context of digital transformation. econsultancy webinar
TRANSCRIPT
-
The context for digital transformation Neil Perkin, Consultant
-
We are thought leaders in digital transformation
2
As leaders in digital insight, Econsultancy has produced a series of research reports relating to the topic of digital transformation, including: Organisational structures and resourcing Securing board buy-in Insourcing and outsourcing Agility and innovation Skills of the modern marketer These reports tackle the issues that senior digital leaders told us were most important to them. Learn more about the digital transformation journey at econsultancy.com/transformation
Econsultancy econsultancy.com/transformation
-
The context for digital transformation
Professor Richard Foster, Yale University
3 Econsultancy econsultancy.com/transformation
Only 63% of S&P 500 companies a decade ago are still in the index today - Thomson Reuters
-
The context for digital transformation
IBM Institute for Business Value Global C-Suite Study based on 4,000 interviews with C-Suite execs worldwide
4 Econsultancy econsultancy.com/transformation
CEOs consider technology to be the single most important external force shaping their organizations
-
Is this digital transformation?
5 Econsultancy econsultancy.com/transformation
-
The context for digital transformation
FASHIONISTAS DIGIRATI
6 Econsultancy econsultancy.com/transformation
http://www.capgemini-consulting.com/the-digital-advantage/
These more digitally mature companies (or 'digirati') are able to combine a focus on change through new technology, with a concurrent focus on change management, people, process, and culture. The study found that this group of companies were, on average, 26% more profitable, had a 12% higher market capitalization, and derived 9% more revenue from existing assets.
-
The context for digital transformation
61
Barriers to agility and progress
7 Econsultancy econsultancy.com/transformation
Legacy technology is our biggest
barrier. Its not just the technology, its the policy, training,
behaviours that surround it.
Which of the following are the most significant challenges or barriers to digital progress for your organisation?
57%
37%
34%
34%
28%
26%
24%
22%
9%
6%
Legacy systems and processes
Finding staff with suitable digital skills
Difficulty joining up data
Focus on short-term revenue targets
Senior management buy-in for investment inresourcing and training
Training / upskilling staff
Identifying correct priorities
Making business cases for investment
Keeping hold of digital staff
Finding suitable agencies
Econsultancy, Organisational structures and resourcing best practice guide
-
The context for digital transformation Barriers to agility and progress
8 Econsultancy econsultancy.com/transformation
Accept that if people around the Board table fail to
grasp what it is you are doing or why it is your failing not
theirs.
Our board / senior managers have a good grasp of the potential of digital channels for our organisation
31%
44%
3%
13%
9%
Strongly agree Partially agree Neither agree ordisagree
Partially disagree Disagree
Econsultancy, Securing board buy-in
-
Digital transformation structures
9 Econsultancy econsultancy.com/transformation
-
02 CENTRE OF EXCELLENCE
03 HUB-AND-SPOKE
04 MULTIPLE HUB-AND-SPOKE
DISPERSED 01
FULLY INTEGRATED 05
Digital transformation structures The evolution of team/organisational structures
10 Econsultancy econsultancy.com/transformation
The most digitally mature companies tend to use the Multiple Hub-and-Spoke model, but the majority of businesses are utilising the Centre of Excellence or Hub-and-Spoke models.
