digital transformation review 4 - accelerating digital transformation

7/28/2019 Digital Transformation Review 4 - Accelerating Digital Transformation

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N 04 MAY 2013

Xavier Hochet CEO

Ken Toombs Deputy CEO andUSA Regional Head

Didier Bonnet Global Head of Practices

Jerome Buvat Head of Research

Andrew McAfee MIT Research Scientist

Michael Welch Visiting Scientist at MIT

The Digital Transformation

Research Institute

Accelerating Digital Transformation

Capgemini Consultings Editorial Board


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ACCELERATION THROUGH

STRONG IT/BUSINESS

RELATIONSHIPS

Zurich: The Department of

YES or the Evolving role of a

CIO - Markus Nordlin

page 24

EDITORIAL

Accelerating Digital

Transformation

- Capgemini Consultings

Editorial Board

page 6

STRATEGY

Allianz: Creating a Digital DNA

- Joe Gross

page 8

ACCELERATION THROUGH

GOVERNANCE

Etisalat: Accelerating

Transformation through a

Digital Services Unit

- Khalifa Al Shamsi

page 16

CONTENTS

BySergi Herrero, CEO, LAtelier

BNP Paribas USA

pages 15, 29, 57

COMPANIES TO WATCH:

VIEW FROM SILICON VALLEY


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Organizations acrosssectors are realizing thetransformative power of

digital. However, while thereis increased appreciation ofdigitals role, many organizationsare struggling to take theirtransformation initiatives tothe next level. They are caughtstruggling for pace, and riskfalling in the chasm betweeninitiation and termination oftransformation initiatives. In thisfourth Digital TransformationReview, we aim to help businessleaders understand how toaccelerate their efforts attransforming digitally.

We open the Review withinsurance giant Allianz, which isinvesting aggressively in digitalinitiatives in a sector not knownfor being digitally-savvy. WeinterviewJoe Gross, Head ofGroup Market Management at

Allianz, who shares his views onwhy organizations should makedigital part of their DNA.

To make digital part of thelifeblood of the organizationnot only requires strong visionand investment, it also requiresaccelerated deployment across

the business. In this Reviewwe look at three primarymechanisms for acceleratingthis needed adoption anddeployment.

The first approach is accelerationthrough better governance.Organizations can creategovernance structures thatinherently allow for replicationof best practices and eliminationof capability redundancies.Leading UAE-based telecomplayer Etisalat recently launchedsuch a dedicated Digital ServicesUnit. We interview Khalifa AlShamsi, Chief Digital Services

Officer at Etisalat, who expandson how a Digital Services Unitis helping Etisalat accelerate itsdigital transformation.

Technology plays a crucial rolein an organizations digitaltransformation. It is imperativethat IT executives play a big rolein the transformation for it to be

successful. This brings us to oursecond approach accelerationthrough tighter linkage

between IT and business. Andthis linkage has to start rightat the top with the CIO. Weinterview Markus Nordlin, the

CIO of Zurich Insurance, tounderstand the evolving role ofa CIO in the context of a digitaltransformation.

Digital transformation isan executive-led initiative.

Nevertheless, any such large-scale initiative can only succeedif it has clear buy-in from rankand file employees across thecompany. The third approachwe examine looks at theimportance ofengagement as atool for acceleration of digitaltransformation. Social media hasmade people more comfortablewith sharing, connecting andengaging with one another.Organizations are now willing toadopt such social networks insidthe enterprise in order to driveengagement. We interviewAdamPisoni, Co-Founder and CTO

of Yammer, to understand hisview of social networks withina corporate environment andhow they can drive employeeengagement.

Employee engagement isindeed a significant challengefor organizations. Our earlierresearch proved that peoplechallenges are amongst the

Accelerating Digital TransformationByCapgemini Consultings Editorial Board

EditorialDigital Transformation Review


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biggest obstacles to a successfuldigital transformation. Wepresent ourlatest researchwith the MIT Center for

Digital Business on the role

of engagement. We expand onhow organizations can kick-startdigital engagement and use itas a tool for accelerating digitaltransformation.

Engagement can also beachieved by understandingemployee activity off-duty andtrying to recreate similar cuesin the workplace. As a result,organizations are keen to seehow they can learn from popularconsumer digital services andapplications and apply theminside enterprises. In this context,gamification or the applicationof game mechanics to help

businesses measure and influenceuser behavior is growing inpopularity. We interview KrisDuggan, Co-Founder and Chief

Strategy Officer of Badgeville, aleading provider of gamificationplatforms. He shares hisperspectives on how companiescan use gamification techniquesto better engage with employees.

Finally, digital transformation isnot just for companies. Societaltransformation towards a betterfuture that is digital-drivenis the next logical step. Thistransformation also requiresacceleration to ensure weempower the digital-citizen.Some countries have alreadyrecognized the role that digitalcan play in creating a betterand more informed country. We

speak to Martha Lane Fox, theUKs Digital Champion, on howdigital can help governmentsdrive change.

Digital transformation,ultimately, is a matter of

executive vision and leadership.It is also an exercise thatrequires collective buy-in andengagement from all, leadersand line employees alike.In this edition of the DigitalTransformation Review, we haveshared perspectives and thinkingfrom around the world on howorganizations can accelerate thetake-up of digital transformationbuilding a true collective willbehind the leaders digital vision

Digital Transformation RevieEditorial


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llianz is one of the worlds top insurance companies with over 78

million customers and 144,000 employees in over 70 countries. The

group had a turnover of over 106 billion in 2012. It has invested

aggressively in digital in recent years. Capgemini Consulting spoke to Joe

Gross, Head of Group Market Management at Allianz.

Allianz: Creating a Digital DNA

Interview with Joe Gross,Head of Group Market Management at Allianz

Digitalization at Allianz

Last year you declared that digitalization would become part of

Allianzs DNA. What has been the driving force behind Allianzs moveto digitalization?

We look at digitalization as a huge opportunity for Allianz. In terms ofwhat has gotten us on our digital journey, I think it is the new custometrends that have set things in motion. In our digital world, consumersexpect us to be available whenever they need our services thats 24/7anywhere in the world. They want convenience and the same high-quality technical standard as from other digital suppliers. Allianz needto provide all of this. Digital is actually a tremendous opportunity totransform the customer experience.

Joe GrossHead of Group Market Management at Allianz

We look atdigitalization as a huge

opportunity or Allianz.

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consistency and standardizationthroughout our processes acrossthe globe.

A crucial step we took was toloop in our marketing and salesteams, right from the beginning.So, it wasnt about only focusingon operations and IT agendas;we encouraged an inclusive

atmosphere that also took intoconsideration the perspectives ofmarketing and sales. We didntwant an imbalance, where onefunction dominated another.

So, what does Allianzs digitalstrategy look like and what have

you done so far?

Weve invested massively in thedigitalization of our businessover the past couple of years.

We first defined a global digitaltarget picture, along with ourlines of business, and it has

been the guiding element in thetransformation process. This wassupported by an assessment ofour operational entities whichhelped them to define theirambition level for the next three-five years.

Based on these results, theoperating entities and Grouphave set up initiatives to drive

relevant topics, such as socialmedia and mobile, globallyand we are building Groupassets such as our global Webplatform Allianz oneWeb. Ouroperating entities are driving thetransformation and for instanceare providing more engaging andresponsive broker interfaces andmobile quoting apps to help ouragents with their everyday roles.

Also, Germany, Brazil and Indiahave been actively using socialmedia to engage with clients andto generate sales leads.

What are the key changes thatyou implemented?

We didnt want to reinvent thewheel. For example, in marketingand distribution functions,instead of replacing the waythings were being done, we triedto complement these processes.So, using social media togenerate sales leads or equippingour Allianz Germany agentswith homepages to engage withtheir clients were some of the

ways we tried achieving this.We also automated our back-office processes. We needed todrive centralization, automation,

o really get things

moving, we needed todrive a sense o urgency

rom the top.

We rst dened aglobal digital targetpicture, along withour lines o business,and it has been the

guiding element inthe transormation

process.

