LEADING DIGITAL

ORACLE OPENWORLD ‘14

DIDIER BONNET KEYNOTE
30TH SEPTEMBER ‘14

TURNING TECHNOLOGY INTO BUSINESS

TRANSFORMATION
 “Leading Digital” Was Born
Out Of 3 Years Of Research
2011

2011
2011
Digital 2012 2013
2013
Digital
Transformation
Digital Transformation Digital Transformation Transformation
Digital Transformation
Framework Performance Execution
Framework Execution
RESEARCH
THEMES
DIGITAL
FASHIONISTAS MASTERS

BEGINNERS CONSERVA
TIVES

Define
‘Digital mastery’
Define Performance/ Uncover execution
OBJECTIVES
“Digital Mastery” Sector Maturity/ Challenges
DNA

50 Companies 500 Companies >2,500

RESEARCH
160 Interviews Companies

Copyright © 2014 Capgemini Consulting. All rights reserved.

 What Is Digital Transformation?

Digital Transformation \ di-jə-təl tran(t)s-fər-ˈmā-shən\ (1) the use of digital technology

to radically improve the performance and/or reach of a company.

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Leading Digital: Why Should You Care?

Inflection point: Digital technology will

radically change the way we do business

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Leading Digital: Why Should You Care?

Inflection point: Digital technology will

radically change the way we do business

Are you ready for it?

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Leading Digital: Why Should You Care?

Inflection point: Digital technology will

radically change the way we do business

Are you ready for it?

Few firms are demonstrating digital mastery,
but those who do are racing ahead

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Leading Digital: Why Should You Care?

Inflection point: Digital technology will

radically change the way we do business

Are you ready for it?

Few firms are demonstrating digital mastery,
but those who do are racing ahead

Digital transformation
is not an arcane art

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Leading Digital: Why Should You Care?

Inflection point: Digital technology will

radically change the way we do business

Are you ready for it?

Few firms are demonstrating digital mastery,
but those who do are racing ahead

Digital transformation
is not an arcane art

Time to start pursuing digital mastery is now.

The longer you wait, the tougher it will become

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Leading Digital: Why Should You Care?

Inflection point: Digital technology will

radically change the way we do business

Are you ready for it?

Few firms are demonstrating digital mastery,
but those who do are racing ahead

Digital transformation
is not an arcane art

Time to start pursuing digital mastery is now.

The longer you wait, the tougher it will become

Firms that do not

adapt will fall behind

Copyright © 2014 Capgemini Consulting. All rights reserved.

 What Do These Two Companies
Have In Common?

“From a physical-intensive
“Be the first company to model to a knowledge and
be fully digital end to end” technology-intensive one”

WHAT HAVE THEY DONE? WHAT HAVE THEY DONE?

• Engaging customers with social • Real time view of operations (1.0)
• Fusion of online and instore experience • Automation of processes & machinery (2.0)
• Unifying data globally • Intelligent mining model (3.0)

HOW HAVE THEY DONE IT? HOW HAVE THEY DONE IT?
• Governing cross-channel consistency • Developed a radical digital vision
• Engaging employees • Invested in cultural change
• Developing new skills • Developed new competencies
• Strengthening IT-Business relationships • Strong governance & execution

“Digital has been a catalyst for everything in the company” “Our business in the past was related to physical labor
today our business is more related to knowledge and
Angela Ahrendts, CEO
technology”
Marco Antonio Orellana Silva, CIO

Copyright © 2014 Capgemini Consulting. All rights reserved.

What Do These Great Companies
Have In Common?

Copyright © 2014 Capgemini Consulting. All rights reserved.

The DNA Of Digital Masters

The What:
Using digital technology to transform the customer
experience, operational processes and business models
Digital Capability

The How:
Successful transformations depend as much
on how firms manage digital transformation than solely on
implementing new technologies

Leadership Capability

Copyright © 2014 Capgemini Consulting. All rights reserved.

