So gelingt Digitale Transformation – Kernaussagen einer Capgemini/MIT-Studie

Transform to the power of digital

So gelingt die Digitale Transformation – Kernaussagen einer Capgemini/MIT-Studie

Business Breakfast 24.10.2013

DI Bernd Bugelnig

DIGITAL TRANSFORMATION IS THE USE OF DIGITAL

TECHNOLOGIES TO RADICALLY IMPROVE PERFORMANCE OR

REACH OF ENTERPRISES

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Copyright © 2013 Capgemini Consulting. All rights reserved.

Digital Transformation Facts

Compared to previous industrial revolutions digitization is mainly driven by consumer behavior and demands


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Business perspective Tipping points Digital usage

> $1 trillion global

e-commerce revenues in 2012 (+19% year on year growth expected in 2013)

141 billion

searches each month on Google

6 billion hours of

video watched each month on YouTube

Amazon.com

announced in May 2011 that it is now selling more electronic books through Kindle than printed books

Apple announced in April 2012 that its App Store has reached

25 billion app

downloads

425 million of these

users access the service with their mobile devices

Mobile data traffic will

grow 26-fold

between 2010 and 2015

More than 50% of all

workloads will be processed in the cloud by 2014

> 6 billion mobile

users (at end 2012), thereof 960 million in China and 880 million in India

80% of American consumers rely on their social networks when searching for products to buy

With 1.1 billion members the user base of

Facebook exceeds

the population of

Europe

Sources: Press releases; company websites; Cisco Visual Networking Index; JP Morgan; International Telecommunications Union

Market valuation (million USD)

Example: Blockbuster’s lack of adaption

Renewal of business model might be an imperative for not being oust by new entrants taking advantage of digital innovations


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Sources: Capgemini Analysis; Company Websites, Annual Reports

Value Proposition

Operations/ Customers

Bankrupt in 2010

(established in 1985)

Traditional DVD rental business

DVD rental through brick and mortar stores and online

Launched online DVD rental business in 2004

More than 6,000 stores in 2010

48,000 employees as of Jan. 2010

2 million online subscribers in 2006

Decreasing physical customer base

8400

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1994 2010

Blockbuster

EXAMPLE

(established in 1999)

Started as an online DVD rental company in 1999

Launched personal movie recommendation system in 2000

Introduced streaming service in 2007

Valuated at $4.9 billion as of April 2012

No physical presence

900 employees

26 million streaming members as of Dec. 2011

Digital Transformation Study

Digging deeper: In a joint study with the MIT we achieved a better understanding how companies leverage Digital Transformation


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157 Interviews 50 Companies 15 Countries

Billion-Dollar Companies IT and Business Executives

Key findings (1/5): Common pressures


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« It’s hard to imagine the brutality of the change in consumers’ behaviour »

COO of a global CP company

Key findings (2/5): Broadly common activities – the building blocks of Digital Transformation


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Customer understanding • Analytics-based segmentation • Socially-informed knowledge

Digital Globalization • Enterprise Integration • Redistribution decision authority • Shared digital services

New Digital Businesses • Digital products • Reshaping organizational

boundaries

Worker enablement • Working anywhere anytime • Broader and faster communication • Community knowledge sharing

Customer touch points • Customer service • Cross-channel coherence • Self service

Digitally-modified businesses

• Product/service augmentation • Transitioning physical to digital • Digital wrappers

Performance management • Operational transparency • Data-driven decision-making

Top line growth • Digitally-enhanced selling • Predictive marketing • Streamlined customer processes

Process digitalization • Performance improvement • New features

Digital Capabilities

Customer Experience

e Operational

Processes e

Business Model

• Unified Data & Processes • Analytics Capability

• Business & IT Integration • Solution Delivery

Key findings (3/5): Different results – Key challenges on Digital Transformation


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“(Only) 40% of the companies (in focus) envision a radical

transformation.”

Limited Transformative Digital Vision Missing Digital Capabilities

Ineffective Coordination

55%

50%

Missing skills

Culture Issues

Ineffective IT

77%

Unclear Business Case

Global

18% Hub

18%

24%

Silo

40%

Central coordination

Key findings (4/5): Best practises - Focus on the “How” more than on the “What”


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THE “WHAT”

ITERATIVE TRANSFORMATION ROADMAP

DIG

ITA

L EN

GA

GEM

ENT D

IGITA

L GO

VER

NA

NC

E

TRANSFORMATIVE DIGITAL VISION

DIGITAL INVESTMENT SKILLS INITIATIVES

DIGITAL VISION

THE “HOW”

Key findings (5/5): Digital maturity matrix


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Dig

ital

inte

nsi

ty

Transformation management intensity

CONSERVATIVES • Overarching digital vision exists, but may be

underdeveloped

• Few advanced digital features, though traditional digital capabilities many be mature

• Strong digital governance across silos

• Taking active steps to build digital skills and culture

BEGINNERS • Management skeptical of the business value of

advanced digital technologies

• May be carrying out some experiments

• Immature digital culture

FASHIONISTAS • Many advanced digital features (such as social,

mobile) in silos

• No overarching vision

• Underdeveloped coordination

• Digital culture may exist in silos

DIGIRATI • Strong overarching digital vision

• Good governance

• Many digital initiatives generating business value in measurable ways

• Strong Digital culture

THE “HOW”

THE “WHAT”

13% 17%

50% 19%

% sample of MIT study

We have delivered projects across most domains of the Digital Transformation framework...


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BMW Retail

BMW Finance

Digital Strategy

Customer experience Operational Processes Business Model