just as connected as their clients. Confronted by the digital tidal wave, companies have the same reaction. Whatever their industries, they face three common challenges: the industrialization of the customer relationship, the data revolution, and fiinally, the invasion of new entrants. The balance of power is shifting and GAFA (Google, Apple, Facebook, Amazon) are emerging as winners today. industrialization 1. The Digitization of companies in 2016: The New Rules
CLICK AND COLLECT, A WINNING COMBINATION For the companies who combine traditional store- fronts with ecommerce or online customer relations, physical proximity plays a key role. "Click and Collect", i.e. the pickup of orders made online, is becoming increasingly popular, especially in cities. But this model still widely coexists with physical shops. " ," said . oday customer data is the lifeblood of a company. Storing and updating customer knowledge with tools such as CRM is becoming a crucial matter. This means having the broadest possible vision of customers and their identities. This also means understanding their preferences, as a function of the market relationship. CRM data also proves to be particularly useful in improving the customer relationship. THE CUSTOMER IS BECOMING A DATA ORIGINATOR The consumer is now seen as a data generator, either through their digital footprint (namely navigation data) that provides information about their habits, or through the new trend of the Internet of Things. All of this information feeds the CRM and big data platforms and leads to more personalized offers, using predictive algorithms. " " recalls THE RUSH FOR THE INTERNET OF THINGS The technological explosion of the Internet of Things can be seen as a key to understanding customers or providing new services: for example, Darty’s Button that simplifies after-sales service, or ERDF and Engie’s smart energy meters… “ ", explains enthusiastically . The Internet of Things can bring many new advantages: “ ” outlined THE DATA WAR In an increasingly open environment, control of end customer knowledge becomes a strategic concern. This is especially true for producers and distributors, who cooperate to share data where they have mutually beneficial opportunities. “ ”, reveals ffi 1. The Digitization of companies in 2016: The New Rules
”, extols . he effervescence of the fledgling Californian startups of the 2000s eventually gave way in 2016 to a multipolar landscape dominated by the 4 digital behemoths of Google, Apple, Facebook and Amazon, as well as a nebula of start-ups and pure plays. These sites profoundly influence the commercial expectations of consumers by offering services that are faster, cheaper and often better than traditional players. “ ”, notes . Big companies are not fooling themselves, and are looking to stand out through strategic partnerships with the two giants, in a win-win rationale. “ , argues J . DISRUPTION: THE ENFANTS TERRIBLES The arrival of new disruptors challenges the core businesses of traditional players. Even more than Google or Facebook, they are bringing about great changes in the economy: keeping physical assets to a minimum ( the ‘asset light’ model), pressure on the margins due to reduced operational costs, the threat of disintermediation, (as illustrated by Uber, who have a high media profile)... developed a business model that reduces hidden costsfor the customer: “ The collaboration of clients and suppliers primarily takes place in the absence of any risk of direct competition. “ ”, explains . Incidentally, it is often the company that conquers the distribution network that can best collect customer data. FROM PRODUCT TO SERVICE, THE IMPORTANCE OF THE CUSTOMER EXPERIENCE Consumption is an important element in the cur- rent transition towards a functional economy, with the advent of content streaming and the sharing economy. For today’s customers services are more important than products. For online operators, the customization of the customer experience brings high hopes. “ ”, notes ffi Products have now become services, and companies follow this principle, according to the model ‘X as a service’. THE ADVENT OF PROGRAMMATIC MARKETING User data also provides the ability to target consumers with unprecedented precision: programmatic platforms allow businesses to automate the processes of buying and selling ad space, while avoiding media agencies, the traditional intermediaries between advertisers and ad departments. While this approach often requires expensive investment, including the establishment of a Data Management Platform (DMP), the solution is promising: “ ffi industrialization 1. The Digitization of companies in 2016: The New Rules
. " On the other hand, new entrants can take advantage of an unequal balance of power to forge stronger links with business partners, who sometimes baulk at the all-powerful GAFA: " ", explains ffi . ” Limiting the costs associated with intermediaries also allows them to increase competitiveness. " ”, de- tailed . AN OPEN ROAD FOR DISINTERMEDIATION Facing upheavals in terms of distribution as well as customer relations, the value chain is inevitably being reconfigured: clearing the way for disintermediation. What salvation exists for traditional players in these conditions? By contrast, certain companies are seeking to integrate their value chain. expands on this philosophy : “ ff ”. By contrast, market places are generated by relying on in- termediation, placing themselves between the customer and a wholesaler, ensuring profitability by commission charges. AN UNEQUAL BALANCE OF POWER However, certain sectors are less exposed than others, being protected by local market regulations, which complicates their access to international players. , describes the situation: “ Senior Partner «Digital channels are growing very rapidly and have become the 'primary' channel for customer relations; traditional channels (stores, call centers ...) have now become 'secondary'." industrialization 1. The Digitization of companies in 2016: The New Rules
or a better understanding of sectoral developments, BCG experts developed a matrix to explore the level of disruption in each sector of activity and the intensity of their transformation. These developments are considered in a historical perspective, from 2010 to a vision for 2020. These changes must be placed in a broader economic perspective. The value creation per sector can be examined via the Total Shareholder Return (TSR), which combines the value of shares and dividends paid on an annualized basis. The changes in TSR of European companies from 2005 to 2016 show that the different sectors - outside of insurance, exist in a context of value destruc- tion. The guide will continue with a close-up on each sector, via the examination of the 5 driving forces that affect companies and their economic environment. BCG experts have calculated the intensity of each of these forces on a scale of 1 to 5. • First of all is technological advances, which bring about varying degrees of digital adoption, between new entrants and historical players. • The data revolution involves a second pattern of disruption, with unprecedented growth in trading volumes, but an inconsistent level of uptake by companies. New business models are now emerging, driven by data to boost their competitiveness. • The third force is the appearance of new business models: the renting economy, payment upon usage, return to the ecosystem, subscriptions, marketplaces, ‘on demand’, and even freemium...all of these exact pressure on the margins. • The change in consumption habits is a fourth pressing factor: customers today mainly turn to digital when interacting with companies, the majority of whom are now shifting from a product driven model to a services oriented one. • Finally, legal and regulatory circumstances also affect the economic models that exist across sectors: barriers to entry, license costs, regulation of production methods, the distribution and delivery of products, etc. A score of 0/5 shows that the sector is protected by legislation which hinders the arrival of new entrants. Conversely, a score of 5/5 indicates a less protective le- gislative environment. Legislation, new usages, technological innovation, and the boom of collection and processing of data ... not to mention new business models, there are many unsett- ling elements that profoundly challenge traditional business models. However, even though all sectors are affected by the digital wave, there is a difference in degree. industrialization 1. The Digitization of companies in 2016: The New Rules
he travel and transportation industry is the most severely impacted by the disruptions sustained in recent years in their respective economic environments. They are expected to continue on this same trajectory during the next five years. The main factors behind the disruption sustained by these sectors are pressure from the margins, the data revolution and technological developments. The fierce competition of online travel agencies (OTA) brought about the creation of aggregators. By referencing hotel and airline companies, these aggregators allow the consumer to find the best prices and book their journey without going through traditional intermediaries. Mar- gins have been severely reduced since these players, by increasing transparency, have managed to lower sales prices while having a destructive effect on revenues (the removal of traditional intermediary costs such as reservation charges) and cultivating a more loyal customer. This trend is expected to continue to grow as these platforms advance rapidly. Some of these aggregators, such as Rome2Rio, offer ‘door to door’ services, which allow the user to book flights, public transport and even taxis, all from the same site. Traditional players are not sitting on their laurels, and some are developing services which connect transportation, the hotel sector and customers: “ ”, explains . “ ”. Model Definition Distribution Factor Ex mples Ecosystem Subscription Freemium On demand Marketplace E-sharing / Location Economy Give to the user temporary ownership of a product without asking them to buy it The profit is created by the sharing economy Intermediary costs are reduced or cut thanks to the connection between the tenant and the owner Firms don't have to have invest in products nor to own stocks Consumers products, services and datas interact and are interdependant Consumers fidelity to the brand dimishes and the transfer costs are reduced Cross sells are made easier Firms become the reference for users in many fields The consumer pays a regular amount to access the product / service Cash-flows uncertainty and advance are reduced by new flows of constant revenues Consumers fidelity grows Subscriptions revenues can exceed those of a traditional unique purchase The basic service is offered for free with paying options Free offers allow to attract consummer fast Clients who do not pay produce datas and comments Trying the brand can be promoted to new consumers The basic service is offered for free with paying add-ons Free offers allow to attract consummer fast Clients who do not pay produce datas and comments Trying the brand can be promoted to new consumers A plateform that connects products/services sallers to buyers The firm has an unlimited potential of offer of products and services Inventories are not needed anymore The firm can make the sellers pay for the extra charges in exchange of supplementary services industrialization 1. The Digitization of companies in 2016: The New Rules