-
Digital transformation structures A model for the allocation of resource
11 Econsultancy econsultancy.com/transformation
Ecommerce Digital Marketing
E-Business
Strategy & Planning
SEO PPC
CRM
Affiliates Display
Analytics/data
Content Marketing
Social media UX
Design
Content/UX
Mobile
Operations CMS
Small change request
Tech/Build
Brand
Customer Insight
Brand strategy
Large scale request
Web Build
(Social Media)
-
Digital transformation structures
Lack of learning outside of Centre of Excellence
Lack of focus on smaller business units
Hindrance to integration
Shared learning within Centre of Excellence
Consistency & control: processes, terminology, standards, measures
Governance & focus - efficiency in resource, prioritisation, unified commercial entity,
senior buy-in
Focal point for the business, Scalability in support & tools
01
02
03
04
ADVANTAGES DISADVANTAGES
12 Econsultancy econsultancy.com/transformation
The continuing importance of centres of excellence
-
Digital transformation structures Hub as Strategy, spoke as execution The desire for greater integration and potential devolvement of expertise
13 Econsultancy econsultancy.com/transformation
I think well see more strategic aspects, like the development
of capability, remain at the centre, but more devolvement of the executional stuff to the
local teams
-
14 Econsultancy econsultancy.com/transformation
We used to have a more functionally-
based team but now the lines between
content, SEO, social are less clear so we increasingly need to join things up more.
Most exciting opportunity 2015 vs 5 years time
Digital transformation structures The importance of customer experience and content
Econsultancy Quarterly Digital Intelligence Briefing Digital Trends 2015
22%
15%
13%
11%
11%
7%
7%
6%
5%
3%
20%
8%
8%
16%
14%
5%
12%
7%
4%
5%
Customer experience
Content marketing
Mobile
Personalisation
Big data
Social
Multichannel campaign management
Marketing automation
Video
Location-based services
Most exciting opportunity in2015Most exciting opportunity infive years' time
-
Two-pizza teams originate from Amazon and is an organisational structure focused around small teams, typically comprised of 8-10 people ('Two-Pizza' teams - the number of people who can be fed easily with two large pizzas). Individuals and small
teams can have a massive impact
They can experiment, fail, try again, and more easily get their successes to a global market
Two-pizza teams
15 Econsultancy econsultancy.com/transformation
-
Digital transformation skills
16 Econsultancy econsultancy.com/transformation
-
Digital transformation skills
IBM CMO Study
17 Econsultancy econsultancy.com/transformation
Marketers are redefining their relationship with technology: Re-invention is required, but most are still feeling their way.
-
18 Econsultancy econsultancy.com/transformation
CMOs need to be able to pull together multiple threads and
weave product campaigns with customer conversation.
This kind of strategic planning outlook once sat with our agencies but is coming
increasingly in-house. You can no longer only have a
traditional campaign calendar you need to be more agile, iterative and plan quarterly or
even monthly.
Digital transformation skills The rise of the marketing technologist
Only 18% marketers feel that they currently have the marketing technology they need to succeed.
Source: Scott Brinker
-
The softer skills are what will define the successful
digital marketer of the future.
Digital transformation skills The rise in soft skills
19 Econsultancy econsultancy.com/transformation
How important would you say the following softer skills or behaviours are to being an effective marketer in the modern digital world?
75% 63% 61%
45% 45% 38%
26%
24%
33% 32%
44% 45% 58%
57%
1% 4% 6% 9% 10% 3%
14%
1% 1% 1% 1% 3%
The ability toembracechange
Ability to spotopportunities
and adaptstrategies
quickly
Beingpassionate,
hungry to learn,curious
Being open andcollaborative
Ability to dealwith uncertainty
Lateral thinking,and the ability
to makeconnections
betweendisparate ideas
or concepts
Beingcomfortabletaking risks
Not important
Neither important orunimportant
Important
Very important
Econsultancy, Skills of the Modern Marketer
-
ARTICULATION/PRESENTATION Clarity when articulating digital ideas and requirements, persuasive presentation of ideas, ability to talk the same language as non- digital
EMPATHY Empathy with the requirements of other functions and stakeholders, empathy with customer needs.
DATA/INSIGHT-DRIVEN Extract insight, make digital data actionable, data-driven decision making.
COLLABORATION Naturally collaborative way of working, ability to work well with other teams across the business.
Digital transformation skills A check-list for soft skills
20 Econsultancy econsultancy.com/transformation
CREATIVITY/LATERAL THINKING Make connections between diverse ideas, concepts, data, to originate new ideas, fresh thinking, challenging thinking, thinking big.