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that level its primarily the CEO othe operating entity who drivesdigital efforts. That happened in

Allianz Italy, for example, wherethe CEO created a committeecomprising the top managementexecutives who have been drivinchange across the unit. At thesame time, our central team alsohas to support the transformatioefforts of our local entities. Theidea is to consolidate all ourefforts and bring in transparencyand consistency across all ourprocesses.

Digital Organization and

Governance

So how did it all start howdid you get the ball rolling in

Allianzs digital transformation?

We realized that the insuranceindustry, as a whole, was late in

joining the digital revolution.We didnt have any benchmarkor company references to fallback on but we had to startsomewhere. So, we startedanalyzing customer behavior what was the impact oninsurance when customers startedusing digital channels. We also

tried studying other industriesand their digital initiatives. Thiscollective learning formed thebasis of a rough groundwork ofsorts.

To really get things moving,we needed to drive a sense ofurgency from the top. So, ourCOO, Christof Mascher, tookon an active role in driving

the digital efforts, with theparticipation from our Allianz SEboard. Not only did we engageour board members, but mostimportantly our main operatingentities. Our objective was to get

a local perspective and leadershipin the digital arena. So, it wasa two-way process of drivingdigital not just top-down butalso bottom-up because in theinsurance sector local presenceplays a crucial role.

Its interesting that you mentionhaving a blend of local andorganization-wide digitalchange. How did Allianz strikethat balance?

Winning the battle at the locallevel was extremely important to

us. In insurance, almost all ouractivities are driven locally withagents tied to specific regionalregulatory environments, withina local product setup, local ITlegacy systems, and so on. So, at

Not only did we engageour board members, butalso our main operatingentities to drive ourdigital initiatives. Itwas a two-way process. It is critical to establish

a common ground auniorm understandingo what digitaltransormation means.



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of them. That was when we reallyhad a holistic picture across allfunctions of what digital meantat a granular level. We then askedour local operating entities toassess themselves based on thecriteria we had outlined. Thatestablished a baseline operatingentity. For every criterion, wealso had the operating entitycome up with an ambition level

Y. So, if you were at level X, youeventually needed to reach Y.

Once we had this in place,we went about looking at thebigger picture at the Grouplevel. We needed to cherry-pick our priorities based onwhich dimension needed moreinvestment and focus. So,while we have been ensuring alocalized, granular approach todigital, we havent lost sight ofthe big picture.

While we have beenensuring a localized,

granular approach to

digital, we havent lostsight o the big picture.

With so many local entitiesdriving digital initiatives in theirrespective regions, how does

Allianz manage governance in itsdigitalization efforts?

Digital transformation can bevery subjective, in the sensethat it means different thingsto different departments. If you

ask the IT folks, they wouldtalk about SAP standardizationor data warehousing. To themarketing guys, their idea ofdigital transformation wouldbe restricted to an app, ordigital marketing. For theclaims processing people, itwould mean digital straight-through processing to reducecosts and claims ratio. With

digital meaning different thingsto different departments, itbecame critical to establish acommon ground a uniformunderstanding of what digitaltransformation meant.

To do this, we started byidentifying touch points thatdigital impacted, and of coursethese touch points spanned the

entire spectrum of the valuechain right from the customerawareness stage to distributionto actual sales, product offers topricing etc. Once we identifiedthese touch points, we devisedassessment criteria against each

Operational Excellence

Large-scale transformationprojects need different abilities.Do you see a marked differencein terms of skill sets required fordigital transformation initiatives

I think from the IT, automation

and operational perspectiveswe are already doing very well.But in areas such as analyticsand predictive modeling, justlike everyone else, we too lookfor top-notch talent. We alreadyhave teams of highly talentedactuaries who have the necessarystatistical and analytical

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Te digital journey

might be slower atAllianz but it issustainable becauseit involves granulartransormation acrossthe value chain.

One o our key

challenges has been topercolate the digitalenthusiasm andwillingness rom thesenior leadership tomiddle managementand operational levels.


background for data analysis.Were trying to find effectiveways to tap into this in-housetalent.

Recruiting people with analyticsskills is one aspect of drivingchange. But what are some ofthe other challenges youvefaced when implementing digitalinitiatives?

We started our digital journey

about three years back andweve been at it ever since. As ofnow, we have complete buy-in from our senior leadershipbut this represents only one

level of engagement. One ofour key challenges has been topercolate this digital enthusiasmand willingness to middlemanagement and operationallevels. Its all well and goodto say that digital has enabledus to have one-click access tocustomer touch points. But if

youre an operational entity that

has, up until now, only workedwith local agents via a call center,how does this change affect youroperations at the most granularlevel?

I think encouraging a culture ofchange becomes easier when wedevelop necessary skills aroundthe transformation. The question

is how do you go about buildingthose skills from within orexternally? It is most criticalto build internal talent and not

just attempt to buy skills. Inselected cases including externaltalent, of course, can augment

your talent pool and cross-pollinate the organization.

Would you like to share the keylessons that you have learnedover the last two to three years othis transformation journey?

I think for a company ofAllianzs size and complexitywe are well underway in thistransformation journey. We maynot be fast enough. But I find

value in being evolutionary andnot revolutionary in Allianz. Itrust in our backbone of digitaltransformation. While the

journey itself might be slow it issustainable because it involvesgranular transformation of thiscompany throughout the valuechain. Its similar to a structurethat has a solid support ground-up - its less likely to fall. If you

do not get a digital businessmodel right, all the fancier stuff

you do on apps, digital bannersand social media will have arisk of being experiments that


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challenge for us is not to go backto our comfort zones, and insteadalways keep looking for newdigital opportunities.

So, how do we sustain thistransformation drive without itbeing permanently pushed from

Te top challenge orAllianz will be tomaintain and acceleratethe momentum that wehave already generated.

the top? We need to create bottom-up change momentum that passesacross people, culture, capabilitiesand tools. So, it is the entire changemanagement portfolio that wehave to use to drive change acrossevery entity, department andfunction.


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Poshmark:Shop fromthe closets ofwomen all overthe world

Companies to Watch:View from Silicon Valley

BySergi Herrero, CEO, LAtelier BNP Paribas USA

According to Vocus, by 2015,50% ofweb sales will occur viasocial media. Social commerce maybring $30 billion every year by 2015. Already,about 20% of online shoppers say they prefer tobuy products through the Facebook page of abrand than its website.

Poshmark is a mobile application that workslike a social network and allows you to buyand sell fashion. Thanks to a Pinterest-likeinterface, women all over the world are ableto put their closets online and thus buy andsell their clothes. Poshmark allows users to getinspired, choose a style mate whom they canfollow and connect to new inspiring style iconswhen they want. Poshmark is different fromother e-commerce platforms. The PoshmarkCommunity uploads about $1 million worthof inventory every day, providing users with aunique experience.

ModernMeadow:

Now you can 3Dprint your meat

Each year, 300 million tonsof meatis consumed worldwide.By 2050, this amount will probably reach500 million tons. Meat is among the mostenvironmentally-draining resources and

industrial farming has been criticized forits consequences on food security, theenvironment and the well-being of theanimals.

Modern Meadow has invented a tissueengineering technique based on bioprinting.They are now applying this 3D printingtechnology to culture leather and meat,suppressing the need for animals. Theirapproach includes cell culture, biofabrication

and bioreactors. Modern Meadow now worksin collaboration with artists, designers andchefs to be able to make the highest qualitymeat and leather.

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Digital Transformation RevieCompanies to Watch: View from Sil icon Valley


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Etisalat is a leading UAE-based telecom player with operations in

15 countries across the Middle East, Africa and Asia. Etisalat had

revenues of over $8.9 billion in 2012. The company recently launched a

standalone unit to focus exclusively on Digital Services. Capgemini Consultin

spoke to Khalifa Al Shamsi, the Chief Digital Services Officer at Etisalat.

Etisalat: Accelerating Transformationthrough a Digital Services Unit

Khalifa Al ShamsiChief Digital Services Officer at Etisalat

Interview with Khalifa Al Shamsi,Chief Digital Services Officer at Etisalat

Digital Services

Last year Etisalat created a Digital Services Unit. What factors have

driven the company to move towards digital?