BlaBlaCar Frédéric Mazzella CEO and Founder «A car costs on average 5000 to 6000 Euros to maintain per year in France. With a fleet of 38 million vehicles in France, this amounts to 200 billion Euros per year, around 10% of GDP in France. As we know, these vehicles spend an average of 96% of the time idling, 0.5% in traffic jams, 0.8% more looking for a par- king spot, leaving only 2.7% of the time where the vehicle actively drives to its destination. In 3 out of 4 cases the driver is the only person in the car. If we were a transportation operator, it would be uni- maginable to maintain such an underuti- lized fleet! » Interview TECHNOLOGICAL CHANGE IS THE SECOND MOST IMPORTANT FACTOR FOR THE TRAVEL AND TRANSPORTATION INDUSTRY, AFTER THE ECONOMIC FACTOR, OVER THE NEXT THREE YEARS. Technologically, the emergence of peer to peer sharing platforms has caused a rupture in business models, by shattering the barriers to market entry related to previously prohibitory costs. Freed from these constraints, and benefiting from weak regulation, new ‘asset light’ players like Blablacar, Uber and Airbnb are rushing into the breach, bringing copycats like Wimdu or 9Flats in their wake. They all contribute to cutting prices in the markets they enter, and inspire fierce loyalty in their users. In 2015, Blablacar had a total of 20 million members, and Airbnb received a market valuation of 24 billion dollars! Traditional players are attempting to counter the offensive by buying OTA competitors and taking advantage of innovations in technology and the collection of data, to improve and simplify the customer experience. The Internet of Things should also greatly benefit the sector. A growing ability to control costs, thanks industrialization 1. The Digitization of companies in 2016: The New Rules
to the availability of real time information, is key. SNCF hopes to develop sensors to improve maintenance in its industrial sector. “We can even cross cut the sensors”, evokes Yves Tyrode, Chief Digital Offi cer at SNCF. “For example we could place sensors on infrastructure to measure equipment wear, and vice-versa with accele- rometers and cameras set up along rail tracks...” The growing availability of all kinds of data has brought about signifi cant changes. Companies now need to track feedback that occurs on the web (analysis of opinions voiced on social media, online marketing etc.) in order to complement their customer knowledge, with the ultimate ambition of 360° coverage. Diff erent players can now exchange data with each other. This can lead to consolidation, ‘plug & play’ services and using tertiary or even in-house APIs. Nevertheless, caution must be exer- cised! The massifi cation of the culture of reviews and online experience feedback led to a drastic increase in customer demands, making it a double-edged phenomenon. If negative opinions propagate on the internet turnover can go into freefall! This is true to such a degree that the feedback economy is considered one of the most important evolutions in the hotel sector by Vivek Badrinath, De-puty CEO in charge of Marketing, Digital, Distribution and IT at AccorHotels. “Digital particularly impacts the hotel sector through the feedback economy and on-line opinions, namely via players such as TripAdvisor, Booking.com or social networks.” Legislation has favored the appearance of new entrants. However, it hinders a total disruption of the sector by leaning on the accessibility of procurement contract data, and the protection of personal data by regulatory authorities still inhibits the enthusiasm of disruptors ... although bypasses to value creation do exist. “I believe T he telecom, media, energy and gaming sectors have seen big changes in recent years, changes that are expected to continue. Although the role to be played by personal data as well as new customer demands are considerable, it is technology and the imperative to remain competitive which will bring the biggest upheavals. Traditional media have been totally disrupted by the digital wave. Their margins have been da- maged by the advent of real-time free information, coming from social networks and blogs. They are also feeling the full force of pure play competitors like the Huffington Post, who have found a genuine economic advantage by using a voluntary contribution model. Media publications must also face more and more low cost competitors such as NextRadioTv, who have digitized all of their channels (TV, radio, internet) in order to expand their audience and increase advertising revenue by multiplying on-demand users. in a general openness of data, and in its reusabi- lity by third parties. If we decide not to make them open, they would be accessible for many through crowdsourcing”, puts in perspective Yann Leriche, Chief Performance Offi cer at Transdev. The au - thorities are increasingly worried to see these new players impacting employment figures and their tax revenues by competing with traditional players. In April, Berlin struck out against online housing platforms (with Airbnb as the figurehead) by introducing mandatory district council permits for apartment renting, and by banning the rental of more than 50% of the surface area of housing available on the rental market via these platforms. 1.2.3 - Telecom, Media, Energy, Gamingsectors:Technologicalprogress is breaking established models industrialization 1. The Digitization of companies in 2016: The New Rules
For the telecom sector, the shock was no less violent. The preponderance of free and freemium services (Skype calls, Whatsapp and others) greatly reduces margins at the same time as they are incurring large infrastructu- ral expenses to move to 4G and 5G. “The telecommunications operator business is undergoing great technological changes, in particular with 4G high speed networks and fibre, which allow the ever increasing consumption of content”, commented Thibault Gosse, Head of eCommerce at Numericable SFR. And what about the gaming industry? Despite national monopolies, the internet has allowed the break- through of new competitors from abroad. “In the online gaming world we have ten competitors! While in terms of the physical world we are the only company in the market”, observed Stéphane Pallez, President & CEO of La Française des Jeux: It is therefore in our best in- terests to avoid a wholesale migration of our physical customers towards the online world, to avoid the risk of them moving to our competitors”. Christophe Leray, CIO of PMU explains that he also believes in digitization… but at the point of sale: “A customer told me one day that he didn’t play on the internet, because it would be like drinking alone. Even in a digital universe, our goal remains to bring the consumer into a community sale point. Digital allows for paperless programs, including the preparation of bets in advance by smartphone.” The energy sector is also undergoing incremental changes, even if they are not as radical as those happe- ning in media and telecom. The arrival of new technologies such as electronic meters (the ERDF Linky meter being the most well known) will no doubt change clients’ habits and allow companies to customize their offer. But the technologies that lead to savings on platforms can On top of this structural challenge, there is a problem which strikes the very profession of journalists, who must totally refocus on articles suited to web usage. In some cases media outlets put paywalls in place on their websites. The ideal economic model for online media has yet to be found but should stabilize in the next 5 years. One thing is certain: publications had to overhaul their work practices to showcase their digital output. “Between the working rhythm of the Paris Match weekly publication, based around typesetting once a week, and online media like ParisMatch.com which publishes in real time, the economic model of journalism has completely changed”, analyzes Fabien Sfez, Managing Director of Digital Development and Technology at Lardère Active. All the more given that the digitization of content leads to the convergence of our different media; radio, video, blogs and they sometimes find themselves in competition with each other.” industrialization 1. The Digitization of companies in 2016: The New Rules
also indirectly affect the traditional value chain of energy players. “The classical model of the service station is today being attacked head on by companies such as Drop don’t park (a car valet service which parks and takes care of your car), or Purple, in the USA (home delivery of gasoline)”, illustrates Marc Gigon, VP Di- gital Marketing & Services at Total “These startups have taken a position close to our business models, and could one day threaten them”. The electricity market seems, however, to be protected from new entrants: “There are almost no intermediaries in the electricity market in Europe, with the exception of the United Kingdom”, explains François Gonczi, Digital Director, EDF Commerce. “In effect, margins are low, and rates relatively close between competitors. The cost structure therefore keeps us safe: I do not see how an intermediary could be profitable under such conditions. The consequence is that winning new customers does not happen in a price war, but by the quality of associated services and customer relations.” The collection of data from the Internet of Things or navigation devices leads to increased operational performance. A/B testing, which allows for live comparison of web features, is replacing traditional marketing tests. “SFR traditionally performed several customer tests before putting a new customer web service online”, details Thibault Gossé, Head of eCommerce at Numeri- cable SFR. “But their profiles (students, unemployed…) didn’t always match our targets, which were more family orientated. This is why we have decided to intensify our efforts with A/B testing and live customer tests.” The data captured by smart meters, for example, should also lead to better targeting of consumers, to ad-just the value proposition. “The final stage, on