ACTION-ORIENTATED Willing to get stuck in, bias towards action.
PASSIONATE Have the hunger and passion for continuous learning and to embrace change.
ADAPTABILITY Embracing uncertainty, comfortable with change, know when to compromise and when not.
TECHNOPHILES Keen adopters of new technologies, enjoy learning about technology, working with it, seeking out improved ways of doing things using technology.
PROJECT/CAMPAIGN MANAGEMENT SKILLS Think holistically, be organised, work well with processes and work well with other team members
CURIOSITY Willing to explore new ideas, interesting concepts, to be intellectually curious
-
Digital transformation skills Digital tools to enable your people
21 Econsultancy econsultancy.com/transformation
-
T-shaped people are defined as those who have a strong vertical expertise but also wider knowledge or empathy for other digital disciplines. This is not to say that vertical expertise is less important, but more that when this is combined with that wider understanding it is increasingly valuable in appreciating the wider context of specialist work, identifying opportunities for greater collaboration or efficiencies, and seeing the bigger picture.
T-shaped people
22 Econsultancy econsultancy.com/transformation
-
Digital transformation skills Broad skills in future
23 Econsultancy econsultancy.com/transformation
Which areas of requirement for digital resourcing / upskilling do you anticipate will grow most over the coming year?
44% 41% 41%
35% 34%
22% 18%
16% 12% 12%
7% 3%
1%
Econsultancy, Organisational structures and resourcing best practice guide
-
Digital transformation skills Vertical skills in future
24 Econsultancy econsultancy.com/transformation
and a looming talent time bomb?
Over the next few years, of these skill areas, which would you say will grow the most in significance for marketers?
51%
50%
46%
44%
25%
15%
15%
10%
9%
6%
5%
1%
5%
Mobile marketing
Content marketing
Web analytics / data
Social media activity
Community management
Website design and build
Search engine optimisation
Apps development
Email marketing
Paid search (PPC)
Display advertising
Affiliate marketing
Other
Econsultancy, Skills of the modern marketer
-
Digital transformation skills Recruitment challenges
25 Econsultancy econsultancy.com/transformation
Some disciplines that are identified as being challenging to recruit for are also areas of anticipated growth and demand analytics/data, social media
28%
17% 16%
15% 15% 14%
13%
8% 7% 7%
6%
3%
Over the next few years, of these skill areas, which would you say will grow the most in significance for marketers?
Econsultancy, Skills of the modern marketer
-
Digital transformation board buy-in
26 Econsultancy econsultancy.com/transformation
-
01 UNCONVINCED Board are not persuaded of the merits of digital investment
Digital transformation Board buy-in Levels of buy-in
27 Econsultancy econsultancy.com/transformation
02 CONVINCED, LOW KNOWLEDGE Board are convinced of the importance of digital but effective prioritisation of investment can be an issue
03 GOOD KNOWLEDGE, ENGAGEMENT Board are fully involved, making informed decisions, regularly updated but digital still separate
04 FULLY INTEGRATED Digital is fully integrated a part of wider business decision-making
-
Digital transformation Insourcing, outsourcing
28 Econsultancy econsultancy.com/transformation
-
Digital transformation insourcing, outsourcing A trend towards insourcing?
29 Econsultancy econsultancy.com/transformation
Which areas of requirement for digital resourcing / upskilling do you anticipate will grow most over the coming year?
45%
32%
23%
More in-houseMore outsourcedSame
Econsultancy, Insourcing and Outsourcing Striking the right balance for digital success
-
Digital transformation insourcing, outsourcing A trend towards insourcing?
30 Econsultancy econsultancy.com/transformation
Which areas are you most likely to do more in-house over the next couple of years?
47%
38%
36%
26%
24%
23%
16%
13%
13%
13%
12%
7%
1%
Content marketing
Social media activity
Email marketing
Web analytics / data
Search engine optimisation
Community management
Website design and build
Paid search (PPC)
Apps development
Affiliate marketing
Mobile marketing
Display advertising
Other Econsultancy, Insourcing and Outsourcing: Striking the right balance for digital success
Nuance: There is a greater investment in resource in data, content and social, but also more sophisticated outsourcing.
