Transform to the power of digital
So gelingt die Digitale Transformation – Kernaussagen einer Capgemini/MIT-Studie
Business Breakfast 24.10.2013
DI Bernd Bugelnig
DIGITAL TRANSFORMATION IS THE USE OF DIGITAL
TECHNOLOGIES TO RADICALLY IMPROVE PERFORMANCE OR
REACH OF ENTERPRISES
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Copyright © 2013 Capgemini Consulting. All rights reserved.
Digital Transformation Facts
Compared to previous industrial revolutions digitization is mainly driven by consumer behavior and demands
Copyright © 2013 Capgemini Consulting. All rights reserved.
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Business perspective Tipping points Digital usage
> $1 trillion global
e-commerce revenues in 2012 (+19% year on year growth expected in 2013)
141 billion
searches each month on Google
6 billion hours of
video watched each month on YouTube
Amazon.com
announced in May 2011 that it is now selling more electronic books through Kindle than printed books
Apple announced in April 2012 that its App Store has reached
25 billion app
downloads
425 million of these
users access the service with their mobile devices
Mobile data traffic will
grow 26-fold
between 2010 and 2015
More than 50% of all
workloads will be processed in the cloud by 2014
> 6 billion mobile
users (at end 2012), thereof 960 million in China and 880 million in India
80% of American consumers rely on their social networks when searching for products to buy
With 1.1 billion members the user base of
Facebook exceeds
the population of
Europe
Sources: Press releases; company websites; Cisco Visual Networking Index; JP Morgan; International Telecommunications Union
Market valuation (million USD)
Example: Blockbuster’s lack of adaption
Renewal of business model might be an imperative for not being oust by new entrants taking advantage of digital innovations
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Sources: Capgemini Analysis; Company Websites, Annual Reports
Value Proposition
Operations/ Customers
Bankrupt in 2010
(established in 1985)
Traditional DVD rental business
DVD rental through brick and mortar stores and online
Launched online DVD rental business in 2004
More than 6,000 stores in 2010
48,000 employees as of Jan. 2010
2 million online subscribers in 2006
Decreasing physical customer base
8400
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1994 2010
Blockbuster
EXAMPLE
(established in 1999)
Started as an online DVD rental company in 1999
Launched personal movie recommendation system in 2000
Introduced streaming service in 2007
Valuated at $4.9 billion as of April 2012
No physical presence
900 employees
26 million streaming members as of Dec. 2011
Digital Transformation Study
Digging deeper: In a joint study with the MIT we achieved a better understanding how companies leverage Digital Transformation
Copyright © 2013 Capgemini Consulting. All rights reserved.
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157 Interviews 50 Companies 15 Countries
Billion-Dollar Companies IT and Business Executives
Key findings (1/5): Common pressures
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« It’s hard to imagine the brutality of the change in consumers’ behaviour »
COO of a global CP company
Key findings (2/5): Broadly common activities – the building blocks of Digital Transformation
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Customer understanding • Analytics-based segmentation • Socially-informed knowledge
Digital Globalization • Enterprise Integration • Redistribution decision authority • Shared digital services
New Digital Businesses • Digital products • Reshaping organizational
boundaries
Worker enablement • Working anywhere anytime • Broader and faster communication • Community knowledge sharing
Customer touch points • Customer service • Cross-channel coherence • Self service
Digitally-modified businesses
• Product/service augmentation • Transitioning physical to digital • Digital wrappers
Performance management • Operational transparency • Data-driven decision-making
Top line growth • Digitally-enhanced selling • Predictive marketing • Streamlined customer processes
Process digitalization • Performance improvement • New features
Digital Capabilities
Customer Experience
e Operational
Processes e
Business Model
• Unified Data & Processes • Analytics Capability
• Business & IT Integration • Solution Delivery
Key findings (3/5): Different results – Key challenges on Digital Transformation
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“(Only) 40% of the companies (in focus) envision a radical
transformation.”
Limited Transformative Digital Vision Missing Digital Capabilities
Ineffective Coordination
55%
50%
Missing skills
Culture Issues
Ineffective IT
77%
Unclear Business Case
Global
18% Hub
18%
24%
Silo
40%
Central coordination
Key findings (4/5): Best practises - Focus on the “How” more than on the “What”
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THE “WHAT”
ITERATIVE TRANSFORMATION ROADMAP
DIG
ITA
L EN
GA
GEM
ENT D
IGITA
L GO
VER
NA
NC
E
TRANSFORMATIVE DIGITAL VISION
DIGITAL INVESTMENT SKILLS INITIATIVES
DIGITAL VISION
THE “HOW”
Key findings (5/5): Digital maturity matrix
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Dig
ital
inte
nsi
ty
Transformation management intensity
CONSERVATIVES • Overarching digital vision exists, but may be
underdeveloped
• Few advanced digital features, though traditional digital capabilities many be mature
• Strong digital governance across silos
• Taking active steps to build digital skills and culture
BEGINNERS • Management skeptical of the business value of
advanced digital technologies
• May be carrying out some experiments
• Immature digital culture
FASHIONISTAS • Many advanced digital features (such as social,
mobile) in silos
• No overarching vision
• Underdeveloped coordination
• Digital culture may exist in silos
DIGIRATI • Strong overarching digital vision
• Good governance
• Many digital initiatives generating business value in measurable ways
• Strong Digital culture
THE “HOW”
THE “WHAT”
13% 17%
50% 19%
% sample of MIT study
We have delivered projects across most domains of the Digital Transformation framework...
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BMW Retail
BMW Finance
Digital Strategy
Customer experience Operational Processes Business Model