the horizon for 2016 or 2017, is to give the technician every means, at the end of his call-out, to promote a fitting product for the customer”, foresees Hervé-Matthieu Ricour, CEO France BtoC at Engie. “Between then and now, we will be able to establish - using data cross referencing- the services a customer uses, especially those which they have not yet availed of, but which would be a useful complement.” In these sectors as elsewhere, the consumer is smit- ten with the great hope of digital tools, and expects to be able to consume media (or connect to their own platform) on every possible device (tablet, computer, mobile…). “The web is a fundamental pillar of our client acquisition strategy and also allows easier access to support services for our customers”, continues Hervé-Matthieu Ricour, CEO France BtoC at Engie. The demand for real time activity also greatly aff e cts c ustomer relations. In the media sector, the dynamic of commentary from on-line readers has also created the necessity for modera-tion, and the possibility of a new form of customer engagement. It must be noted however, that the media, telecom and gaming sectors are seeing a growing convergence of their platforms and content. Thibault Gossé, Head of eCommerce at Numéricable SFR explains : “We are in the process of creating a range of products for multi-channel distribution, through our VOD package, which allows us to promote series produced within the group. This logic does not stop at production, but will also incorporate partnerships, particularly the retransmission of spor- ting events”. Thus in reality, the services provided by the operator “will be closer to Canal+, rather than traditional competitors like Orange or Free.” industrialization 1. The Digitization of companies in 2016: The New Rules
T he retail, consumer products and fashion sectors have been greatly impacted by the break- through of marketplaces like Amazon, who have set new standards for customers. That said, technological pressure is less fierce than in other sectors and a data revolution is underway, which could allow different players to win out, if they take advantage of new consumption habits. This is taking place in a favorable environment for these sectors, who have achieved more value creation since 2006 compared to the other sectors examined. New customer usages leads to an expansion in available data, through assessments and ratings made on social networks or specialized sites. This information can help companies to predict demand, or to simply manage their online reputation better. It is therefore no wonder that data collection has become a key issue for all players in these sectors. This has consequences for the economic landscape, as companies are no longer hesitating to buy smaller players, who are holders of interesting data. In 2015, the sports clothing brand Under Armour ac- quired the nutrition and physical exercise platforms of MyFitnessPal (120 million users) and Endomondo (80 million), which allows them to utilize a much larger prospect base and target customers better. In some cases, it is the retailers themselves who partner with suppliers in order to share customer knowledge. “We provide our suppliers with a set of tools, which help them to know how their products are performing in store. They can then perform their own analytics in order to understand which campaigns and/or products are the most ef- fective, and where”, comments Thomas Nielsen, Chief Digital Officer at Tesco. Legal issues ultimately act as both an accelerator and a brake in these sectors. They slow down the transformation of markets, notably through the licenses accorded by regulators for media and telecom players. But sometimes they also prevent them from seizing new opportunities. “"We have a commitment to responsible gaming, which involves a non-intensive model, which means that our only means of growth is to enlarge our customer base: we cannot intensify certain segments, that would contradict our ethical commitment” explains Stéphane Pallez, President and CEO of La Française des Jeux. “As much as certain companies choose a strategy that seeks to increase the average ticket size, we cannot do this.” 1.2.4 - Fashion, Retail and Consumer Products sectors: A comparative lull, but for how long? industrialization 1. The Digitization of companies in 2016: The New Rules
IBM France Rémi Lassiaille Managing Director SNCF Traditional players in the travel and transportation sectors have seen competitors emerge from sectors of activity which are sometimes diametrically opposed to their own. These disruptors also bring with them new technologies, new business models and innovative organization. Particularly, they introduce sales tools and methods specially adapted to the ‘increasingly digital behavior patterns’ of end customers. Moreover, the In- ternet of Things will bring an improvement in the quality of services and considerable gains in productivity, which prove indispensable in this ‘disruptive’ period. The activity in these sectors generates a great deal of data which must be utilized in the optimal manner. The challenge for these companies is to integrate the necessary tools for the gathering of data and its analysis, to then find their place within traditional industrial processes and information systems. To transform rapidly, profound changes that put digital at the core of the company, are vital. Expert Opinion The 3 disruption trends observed in the telecom sector: • The seizing of power by users • The explosion of mobile data usage • A strong trend towards the concentra- tion of the market to a limited number of very powerful players The IBM Zoom Lagardère Active Fabien Sfèz Managing Director of Digital Development and Technology «We recently won a call for tender from Nice airport. We are leveraging our experience in real time targeted mobile advertising, which was initially developed for our sites. This allows us to reach connected customers in the airport, with relevant ads from businesses, in Engli- sh, as 50% of Nice airport purchases are made by foreign visitors..» Interview industrialization 1. The Digitization of companies in 2016: The New Rules
Inevitably, the digitization of sectors also puts pressure on the margins, since new players are appearing, who attack the market shares of traditional players. Dollar Shave Club, an American company which offers home delivered razors and other beauty products on a subscription basis, with an entry level plan of one dollar per month, has received a market valuation of 615 million dollars. IBM France Lionel Vidart Telecommunications Leader The problems faced by companies in the telecom sector are exciting, because they are being forced to launch new digital services very quickly and this leads to a growing demand for end customers. Operators are therefore caught in the inescapable dynamic of a forced march towards digital transformation. Furthermore, the improvement of the customer experience through digital is certainly a strategic priority for companies in this sector, whether this means client acquisition or improving existing customer loyalty. The challenge for operators also lies in the utilization of the huge amounts of data generated by all objects which are part of the Internet of Things, to create new sources of revenue. They must also measure and manage the quality of the service experience by their customers, analyzed via the network and the information provided by apps and device usage. This can help improve customer satisfaction and loyalty. Expert Opinion In fashion and especially luxury goods, data processing from diverse sources has an even more paradoxi- cal effect: “Big Data allows us to reintroduce customer knowledge and therefore personalization, into what has become a global industry that can no longer know its customers individually, without the aid of technology”, explains Sébastien Hua, eCommerce & Omni- channel Director at Kering. “So it is more like a return to our roots than a real departure.” As is the case in other sectors, consumption practices have profoundly changed with the digital wave. More aware and demanding customers trust crowdsourcing rather than expert opinions, and prefer to consult online reviews before buying a product, instead of listening to salespeople. They also follow more and more complex sales paths which mix online and offline activity. 45% of consumers now prefer to grocery shop online instead of in physical stores. (Source IBM). “Click and collect” is the figurehead of this movement for a complete overhaul of the supply chain, which will develop in relation to different sales and distribution activities. “In the DIY industry, there is no point in emulating the click and collect models of agri-food brands”, remarks Christophe Verley, Chief Digital Officer at Adeo. “Our challenges are very different: in the food industry, the consumer seeks to avoid having to enter a store. In DIY, however, clients often come from far away to ensure the availability of products when they visit, and to then complete their purchases upon entering the store”. It follows that there is pressure for delivery times to be reduced. “With new customers like Amazon, customer expectations are changing, with new implicit norms being established, for example in terms of delivery times and the choice of time slots for delivery”, believe Christian Lou and Yan Aubriet, Director of Direction Marketing & Digi- tization and Director of Digital Development at Darty. industrialization 1. The Digitization of companies in 2016: The New Rules
