capgemini digital transformation - beyond the hype

DIGITAL TRANSFORMATION

BEYOND THE HYPE

2Copyright © Capgemini 2013. All Rights Reserved

The Digital Advantage - Dreamforce_M

What do these companies have in common?



Digital Capability Leadership Capability

What is digital mastery?

Technology-enabled initiatives in:

Customer Experience

Internal Operations

Leadership capabilities including:

Vision

Governance

Engagement

IT-Business Relationships



Mastering both dimensions is the key to achieving the digital advantage

Nike: From Separate Initiatives to Firm-Level Transformation

Social MediaSocial Media Digital Product Design

Digital Product Design

Customized Manufacturing

Customized Manufacturing

Digital Division: Nike Digital SportDigital Division:

Nike Digital Sport

11

22

DIGITAL CAPABILITY

LEADERSHIP CAPABILITY Digital marketing Digital product innovation/design Digital commerce (e/m-commerce) Digital technologies (GPS, mobile, etc.) Customer analytics

FIRM-LEVEL TRANSFORMATION++



BEGINNERSManagement skeptical of the business value of advanced digital technologiesMay be carrying out some experimentsImmature digital culture

FASHIONISTASMany advanced digital features (such as social, mobile) in silosNo overarching visionUnderdeveloped coordinationDigital culture may exist in silos

Four levels of digital mastery

CONSERVATIVESOverarching digital vision exists, but may be underdevelopedFew advanced digital features, but traditional capabilities may beStrong governance across silosTaking active steps to build digital skills and culture

DIGITAL MASTERSStrong overarching digital visionGood governanceMany digital initiatives generating business value in measurable waysStrong digital culture



Digital mastery varies widely

DIGITAL MASTERS

CONSERVATIVES

FASHIONISTAS

BEGINNERS



Revenue Generation Efficiency

Profitability Market Valuation

Digital Masters have significantly better financial performance than their peers

+6% +9%

-4% -10%

Basket of indicators:Revenue / EmployeeFixed Asset Turnover

-11% +26%

-24% +9%

Basket of indicators:EBIT MarginNet Profit Margin

-12% +12%

-7% +7%

Basket of indicators:Tobin’s Q RatioPrice / book ratio



Some industries average higher mastery than others…

Average industry digital mastery:

Banking

Consumer Packaged Goods

Insurance

Manufacturing

Pharmaceuticals

Retail

High Technology

Telecoms

Travel and hospitality

Utilities



…but every industry already has digital masters

Percentage of firms in each industry by quadrant



They invest in 100% of the elements of Leadership Capability…

Digital Masters have a common Digital DNA

Transformative Vision Shared Vision

Chief Digital Officer Shared Digital Units Investment Committees

Promoting Change Employee Participation Investing in Skills

Shared understanding between IT and business executives on role of IT

“Digitising P&G will enable us to manage the business in real time and on a demand-driven basis. We’ll be able to collaborate more effectively and efficiently, inside and outside the Company”

Innovation challenges Digital Year

CDOs & Digital UnitChief Digital Officer

“The IT Team (...) now work hand in hand with the Creative Media team.”

Vision

Governance Engagement

IT / Business



Focus Investments on Where they Choose to

Excel Digitally

Combine Digital Capabilities to Exploit

Synergies

+

Customer Experience

Social media Mobile channel

In-store

Online

Unified Processes / Integrated Data

Process Excellence

Supply-chain Integration

Centralized Ordering New business models

Customer experience


Analytics capabilities

Personalized Customer experience


On-premise

Online

Digital Masters have a common Digital DNA

…and they make strategic decisions on where to excel with digital capabilities



Frame the Digital ChallengeUnderstand the ImpactAssess Digital MaturityDevelop Vision & Align Around It

Focus InvestmentsBuild a Digital RoadmapBuild Investment CaseSet up Governance Model

Sustain the TransformationBuild CapabilitiesAlign Incentives & RewardsMeasure, Monitor & Iterate

Engage the OrganisationSignal the ChangeMobilise at ScaleEvolve Culture & Adapt Work Practices

How to drive digital transformation

Sustain Frame

Engage Focus



In conclusion

DIGITAL MASTERY MATTERS

IT MATTERS IN EVERY INDUSTRY

ANY COMPANY CAN BUILD DIGITAL DNA

TAKE ACTION NOW TOCREATE YOUR OWN DIGITAL

ADVANTAGE

DIGITAL MASTERY MATTERS

IT MATTERS IN EVERY INDUSTRY

ANY COMPANY CAN BUILD DIGITAL DNA

TAKE ACTION NOW TOCREATE YOUR OWN DIGITAL

ADVANTAGE



The

New

Digital

Masters

The information contained in this presentation is proprietary.© 2013 Capgemini. All rights reserved.

Rightshore® is a trademark belonging to Capgemini.

www.capgemini.com

About Capgemini

With more than 125,000 people in 44 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The Group reported 2012 global revenues of EUR 10.3 billion.

Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.

Learn more about us at www.capgemini.com

capgemini digital transformation - beyond the hype

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