© 2016 Information Services Group, Inc. All Rights Reserved.

© 2016 Information Services Group, Inc. All Rights Reserved.

William S. McNeeNovember 17, 2016Greenwich, CT

The Digital JourneyKeys to Success

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Pace of Digital Business adoption is quickening, shifting from a Board Room debate just a couple of years ago – to a core operational mandate at many firms today

This suggests that as a “strategic priority” – Digital is beyond the inflection point. With mainstream adoption, we shift to the hard work of making it a reality in the business

In this sense, there is a growing recognition that Digital Business is just the future of business

With greater experience / maturity comes a richer appreciation of what it takes to succeed and win in the new era

Taking the Pulse

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Digital Business: Key Signposts

68% 73%

Digital Business is a strategic / corporate priority at my com-pany, with defined business

goals.

2015 2016

46% 54%

Data Science is at the heart of our Digital Business Strategy.

2015 2016

76% 68%

My company has budget set aside specifically for Digital

Business initiatives.

2015 2016Source: Saugatuck Technology, an ISG business“Digital Business” Survey, Nov. 2015, N=129 & Sept. 2016, N=141 “C-level” Bus/IT Leaders

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Digital Business: Key Signposts

52% 58%

We are having difficulty finding the right talent to support our emerging Digital Business ini-

tiatives.

2015 2016

24%

55%

My company has, or is currently evaluating the need for a Chief Digital Officer or Chief Digital

Strategist.

2015 2016

34%

55%

Our digital offerings are con-tributing more to our growth than our traditional products

and services.

2015 2016Source: Saugatuck Technology, an ISG business“Digital Business” Survey, Nov. 2015, N=129 & Sept. 2016, N=141 “C-level” Bus/IT Leaders

Big Jump Big Jump

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Key Trends

Recognition for and emergence of the CDO / CDS reflects strategic importance of Digital Much deeper understanding that unlocking insights from myriad internal and external

data sources through the use of Data Science is central to Digital Business success Budgets for Digital initiatives are increasingly being consolidated into ongoing operations

– as firms get beyond the early stages and are fully engaged and committed Recognition that Digital Business demands new skills and resources, and a fundamental

rethinking of critical business processes / workflows (internally and externally) Evidence that Digital is now beginning to truly contribute to the top and bottom line . . .

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Digital Business – Five Key StagesThe Train Has Left The Station

Source: Saugatuck Technology, an ISG business“Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders

2016 2018 20200.0%

10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%No Digital Footprint

Experimental / Learning

Committed / In Process

Engaged / Ongoing

Established / Improving

60%

88%

US Europe(UK + DACH)

2016 2018 20200.0%

10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

54%

79%

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Top Business Drivers / Pressures Causing Digital Business AdoptionTop Business Drivers / Pressures UK DACH US GlobalNeed for greater operational agility and flexibility 56% 42% 55% 52%Increased competition – from existing competitors within my Industry

59% 42% 35% 43%

Expand share of wallet from existing customers 32% 61% 34% 40%Grow profits / EBITDA, Return on Assets or Return on Equity 41% 18% 45% 38%Expand share of market from new business 35% 36% 34% 35%Increased competition - from new competitors outside my industry 29% 33% 31% 31%Need to introduce new operating model (s) 24% 30% 31% 29%Respond to segment disintermediation 21% 36% 16% 22%Changing expectations in the workplace 3% 0% 19% 11%

Source: Saugatuck Technology, an ISG business“Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders

© 2016 Information Services Group, Inc. All Rights Reserved.

In 2000 our company's revenue was $1.3B and we distributed 8 million printed classifieds magazines per week. We will print our last magazine this year. Our entire business model will then be digitally based. – CIO, Publishing, Large (US)

Our commitment to growth is driving our digital agenda – EVP, FinSvcs, Very Large (Global)

Projects take a long time at large companies like ours. Things are implemented by region. Nationwide rollouts are too risky. – COO, Media, Very Large (UK)

We have implemented many of the early digital technologies to make us more competitive. Now we need to focus on some key process changes. – CTO, Pharma, Very Large (Germany)

This year we are totally re-platforming for deployment in 2017. We are very committed to digital strategies as a brand. – CMO, Retail, Very Large (US)