Our customers are becoming more technologically connected each dayand prefer using online channels. This may be perceived as a potentialthreat by certain traditional telecom players, but we view it as a greatopportunity for Etisalat. We believe that the positive aspect of changein consumer behavior is that they are now a lot more open to newservices in contrast to the recent past. For instance, when telecomcompanies launched the MMS (Multimedia Messaging Service) offeringit took a lot of time and marketing expenditure to convince consumersto use this service. Now, consumers are more eager and willing to try

new services.

We established a DigitalServices Unit last

year to accelerate ourtransormation.

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Basically, we wanted a good mixof people from different regionsand backgrounds telecom aswell as non-telecom to enrichthe team and, thus, drive aculture of innovation within thecompany.

To accelerate the rollout of digitalservices, we have focused on

building a good blend of bothcommercial and technical skillsets in our unit. For instance,we need technology capabilitiesto implement and supportdigital services and commercialcapabilities to drive productinnovation, design and strategicalliances.

As a telecom player, Etisalathas the dual task of enabling

Te challenge was tounite all our digitalinitiatives under oneumbrella.

Our CIO is responsibleor Etisalats internal

digital transormation.

o accelerate the rollouto digital services,we have ocused onbuilding a good blendo both commercial and

technical skill sets in ourunit.

digital transformation forother organizations, whiletransforming internally at thesame time. How do you approachinternal digital transformationand does the digital unit haveany role in it?

We have an important mandateat the Group level to transform

Etisalat into a digital enterprise.We have clearly defined rolesand responsibilities for achievingthis. Our CIO is responsiblefor Etisalats internal digitaltransformation while the DigitalServices Unit focuses on digitalservices for our customers.The CIOs role is shifting froman IT-centric profile towardsinnovation and empowerment. In

a digital enterprise such as ours,the CIO empowers the businessunits to drive lean and efficientbusiness operations rather thansolely focusing on deliveringdiscrete IT projects.

Operational Excellence

We found from our research withthe MIT that telecom companies

are investing in digital initiativesHowever, they appear to bestruggling around transformatiomanagement in aligning commo

vision and governance acrosssilos and engaging differentteams to work together. What are

your views on such challenges?

The internal acceptance forinvestments in technologies is noan issue within Etisalat. We have

an ambitious digital vision and



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we will pursue it. For instance,we placed a lot of importanceon rolling out a nation-wideoptical fiber network while othercountries were still debating onwhether they should roll it out ornot.

We are still at an early stage inour digital services journey. We

have had good initial success,but there is a long way to go. So,at present we cannot claim anysuccess story but we have takenthe right steps at the right pace.Going forward, we understandthat we need to address multiplechallenges along this journey,most significant of which will bealigning and managing the rightresources and teams to focus ondigital services.

Then, searching for the rightalliance partner is anotherchallenge. A right strategicpartner needs to have the sameambition and commitment levelsas we have while also beingwilling to take equal risk andgain similar rewards. So, weneed to continuously explore,evaluate and select the rightpartners (whether these includeother telecom companies or our

suppliers) that support our digitalservices initiatives across ourfootprint.

Customizing digitalservices to localmarket realities isvery important.Tus, analyzing anddeveloping the ecosystemis vital or success.

Apart from the challenge ofaligning the right resources andteams around digital services,what other internal or externalfactors would you say can proveto be pain points?

Different digital services havevarying maturity levels ineach country. Customizingdigital services to local market

realities is very important. Thus,analyzing and developing theecosystem is vital for success. For

instance, while releasing digitalservices involving financialtransactions (m-commerce),one has to check the readinessand capabilities of a financialinstitution (bank), regulatoryauthorities and a centralbank. Similarly, for digitaladvertisement services, onehas to ensure that brands,

aggregators and broadcasters arecorrectly aligned for the initiativto successfully work.

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latest digital technologies?

We tap into the collectiveknowledge of our resourcesto keep abreast of the latesttechnologies and trendsin digital. This collectiveintelligence comprises not justour internal knowledge databasebut also our highly-skilled

newly recruited employeeswho share industry trends andbest practices. We also conductregular meetings and knowledge-sharing events that sharpen ourunderstanding around industrydevelopments. These meetingsinvolve interactions with ourpeers who are not just from thetelecom industry but from otherindustries as well. All these key

So, for these types of services,apart from our readiness,ecosystem development isabsolutely critical.

How do you measure yourprogress towards the deploymentof digital services acrosscountries? What are the key

metrics applied?We have established differenttypes of Key PerformanceIndicators (KPIs) to measure ourprogress. For instance, thereare operational KPIs, whichevaluate the milestones, e.g.whether beta testing of a servicehas been conducted, evaluatingthe number of subscribersfor a particular service, their

satisfaction levels and gaugingcustomer reaction towardsservice failures. In addition, wehave financial KPIs that assessthe contributions of a particularservice in retaining users orgenerating additional revenues.

Etisalat has launched servicesbased on new technologies such

as M2M and Augmented Reality.With the rapid evolution oftechnologies, what processes do

you use to stay updated and keepyour team up to speed with the

Te key priority or adigital entity such as

ours will be to deliver

the promise o keeping

Etisalat relevant in the

digital space.

learnings are then funneleddown into a few high-priorityareas that we start focusing onfrom the perspective of stayingrelevant in the market.



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One o the keychallenges will be torene digital servicesbased on evolving needs that might entail

discontinuing existingservices and includingnew relevant ones.

Digital Future

Looking ahead, what are yourfuture priorities for the DigitalServices Unit?

The key priority for a digitalentity such as ours will be todeliver the promise of keepingEtisalat relevant in the digitalspace. We can achieve this bydemonstrating the value-add

Digital Transformation RevieEtisalat: Accelerating Transformation through a Digital Services Unit

that our unit delivers, innovatingand leveraging our telecomcapabilities, and providinga consistent revenue stream.

Another priority for us will beto track and maintain the rightportfolio of digital services. Oneof the key challenges will beto refine digital services based

on evolving needs that mightentail discontinuing existingservices and including newrelevant ones.


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A Digital Services Unit (DSU) is a centralized entity that delivers a broad

catalog o digital services and coordinates eorts across various units.

Digital Services Unit as a Tool to

Accelerate Digital Transformation

For instance, Nestls centralized DSU is responsible for a wide range of digital services including e-commercplatforms, digital marketing, social media, consumer relationships, m-commerce, Search Engine Optimizatio(SEO), analytics and Research & Development. A DSU, as a control unit, plays a critical role across functions

ranging from formulating digital strategy, developing digital services for business units, brands or countries,facilitating innovation, monetizing digital assets and creating new avenues for digital businesses (see Figure

Fig. 1: Roles and key functions of a DSU

Source: Capgemini Consulting Analysis

Evaluates new platforms such ase-commerce, social media, viral videoetc., to create new revenue generatingavenues and drive sales

Digital Monetization Digital Factory

Key objective of DSU is to give back tothe brands and markets, the data andintelligence on their consumers

Facilitates collaboration across variousresources in the organization

Digital

Service

Unit

Digital

Service

Unit

Digital Strategy & Transformation

Focuses on ensuring seamless DigitalTransformation by aligning marketing,Finance, HR, Operations, Brandingfunctions with all digital channels

Digital Innovation

Promotes online innovation andestablishes a culture of ideation andcollaboration in the company

Digital Skills

Enhances digital skills and capabilitiesacross the organization

Avoids silos of digital capabilities

Digital Business Creation

Develops IT services to support internaland external clients such as marketing,sales, customers etc.

Develops online content to facilitate newbusiness opportunities

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Enabling a Digital Factory

A DSU facilitates collaborationbetween the digital units andinternal clients. It also helps inmaximizing resource utilizationby creating a service catalog. Forinstance, Philips has a digitalcompetence center that providesservices to both Philips businessunits and countries, with themarketing service desk actingas a single point of contact formarketing.

Fostering Innovation

A DSU fosters innovationthrough the usage of digitaltechnologies and platformssuch as crowd sourcing, open-source platforms and socialmedia networks. These digitaltechnologies help reduceinnovation cycle times and drivethe ideation process even in largedistributed organizations.

