Leaders spend billions on digital transformation. How to keep up?
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- Many companies will die in the next 10 years if they don't undergo digital transformation to adapt to new technologies. Only 16% of companies see themselves as digital natives currently. - To succeed with digital transformation, companies need to develop a clear digital strategy, form strategic partnerships with digitally advanced vendors, and exploit open source solutions. They must eventually shift to a digital culture where digital is the core of their business. - Case studies of Telefonica and Lebara show how they developed digital strategies, partnered with key solution providers, used open source components, and are shifting to digital-first mindsets. This approach helped boost their operations and customer experiences.
Leaders spend billions on digital transformation. How to keep up?
- 1. Leaders spend billions on Digital Transformation. How to keep up?
- 2. At least 40% of all businesses will die in the next 10 years… if they don’t figure out how to change their entire company to accommodate new technologies.” INTRO By 2020, digital will be the key revenue driver for 50% of the Global 2000 companies By 2018, over 70% of the world’s largest corporations will establish dedicated digital transformation teams Create new business opportunities; Generate new funding channels; Speed up business innovation; Shift customer expectations. John Chambers, Executive Chairman, Cisco Systems, 2015 “ Disruptive technologies affect global economy in so many ways:
- 3. 5% 16% 47% 85% of companies mastered digital to a point of differentiation from their competitors of companies think they are digital natives of companies have not started with digital transformation feel they will fall behind competitors if they don’t start digital transformation by 2019 Digital Transformation Global Overview Even if you are behind with digital, there is still time to close the gap At the same time, various studies indicate there is still a huge gap between the understanding of the need for change and starting with the actual digital transformation. This data has one important implication:
- 4. LEARN FROM THE LEADERS OF DIGITAL TRANSFORMATION As of May 2017, only 16% of companies recognize themselves as digital natives Technological leaders share certain common features: A formal business strategy for digital. Digital natives outlined and communicated how they are going to use disruptive technologies to achieve their business goals. CEO leads digital transformation. Top management involvement stresses the importance of the digital change. It also ensures the credibility of the transformational efforts. Digital Natives: Profitability: +25% above market. Outside boost of digital capabilities. Digital natives turn to third-party service providers and open source communities far more often than their competitors do. Sales: +9% compared to industry average.
- 5. 01 It is hard to achieve any consistent results when you don’t know where you are headed. There is little sense in embarking on digital transformation because “you have to”. A clear strategy helps you figure out how technology is going to support your business objectives. DEVELOP BUSINESS STRATEGY FOR DIGITAL Silicon Valley is coming and if banks don’t up their game, then tech companies will take over the industry’s business.” Jamie Dimon, CEO, J.P. Morgan, 2015 “
- 6. FORM STRATEGIC PARTNERSHIPS 67% of companies believe the partnership with a digitally advanced vendor is a good digital transformation strategy Sophisticated expertise. Outsource parts of the transformation process where your company has little or zero expertise. Digital insights. Learn about the newest disruptive technologies and find ways to use them for your business needs. Faster time-to-market. Speed is one of the key features of any digital transformation process. Strategic Partnerships. Solution providers that specialize in digital transformation usually have experience in multiple disciplines. Businesses can benefit from partnerships with third-party solution providers in several ways: 02
- 7. Studies reveal interesting findings: The majority of businesses that collaborated with third-party vendors are satisfied with their choice to outsource. At the same time, companies are not structuring consistent and ongoing collaboration with their solution providers. As a result, only 34% of businesses are completely satisfied with their digital vendors. By 2019, 3rd platform technologies & services will drive nearly 75% of IT spending Big Data scales beyond the confines of the traditional business model in the operation of physical facilities; so companies are outsourcing data processing tasks.” Technological disruption calls for closer cooperation between customers and vendors. — Philip Evans, senior advisor, Boston Consulting Group, 2016 “
- 8. Open source software offers great possibilities that you simply cannot overlook: Remove Technological Constraints. With open source software, companies no longer have to rely solely on their own IT department. 03EXPLOIT OPEN SOURCE SOLUTIONS By 2020, digital transformation teams will source 80%+ of their solution components from open source communities Boost Innovation. Proprietary software licenses eat up a big chunk of the IT budgets. Using free components instead allows redirecting expenditures to innovation and other important aspects of digital transformation. Keep Digital Flexible. Shape your digital products and services the way you want. With open source software, you can easily add new features, customize, and adjust platforms according to your business needs. Outsourcing parts of the digital transformation process and using open source components are closely related.
