THE CHALLENGES WITH DIGITAL TRANSFORMATION

OR

“THE CHALLENGES FOR DIGITAL IN BROWNFIELD ORGANISATIONS”

BACKGROUND Malcolm Whitehouse CBE FBCS

CTO – Life and Pensions

E-Business Director

Chief Technology Officer

Agency CIO

Executive sponsor – Information Management

Group Applications Director

Programme Director / Deputy CIO

CIO

UK CIO

Very Large Central Government Department

FTSE 100 Insurance Company

National UK Charity

Global Insurance Business

“The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic”

Peter Drucker “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”

Alvin Tofler – Future Shock

“The only sustainable competitive advantage is an organization's ability to learn faster than the competition.”

Peter Senge – The fifth discipline

AGENDA

1. Introduction

2. What is digital transformation

3. What’s going on

4. Pathways to transformation

5. Elements of Digital Business

6. The big enablers

7. Challenges faced

8. What does the room think

INTRODUCTION

1. Digital transformation – its an enormous subject

2. Huge difference between pure-plays and digitally transforming traditional businesses

3. Everyone has a view – at all levels of an organisation – everyone is a customer – with their own loves and hates

4. The pace of change is relentless and increasing – incumbents find it hard to respond to digital disruptions

5. Conversely - barriers to entry for traditional markets are reduced –low cost – no legacy

WHAT IS DIGITAL TRANSFORMATION – SOME DEFINITIONS

• The re-alignment of, or new investment in, technology and business models to more effectively engage digital consumers at every touchpoint in the customer experience lifecycle. (Altimeter group)

• Digital transformation is about enabling existing businesses to fundamentally reshape and/or recreate the way they do business in response to

• Market competitive forces and changes

• Customer expectations

• Disruptive forces from outside your industry – especially digital disruption

• Technology and business model innovation within your industry / segment

• Government – Digital services so good people prefer to use them – Digital by Default

• The Government Digital Strategy and departmental digital strategies commit government agencies to the redesigning and rebuilding of 25 significant ‘exemplar’ services. (We’re) going to make them simpler, clearer and faster to use.

Ref: Altimeter Group, MIT and CapGemini study, GDS

WHATS ACTUALLY BEEN GOING ON1. Web, digital, mobile grows from 1995 – media, content, music, gambling – but this

together with the improved technology drives consumer take-up2. Broker channels easy targets for new models – driving further take-up

• Aggregators in energy, financial services, travel, e-auction, reverse auction, 3. Customers expectations driven by new technology and new business models

• Traditional businesses and government agencies pushed by customers to provide more accessible, more transparent and better services

4. Drive for efficiency and effectiveness in all businesses• Government austerity drives need for significant cost reductions• Competition driving expense savings in traditional businesses to compete with

new entrants• Even charities seek new models to capture wallet share

5. Digital disrupters operate new models with no legacy to hold back growth• Today eg: Hailo, Uber, airbnb, blablacar, slack, hive

6. New technologies create new opportunities – plus web 2.0, cloud, data • Telematics just one example in insurance creating new opportunities for both

customers and providers (gaming opportunities)• Personal data store possible disruptor in FS marketplace

PATHWAYS TO TRANSFORMATION – WHAT OR HOW

Intgrate

Leverage

Create

Improve Extend Redefine

Digital Transformation

Reshape Customer Value propositionThe What – digital capability

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BUT DIGITAL TRANSFORMATION IS NOT JUST ABOUT TECHNOLOGY

Leadership –digital at the

heart of strategy

Digital capabilities

- analytics, UXD, CRM, SEO etc

Holistic design thinking across

organisation

Data, technology, integration

roadmap for legacy to future

stateInnovation and

creativity as corporate capability

Learning organisation –

culture of continuous re-

invention Customer, supply chain

and employee input

The enablers are the biggest challenge

THE ENABLERS ARE THE BIGGEST CHALLENGE - DISCUSS

1. Keeping pace with digital disruption

2. Creating the environment for agility, innovation, learning and insight

3. Building, maintaining and retaining the critical skills and capabilities

4. Breaking the traditional silos to create genuine end to end customer journeys

5. Joining up the CMO, CDO, CIO (Marketing, Digital and IT)

6. Holistic design

7. Tackling the heartland