 4 Levels Of Digital Mastery

FASHIONISTAS DIGITAL MASTERS

• Many advanced digital features • Strong overarching digital vision
(such as social, mobile) in silos
• Excellent governance across silos
• No overarching vision
• Many digital initiatives generating
• Underdeveloped coordination business value in measurable ways
Digital Capability

• Digital culture may exist in silos • Strong digital culture

BEGINNERS CONSERVATIVES
• Management skeptical of the • Overarching digital vision exists, but
business value of advanced digital may be underdeveloped
technologies • Few advanced digital features,
• May be carrying out some though traditional capabilities may be
experiments mature
• Immature digital culture • Strong governance across silos
• Active steps to build digital skills and
culture

Leadership Capability

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Mastering Both Dimensions Is The Key

1. DIGITAL CAPABILITY

Digital Product Customized

Social Media
Design Manufacturing

+ Firm-Level
Digital
2. LEADERSHIP CAPABILITY Transformation
• Digital marketing
Digital Division: • Digital product innovation/design
Nike Digital • Digital commerce (e/m-commerce)
• Digital technologies (GPS, mobile, etc.)
Sport • Customer analytics

Source: “The Digital Advantage: How digital leaders outperform their peers in every industry” G. Westerman, M. Tannou,D. Bonnet, P. Ferraris, A. McAfee, MIT Center for Digital
Business and Capgemini Consulting, Nov. 2012.

Copyright © 2014 Capgemini Consulting. All rights reserved.

 The Time To Act Is Now: Digital Masters Have
Significantly Better Financial Performance
REVENUE GENERATION EFFICIENCY PROFITABILITY

+6% +9% %
-11% +26%

Digital Capability
Digital Capability

-4% -10% -24% +9%

Leadership Capability Leadership Capability

Basket of indicators: Basket of indicators:
• Revenue / Employee • EBIT Margin
• Fixed Asset Turnover • Net Profit Margin

* Average performance difference for firms in each quadrant versus the average performance of all large firms in the same industry for the 184 publicly-traded companies in our sample

Copyright © 2014 Capgemini Consulting. All rights reserved.

The Time To Act Is Now: Every Industry We’ve
Studied Already Has Digital Masters

Copyright © 2014 Capgemini Consulting. All rights reserved.

 The What: Building Blocks Of Digital
Capability

CUSTOMER BUSINESS
OPERATIONS
EXPERIENCE MODEL

Customer Understanding Process digitization Digitally-modified business

Top Line Growth Worker enablement New digital business

Customer Touch Points Performance management Digital globalisation

Digital has informed and Digital is removing Digital business models can
amplified customer traditional constraints in reorder value chains and
expectations operations create new opportunities

Copyright © 2014 Capgemini Consulting. All rights reserved.

 There Are Clear Patterns In How And Where
Digital Masters Invest In Digital Capabilities

CUSTOMER-FACING PROCESSES OPERATIONAL PROCESSES

Process Internal
Social Media Analytics
Digitalization Collaboration

Customer
Experience
Data Integration

Mobile Channel Sensors

BUSINESS MODEL

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Four Interventions That Together Change
The Customer Value Equation

Increase
Design Seamlessly
reach Put customer
customer mesh the
& engagement data at the
experience digital and
with smart heart of the
from the the physical
digital experience
“outside-in” experience
investment

• Forensic • New Digital • Make customer • Old & new

understanding Channels experience and matter
of customer personalisation
• Reach & engage • Omni channel
behaviour more scientific
where it matters integration
• Segment: • Harvest and
Journeys / enrich data
Personae

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Operations: The Less Visible Competitive Advantage

Using Digital To Break Traditional To Get To The “Hidden,” Digital

Capabilities… Operational Constraints… Operational Advantage

• Process & Productivity

People Process Knowledge Coordination Improvement
- Cost / Quality / Safety
Pager Risk
• Better Employee Collaboration
- Connected & Empowered
• Better Decision Making
Technolog
Information Time Distance - Agility & Responsiveness
y