Retailers have not been spared either, with the arrival of giants like Alibaba and Amazon who, armed with a technological advantage, benefit from efficient logis- tics and low cost physical distribution, which leads to the shrinking of already weak margins. “The grocery market is a very competitive one, especially in the UK with everything from pure plays such as Amazon Fresh to the arrival of some discount competitors”, concedes Thomas Nielsen, Chief Digital Officer at Tesco. As a result, traditional players have to review their supply chain from end to end in order to cut costs. They may not be safe yet. In the future competition may even come from suppliers themselves, who could be tempted to disintermediate their distributors, and take control of their customer relationships. Michael Aidan, Chief Digi- tal Officer at Danone, gives a nuanced word of warning : “We are experimenting with home delivery for Evian water bottles, but it is impossible for us to deliver to businesses such as bars or cafés.” These sectors are ultimately prone to technological evolution. Thanks to online sales, sellers lean more and more on the theory of the long tail, to increase their sales. This means expanding their catalogue as far as possible by targeting less popular products, with an ex- panded catalogue making up for lower sales per item. The Internet of Things also contains a repository for innovation, with the future development of smart kitchen equipment. “We could potentially see the advantage of forging partnerships with sellers of connected refrigera- tors”, imagines Florian Sauvin, Chief Digital Officer at Bel Group and Director of Unibel. Between now and this futurist outlook, digital showrooms are flourishing. “We created a 150m2 showroom to complement our digital sales channel”, reveals Nathalie Balla, Co-Owner & CEO of La Redoute. “For us it is a way to reinvent a new kind of physical store. IBM France Emmanuel de Saint Leger Distribution Sector Leader Of all the sectors, the retail sector was one of the har- dest hit by the wave of digital transformation. Compe- ting directly with online sales platforms and subject to a strong change in customer relationships, the big retail companies have seen their existing business models challenged by new consumer practices. Faced with these challenges and their huge impact on business processes, the sector confronts three major problems : • The digitization of all or some of the activities of companies in the sector, moving particularly towards the installation of online sales platforms. • The optimization of customer knowledge and pathway to ensure better customer relations. • The establishment of integrated omnichannel and supply chain management. Expert Opinion Physical sales are good, and the rate of web conversions is exploding in surrounding areas”. On the legal front, there are few changes however. The disparity between national regulations limits international competition. Nonetheless, by putting strict controls on stores’ opening hours, legislators hand the advantage to online distribution channels over physical retailers. industrialization 1. The Digitization of companies in 2016: The New Rules
Boston Consulting Group Nicolas de Bellefonds Partner at BCG Mass consumption faces the risk of soft disruption Immune to disruption until now, the mass consumption industry is making use of the growing opportunities of the digital economy and is making up for lost time with accelerated transformation programs. The battle is being waged on four fronts : • Transformation of marketing via earned media and data, to reinforce brands and perform large scale targeted advertising • Development of direct or indirect ecommerce, which accounts for 50% of growth at 5 years • Digitization of operations to increase their efficacy • Innovation in services to move value proposition towards the experiential The difficulty lies in bringing about this change in historically decentralized and entrepreneurial cultures. Organizations that are slow to adapt risk facing a softer disruption, but this is not without danger. The relevance of their message can fade, publicity costs can increase and market shares in digital channels can be diluted.” Expert Opinion 1.2.5 - Insurance sector: When regulatory inertia maintains disruption T he insurance sector was until now protected from disruption by generally protective national legislations, which limit the number of new entrants. However, the growing use of data and technological change suggest that profound transformations are on the way. Value creation in 2016 is two times lower than the S&P 500 average index. The situation is even more troubling than the growing use of data, and technological changes suggest that profound transformations are on the way. The benefit of new technologies to insurers is considerable : Big Data tends towards the automatization of processes and drastically reduces costs, opening the way for new models of customized offers by capitalizing on the Internet of Things. “ The Internet of Things has the potential to measure the behavior of the insured more industrialization 1. The Digitization of companies in 2016: The New Rules
accurately, and thus allow us to adjust our rates accordingly”, asserts Isabelle Moins, Head of Direct Activi- ties, Digital, Customer Marketing at Aviva. “ We launched a behavioral auto insurance offer on Amaguiz, based on data collected from a unit connected to the vehicle”, counters Thomas Vandeville, Di- rector of Group Digital Transformation at Groupama. “This model changes the rates for risks and leads to a mechanistic reduction in premiums”. A mutual benefit: insurers optimize their risk while customers pay lower premiums. As a result, the combination of the IoT with Big Data should earn $14 billion for insurers over the next 10 years. This promise should be tempered, because it implies a profound challenge to the insurer's economic model. “If the data is drawn directly from the insured’s environment, we might not own this data in the future”, alerts Isabelle Moins, Head of Direct Activities, Digital, Cus- tomer Marketing at Aviva. Automobile manufacturers could choose to retain control of captured data: “The connected car will revolutionize the structure of the insurance market, giving more power to the manufac- turer who would be in an ideal position to utilize the data coming from vehicles”, warns Thomas Vandeville. A REVOLUTION IN DISTRIBUTION FOR INSURERS Parallel to this, customers are becoming more demanding and want to choose their mode of access (mobile, web, telephone, physical). Insurers must readjust as a result. Carline Huslin, Head of Digital and Multichannel Customer Experience at Generali France, underlines this point: “The digital revolution also affects the distribution mode: it is no longer the provider who decides what is proposed to the customer, it is the customer who chooses the product that they will be provided”. Boston Consulting Group Nicolas Harlé Senior Partner Banks : changes are inevitable, faced with FinTech and new customer expectations The digital transformation is one of the main challenges to banks experiencing difficult regulatory and economic conditions (negative interest rates). This is being forced by today’s customers, who use digital channels more intensively than ever. Nowadays, mobile applications and the web are the main contact channels, ahead of traditional channels like the telephone or physical bank branches. GAFA have set the standard for customers and they have high expectations for the quality of their digital interaction with banks. Furthermore, banks now face multiform competition, friend-enemy, through the emergence of more than 8000 FinTech companies that have raised more than $75 billion since 2000, chiefly in venture capital. To transform themselves banks must revamp their operational models, adapt their computer systems, ensure the evolution of their competency models to adapt to digital, put in place ambitious data strategies, establish FinTech ecosystems and weigh the opportunities to launch disruptive models. Expert Opinion industrialization 1. The Digitization of companies in 2016: The New Rules
1.2.6 - Banking sector: A sector that remains protected from regulation P illars of the real economy, banks are underta- king digital transformation programs…but they are doing it in an environment of increasing regulation, where their profitability is at its lowest. Their value creation has since been significantly lower than in other sectors, on a consistent basis. The trend may continue as banks are not safe from radical modifications of their environment in the next 5 years. Even though they are both under pressure, but also protected from their competition by regulatory and license constraints, they must also deal with heavy technological changes and growing compliance costs for their systems. Technology is a window of opportunity for bankers, allowing them to reduce certain operational costs. Today’s digital orientated consumers execute banking operations from their mobile devices (or more rarely their computers), which in the past would have required the medium of a physical teller. This even includes complex operations like mortgage applications. Banks who are at the forefront of digital can reduce their costs by a third.1 This source of savings can be up to $200 billion.2 But these technical changes are not always easy to put in place. The integration of new technology parallel to rigid, outmoded computer systems is a real challenge, even if banks have generally strong technical competen- cies. Much simpler evolutions nonetheless allow banks to deal with growing customer demands, as the ergonomic features of interfaces are still open to much improvement. Less than 1% of traditional mobile banking app users would classify them as their favorite.1 Traditional banks are not missing this fact, and most are developing 100% digital versions of their services Just like the air travel sector a few years earlier, the insurance sector is dealing with strong marginal pressure from aggregators like LeLynx.fr. By acting as the first interface between customers and insurance companies, they are waging war at the margins, which clears the way for new players who interrupt the value chain and are free from certain traditional costs (namely rent and physical employees). Nonetheless, not all entrants are pure plays: Ford garage owners now provide their own brand of auto-insurance and free themselves from the B2B services of traditional insurers. The diversification of services (insurers becoming bankers, or the reverse) leads to increased competition with banking players. Historical players are transforming to stay in the race. AXA has implemented powerful digital governance and launched numerous pilot programs with business lines. Partnerships with startups, mainly Blablacar, are expected to accelerate with their two innovation labs and their Strategic Venture. Groupama is also expanding strategic collaborations: they have established partnerships with Renault, to counter the disintermediation of automobile insurance, and with Orange to place themselves in the payments market. Furthermore, the architecture of the company has been recast in the style of the Ama- guiz platform. industrialization 1. The Digitization of companies in 2016: The New Rules