Building Digital Skills

A DSU plays a critical role indeveloping relevant digital skillsthrough organization-widetrainings and knowledge-sharingsessions. Since the DSU is alsothe umbrella unit, when it comesto digital development across allfunctions in the organization,

Driving Digital Strategy

A DSU is responsible fordefining clear guidelinesand responsibilities of

various business units forall digital initiatives withinan organization. It defines aclear digital transformationroadmap by analyzing customerrequirements, the companysstrategy, the competition, andoperational competencies. TheDSU ensures that local and globaldigital strategies are alignedto achieve optimal results andto give a consistent experiencefor customers across digitalchannels. For instance, Spanishmedia major Prisas digital unitcoordinates all online activitiesand businesses across the firm.

The unit has a digital strategysub-unit that drives digitalstrategy, sales, innovation andrevenue management.

Our research showed thatover 80% of firms agreed thatestablishment of strategies andpolicies ranked high among theroles of a digital unit1.

it can consequently play acritical role in centralizing anddeveloping relevant digital skillsThis avoids skill build-up in silos

Monetizing Opportunities

A DSU coordinates digitalefforts of all local businessunits. It provides advice on assetmonetization avenues ranging

from selling digital content toleveraging paid advertisements,entering into e-commerceagreements with third parties, tocommunity management.

Creating New Digital Businesses

A DSU helps develop newdigital businesses either in-house or through collaborationwith external third-partyorganizations. Technologiessuch as virtual prototyping,3-D renditions and modeling,business intelligence andBig Data analytics, provideopportunities for organizations tdevelop new business offerings.

All these offerings have thepotential to become business

ventures, which can then beautonomously managed by theDSU.

1 Capgemini Consulting andMIT- Center for Digital Business (CDB) Research

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Zurich is a global insurance company with over 60,000 employees and

operations in over 170 countries. The company is starting on a digital

transformation of its customer experience. Capgemini Consulting spoke

to Markus Nordlin, the CIO of Zurich, to understand the evolving role of a CIO

Zurich: The Department of YESor the Evolving Role of a CIO

Interview with Markus Nordlin,CIO of Zurich Insurance

The Evolving Role of the CIO

What have been your key focus areas over the past few years?

At Zurich, our strategy has focused on leveraging our global presenceto drive efficiency and expense reduction. In my role as a CIO, I help tosimplify and improve our processes and systems thereby supporting oustrategy. In support of these goals, Zurichs IT organization has focusedextensively on IT infrastructure sourcing over the past few years. Thishas helped to free up resources, which can be reinvested to achieveanother key pillar of our business strategy improved customer focusthrough digital transformation.

Markus NordlinCIO of Zurich Insurance

Outsourcing helped toree up resources, which

can be reinvested to

achieve another keypillar o our businessstrategy improvedcustomer ocus throughdigital transormation.

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Digital Transformation

How do you ensure that yourteam is aware of new digitaltechnologies?

We are creating a technology

advisory committee that Iwill chair, which will haveoutside members, from, forexample, technology and FMCGcompanies, to keep abreast of thelatest digital developments. Ineffect, this advisory committeewill consist of both IT andbusiness stakeholders to discussthe art of the possible.

How about implementationof digital technologies? Do

you see a marked difference inthe skills required versus theskills available in the currentworkforce?

What is driving your shifttowards digital?

Digitization is set tofundamentally change businessesin the next few years, irrespectiveof the industry they operate in.This means its imperative forcompanies such as ours to drivethe evolution towards a digital

enterprise.

Going forward, we see bigdata, mobility and social mediaplaying key roles in our drive toachieve customer centricity anddelivering the innovation neededto stay relevant in a crowded andever-changing market place.

Zurich is just starting digital

transformation journey. Howdoes it affect your role? Does itadd new responsibilities?

There are new dimensions to myrole. As a CIO, I have to ensurethat my team of IT leaders isaware of new technologies andenabling solutions. I now giveregular technology updates to ourboard and our Group Executive

Committee, and I present a planon how to respond to these newtechnologies: frameworks, pilotprograms and broad rollout ofsuccessful technologies group-wide.

Sourcing has gone someway to reduce our internal ITorganization. We now need tobuild capabilities in the digitalarena and we are learning thatthis is a difficult task; especiallyin areas where there is a shortageof suitably trained professionals,such as data scientists forexample. But, on the bright side,

there is tremendous energy in thorganization to pickup and learnnew technologies. This has led usto believe that we can re-skill orretrain some of our own peopleto successfully manage our keydigital transformation initiativessuch as the creation of a mobilitycenter of competence or big dataefforts. We will also hire relevanttalent to drive our digital agendaand supplement these skills withtrusted partners.

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We now need to buildcapabilities in thedigital arena and weare learning that this isa dicult task.


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the IT department and workdirectly with external vendors?

In such a large globalorganization, this kind of arisk always exists. But it is ourexpectation that business unitsinclude us early on in suchdiscussions; and we will be happyto help them go forward. For

instance, if a business unit wishesto use a particular technology,we need to figure out the securityand support issues related to thistechnology. But to make sure wehave good relationships with ourbusiness units, I have to be thedepartment of `yes`and not thedepartment of `no.

I have to be thedepartment o yes, notthe department o no.

Te successul leaderso tomorrow are goingto be true hybrid

proessionals who havespent some time in

I but have shited to

operations and vice-versa.


This would be our three-prongedapproach to obtaining anddeveloping the skills that we needas we go forward.

IT/Business

RelationshipYou spoke about re-skilling. Doyou also see a need for cross-pollination between IT andbusiness?

I believe that the successfulleaders of tomorrow, in anybusiness or industry, are goingto be true hybrid professionalswho have spent some time in ITbut have shifted to operationsand vice-versa. This will be verybeneficial for businesses, asbusiness and IT leaders will havecommon knowledge, commonunderstanding and somecommon and shared experiencesas they go forward.

You spoke about the need for

technologically-savvy businessprofessionals. Do you foresee arisk that business units staffed bythese professionals may bypass

Looking ahead, do you foreseethe creation of new rolesdue to your focus on digitaltransformation?

Social media is one area ofopportunity. These platformsmight give us the opportunityto append social data to ourexisting database, in order to

meet and exceed our customersexpectations - even ones thatthey dont have yet!

We are also looking at bringingmarketing and communicationspeople together to understandand harness the power of bigdata, which comes from socialmedia and the Internet. We needto look at people who understand

both marketing and data andthese will be pretty unique skills.


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investments. But we will needto set aside some resources forexperimenting in these topics ofmobility, cloud, big data, andsupporting analytics. We need tolearn what can actually drive realbusiness value because this is notclear today in the industry.

One o the keyinitiatives that we aredriving is our DigitalWorkplace.

Going forward, what challengesdo you foresee? What are thehurdles that you will have toovertake?

In terms of future challenges,one of my predictions is thatcloud might become the nextlegacy. Those who are movinginto the cloud space are quicklyrealizing that governing a clouddeployment, knowing wherethis data is, what data is leavingan enterprise is actually verydifficult to manage. I believe

caution is required and wewill move carefully into cloudcomputing only when and if it isappropriate.

Digital Transformation RevieZurich: The Department of YES or the Evolving role of a CIO

Future Challenges

Going forward, what are themajor changes that you want todrive in the next two years?

One of the key initiatives thatZurich IT is driving is our Digital

Workplace initiative. Ultimately,

our ambition is to ensure that ouremployees, wherever in the worldthey are, have full access to all ofour technology resources; click tocall, click to chat, click to videoconference; on any device. This

year, were rolling out the abilityfor all of our employees to bringtheir own iOS deviceiPad oriPhone.

What are the other changes youwould like to implement?

Another key focus for us in thisnext year will be big data. Wewill create our target frameworkand do some pilot projects.

Do you see any difficulty inconvincing stakeholders aboutthe business case for big data orsocial media?

We are still firmly looking atbusiness cases for all of our IT


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Do you see the CIO giving way to,say, Chief Digital Officer or ChiefData Officer in the next two-three

years?