What Large Enterprise Leaders Have to Day: Stages of Digitization

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Success and the Fast Growers

Digital now seen as the growth engine for the future of business across many industries Firms furthest along in their Digital journey are the fast growers (5% +), followed by

firms experiencing contracting revenue growth (-2% +) For the fast growers, Digital Business is all about being nimble, agile and flexible to

changing market demands. No other business driver comes close With markets moving rapidly, firms with flat to modest revenue growth may be the

most challenged and exposed as they take up the Digital Business mandate Organizational willingness to change, along with cultural transformation issues, remain

among the most difficult challenges to overcome for most of the Global 2000

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Mind the Gaps: USImportance and Success of Factors Driving Digital Business Growth(Very + Extremely Important / Successful responses only)

Source: Saugatuck Technology, an ISG business“Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders

US Importance

Success Gap

Enhanced user experience 75% 33% -42%Digital engagement of suppliers / business partners 71% 30% -41%Launching digital add-ons to traditional products / services 66% 30% -37%Deploying innovative business / operating models 62% 26% -36%Advanced customer targeting (using analytics/big data) 70% 34% -36%Channel expansion 63% 35% -28%Launching innovative new digital products / services / apps 68% 41% -27%Establishing a “Mobile First” solutions policy 55% 30% -25%Proactive customer engagement through social media channels 57% 35% -22%Deploying new monetization platforms for Digital Business 50% 35% -15%

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Mind the Gaps: EuropeImportance & Success of Factors Driving Digital Business Growth(Very + Extremely Important / Successful responses only)

Europe Importance

Success Gap

Launching innovative new digital products / services / apps 75% 41% -34%Digital engagement of suppliers / business partners 64% 35% -29%Deploying new monetization platforms for Digital Business 61% 37% -24%Launching digital add-ons to traditional products / services 58% 41% -17%Deploying innovative business / operating models 65% 49% -16%Proactive customer engagement through social media channels 52% 39% -13%Channel expansion 55% 42% -13%Advanced customer targeting (using analytics/big data/location-based svcs) 54% 42% -12%Enhanced user experience 59% 52% -6%Establishing a “Mobile First” solutions policy 49% 43% -6%

Source: Saugatuck Technology, an ISG business“Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders

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Overall, the research reinforces the fact that Digital Business is really hard to do

Earlier-generation digital marketing initiatives are giving way to newer models of customer and partner engagement, and a fundamental rethinking of business models, value chains, and operating principals

Success demands strong executive leadership, organizational alignment and a culture willing to evolve / change

Launching innovative new digital products and services, and implementing technologies and strategies to effectively monetize them, remain the most illusive thus far

Where’s the Success?

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Top Challenges: Global(Question: Pick top 3)

Partner engagementClient engagement

Functional staffing / talentTechnology – Tools / IT infrastructure

Organizational alignment / employee engagement / collaboratiBusiness model evolution

Data qualityIT staffing / talent

BudgetSenior executive leadership

Company cultureOrganizational willingness to change or evolve business proc

0% 10% 20% 30% 40%4%4%10%21%24%25%28%28%28%30%31%34% As with prior global CXO studies, the

top challenges to successfully develop and deploy winning Digital Business initiatives are all non-IT issues

The top three challenges in the US: 1) Organizational Willingness to Change 2) Budget 3) Company Culture

“Senior Executive Leadership” support tops key challenges in Europe, whereas is ranked 6th in the US

Non-ITIssues

Source: Saugatuck Technology, an ISG business“Digital Business” Survey, Sept. 2016, N=141 “C-level” Bus/IT Leaders

© 2016 Information Services Group, Inc. All Rights Reserved.

Digital engagement. Customers expect a seamless, personalized experience that spans across physical and virtual worlds

Digital insights. Data is at the heart of Digital Business; building strong data science skills will be critical for next-generation insights

Digital backbone. A platform that can continuously and flexibly adapt will bea critical for Digital Business success

Three Key Imperatives to Invest Around and Focus On

Processes

Cloud

CustomerAnalytics

Collaborative Product

Innovation

BusinessInsights

CustomerExperience

Product Analytics

IoTAutomation

Platforms

Access Channels

Social MediaCollaboration

@ @ PartnersCustomers

Enterprise

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