IBM France GBS Vincent Daerden Leading Banking and Insurance Sector The players from the banking, finance and insurance sectors are faced with major challenges which can only be met with digital transformation. New usages by customers, the consolidation of commercial margins and ROE, reductions in structural costs...and regulatory pressure forces them to rethink their back office internal systems and put in place new technological tools. To this end, the creation of online services, market infrastructure or new payment solutions are their future flagship projects. FinTechs are also establishing privile- ged partnerships with large groups for the formulation of their digital strategies. Lastly, they have embraced emerging technologies like AI or Blockchain, which are moving from the experimental phase towards industrialization, with major financial rewards in sight. Expert Opinion (for example Société Générale with Boursorama). The sector also foresees the dawn of disruptive technologies like machine learning and blockchain, which will bring techni- co-economic upheavals for banks. MOBILE WILL SOON OVERTAKE THE DESKTOP IN TERMS OF THE NUMBER OF BANKING OPERATIONS PERFORMED ONLINE (32% FOR MOBILE THROUGH APPS, AGAINST 37% FOR THE WEB IN 2015) As well as dealing with technological advances, the banking sector must adapt to the arrival of new entrants. On the frontline are FinTech companies, with lighter cost structures, threatening traditional players who are already dealing with a historical decline in interest rates over several years. FinTech are also in pursuit at each level of their value chain, threatening the sector with a phenomenon called ‘death by a thousand cuts’. 70% OF COMPLIANCE OFFICERS INTERVIEWED BY IBM EXPECT TO SEE GROWING REGULATORY COMPLEXITY IN 2017 The work of banking establishments is further compli- cated by legal issues. The financial crisis, the fight against terrorism and money laundering, fiscal fraud... regulatory constraints on banks are becoming more and more expensive. And it’s not over, since 70% of compliance officers expect to see growing regulatory complexity in 20171. Ano- ther heavy blow for banks: states are now forcing them to share their data with authorities, in order to open up the markets. “ Regulators chose to promote free competition, by pushing open data or obligating us to make our customer account information accessible to third-party providers”, analyzes Philippe Poirot, Director Develop- ment Digital, Transformation & Quality at BPCE. industrialization 1. The Digitization of companies in 2016: The New Rules
An example of a banking disruptor: Compte Nickel Founded in 2012, Compte Nickel offers a simple and innovative instant payment service, which guarantees freedom from overdraught and premium charges. With the support of strategic partners in the card payment sector (VISA, Mastercard, Gemalto) the startup has conquered a niche market of individuals who have been abandoned by banks and require a bank account number. They attract young people and even traditional bank customers, who are not afraid to try their services, while still keeping their standard account. They have achieved success with over 300,000 customers in May 2016, and 20,000 new accounts created per month.Compte Nickel now challenges traditional banks with their radical business model. While traditional players are suffering from high distribution costs, the startup has developed a partnership with tobac- co stores, which guarantees a broad territorial base and a mere 3€ customer acquisition cost. The fledgling company hopes to establish itself internationally by 2017-2018, and has ambitions of transforming itself into a banking platform by collaborating with FinTech players. Compte Nickel is seeing real success thanks to its promise of instant payments without hidden rates or charges, much like peer to peer payment and funding platforms between individuals. The threat is much more serious for banks than FinTech companies, who are present in niche markets, and are beginning to organize partnerships, like Number 26 and TransferWise. The next disintermediation will more than likely relate to mobile payments, which grew by 40% in 2015 and 2016, and are expected to reach over $1 billion between now and 2017.1 There are upheavals to come, to be sure, and even more so if GAFA take on the market, following the lead of Apple’s ApplePay. Zoom on Compte Nickel industrialization 1. The Digitization of companies in 2016: The New Rules
CHA - 2
2 : 2.1 - Faced with market standards set by pure plays, companies adapt by redoubling initiatives 2.1.1 - Pure plays set the market standard p. 2.1.2 - Classical players begin their transformation with customer engagement p. 2.1.3 - Companies are learning to use data: increasing POCs and experimentation p. 2.1.4 - Companies innovate incrementally on products, services and processes p. 2.1.5 - Companies establish external innovation programs through venture capital, accelerators and startup acquisitions p. 2.2 - Initial forces still hinder traditional companies' scale-ups and their digital innovation is less advanced than pure plays and customer expectations p. 2.2.1 - Obstacles to reaching scale p. 2.2.2 - Traditional players remain short of the digital innovation levels set by pure plays and customer expectations p.
In 2016, digital transformation must no longer be limited to the superficial digitization of activities. Companies are catching on, which means redoubling digital initiatives for customer relations and data. “ ”, posits ff . There is, however, a big element which complicates things for established players: public expectations for ergonomics, ease of usage, diversity of services and reactivity, which come from the standards set by pure plays and other new entrants. The benchmark for digitization is set by companies from the digital revolution, who function like permanent innovation labs. Their successes become standards for the entire sector. This environment is inspiring digital renovations which affect individual companies as well as entire sectors of activity. Companies are especially open to new modes of innovation and are keeping a close eye on the best practices from other sectors. They are opening up to the ecosystem of startups who are one-stop shops for new technologies, new cultures and new working methods. Com- panies are spurred by economic urgency, and the potential to reduce their time-to-market by increasing synergies. 02. Despite many experimental initiatives, both internal and external, companies are still lagging behind pure plays and customer expectations p
On the road to digital transformation, companies are expanding their initiatives, pursuing the belief that solutions are to be found externally. In the economic world, as elsewhere, there is strength in numbers. onsumer quality expectations are set by pure plays. Services centred on digital know-how limit time wastage, and provide an ergonomic experience. They also provide the ability to customize and use customer interactions for evaluation and quality improvement. The gap between new market entrants and established players is sometimes so stark that, according to a study carried out by Fujitsu in May 2016, 20% of European consumers would be willing to use Google, Facebook or Amazon for banking services or insurance products. Two trends for pure plays emerge from this survey: they must reinvent themselves, but also capture new sources of growth by opening up new markets. It is therefore vital that traditional companies not allow too large a gulf to emerge between their most innovative competitors. This means staying in the race, with customers who care less about the core of the business and who their providers are, than the digital transformation of the consumer experience. industrialization .
”, assures ffi . This customer centric approach, with the customer as the focus of all concerns, is crucial in establishing a quality long-term relationship between a brand and its customers. This is also known as relationship marketing. “ ”, describes . This makes it possible to increase performance through commercial targeting. “ ”, pursues . MORE INTELLIGENT COMMUNICATION In line with this trend, all traditional marketing functions are being digitized: “ ”, clarifies Offi Although large campaigns based on un- differentiated advertising spots remain interesting for FMCG players, communication is becoming more subt- le. The focus is on social media buzz, in the wake of the 2015 recruitment campaign by Michel & Augustin, in the Paris metro. Thanks to data collection, advertising campaigns are becoming autonomous through programmatic marketing as well as becoming more personalized and efficient. They are also opening the way for hybrid campaigns between digital and commercial promotions. explains with an example : “ .” This approach n a market led by new entrants, traditional players are reinventing customer engagement in order to stay in the race. The first commercial challenge involves making products and services available through online sales. Marketing is also following suit, by evolving into digital marketing: today’s media investments inevitably involve buying advertising space on Facebook, or keywords at Google… and follow diverse media policies according to devices (web, mobile…). ”, evokes . Companies must now cover all traditional professions digitally, from sales to distribution, by way of media communication. “ ”, analyzes . Today, people spend up to 11 hours a day consuming digital services, and screens play a central role in our li- ves. This is a new paradigm for advertisers, who need to review their marketing mix and adjust their sales strategies. “ ”, observes . “ .” This concern is shared by many B2C players, but also B2Bs. “ industrialization .
”, states . “T ” DIGITIZE ... WHILE MAINTAINING CUSTOMER RELATIONS STANDARDS Nonetheless, the digitization of customer relations also has its limits. The quality of human relations remains paramount, particularly for customer support or after-sales service. “ ”, confirms . “ .” Digital is therefore an ingredient that must be applied judiciously in the customer relations equa- tion, at the risk of having negative effects. A realization that is particularly true in demanding fields, like luxury items: “ ”, observes (formerly Pinault-Printemps-Redoute). “ ” ore and more initiatives are tapping into the mass of data generated by consumers throughout their journey, including digital and physical networks. This is a big challenge: in 2022 there will be 50 connected objects per household, compared to ‘hardly’ 10 in 20151. “ is carried through to diversifying media campaigns: “ .” SUPPLEMENTING CATALOGUES WITH MARKETPLACES Companies are also focused on extending or diversifying their catalogue of products, by looking to marketplaces. 73% of companies surveyed in our panel re- vealed that they have launched alternative distribution platforms. The challenge is selling products that are not stored in-house, but available through wholesale partners, who charge a commission. Darty is an ambitious example. provides the details : “ ” The approach is extending to the provision of services, as seen by the creation of an AccorHotels marketplace: “ ”, describes . CUSTOMER-CENTRICITY: A BULKWARK AGAINST DISINTERMEDIATION Maintaining customer relationships can also help limit disintermediation. “ i - ”, analyzes once again . This vision is shared by other traditional players, like the SNCF. “ industrialization .
