Digital Transformation Ashley Friedlein CEO Econsultancy

Digital Transformation: what it is & how to get there

Ashley Friedlein, CEO, Econsultancy@AshleyFriedlein

| 2013 | Digital Transformation

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| 2013 | Digital Transformation| 3

Ashley is the CEO and Co-founder of Econsultancy, a

research and training group with over 200,000 subscribers.

Econsultancy provides access to data, best practice guides,

trends, training and events - all focused on improving digital

skills and digital marketing and ecommerce effectiveness.

Econsultancy was founded in 1999 and has offices in

London, New York and Singapore.

Ashley has written two books on digital marketing which

have sold over 40,000 copies. He is a columnist for

Marketing Week magazine and guest contributor to

numerous other digital media and marketing publications.

He writes for Econsultancy’s own award-winning blog and

speaks at events internationally, actively promoting

Econsultancy’s brand and content as well as the interests of

digital and marketing professionals more generally.

About the author

Interested in Ashley presenting to you? Please see contact details on final slide

Contents

Digital Transformation

Strategy

Technology

People

Process

Business Transformation

Digital Transformation

What is Digital Transformation?

Digital Transformation is the journey from where

company is, to where it aspires to be digitally.

What is a ‘digital’ organisation?

A digital organisation is one that:

1. Focuses on customer experience irrespective of

channel

2. Has a ‘digital’ culture

Net-a-Porter is a successful digital business. What do they obsess about?

Customer Service

Packaging

“EIP”s

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

Amazon’s relentless focus on improving the customer experience

Sources: Amazon, Oracle

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

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

*The* strapline for a digital organisation?

What is a digital culture?

7. Empowered

8. Data-driven

9. Passion

10. Innovative

11. Agile

Suggestion: Hire for culture / personality and not (just) digital skills. The latter can be taught.

1. Commercial

2. Customer-centric

3. Transparent

4. Collaborative

5. Environment

6. “Growth hacker”

Perhaps you know you are digital / digitally transformed when…

No-one in your company has ‘digital, online, e-,

interactive…’ in their job title

There is no separate ‘digital strategy’

Real-time retargeted dynamic

online ads based on social

profile data #whatever

Posters in the underground

#howcoolisthat

Econsultancy’s Digital Maturity Framework: roadmap to digital excellence

Digital Excellence

Success is down to leadership…

Source: McKinsey Global Survey, August 2013

..and organisational alignment

Source: Econsultancy User Survey, Sept 2013

But only 1 in 10 marketing and IT executives believe collaboration between CMOs and CIOs is at the right level

Source: The CMO-CIO disconnect: Bridging the gap to seize the digital opportunity, Accenture Interactive

33% see Digital Transformation as a ‘huge challenge’

Source: Econsultancy User Survey, Sept 2013

27% of execs rate digital transformation as already “A Matter of Survival”

Source: MIT Sloan Management/Capgmini, “Embracing Digital Technology”, 2013

“Executives estimate that at best, their companies are

25% of the way toward realizing the end-state vision for their digital programs”

Source: McKinsey Global Survey, Aug 2013

How do you actually make it happen at scale, across the whole organisation?

1. Create the right environment for ‘osmotic’ digital

transformation Incentivising the right behaviours

New blood/digital natives

Show/prove the value of digital to all

Digital culture

2. LEAD the transformation CEO should own/drive this

"Demand is growing for insight into digital business, particularly

among CEOs”

Source: Diane Morello, managing vice president, Gartner, 2013

"31% say their CEOs personally sponsor these

[digital] initiatives, up from 23% who said so in 2012.

[...] the CEO is the only executive who has the mandate

and ability to drive such a cross-cutting program.”

Source: McKinsey Global Survey, Aug 2013

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

| 2013 | Digital Transformation| 1 Feb 2010 | LV= Strategy Day, Econsultancy Presentation| 27

Strategy

What should be in a Digital Strategy? (1)

Strategy•Make it clear how the digital strategy supports the overall business

strategy.

•Business plan/P&L for digital as necessary.