For the large financial servicesfirms, I see the role of the CIOremaining as before. The legacy,the volumes, the budgets areso large that its hard for me to

foresee that role would disappear.

But yes, we will start havingenhancements in roles whetherthey fit in IT or next to IT as

Te CIO will haveadditional roles andchallenges but they willnot eliminate the coreresponsibilities o acorporate CIO.

partners in the business. ChiefDigital Officer or Chief DataOfficer are emerging roles thatwill definitely be key. But I thinkthat the organizational constructsfor these roles are still beingexperimented with. My feeling isthat the CIO will have additionalroles and challenges but theywill not eliminate the core

responsibilities of a corporateCIO.



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Companies to Watch:View from Silicon Valley

BySergi Herrero, CEO, LAtelier BNP Paribas USA

Amplify:A tablet tomonitor K-12

classrooms

Lyft:Drive and share

your car with

people aroundyou

As many as 81% ofAmerican teachers believetablets enhance learning. However, access tosuch tools is fairly unequal and disparities existbetween students coming from higher andlower income families. Approximately 41% ofteachers consider those disparities to result inlearning gaps between students. Among otherthings, the price of tablets is a serious concern.

Amplify - a product from News Corporationseducation unit - is a 10-inch Android tabletdesigned to bring connectivity to the classroomand to enable blended learning. It is preloadedwith educational material for students, such aslessons, exercises and Khan Academy videos.

With the tablet, the teacher can monitorstudents devices, unlock and lock specificapps and run short tests to check if studentsunderstood the lesson. Amplify, which can beused for blended learning, costs $299 and canbe used by an entire school or district for a morehomogeneous learning experience.

In 2012,17 million cars weresold in the U.S. This number isexpected to reach the 20 million mark by 2019.

A growing number of people are buying carseach year and Americans have been estimatedto drive nearly 3 trillion miles annually.However, not all of these cars are filled to theircapacity and this impacts transportation.

Lyft is an app launched in 2012 that allows itsusers to do carpooling within cities for shortdistances, similar to taxi rides. Lyft cars wearpink moustaches and can be localized througha map available with the application. So if youdont want to pay as much as a taxi or cannotfind one, just ask for a Lyft ride!

Digital Transformation RevieCompanies to Watch: View from Sil icon Valley

2


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ammer is a pioneer in the Enterprise Social Networking space. It

is used by over 200,000 organizations globally, including 85% of

Fortune 500 companies. By end of 2012, it had more than 7 million

registered users. The company was founded in 2008 and was acquired by

Microsoft in 2012. Capgemini Consulting spoke to Adam Pisoni, Co-Founder

and CTO of Yammer to understand social networks in the enterprise and their

role in employee engagement.

Yammer: Driving EmployeeEngagement through Social Networks

Adam PisoniCo-founder and CTO of Yammer

Interview withAdam Pisoni,Co-founder and CTO of Yammer

Social Networks for EnterprisesSocial networks have registered a rapid adoption in the consumersegment. What do you think is the key difference between consumerand enterprise social networks?

In a consumer social network youre primarily interested in the peopleyou already know. But in an enterprise social network, you need theinformation to do your job regardless of whether you know the personwho has it. This creates all sorts of fundamental changes in the way yothink about creating these networks. Over time, I think we are going tocontinue to see a divergence in how enterprise social networks evolvecompared to consumer social networks.

Y

Leadership is nomore about cascadingdirectives rom topto bottom, but abouthearing rom bottom totop and across.

Yammer: Driving Employee Engagement through Social NetworksDigital Transformation Review


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What do you think are the keydrivers for adoption of enterprisesocial networks?

I believe the fundamental driveris the current pace of change.I think that the way in whichwe organize and communicatewithin companies today ischanging. The job of a company

is no longer to do the same thingas consistently as possible, butto figure out how to innovateand provide value as soon aspossible. Social networks createtight feedback loops betweendisseminating information andgetting feedback from acrossthe organization. By doing so,they help companies better alignpeople to this goal.

Impact on Digital

Organization

How do you think theimplementation of enterprisesocial networks changes the role

of leaders in an organization?

I think that the role of leaders isgoing to change the most in thisdigital revolution. Today, leadershave to understand the influx of

changes that are occurring andact on feedback from people whointeract with end-customers. So,they are involved in building andadjusting the offerings accordingto this feedback and ensuringthat the field force conveysinformation back to customers.This is a different model than theconventional approach where

it was just all about cascadingdirectives from top to bottom.Now, it is about hearing frombottom to top and across theorganization and being able topush information down quickly.

So what do you see as the keybenefits of social networks in anenterprise?

I believe enterprise socialnetworks have three fundamentabenefits. First, they help youget the information you needto make better decisions. Youcan get that information from

your co-workers, customers ormanagers. Second, they help

you share information that otherpeople need to be successful. Thi

information could be from themanager to their employees tomake sure that they are alignedor know recent directionalchanges. Finally, social networkshelp in communicatinginformation amongst employeesThis information exchange couldbe from the bottom to the topmanagement. But ultimately, itsall about getting your work donemore efficiently.

We have seen companiesthat adopt socialnetworks with a ocusedapproach benet rom itwithin months.

In a consumer socialnetwork, who youknow matters; inan enterprise socialnetwork what you

know makes yourelevant.

Digital Transformation RevieYammer: Driving Employee Engagement through Social Networks


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Social Networks keepemployees involvedand retained becausethey eel more connectedto the organizationsmission.

How about the Return onInvestment?

I think when social networkswere introduced in enterprises,their impact was not clear amongmany senior leaders. At that time,a lot of discussions were aroundemployee engagement and otherbenefits to the company but they

were not directly attributableto ROI. However, now we arebeginning to understand andrecognize the value-for-moneybenefits of social networks.Today, we are beginning to seethat social networks can havea positive impact on customerretention. For example, socialnetworks help customer serviceagents to connect with one

another and rapidly pull theinformation they need to makebetter decisions in real-time.So, customer service and salespeople can reach out to socialtools at the right moment to helpcustomers and retain them.

Similarly, enterprise socialnetworks also help in drivingrevenues. We have seenmultiple retailers who havetracked increased performanceto increased participation onsocial networks such as Yammer.These retailers have evolved andadapted faster to measurable

Another interesting benefit ofenterprise social networks is thatthey allow employees to sharetheir opinion and experiences,helping drive up their motivation.It keeps employees involved andretained because they feel moreconnected to the organizationsmission and that they are able toinfluence the results.

results because their employeeswere able to rapidly shareinformation within and betweenthe stores using social tools.

Accelerating Social

TransformationHow long do you thinkcompanies will take to realizesuch returns once they launch anenterprise social network?

Enterprise social networks are anew concept and implementingthem successfully requires alot of change management. If

organizations do not see itsvalue quickly they will not makethe kind of investment that isneeded for its success. So, within

Yammer, we have the customerengagement team, which helpscustomers throughout theadoption journey by sharing bespractices, providing technicalsupport during deploymentand offering educational and

training services. One of the keyobjectives for this team is toempower organizations to derivequick value out of their enterprissocial network.



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We are beginning to seethat social networks canhave a positive impacton customer retention.

Are there any big stumblingblocks that companies should beaware of?

I think one of the initial mistakesthat organizations make is tothink that adoption of socialnetworks will happen by itself.

Its also often assumed thatonce launched, an enterprisecollaboration platform will beable to fix every problem withinthe company without any supportfrom top management. However,there are several changemanagement and cultural issueswhich occur while adoptingsocial networks. Focusedinitiatives from top management

and technology solutions playa key role in rising above theseissues.

What are some of the culturalissues that you have mentionedas a major challenge?

Its true that a lot of socialdeployments have failed. Theres

one big reason why the majorityof enterprise social rolloutsfail, and it goes back to what Iwas saying before about how itdoesnt happen on its own. If acompany is going to have a socianetwork, it has to be comfortablewith transparency and peoplehave to feel comfortable doingtheir work in public. Thats ahuge cultural change for a lot

of companies where they sortof err on the side of privacy orpeople may be afraid to pointout problems or talk about the


One o the initialmistakes thatorganizations makeis to think that socialnetwork adoption willhappen by itsel.