-
Digital transformation insourcing, outsourcing A continually shifting dynamic
31 Econsultancy econsultancy.com/transformation
Opportunity at the centre (automation of core, well-
defined, controlled processes), and at the edges (emergent, set-up, design, understanding value)
http://www.jarche.com/2013/01/the-power-of-pull-and-pkm/
-
Digital transformation agility
32 Econsultancy econsultancy.com/transformation
-
Digital transformation agility Digital maturity model
33 Econsultancy econsultancy.com/transformation
Emergent Managed Optimised
Change management, KPIs
Digital capability development not central to organisational
strategy/KPIs
Strong digital vision and strategy, organisational priorities/KPIs change
Digital vision lived through leadership and operations,
top-down bottom-up, agile and adaptive strategy
Data and technology
Siloed data sources, basic analysis tools, technology restricts, legacy platforms
Software-as-a-service tech, multichannel, joining up data,
basic modelling
Joined-up data/tech empowered front line staff, customised dashboards, scalability of the cloud, actionable modelling, integrated digital and
online/offline, real-time decisions
People, teams, culture
Isolated knowledge, vertical skillsets, poor training
CoE, specialists and generalists, tech skills, more fluid structures, collaborative
environment
T-shaped, deep knowledge, human layer over tech,
knowledge sharing, highly fluid/collaborative, agile
culture
Working practices, processes, tools
Rigid structure, waterfall project mgt, infrequent release
cycle
Agile development, SCRUM, test and learn, rapid prototyping and build
Interdisciplinary agility, cross-functional, small, nimble teams. Permission to fail.
Entrepreneurial
The model is useful in understanding high level maturity in skills, people and culture, but also the context of that with other critical dependencies such as strategy, processes and use of technology.
-
Digital transformation agility Top down, bottom up approach to achieve maturity
34 Econsultancy econsultancy.com/transformation
Emergent Managed Optimised
Change management, KPIs
Digital capability development not central to organisational
strategy/KPIs
Strong digital vision and strategy, organisational priorities/KPIs change
Digital vision lived through leadership and operations,
top-down bottom-up, agile and adaptive strategy
Data and technology
Siloed data sources, basic analysis tools, technology restricts, legacy platforms
Software-as-a-service tech, multichannel, joining up data,
basic modelling
Joined-up data/tech empowered front line staff, customised dashboards, scalability of the cloud, actionable modelling, integrated digital and
online/offline, real-time decisions
People, teams, culture
Isolated knowledge, vertical skillsets, poor training
CoE, specialists and generalists, tech skills, more fluid structures, collaborative
environment
T-shaped, deep knowledge, human layer over tech,
knowledge sharing, highly fluid/collaborative, agile
culture
Working practices, processes, tools
Rigid structure, waterfall project mgt, infrequent release
cycle
Agile development, SCRUM, test and learn, rapid prototyping and build
Interdisciplinary agility, cross-functional, small, nimble teams. Permission to fail.
Entrepreneurial
-
Digital transformation agility Defining digital culture
35 Econsultancy econsultancy.com/transformation
Commercially minded
Non-hierarchical
Empowered
Innovative and agile
Collaborative
Customer-centric
Open
Growth hacker
Passion/learning
Data driven
-
01 Clear principles: data driven, open, inclusive, iterative, simplicity, context
02 Policy first, user need secondary 03 Working back from user need
Digital transformation agility GOV.UK case study
36 Econsultancy econsultancy.com/transformation
-
Digital transformation agility The end of sustainable competitive advantage
37 Econsultancy econsultancy.com/transformation
Digital transformation is a multi-faceted opportunity touching many areas of the business The purpose of strategy has changed from trying to secure sustainable competitive advantage to exploiting a series of transient competitive advantages that in themselves combine to form long-term advantage. McGrath based this assertion on research that looked at companies which had a market cap of over $1Bn and that had, over the period 2000-2009, sustained a net income growth of 5% above global GDP.