Standardizing Controlling Orchestrating

or AND or AND or AND
Empowering Innovating Unleashing

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Challenge Your Business Model Before
Someone Else Does

THE COMPETITIVE LANSCAPE FIVE ARCHETYPE

IS IN PERPETUAL MOTION CHOICES

Re-inventing
Globalized Competition
Industries

Substituting Products
Falling Barriers To Entry
& services

Crafting New
Access Vs. Ownership Of Assets
Digital Businesses

Reconfiguring
Blurring Industry Boundaries
Delivery Models

Rethinking
Everything Connected
Value-Propositions

Copyright © 2014 Capgemini Consulting. All rights reserved.

 The How: Leadership Capabilities Is What
Turns Digital Investment Into Digital Advantage

Fuse IT & business Create a shared

communities to build transformative vision of
digital skills & transform the digital future
technology platforms
TECHNOLOGY VISION

GOVERNANCE ENGAGEMENT
Establish strong digital Engage employees at scale
governance to steer the to make vision a reality
course

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Only the senior-most executives can
create a compelling vision of the future

• 1.0: Real time operation • Sales team customer

• 2.0: Full automation
Evolve The Identify
relationships were high
• 3.0: Human free mines Vision Over Strategic value
Time Assets • Shift to sell digital
services not books

Define A Clear Create A

Intent And Transformative
Outcome Vision
• Fully digital end-to-end • Industrial Internet –
• Align same experience marriage of industrial
across channels engineering and Big
worldwide Data analysis

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Vision Sets Direction.
Engaged People Make It Happen
CONNECT THE ENCOURAGE WIDER FOSTER NEW WAYS
ORGANIZATION CONVERSATIONS OF WORKING

• Wikis • Executive involvement • Closing knowledge gaps

• Microblogs • Digital champions • Increasing engagement
• Social Networks • Reverse mentoring • Solving business issues
• Video Conferencing • Use cases • Generating new ideas

WIRING ADOPTING SCALING

“Communities that are created on the New innovation process is creating
network are free from geographical, “With executive engagement, you more innovation, collaboration, and
functional or hierarchical don’t have to mandate activity.” employee engagement across the
boundaries.” company’s business units.

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Strong Digital Governance Keeps
The Company On Track

MULTIPLE MECHANISMS
GOVERNANCE GOALS KEY MECHANISMS
TO SUIT CULTURE & REACH

COORDINATION Digital Leadership

• Prioritizing Roles
• Synchronizing
• Aligning
SHARED DIGITAL UNIT
Shared Digital
Units
SHARING
• Capabilities
• People
• Processes Digital Governance Unit/ Unit/ Unit/ Unit/
• Technology Committees Region/ Region/ Region/ Region/
• Information Brand Brand Brand Brand

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Business And IT Leaders Together Drive
Transformation Efforts Better Than They Do Apart

IT Business
• New ways of working
Relationship

Digital Digital
• Rethinking • Digital IQ program
infrastructure /
Platform Skills
replatforming

Copyright © 2014 Capgemini Consulting. All rights reserved.

 Digital Transformation Is A Job For Now:
The Digital Transformation Compass

Sustain the Transformation Frame the Digital Challenge

• Build Foundation Skills • Build Awareness/Understand

• Align Incentives & Rewards Impact
• Measure, Monitor & Iterate • Know your Starting Point
• Craft Vision & Align Top Team

Mobilize the Organization Focus Investments

• Signal your Ambitions • Translate Vision into Action

• Earn the Right to Engage • Build Your Governance
• Set New Behavior & • Fund the Transformation
Evolve Culture

Copyright © 2014 Capgemini Consulting. All rights reserved.

 You Ain’t Seen Nothin’ Yet
3D Printing Robotics Artificial Intelligence

Sharing Economies Wearables Augmented Reality

Digital Technology Will Remain The Endless Agitator Of The Business World

Copyright © 2014 Capgemini Consulting. All rights reserved.

Thank you!
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