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voluntary adoption. It is hardto mandate people to use socialnetworks and employees willnot use them if there is no valueattached.

Beyond measuring adoption,we help companies find andimprove KPIs that are meaningfuto their goals. For instance, a

major hamburger chain neededto change its menu frequently.One of the things they trackedwas to check how quickly a menchange was understood by theserving staff, and they have a KPfor that. We were able to track thimprovement in that KPI by usin

Yammer as a social tool. Theyalso used Yammer to circulate thinformation of improvement inKPIs among employees.

34

Considering the culturalchallenges you mentioned,can you share any interestinginstance of successful enterprisesocial network deployment?

Let me tell you about NAB, anAustralian bank that leveragedtheir social network to driveimprovements in their processes.They deployed principles of

continuous improvement(Kaizen) on their social network.So, whenever employees identifyareas that need to be improved,they share it on the network andsolutions can then be crowd-

sourced. By doing so, they wereable to drive real results in amatter of hours as opposed tothe months that it took themearlier. NAB is driving a culturalshift by spreading the messagethat improving a company iseveryones job.

I a company is going tohave a social network,it has to be okay just totalk more openly within

the company aboutthings.

echnology is reallya minor part o the

problem.


things that arent working.People may be rewarded forhoarding information as opposedto sharing. Its not somethingwhere you can just have asocial network and hope that itgives you the benefits you needbecause the technology is really aminor part of the problem.

So do you think employeeengagement or adoption can beconsidered as success metrics foran enterprise social network?

I think that different companieshave different objectives that

they try to improve internally.However, I do believe thatemployee engagement andadoption can be used assubstitutes to measure valuebecause social networks require

At NAB, socialnetworks are drivinga cultural shit byspreading the messagethat improving acompany is everyones

job.


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So, there are different KPIsfor different companies. Thefundamental question is howdoes a company measureinnovation and engagement atthe front-end and that is differentfor each company.

Digital FutureWhat do you see as the future ofenterprise social networking?

I think that employees incompanies of all sizes, sectorsand geographies are going tocommunicate internally usinga lot more social tools in the

coming years. There will be asocial transformation and all ourkey digital tools will be aroundsocial networks. It is going to bethe default and fundamental waywe all will work internally.



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Digital Transformation RevieBeing Digital: Engaging the Organization to Accelerate Digital Transformation

Engaging Employees

through Digital - A

Double-Edged Sword

Ask any executive who hasled an organization through a

large, transformative change,and he or she will tell you thata companys strategic vision isonly as good as the people behindit. Digital Transformation is nodifferent. Making new digitalways of working stick is a matterof winning the hearts and mindsof people at all levels in theorganization. Instead of offeringresistance, employees who are

engaged and invested in a sharedvision of the companys digitalfuture help make that vision areality.

Many of the concepts in theexecutives change managementplaybook still apply to DigitalTransformation. But, howexecutives are engaging theirorganizations is dramaticallydifferent. Digital tools helpleaders connect with employeesat unprecedented scale andin new ways. Blogs provide a

forum to share regular, candidperspectives and collect feedback.Digital videos help createricher, more personal executivecommunications. Enterprisesocial platforms offer employeesthe opportunity to share theirideas, collaborate with colleaguesand be recognized for theircontributions.

Yet these new digital channelsare a double-edged sword;technology often poses oneof the biggest hurdles when

engaging employees in DigitalTransformation. Where differentgenerations of workers havedifferent levels of familiaritywith digital, executives struggleto reach everyone in theorganization. Adoption of digitacollaboration platforms alsoremains low in many companies(see infographic on page 41),

despite significant investment(and considerable hype).

Being Digital: Engaging the Organization toAccelerate Digital Transformation

ByAndrew McAfee, MIT and Michael Welch, Capgemini Consulting

IT and Capgemini Consulting, as part o their 3-year research

collaboration, have identifed engagement as one o the key success

actors o any Digital Transormation.M101011010010

101011010010

101011010010

A major research initiative at the MIT Sloan School of Management

Simply put the bestway to become digital, ito be digital.


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The stakes for digital engagementare high. Capgemini Consultings

joint research with the MITCenter for Digital Business showsthat digital engagement is amajor driver of success in DigitalTransformation1. Rather than

jumping headfirst into digitalengagement, executives needto lay the groundwork to make

sure those efforts are effective.This means taking a proactiveapproach to many of the commonchallenges that organizationsface, and leveraging strategiesthat many leading companiesare already taking in their ownDigital Transformations.

Digital EngagementPresents Common

Challenges

Over the course of our research,we interviewed over 150executives across a broad

range of industry sectors andgeographies. Many executivesnoted challenges that they facedin engaging their employeesin Digital Transformation.

Among these issues, a number ofcommon themes emerged:

A Generational DivideYounger workers today have fargreater familiarity with digitaltools and ways of working thantheir more tenured counterparts.Many executives highlighteda growing gap between olderand younger workers in theirexpectations and work habitsaround technology. Whereolder employees face a learningcurve, Generation Y workersare often underwhelmed by thedigital tools available to them.One executive comments, thesepeople coming into the company,mid 20s, late 20s, even early30s, they do everythingelectronically. They say Comeon, I know the company isover 100 years old, but ourinformation and IT capabilitiesdont have to match the age ofthe company!

Executives also noted thatyounger workers are oftenfrustrated by a slow pace ofchange. The woman that isin charge of our social mediapolicies is pushing, right up to thCEO, saying, We are way behind

You better move now. We areway behind. Move now. Its verypersistent as well. Really trying t

bring the company forward.

Finding the rightcommunications strategy,incentives and pace of changeamidst this generational dividehas proven a challenge for manycompanies.

1 Digital Transformation: a roadmap for billion-dollar organizations, MIT-CDB and Capgemini Consulting 2011The Digital Advantage: how digital leaders outperform their peers in every industry, MIT-CDB and Capgemini Consulting 2012

Come on, I know thecompany is over 100

years old, but ourinormation and Icapabilities dont haveto match the age o thecompany!

Being Digital: Engaging the Organization to Accelerate Digital TransformationDigital Transformation Review


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of] opportunities arent lookingat [our company] for them.

Without the digital talent torealize them, ambitious visionsfor Digital Transformation maylack credibility or worse overreach the capabilities of theorganization.

Digital Platforms: High Potential,

Low AdoptionSome of the executives we

interviewed reported successin using platforms such asenterprise social networks orcollaboration tools; othershighlighted challenges. Given

I need a charismaticquant somebody whosan infuencer and cancarry their weight in asenior meeting, but atthe same time, someone

who could roll up theirsleeves and look at datatables and build modelsand enjoy it.

And this issue shows no signsof abating. Within just the nextfew years, college graduatesentering the workforce will haveno memory of life before theInternet. Just as a house dividedcannot stand, a widening digital(and cultural) divide betweenemployees may frustrate effortsto engage the entire organization

in transformation.

The Scarcity of Digital TalentDigital Transformation is aboutturning technological potentialinto real business outcomes, andit demands a different mix ofskills. Finding people with equalparts digital savvy and businessacumen has proven a challengefor many of the executives thatwe interviewed. Accordingto one executive, I need acharismatic quant somebodywhos an influencer and cancarry their weight in a seniormeeting, but at the same time,someone who could roll up theirsleeves and look at data tablesand build models and enjoy it.

When these skills do not alreadyexist within an organization,executives also noted difficultyfinding them externally, Ourrecruiters dont know where togo find these people, and peoplewho are looking for [these kinds

the investment made in thesesystems, lack of adoption is aserious concern. One CFO states,Weve spent an awful lot ofmoney on technology, but I stillsee people working in the oldway.

On the user side, executivesreported a lack of understanding

and unclear business value asmajor issues. A leader in thefood service industry explains,I think people are apprehensiveabout new technologies. Theydont understand them, there isa fear of unknown. They dontreally fully understand howtheyre going to drive businessoutcomes.