•Articulate short, medium and long term plan/vision for digital. For

example it may well be that in the long term the objective is that ‘digital’

will dissolve back into the business so structures, roles, P&Ls etc will

change over time.

•Define digital principles and digital design principles. Focus should be

user-centred design and customer experience

•Define “what good looks like” for digital: KPIs, success metrics, what

analytics/reporting are planned

People/Process•Digital governance: who makes decisions and how? Who are the

leaders for digital?

•Structure: organisational design, teams, roles and responsibilities for

digital

•Culture for digital: define how you plan to work (agile, iterative), your

planned environment, your values e.g. sharing, transparency,

collaboration

•Training, education, empowerment, integration of digital across the

business. Articulate how you plan to bring digital to the whole business,

break down knowledge, and other, silos.

Tech/Ops•Your plans around content, community, commerce

•Digital tech: infrastructure, architecture and ecosystem inc. points of

integration across business

•Data: metadata, taxonomy, integration with rest of business and systems

e.g. CRM, sales

•Tech Standards: standards/protocols you intend to use/comply with

•Legal: data protection, privacy, IP/rights policies, licences etc.

•Procurement: define who is in charge of digital tech and agency

procurement/selection (should be digital specialists)

•Define tools/environment the digital team will require to do their jobs

effectively

Marketing/Sales•Plans/resourcing around customer lifecycle: customer acquisition,

conversion, retention (including online customer service)

•Address plans around digital marketing fundamentals: advertising,

email / eCRM, content marketing, social, mobile, search marketing,

customer experience, analytics/optimisation

Source: Tate website

Tate’s digital strategy evolution

GOV.UK digital & design principles

Technology

Even politics has experienced the rise of tech

• Obama’s 2008 presidential campaign

team had 4 engineers working on it

• Obama’s 2012 campaign team had a

team of how many engineers?

By 2017 the CMO will spend more on IT than the CIO

Source: Gartner, 2013

66% strongly agree that:

Marketing is becoming increasingly

technology-driven

Source: Econsultancy User Survey, 2013

Source: McKinsey Institute, “Disruptive technologies: Advances that will transform life, business, and the global economy”

Most future disruptive technology relates directly to digital business transformation

However… although 90% of professionals say tech impacts their job, only 20% have the right skills

Source: Research for Digital Domination Summit 2012 (2,000 professional respondents)

*Which* technology is much less important than organisational alignment with IT

“Marry the technologists”

People

Structure

Source: Econsultancy’s Digital Marketing: Organisational Structures and Resourcing Best Practice Guide

Stage 1: Let many digital flowers bloom…

BBC1997-2001

Stage 2: Dedicated Digital Team / CoE

BBC2001-2006

Stage 3: Hub & Spoke

BBC2007-2012

Stage 4: Multiple Hub & Spoke

BBC2012

Digital Enlightenment = “Honeycomb”

Culture

Culture is one of the most significant barriers to digital transformation

Source: MIT Sloan Management/Capgmini, “Embracing Digital Technology”, 2013

What is a digital culture? (recap)

7. Empowered

8. Data-driven

9. Passion

10. Innovative

11. Agile

1. Commercial

2. Customer-centric

3. Transparent

4. Collaborative

5. Environment

6. “Growth hacker”

Nordstrom: “What we want in a teammate”

“Customer-driven”

“Constantly changing”

“Collaborative”

“Curiosity”

“Passion”

“Always learning”

Roles & Responsibilities

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

Growth Hacker

• From Silicon Valley• Combines marketing with

product development• About getting to points of

sustainable growth with new

products/services• AirBnB case study: Growth

Hacker is the new VP

Marketing

Product Manager

Source: Mind the Product

One way to do it... from CIO to CMO

Ali HineCIO CMO, IG Group

To CDO or not to CDO?

Source: Econsultancy

“30% of respondents have a CDO. [those with a CDO] indicate significantly more progress toward their digital vision than those without one” McKinsey Global Survey, 2013

Suggestion: CDO should be an interim role. CDO should report to CEO.

New job descriptions for HR to understand

Source: Econsultancy

How do you attract top digital talent?