-
Digital transformation agility Changing shape of business
38 Econsultancy econsultancy.com/transformation
The Boston Consulting Group Growth Matrix Revisited Cash cows generated a smaller share of total profits (25% lower than in 1982), and were proportionately fewer, with the life span of this stage declining Greater, more systematic experimentation
-
Spin-offs Labs Organisational change
Digital transformation agility Approaches to agile
39 Econsultancy econsultancy.com/transformation
-
Digital transformation agility 70-20-10 approach to innovation
40 Econsultancy econsultancy.com/transformation
Budget split Life stage Objective KPIs Team
70% Core/oldest products Small growth Maintain profit Rowing team
20% Young/mid Increase share and profit Profitable growth White water rafters
10% New Prove leap of faith Solving user problems Diving for sunken treasure
-
Digital transformation agility The key elements of change
41 Econsultancy econsultancy.com/transformation
Vision
Vision
Vision
Vision
Vision
Action Plan
Action Plan
Action Plan
Action Plan
Action Plan
Resources
Resources
Resources
Resources
Resources
Incentives
Incentives
Incentives
Incentives
Incentives
Skills
Skills
Skills
Skills
Skills
= Success
= Confusion
= False starts
= Frustration
= Resistance
= Anxiety
All respondents in the research recognised the need to align a number of different but essential aspects in order to facilitate the change to more agile approaches, enhance innovation, and drive digital transformation. A suitable model for effective organisational change incorporates five key elements: vision, skills, incentives, resources, and an action plan. Significant challenges arise if one or more of these elements are missing.
Knoster T, Villa R, & Thousand J. (2000). A Framework for Thinking about Systems Change. In R. Villa & J. Thousand
-
Digital transformation agility Building blocks for leading change
1.
2.
3.
4.
5.
6.
7.
8.
CREATE URGENCY
FORM A POWERFUL COALITION
CREATE A VISION FOR CHANGE
COMMUNICATE THE VISION
EMPOWER ACTION
CREATE QUICK WINS
BUILD ON THE CHANGE
MAKE IT STICK
Creating the climate for change
Engaging & enabling the organisation
Implementing & sustaining for change
42 Econsultancy econsultancy.com/transformation
Kotter International, John Kotter
-
Digital transformation agility Pinterest agility case study
43 Econsultancy econsultancy.com/transformation
Quarterly planning, mission control meetings, company-
wide progress meetings, 2-pizza teams, high/low/no
lights
Shared values, PDRs, Workshops, cultural
interviewers, key principles and strategic anchors
Ownership mindset, beyond the job description,
expectation, autonomy, mastery, purpose
Tight feedback loops. Reflection time, Go,
Reflect, Adapt
Agility = Velocity x Flexibility
-
Thank you
44
Contact us and start your transformation Talk to us about an initial consultation. Well discuss your toughest challenges, outline our methodology and come back with a proposal. [email protected] EMEA: +44 (0)20 7269 1450 US: +1 212 971 0630 APAC: +65 6653 1911
Econsultancy econsultancy.com/transformation
Slide Number 1Slide Number 2Slide Number 3Slide Number 4Slide Number 5Slide Number 6Slide Number 7Slide Number 8Slide Number 9Slide Number 10Slide Number 11Slide Number 12Slide Number 13Slide Number 14Slide Number 15Slide Number 16Slide Number 17Slide Number 18Slide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Slide Number 24Slide Number 25Slide Number 26Slide Number 27Slide Number 28Slide Number 29Slide Number 30Slide Number 31Slide Number 32Slide Number 33Slide Number 34Slide Number 35Slide Number 36Slide Number 37Slide Number 38Slide Number 39Slide Number 40Slide Number 41Slide Number 42Slide Number 43Slide Number 44