Executives also pointed outchallenges in managing theimplementation of theseplatforms. When success criteriaare focused on IT deployment,actual user adoption can take aback seat to tactical milestones.Implementation goals definedin terms of active licenses orlive deployment locations missthe true ROI of enterprise socialplatforms: actively engagedusers. The result is a widelydeployed system that no oneactually uses.



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One hospitality industryexecutive also voiced challengesin shifting technology strategies:We were looking at one tool.

We got a decent user base in it.And then we found out that wedidnt like their pricing model

And so, we said, OK, were goingin another direction now, weretrying a different tool, and [we

had to] to regain the momentumthat we had with the previousone. When employees haventadopted new digital tools, theyoften cannot contribute to animproved business process,much less a successful DigitalTransformation.

Management Roles in a DigitalOrganizationNew digital tools, automationof business processes andan increasing role of data indecision-making can increasetransparency in an organization.But, as conversations moveonline and information ismore freely available, someexecutives noted resistancefrom management employees.Managers may view these trendsas a threat to their autonomyor influence. Explaining salesmanagers reactions to theintroduction of a real-timereporting platform, one executivecomments,

Implementation goals

dened in terms oactive licenses or livedeployment locationsmiss the true ROIo enterprise social

platorms: activelyengaged users.

That kind of transparency,theyre not used to, so theres aninitial pushback.

Middle managers are often thefront lines of introducing changeto an organization, as they havethe important task of translatinga strategic vision into everydayoperations. Where engaged

managers can be a cornerstoneof cultural change, resistantmanagers can stop DigitalTransformation in its tracks.

Where engagedmanagers can be acornerstone o culturalchange, resistantmanagers can stop

Digital ransormationin its tracks.



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Taking leadership onlineGone are the days of executiveshaving assistants print out emailsfor them to read. Today, manydigital-savvy CEOs are activebloggers, podcasters and Twitterusers. Many of the executiveswe interviewed are using similardigital platforms to communicatewith their organizations around

Digital Transformation. In doingso, they are leading by exampleand setting expectations forthe rest of the organization. Amedical technology companywe interviewed used digital

video broadcasts to reportthe progress of a multi-dayexecutive strategy workshop (seeBroadcasting Accountability).Kraft Foods employees canaccess podcasts (dubbed Kraftcasts) from the CEO and otherexecutives to stay on top of thelatest corporate strategies andbranding initiatives. Accordingto one executive, this allows thecompany to communicate withour employees in a way that ismore visual than having them sitand read text2.

Inviting contributionsAccording to our research,the strategic vision for DigitalTransformation must be led fromthe top. However, the collectiveingenuity of the crowd, canbe an insightful source offeedback as well as a powerfultool to engage employees.

2 http://www.apple.com/iphone/business/profiles/kraft-foods/3 MIT-CDB and Capgemini Consulting research

BroadcastingAccountability

A medical technology companywe interviewed hosted closeto 300 executives and seniormanagers in a multi-daystrategy workshop. Eachafternoon, the companyrecorded digital video debriefsfrom executives sharingwhat was discussed and whatdecisions were made. These

videos were then broadcastto the rest of the organizationso employees could followthe progress of the workshop.Moreover, the broadcasts helpedhold the attendees accountable

for the decisions and actionsthat were taken in the session.According to one attendee,Youre broadcasting, Hereswhat were working on, day oneback to their organizations. Sowhen [executives] walk out ofthe meeting, people know thatthey were there and what theywere working on. And all of asudden the organization has an

expectation of follow-up. Itsreally interesting3.


Gone are the days o

executives having

assistants print out

emails or them to read.

oday, many digital-

savvy CEOs are active

bloggers, podcasters and

witter users.


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Formal, dedicated roles canalso help drive engagementin Digital Transformation.Prisa a major Spanish mediacompany unified differentregional operations under acommon strategy and platformby formally naming a ChiefDigital Officer in each region.These individuals liaise with the

companys central digital unit toalign top-down digital strategieswith regional requirements. Indoing so, they also ensure thatregional operations remainengaged and that their needs andcontributions are represented atthe corporate level.

Management Roles in a DigitalOrganizationTo meet the growing need fortechnical and managerial skillsin new digital disciplines, manycompanies are making significantinvestments in digital skills.Procter & Gamble establisheda baseline for all its employeesthrough a digital skillsinventory, and set proficiencyexpectations for specificroles and career progression7.

Similarly, Pepsi launched itsdigital fitness program to keepits marketers digital skills up topar. According to one executive,Theres a gap, and we have towork relentlessly to close thatgap. Weve looked for a way todescribe it, and thats fitness. Youcant just work out once8.

7 Forbes, The Matrix of Soap, 20118 AdAge, Digital Fitness Is Latest Craze in Building up Your Marketing Ranks, 2011


Prisa a major Spanishmedia company unied dierentregional operationsunder a common

strategy and platormby ormally naming aChie Digital Ocer ineach region.

Teres a gap, and wehave to work relentlesslyto close that gap. Wevelooked or a way todescribe it, and thats

tness. You cant justwork out once.


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Kick-starting Digital

Engagement

Digital Transformation is oftena multi-year journey, andbuilding employee engagementbehind it takes time. Winning

the employees hearts and mindswill not happen overnight.Once executives have defineda vision for leading DigitalTransformation, they shouldbe proactive about engagingemployees. The followingchecklist includes actions thatexecutives can take tomorrowmorning, as well as others tothink about within the next six

months:

Tomorrow morning:

Start (and sustain) a two-way

conversationBlogs, internal social networks,and streaming video representmore than just a biggermegaphone. The real value ofthese platforms is in their ability

to capture feedback and facilitate

9 MIT-CDB and Capgemini Consulting research10 AdAge, Digital Fitness Is Latest Craze in Building up Your Marketing Ranks, 2011

Bridging the Generational Divide

To bridge the generational divide between employees, the samemedical technology company introduced an informal XYZnetwork. Within this network, employees pair with colleaguesfrom different generations to share their respective experienceswith one another; senior employees provide career coaching, while

younger employees contribute digital skills and perspectives onhow to leverage technology better. Describing the junior members

of the group, one executive says, Were really attempting tobe responsive to that group. They have a whole different set ofexpectations about what information they need to do their job, howthey want that information, and just as importantly, how they wantto communicate with others in the company9.

Keeping (Digitally) Fit

Acknowledging a widening gap between societys use of digitaltechnology and the digital skills inside the organization, Pepsihas instituted a Digital Fitness program for its marketing teams.The program leverages online learning courses and hands-onexperimental sessions to keep Pepsis marketers up-to-date onthe latest digital tools. According to one executive, As we look atwhere our customers are going in the future, [we realize] everythingfrom supply chain to sales needs to understand how to operate inthis digital world. And its going to happen really quickly. Its not 20

years out, its four years out10.



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discussion with employees.Executives should leverage oneor more of these channels tofoster an open online discussionwith employees. Not only isthis leadership by examplegood practice, it engagesemployees and can help leadersmaintain a finger on the pulseof the organization as the

transformation progresses.

Be upfront about requiredcultural changesThere is no way around it: newdigital ways of working willrequire cultural changes in manyorganizations. According to anexecutive at Prisa, If theresany one thing thats going toaccelerate the change in thisorganization and develop a one-team culture, it is the degree oftransparency. Address requiredcultural changes head-onand discuss expectations withmanagers and other affectedgroups.

Identify your digital championsDigital Transformation shouldbe driven top-down, but itsstrongest ambassadors will oftennot come from senior ranks in theorganization. Identify the team

members with digital acumenand position them to share theirknowledge and enthusiasm withcolleagues. Where new formalroles (e.g. Digital Liaisons) areneeded, understand how theseindividuals can contribute to

your digital governance strategy,in addition to being agents ofchange11.

Over the next month:

Create opportunities for people to

contributeTap into employees innovativepotential, and simultaneouslyprovide them an opportunityto become invested in Digital

Transformation. Launch aninnovation contest or awardprogram to recognize and rewardengagement in your DigitalTransformation.