- 9. Various industries are also facing disruption from the emerging technologies: Direct neural interfaces that will connect human brains to the machines. Autonomous cars and flying vehicles can completely alter the landscape of the global economy. SHIFT FROM DIGITAL STRATEGY TO DIGITAL CULTURE Internet of Things (IoT) is going to connect more and more devices, becoming a game changer in consumer electronics. Cognitive/ArtificialIntelligence.Itishard to predict how exactly it will affect the economy, but it is clear the impact is going to be massive. AS OF MAY 2017, THE BIGGEST DISRUPTIVE TECHNOLOGIES ARE (% OF RESPONDENTS): 58% 54% 52% 45% Cloud Data Social MediaMobile
- 10. Digital is not part of our business; digital is our business.” – Ashok Vaswani, CEO, Barclays UK, 2017 Therefore, digital transformation is just a tip of the digitalization iceberg. The ultimate goal is to carve digital ideology into the company’s DNA. 78% of organizations regard strategic alignment of business strategy and IT as the most critical organizational capability Digitization is a continuous process of extracting value from existing and evolving technologies. “
- 11. CASE STUDY: TELEFONICA INTRO As one of the world’s largest telecom providers, Telefónica faced overwhelming competition from its more digitally advanced competitors. They wanted to eliminate fragmentation, boost customer service, and greatly improve the efficiency of operations.
- 12. 03 02 01TELEFONICA’S STRATEGY FOR DIGITAL Telefónica’s management developed a vision and objectives for the change that later translated into a clear company- wide digital strategy. TELEFONICA’S STRATEGIC PARTNERSHIPS Overall,theyselectedthreekeypartners: Amdocs supplied customer experience solution. Netcracker delivered business support system solutions. Huawei provided Telco OS that covers an entire lifecycle of telecommunication services and operations. TELEFONICA’S OPEN SOURCE COMPONENTS The company decided to rely on a variety of open APIs for seamless integration of any future internal or external solutions and components. FROM DIGITAL STRATEGY TO DIGITAL CULTURE The initiative decreased time to market and greatly reduced the number of data centers, physical servers, and IT applications. The end target is to make the company a digital native.
- 13. 01 Lebara is a mobile virtual network operator (MVNO) headquartered in London, UK. Lebara’s management decided to embark on a digital transformation. LEBARA’S DIGITAL STRATEGY Management identified three key areas of digital transformation: Microservices backend. Lebara decided to create an omni-channel delivery system. Back office. The idea is to switch from complicated trackingandreportingto standardizedback-officeoperations. Front office. Thecompany wants to create a set of mobile and web solutions to enhance its digital services. CASE STUDY: LEBARA INTRO
- 14. 0302LEBARA’S STRATEGIC PARTNERSHIP WITH N-IX The solutions developed by N-iX include: Payment engine; Customer management systems; Campaign management tools; Shared data and content management solutions; Real-time charging and offer management apps; Reporting, accounting, and billing applications; Digital content streaming. OPEN SOURCE COMPONENTS AT LEBARA In its solutions, N-iX extensively uses open source software components on .NET, Java, and Hybris. SHIFT TO DIGITAL CULTURE AT LEBARA Strategically, the management sees digital as an integral part of the corporate culture, not merely a set of segmented technologies. Combining business goals with a digital mindset should help to adapt seamlessly toanyexistingandemergingtechnologies.
- 15. AFTERWORD Give your customers and employees what they want — smooth digital experiences. A business strategy without technological vision is practically meaningless.” — Andrew Pavliv, Founder & CEO, N-iX LLC, 2017 “ Download the full report here: https://goo.gl/mPnU69
- 16. HOW N-iX HELPS COMPANIES GO DIGITAL Transforming critical business processes through effective CCM and ECM; Leveraging blockchain technology to create decentralized applications; Building enterprise VR and AR apps. N-iX helps clients like Lebara and CurrencyCloud translate their digital transformation strategies into success stories: Employing Data Science, Big Data and BI for data-driven transformations; Delivering innovative enterprise mobility solutions;