”, announces . The Internet of Things helps to further refine analyses, by finding new data sources. “ ”, evokes . STARTING SMALL WITH POCS The first step, before embarking on large scale experimentation, is to establish necessity and technical feasi- bility. Pilot projects begin with POCs (Proof of Concept), an essential first step before confronting the technical or human related problems of growing to scale. Compa- nies mostly take a pragmatic approach, known as ‘test and learn’. “ ff ’", details . “ .” PILOT PROJECTS MUST MEET CUSTOMER NEEDS For these pilot projects, the main imperative remains economic viability, which depends directly upon customer adoption. Pure plays, who have grasped how data can make considerable growth possible, often have a head start. “ off ”, reveals . SCALING-UP: A QUESTION OF TIMING The success or failure of an experiment also comes from a delicate balance between the maturity of demand and that of the stakeholders of the organization. The external economic environment is also evolving, which could remove possible partnerships with providers. This brings the risk of creating an unusable pilot program. Success also depends upon the level of urgency: “ ”, analyzes “ ” BIG DATA: TOWARDS THE END OF MASS STANDARDIZATION In the Big Data era, the supply of services or marketing campaigns is becoming highly customizable. This ability to influence the end customer more accurately can benefit all players that formerly followed B2B2C models, and mass retail in particular. DATA SERVICES The growing importance of the Internet of Things and Big Data is thereby directly influencing the evolution of products and services, and accounts today for one of the foremost levers of innovation. Digital innovation industrialization .
INCREMENTAL INNOVATION: OPTIMIZING EXISTING MODELS THROUGH DIGITAL For distributors who have physical stores, incremental innovation could mean developing new online func- tionalities that extend web services to track consumption and billing with smart meters. “ ”, observes . “ ”. In the world of sales, like the catering trade, promo- ting customer loyalty is another example of incremental innovation. “ ”, reveals The agribusiness group Le Duff have hopes for a similar program: “ ”, explains ff. Incremental innovation can also involve taking advantage of digital to move upmarket, by improving the customer experience. “ ”, indicates Anne Browaeys-Level, Chief Marketing, Digital & Tech- nology at Club Med. “ ” THE BURDEN OF OPERATIONAL CONSTRAINTS Companies often have a strong internal culture for incremental innovation, through established processes has brought changes such as the ‘Product as a Service’ model (deployed by 56% of the companies interviewed for this guide) and service platforms. For companies it is no longer simply about the once- off sale of a product. They now sell services that can be monetized according to the frequency of product usage. For this, there is one key factor: a radical paradigm shift for manufacturers and builders. “ ’, attests . This approach also makes it possible to broaden and diversify traditional services. Personal data collection nonetheless carries legal risks, of which companies are wary: the customer must be able to control their personal data. “ , warns Offi . Companies can anticipate these kinds of issues through proper organizational measures. “ f fi ”, clarifies f fi . he challenges of innovation are clear for all to see. Companies are also accelerating the development of incremental internal innovation. Integrated into active operations, they rely upon internal resources, from the formulation of ideas to their im- plementation. They do not change existing models, but seek to optimize them. “ ”, comments ffi . industrialization .
”, evokes . This means accelerating the technological maturity of the disruptions developed, in order to reap the rewards early. Relationships can be developed beyond simple partnerships, by way of accelerators, incubators or investment funds...65% of surveyed companies practice in-house incubation versus 48% externally. CORPORATE VENTURES: A FINANCIAL VEHICLE FOR INNOVATION Company investment funds (or corporate ventures) are formed to help intensify external innovation. There are two complementary approaches: investment in a specialized fund, like those managed by Partech Ven- tures, as 45% of companies on our panel have done, or the development of an in-house investment fund. Accor- ding to a study performed by Insead1 and 500 startup funds, 50% of the the 100 Forbes Global 500 now have corporate funds. “ ”, describes . According to CB insights1, these private funds contri- buted to more than half of all startup financing in the world in 2015. This was a 70% growth on the previous year. This is a promising expansion, even though Europe is less affected for the moment, receiving only 15% of total financing. and practices. Organizations can sometimes be tempted to over-experiment, without setting proper limits. “ , asserts . “Test and learn” is also an emergent trend. Aborted pilot projects are therefore not seen as deadweight, but as necessary trials. “ ”, reveals . e o avoid being outpaced by pure plays, traditional companies must stay in the innovation race. Big players now see startups as their chosen partners to accelerate innovation, particularly innovation that disrupts their traditional activities. These partnerships often have a level of opportunism, by exploiting an immediately available technology. “ ”, underlines ffi “ ”. Aware of what fledgling operations can bring to the table, more and more companies are appointing executives to orchestrate a culture of external innovation: the Chief Disruption Officer. CONNECTING TO THE ECOSYSTEM Beyond this opportunistic mindset, more and more companies are developing active links with the startup ecosystem. This desire can be seen in large-scale programs: “ industrialization .
Member of the Executive Commitee - Digital and Market Management “We have a startup accelerator, which helps us to stay as close as possible to this ecosystem. That way we pay attention to their methods and technologies. We help them to grow, we provide administrative, legal and financial support as well access to a network, but we do not necessarily impact their capital: we must not stifle their development.” Confronted with new paradigms introduced by pure plays, trusted formulas no longer work as well as they used to. Traditional companies are hindered by internal inertial forces and are generally less digitally mature than their markets. ll companies, whether they are established players or pure plays, face the burden of their history. Vestiges of this heritage are found in internal organization and are often a source of friction. These obstacles are chiefly cultural, which can involve a clash between traditional and digital teams. “ ffi , recognizes Offi . At the heart of this problem, digital can be seen as a threat by colleagues, particularly when performance indicators for the physical sales networks and online sales channels are poorly indexed and refl ect badly upon the cross-channel systems in place. “ . ”, confiides s industrialization .
. “ .” “ ”, underlines . “ ” There is also the burden of established processes which create sub-cultures that are difficult to change: the famous silos. “ ”, adds . “ ” The cultural change that needs to take place for most players involves putting the customer at the heart of the process. “ ” Beware of false steps however: digital transformation can reveal longstanding dysfunctions, which partners grew to tolerate. “ ”, warns . “ ” AN INEVITABLE LOSS OF CONTROL These cultural obstacles are often combined with static management, who must adapt to changing times and take the plunge into the unknown. “ ”, evokes ffi “ ” This is compounded by a fear of loss of control by middle management. “ ”, admits . “ ”. shares this need for transparency: " ”, insists “ ”, analyzes ff . “ diffi .” AN INTERNAL MANAGEMENT UPHEAVAL Beyond human talent and management styles, digital also modifies the traditional key performance indicators (KPIs) of companies. These must be rethought, in order industrialization .
to avoid any counter-productive eff ects on overall economic performance. “ ffl ”, re cognizes . “ ” underlines . These performance indicators become more granular as the organization collates more and more internal data, sharpening its BI and Analytics performance. “ ”, warns . “ .” These phenomena have repercussions on company structure, which must become more and and more transversal. Historically sequestered divisions now find themselves working together, through increasingly matrix-organized fl ow systems or project platforms. “ ”, advances s z . New digital subjects naturally tear down certain silos. This idea is explained by fficer of Adeo Services : “ ” This activity directly impacts governance and we will return to it in Chapter 4. “ ”, advances again . “ ”, summarizes ff “ .” ot all companies have the same awareness of the magnitude of the transformation taking place. Many are still waiting for the signal innovative disruptions of their sectors to become more profitable and are mostly sticking to the digitization of sales channels. Even worse: only 25% of surveyed companies declare earning more than 25% of their revenues via digital channels, with customer satisfaction still leaving a lot to be desired1. “ ”, announces industrialization .
PURE PLAYS HAVE A GREATER DIGITAL MATURITY With the growing power of online commerce, we ob- serve the increasing coexistence of two models: full online, which sees transactions coming exclusively from digital channels, and a hybrid model, which combines new online sales channels with the traditional physical network. It is no surprise that pure plays, digitally mature masters of full online, often provide a fully digital end-to-end customer experience with more accessible, fun websites. By contrast, traditional players still find themselves between steps 2 and 3 on our diagram, between the development of online channels and the digitization of processes. . Historical players mostly prefer to use proven business models rather than taking risks, according to a BCG publi- cation1. Even for the more audacious large scale innovators, the impact on their turnover still remains modest. “ ”, recognizes . Added to this lack of maturity is another problem: customer perception. Despite all the efforts employed to digitize, customer expectations are not being met1. Customers complain of both a lack of choice and quality in the available channels. This is a definite sign of a flawed transition to digital activities. industrialization .