Raise the bar for digital skillsEmployees can only engage inDigital Transformation if theyhave the right digital skills. Raise

the expectations for all employeearound digital skills not justthose whose roles will be mostimpacted. Identify where digitalskill gaps exist and make thenecessary investments in trainininternal support communities orexternal hires.

11 MIT-CDB and Capgemini Consulting, For more information on formal digital leadership roles, see Governance: a central component of successful DigitTransformation, 2012



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Within the next six months:

Provide the Right IncentivesOrganizational culture andindividual behaviors are difficultto change without the rightincentives in place. Identify whiclevers are the most effective, adareward systems, and communicachanges openly. At senior levels,

tying personal performanceKPIs to Digital Transformationmilestones can help focusexecutive attention.

Focus on Behavior Change, Not

ToolsIntroducing digital collaborationplatforms needs to focus onusing the tools, not having themMeasure success and frame KPIs

terms of actual user adoption anactivity on the platform, not interms of how widely available orfeature-rich the tool is. Executivecan also leverage creative newsolutions to sustain adoption. Foexample, gamifying new digitatools by embedding rewards,achievements and recognitioncan create a more engaging userexperience14.

12 Case Study: EMC Drives Employee and Customer Engagement with Badgeville, Presentation by Tyler Altrup13 Case Study: EMC Drives Employee and Customer Engagement with Badgeville, Presentation by Tyler Altrup14 Capgemini Consulting, For more information on the potential of game mechanics to accelerate user adoption, see Let the Games Begin: Using GameMechanics to Drive Digital Transformation, 2013

Winning the Adoption Game

High-tech company EMC had implemented an enterprise socialplatform, called the EMC Community Network (ECN), to connect itsecosystem of employees, partners and customers. But, getting usersto adopt and use the platform proved a challenge. EMC embeddedgame mechanics through a program it called RAMP (Reward

Awards and Motivation Program) to increase overall activity on theplatform and reward desired user behaviors.

The company piloted this gamification strategy during its annualEMC World conference, with the goal of making the event a moreinteresting, more engaging, online-connected-to-offline experiencethan its ever been before12. To do this, the RAMP team prioritizedthe real-world attendee behaviors they wanted to promote, anddesigned corresponding game mechanics and rewards into the ECN.For example, the team designed check-in missions to encourageattendees to visit multiple event booths. By the end of the event,more than 350 attendees had earned ECN profile achievements forchecking-in at fifteen or more booths.

Since the integration of RAMP into the EMC Community Network,the company has seen a nearly 20% increase in communityinteractions and profile page views have more than quintupled13.It has also extended RAMP integration to EMC|One, its internalemployee community, as well as external social media channels.



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Badgeville: Helping Companies to BetterEngage with Employees

Badgeville is one of the leading vendors of gamification platforms that

help businesses measure and influence user behavior through the

usage of game mechanics. The company, based in Redwood, California

was founded in 2010 and has over over 250 customer organizations that

employ its solutions. Capgemini Consulting spoke to Kris Duggan, Co-Founde

and Chief Strategy Officer of Badgeville.

Kris DugganCo-Founder of Badgeville

Gamication helpsaddress a key challenge

with employees andcustomers - improvingengagement levels.

Interview with Kris Duggan,Co-Founder of Badgeville

Gamication Techniques for Enterprises

Gamification is the flavor of the season. Why do you thinkorganizations are looking towards it?

There are two fundamental changes that are leading to the rapidadoption of gaming techniques. The first change is the impact thatdigital footprints and evolving technologies are having on the behaviothat we are trying to drive. Behaviors that were difficult to measureearlier can now be tracked and measured. For instance, in the pastcompanies determined customer loyalty by only focusing on a behavioof repeat purchase. But today, with the use of digital tools, we are ableto determine what customers purchase, review, refer and whether they

purchase across multiple product categories. So, there are multiple setsof behaviors that we can now actually examine and use to determinecustomer loyalty.

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The other fundamental changeis how digital technologieshave expanded traditionalways of incentivizing users foradopting desired behaviors. Inthe traditional arrangement,the reward program was onlyabout discounts, coupons andsavings. But now companies arerecognizing that there can be a

lot of other rewards and some ofthem can entirely be intangible.These are things like status,reputation, expertise, recognition,and privileges. So there is anexpanded set of rewards andincentives that marketers canuse to improve customer loyaltyor managers can apply to driveemployee productivity.

What are some key benefitsthat organizations can aim toachieve through usage of gamingtechniques?

Gamification addresses one of thekey problems that organizationsare facing with both theircustomers and employees today;the challenge of improvingengagement levels. The key

benefit of gamification on thecustomer side is that it helps inimproving customer relationshipand loyalty. On the employeefront, it is more about enhancing

employee productivity andbuilding more productive teams.

Are these business benefits easilyquantifiable?

It depends on how you wantto measure the gamificationprogram. It is aboutunderstanding the behaviors

that you are trying to drive.So if you want to increase thefrequency of some desiredbehavior then I think it is easilymeasurable. Using analyticswe can compare the increase infrequency of a particular activity.Typically, implementation ofgaming mechanics on top ofexisting systems results in about30% - 50% increase in the

frequency of activities. Take thecase of Autodesk (see Exhibit 1overleaf). It registered increasedengagement levels in terms of10% more trial downloads and40% increase in trial usagethrough usage of gamificationtechniques. Similarly, Samsungrecorded a 500% increasein reviews and 200% morecomments across the site by

gamifying their corporate website(see Exhibit 2 page 53).

On the internal process efficiencyfront, gaming techniques can

help in optimizing specificworkflows. It can be about howto ensure that people submit theiexpense reports on time or tomake them use a new software.

Impact on Digital

Organization

How does the implementation ofgamification techniques impactthe role of managers?

The two fundamental changesthat we discussed make it aninteresting time for managingcustomers and employees. Now,

managers have to prioritizewhat kind of behaviors theywant to motivate qualitativeor quantitative and how theyshould be measured. They alsoneed to select the right rewardsystem be it about expertise,reputation or recognition andhow to effectively implement it.These are the key challenges formanagers.

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Digital Transformation RevieBadgeville: Helping Companies to Better Engage with Employees

Background

Autodesk, a leading 3D design and engineering software company, wanted to provide an engagingexperience for software trial users. Due to the complexity of Autodesks software, a user license canbe a significant investment, making software trials a critical component of a customers purchasing

decision. With millions of online visitors every week looking for software trials, the company intendedto reward and encourage these users to explore the robust features and functionality of its software.

Initiatives

Autodesk included game mechanics to create a new software experience for trial users. Utilizinggamification techniques, the trial was contextualized within a race-against-time narrative.Participants competed against their peers to earn the most Points. The top performers received

Autodesks Entertainment Creation Suite.

Autodesk identified and configured the key behaviors it wanted to drive with gamification elements.For instance, the company designed a series of learning tracks or Missions to guide users throughthe various features of software. Users were rewarded with points and Achievements for completingmissions or specific behaviors. They could also share their achievements on social networks such asFacebook and Twitter to earn additional points. A Leaderboard showed trial users how they rankedagainst their peers and who won the game.

Benefits

Autodesk created their 30-day trial into a more engaging and fun experience by using game mechanics.The company registered increased engagement levels in terms of 10% more trial downloads and 40%increase in trial usage.

Exhibit 1: Autodesk Registered 40% Increase in SoftwareTrial Usage with Gaming Mechanics


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engagement and thus yield bettebusiness results.

So what kind of advice wouldyou give to companies thatare starting their gamificationinitiatives?

The key advice would be to getstarted and do something now.

They need to understand the twofundamental concepts whatare the behaviors that they aretrying to derive and what are thecombinations of rewards they caprovide. The first year could beabout experimentation, learningwhat works. The second year isabout applying the learning. Thethird year can then be a potentiarollout, but it is going to take

multiple years to master gamingconcepts. Also, the requiredexpertise and technologies inthis space are still limited anddeveloping.

Accelerating Digital

Transformation

Deployment of digital tools istypically a drawn-out process.

What role does gamification havein a digital transformation?

Gamification concepts shouldbe bundled early-on whileimplementing any digitalinitiative in an o

digital transformation review 4 - accelerating digital transformation

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