Digital vision – a clear strategy and the

opportunity “to make a difference”

Product – the chance to create a beautiful

product / experience

Talent begets talent - get to work with other talent,

digital ‘craft’

Culture - you have a digital culture (see earlier)

Environment

BBC W1 – tech + editorial together

BBC Salford, Google London – open / collaborative / ‘ad hoc’ spaces

Space echoes working practices: small, rounded teams; fluid / agile; mixing disciplines; no hierarchy.

Process

Four big challenges for digital / process

1. Multi-disciplinary

2. Speed / Agility

3. Complexity

4. Innovation

How we need to work

“A successful digital culture is reliant on innovation, openness and responsiveness.”Rachel Neaman, Department of Health, Deputy Director, Digital, Channel Strategy and Publishing

“Being able to change at speed is very important. We know government can move quickly because we built the new e-petitions system in less than 2 months.”Sharon Cooper, Government Digital Service, Cabinet Office, Deputy Director

“Transformation means a change in culture and process inorder to deliver change and make sure that we are seen by our customers to be innovating and moving forward.”Simon Shorey, Barclays, Head of Development, UK Retail and Business Banking

Multi-disciplinary: Amazon’s “two pizza” teams

+ co-located

+ manage by objectives / “freedom within boundaries”

How do we deal with the need to operate at SPEED?!

Real time

On demand

Automation

Responsive

Agile – for software development

Manifesto for Agile Software Development

We are uncovering better ways of developingsoftware by doing it and helping others do it.Through this work we have come to value:

Individuals and interactions over processes and tools

Working software over comprehensive documentation

Customer collaboration over contract negotiation

Responding to change over following a plan

That is, while there is value in the items onthe right, we value the items on the left more.

Agile – for marketing

Nordstrom Innovation Lab

Speed is a vital source of competitive advantage in digital

Google’s USP has always been speed?

From mere fast to Now. Predictive. Push.

iOS7’s “background refresh” – improving the speed / responsiveness of the user experience

“more recent information... content fresh and ready... no need to wait... massive improvement in customer

experience” Eventbrite, Yplan, Realmac

1-3 days: if a video is to go viral

Source: Unruly “Science of Sharing”, July 2013

< 6 hrs: half your email opens occur

Source: Mailer Mailer

< 3hrs: 50% of clicks on shared links

Source: bit.ly

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

The Stalagmite vs. the Conductor

| 2013 | Digital Transformation| 1 Feb 2010 | LV= Strategy Day, Econsultancy Presentation| 80

The rate of change is accelerating at a business level too

“The average lifespan of an S&P 500 company has decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today”

Source: Professor Richard Foster, Yale University

“By 2020, more than three-quarters of the S&P 500 will be

companies that we have not heard of yet.”

Source: Professor Richard Foster, Yale University

The journey towards digital excellence

Source: Econsultancy Digital Maturity Framework

Burberry – doing well because of ‘digital transformation’?

Source: The Digital Advantage: How digital leaders outperform their peers in every industry, CapGemini / MIT Sloan Management

Digitally-transformed busineses outperform their peers in every industry

Source: The Digital Advantage: How digital leaders outperform their peers in every industry, CapGemini / MIT Sloan Management

Profitability

Digital Transformation is actually

Digital Transformation with EconsultancyWe can measure your organisation’s digital capabilities so you know where you are. This is the baseline against which improvement can be measured and benchmarked, both internally and versus the market.

We help organisations build their digital capability roadmap outlining how they are going to achieve their digital transformation in terms of people skills.

We deliver digital capability programs via training and workshops both face to face and online. These accelerate the adoption and integration of the digital skills needed to deliver on digital transformation.

We can provide certification and CPD for the digital capability programs we deliver

Editable PowerPoint version of this presentation, with commentary in the notes, and including builds, is available to Econsultancy subscribers on the Econsultancy site.

Call us on +44 (0)20 7269 1450 (UK) or +1 212 971-0630 (US) or email transformation@econsultancy.com

Digital Transformation Ashley Friedlein CEO Econsultancy

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