Tangible proof of this trend: large ecommerce platforms like Amazon, Ebay, Craigslist and Leboncoin.fr do- minate the global rankings of most consulted sites, com- piled by the online traffic analysis service SimilarWeb (respectively placed 4th, 32nd, 49th and 109th). By contrast, hybrid players are recording the humblest per- formances. A study of sectorial digital maturity carried out by BCG, using data from SimilarWeb, helps to understand how digitization affects players’ web presence. It is based on traffic data from the principal European transaction sites (content sites or commercial platforms). BCG has used these figures to prepare an index of digital maturity, along 3 axes of comparison: 1. The channel used (mobile or computer), which helps to understand in which situations the consumer connects. 2. The bounce rate, otherwise known as the site’s capa- city to retain the browsing user, which is based on 3 criteria: the interface design, the relevance of content and/ or services provided, and the technical performance of the page. 3. The source of traffic, in order to determine strategies for site access. In each of these indicators, the performance of historical players remains below the standards set by the best pure plays. While today 58% of Amazon’s site hits are from mobile devices, traditional players are still mainly accessed from computers. The bounce rate is also higher for traditional players, reaching nearly three times that of Leboncoin.fr from a computer and 1.7 higher from a mobile device. Traffic sources show strongly diverging trends. Direct traffic is the main source of traffic for pure plays, at 49.3%. For traditional sites it is search traffic, at 49.4%, which shows that they have succeeded in building online brand recognition along with a traffic acquisition strategy that makes them less dependant on intermediaries like Google. This is mainly achieved through investments in CRM and Social, leading to more accurate targeting and a more advanced customization of promo- tional communications. OFFERS STILL FAIL TO MEET CUSTOMER EXPECTATION Featuring a less mature digital approach than pure plays, traditional players still lag behind in customer satisfaction. According to a BCG-Nice study on the banking, insurance and telecom sectors, consumers remain very dissatisfied with available digital services. Pure plays themselves must remain vigilant, as their digital maturity runs the risk of shrinking over the years. “ ”, observes ffi . The threat is even more serious, because disruptive startups are still outweighed by GAFA. In May 2016, Google announced the addition of a car-sharing functio- nality (Waze Rider) to its community vehicle guidance application Waze, currently only available in the USA. This brings direct competition to the car-sharing services developed by fledglings like Blablacar, Uber and Lyft. industrialization .
CHA - T 3
3 : 3.1 - Accelerating scale-up, the IBM approach p. 3.1.2 - Scaling Up: digital industrialization p. 3.2 - The Data-driven company, or the overall improvement in competitiveness thanks to internal and external data p. 3.2.1 - The Internet of Things and Big Data: 2 arguments for competitiveness and innovative business models p. 3.2.2 - Open data, hackatons ... data to be utilized both inside and outside of the company p. 3.3 - Digital IT: a more agile and fl exible IT architecture for surviving market change p. 3.3.1 - IT is becoming more agile and is working closer with the other departments p. 3.3.2 - The IT role must be flexible, to maintain the running of operations p. 3.4 - Collaboration is a competitve lever: breaking internal silos and embracing open innovation p. 3.4.1 - Greater transversality inside the organization p. 3.4.2 - Openess to major partnerships and external open innovation p. 33 :3 : - Accelerating scale-up, the IBM approa- Accelerating scale-up, the IBM 33..11...11 -1 -- DDDiiigggiiitttaaalll::: fffrrrom tom tom trrraaannnsfsforormmaattiion toon t digitization 3
Digital is a springboard to competitive growth. Today, GAFA and pure plays are leading by example. In a rapidly changing world, best in class players accelerate their transformation through three levers: data analysis, agile and flexible computer systems, and the arrival of new collaborative and multidisciplinary work methods. Data utilization improves the overall performance of a company beyond simply tweaking customer relations, and creates a new model for data-driven companies. Digital transformation, by influencing every profession, profoundly reconfigures the traditional role of computer systems within organizations. ISDs are transformed into agile and flexible teams in the pursuit of more transversal goals. Legacy systems are being more easily accessed thanks to APIs. The catalyst for this transformation is clearly the human factor: collaborative methods are becoming more transversal (agile methods, test and learn…) and they create a vital force that transcends silos and even company walls. Interdependence with the ecosystem is accentuated by open data, such as the open innovation model. The big challenge? Appropriating disruptive innovations from ecosystems outside of the company. 03. Best practices for accelerating scale-ups
industrialization ver the past decades IT budgets have been mi- nimized through ERPs, or centralized systems, such as core-banking. Each company optimizes its physical value in relation to its direct competitors, by improving its operational excellence and therefore redu- cing costs. However, in recent years new technologies have emerged: the cloud, social media, mobility, the In- ternet of Things and most recently, cognitive computing. As a result we have seen huge developments in data utilization. Parallel to this, new competitors and more impor- tantly, new business models have materialized. Hungry for success, new entrants aim for a disruptive strategy. This means appropriating a new culture and new working methods. Here again, traditional players must draw on disruptive experiences, test new collaborative ideas, and undertake the digital transformation of their organizations. Otherwise, they risk meeting the same demise as Kodak or Virgin Megastore. Digital industrialization essentially involves transforming the data available to companies to reinvent disruptive services: • Telecom operators are now offering banking services • Connected Cars make new mobile services possible, but also data collection and optimized maintenance • The insurance sector is reinventing itself with the development of the Internet of Things This collaborative creation of digital value now takes place in conjunction with the customer, and draws on the methods of new entrants (Service platforms, Design Thinking, Factory, Academy,...) Take EMLyon, who dealt with the arrival of new entrants (mainly American) on their territory, by creating the first ever digital campus. The management school was able to combine transformation and new service creation. This co-creation is a true differentiating factor for EMLyon. The vast majority of French companies and organizations are now aware that the digital transformation is taking place and will continue with or without them. Nonetheless, they must also beware of the opposite extreme, the creation of ‘digital excess’. Some organizations are leading a competitive ‘race to POCs’ (Proof of Concept). By overdoing Design Thinking, some companies have developed more POCs than they know what to do with. What obstacles need to be avoided and what good practices need to be fostered in light of the digital transformation? How can scale-ups be accelerated? Here are IBM Interactive’s tips for successful digital industrialization.. industrialization
here are 4 keys to success for scaling-up: 1. Platforms New entrants have based their success on platforms, which is why traditional companies need to react by building 3 paired and complementary platforms: • The industrial platform (System of Record) collects transactional data. This company history will remain in existence and become increasingly industrialized and normalized. • The digital platform (or System of Engagement) cap- tures external data. It is becoming more and more prevalent. It uses permanent innovation to improve customer proximity (internal or external). • The cognitive platform (or System of Insights) incor- porates the analytics and big data functions of the organization. Combining these 3 platforms is crucial, and is done with the most innovative tools such as APIs, the DevOps approach, and optimal planning for development cycles both long and short. Vice President - General Manager at IBM The cognitive platforms that demonstrate the idea of ‘augmented intelligence’ are distinguished by 3 very particular and totally unique qualities: • A profound comprehension of natural lan- guage. This ability to understand the meaning and context of information harnesses the entire mass of unstructured information, internal or external. • The formulation of arguments based on evi- dence, which postulate a tree of hypotheses, that respond to direct questions. Each of these hypotheses is presented with an index of statistical relevance, accompanied by sources cited by Wat- son, making it an excellent system for assisted decision making. • IBM Watson improves with use. The under- lying technology is based on learning, and, like a human being, IBM Watson learns and improves from qualitative evaluations of its answers. industrialization
2. Co-creation and creativity with customers Companies must reinvent all of their front and back office processes that deal with customer experience. The participation of customers and the ecosystem is inva- luable during these stages of Design Thinking. Living Labs, Customer Data Lab and Pool UX/UI concepts then appear. This is why a studio or digital agency that can help the company to have a clearer understanding of customers, can prove to be a useful ally. 3. Digital industrialization with different factories Factories help with digital industrialization, by ensuring the optimal delivery of web, mobile and even cognitive applications, without neglecting integration with existing systems or initial test phases. They are actually crucial and too often overlooked : “The more creative you are in the Studio, the more industrial you should be in the Factory.” 4. Managing change and the evolution of skills: The Academy Skills’ evolution and change management are essential to helping this digital transformation. Management methods must also adapt to these changes. The evolution of internal skills leads to upskilling programs, such as the organization of hackathons. n Germany, Industry 4.0 could create productivity gains of up to 8% and raise GDP by a point, in the next ten years1. An industrial revolution which now holds an extra lever for action: company and customer data, which not only helps to create innovative products and services, but also to optimize the assets and internal processes of the company. The combination of sensors and Big Data also helps companies with operational activities. , illustrates this trend with an example : .” Sensors are nothing new for industry. They have been used for many decades: the Internet of Things is simply industrialization
another stage for them, that provides widespread inter- connection through the internet. Combined with Big Data techniques (data crunching) and predictive analysis, captured data has the potential to optimize professional processes. “ ”, explains Nonetheless, the Internet of Things seems to have a much more significant disruptive effect on customer relations than internal processes. “ ”, believes “ .” BIG DATA CREATES MARKET VALUE Maintenance, internal processes...Big Data algorithms help to value internal and external data and improve its utilization. But outside of company walls, this is above all a market value, and lends itself well to new B2B and B2C offers. “ ”, describes . “ ”. , describes his take : “ .” This enthusiasm is shared by who anticipates the customer data provided by Linky meters: “ .” French Division President “For me, the race for Big Data looks more and more like a race to data storage, which seems irrelevant to me. I believe much more in the real-time use of data than in storage, which will also be extremely expensive and raises security problems. The challenge is the utilization of data in real- time. Analyzing the past is not enough to predict the future.” ETHICAL DATA TREATMENT, TO MAINTAIN CUSTOMER CONFIDENCE Although they have not yet been industrialized to a large extent, IoT technologies are already an area of exploration for all: “ ”, explains with enthusiasm . “ ”. This influx of data drives new business models, but requires ad hoc governance. The challenge is to define this governance of data by adapting to local regulations and maintaining customer confidence. “ industrialization
he security of user data is seen as a serious imperative for all, and regulatory compliance obligations are there to ensure they are protected. Though data can be seen as a war treasure to be protected, it can often be more valuable for users outside of the company. Companies are now beginning to make their knowledge available through open data programs. In fact the French government is leading by example in making data public, with the opendata.gouv.fr platform and the Jutand Report of March 2015, which invited transport operators to share their data. Companies are now following suit, tempted by the potential for innovation which counterbalances the risk of revealing strategic information. Hackathons are another valuable way to explore possible innovations. HACKATONS: A BRIDGE TOWARDS INCUBATION Of the companies on our panel, 39% declared having organized open hackathons, to accelerate innovation through collective intelligence. Hackathons should be thought of as competitions for teams of external developers, designers and innovators, to innovate using company data. According to BeMyApp, a specialist in company developer relations, more than 70% of hackathons have the goal of creating an innovative application1. In over 70% of cases, the winners see their solutions pushed to incubation, either internally (20%) or through an outside organization (50%). Public hackathons are also developing: in 2013, they mainly consisted of IT specialists and graphic designers, with an opening up to business school students in 2014, and the inclusion of startup creators in 20152. “ , declares . The topics are also becoming more specialized, dominated by leading technologies (such as virtual reality) that are more and more advanced (from up to 10% in 2013 compared to 40% in 2015), which guarantees the participation of specialized developers, and therefore the quality of the proposed technological solutions. A TOOL FOR COMPANY ACCULTURATION 45% of companies interviewed for this guide also hold internal hackathons. “ ff ff ”, argues . ”, thinks . “ ”. For this reason, some companies choose to limit the scope of Big Data: ‘ ”, tempers . “ .” In the UK, 20% of the population says they are willing to use ad- blocking programs to avoid being tracked on the internet and repel ultra-targeted ads. Transparency is therefore a crucial component of high added-value services. industrialization
We’ve come a long way from the ‘IT Doesn’t Matter’ mentalityespousedbyNicholas Carr,in an infamousHar- vard Business Review article from May 2003. Long seen as a support function, IT is one of the spearheads of the digital transformation, even though not all information systems are digitizing at the same speed. In greater proximity with the work being done, as well as being more agile and flexible, IT teams are adjusting to become key drivers of digitization, driven by their critical technical skills. SD digitization is primarily driven by the va- rious needs of the other departments, who steer it to deal with new imperatives, most often in a distinctly digital direction. This MO has clear implica- tions on the distribution of roles within an organization, as IT teams must work much closer with other departments than in the past. Today, marketing teams acquire technological skills that are key to customer relations based on the quality of front office applications. Parallel to this, ISDs are opening up to new skillsets related to the architecture and processing of data, which sometimes entails separate teams from traditional IT departments, under the supervision of a Chief Data Officer. According to BeMyApp, motivations range from team building (40%), and internal innovation (40%), to the dis- covery of high-potential digital profiles within the company (20%). Accordingly, close ties with the IT team become crucial. “ ”, indicates . “ ” industrialization
Strategy & Transformation Director IBM Global Business Services ISD transformation "ISDs must transform their relationships with other departments, as evoked during many of our interviews. The long cycle approach must give way to more agile methods such as DevOps. The day has gone when information systems were very integrated and difficult to change. Frameworks like SCRUM provide the means to manage iterative development methods. ISDs must adapt to the demands of digital and transform their models to better meet the needs of each department. “ AGILE METHODS ARE THE NEW NORM However, in order to work in a more transversal way, i.e. increase the number of stakeholders without affecting the time-to-market of projects, working methods are evolving, and are becoming more collaborative. Agile method bring together projects, domain experts and battle hardened developers, and are seeing great success. This is a profound transformation for IT teams: development cycles, known as V-Models, prove to be long and expensive. THE CHALLENGE OF WORKING CLOSELY WITH ISDS TO MANAGE "DIGITAL" PROJECTS The proliferation of projects earmarked as ‘digital’ nonetheless runs the risk of ISDs losing their support function role, with internal functions given free rein over the design of their own systems. The challenge for ISDs lies in guaranteeing the ease and quality of maintaining systems and applications which are not always built to common standards. IT departments must therefore contribute to establishing common rules for software development, and enforce them in a centralized way. industrialization
The main driver of digital transformation is first and foremost human, through novel collaborative methods that help organizations become more transversal. The goal, inside the company, is to break away from traditional silos, in order to work more easily with each and every department. Collaboration must also take place with closer ties to the startup ecosystem. igitization, by driving the evolution of work devices, transforms the entire organization and reconfigures it according to digital modalities. This means acculturating the organization to digital, in order to change attitudes. “ ”, confides Offi . TRANSVERSAL COLLABORATION BREAKS DOWN SILOS It comes as no surprise that agile methods are a royal road to destroying silos within a company and gaining valuable time-to-market by accelerating innovation processes. Nonetheless, the agilization movement is just getting started. Only 14% of companies interviewed for this guide declared running more than 35% of their projects in agile mode. -speed IT’ is a recurring term, so much so that 57% of surveyed companies find themselves in this situation. But is it a methodology to be avoided or a crucial readjustment phase? The answers are varied: “ ”, declares . Others contrast two logics that are hard to compare: “ ”, clarifies . “ .” Even more so, consi- dering certain legacy ERPs are ill-suited to agilization: “ ”, confides ff FOCUS ON MODULARITY WHEN INTEGRA- TION IS A SHORT-TERM UNCERTAINTY In practice, the budget allocation for digital is less than 35% for 68% of companies interviewed for our panel. This is considerable, given that maintaining operational conditions is the main expenditure for ISDs. Digital is therefore a priority, but problems remain: insurers and bankers, for example, have traditionally dealt with legacy back office systems that are difficult to migrate, which gives them greater constraints. The most common solution is APIs, which overcome technical inconsistencies to access back office information. “ ”, summarizes ffi industrialization
ff President Digitizing the façade without reviewing the architecture is inefficient "IT departments must also reorganize themselves in order to deal with the demands of iterative development, which could involve partnerships with a broader ecosystem or newer, more agile ways of working. That said, ISDs are not alone in the need to become more agile, other departments are also implicated. It is especially important to rethink the architecture as well as the façade. Redoing the façade without thinking to review back office systems and processes is catastrophic and counter productive! Core IT must also be modernized, but this doesn’t necessarily mean that it must be replaced. In this respect, IT architecture is becoming a key role, charged with the heavy task of identifying suitable anchor points between Core IT and Fast IT, to guarantee both speed and durability. The fact remains that IT system maturities vary considerably from one company to another...they must find the strategic alignment which guarantees them a Business Partner status. In reality IT and marketing have a lot in common! For both, digital industrialization is imperative.“ DIGITAL PROFESSIONAL COMMUNITIES Improved communication is another lever for transformation. “ ”, feels Leaders now promote professional communities, which afford employees greater freedom and the opportunity to devote themselves to new projects. Business social networking is a good example. However, working transversally with little hierarchy is not always easy in highly structured organizations. Traditional methods such as the internal information letter are still prevalent. “ ”, explains ffi LEAVING TRADITIONAL HIERARCHY BEHIND To support these communities, organizations are learning to adapt and hierarchies are changing, often according to a matrix organization. “ diff ,” comments Companies are putting in place more horizontal structures or divisions, to push competition between colleagues and carry the rest of the organization in their wake. Some prefer to build on established forces: in this way Groupama uses its Amaguiz subsidiary as an internal innovation platform. “ ”, considers industrialization

Digital industrialization 2016 - International version

Digital industrialization 2016 - International version

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