Ron Tolido presented this at our Meetup on Sept. 16th, 2013.
With digital transformation, the use of digital technologies to radically improve the performance or reach of enterprises, companies can become more customer-centric, more valuable and more profitable. Ron Tolido (@rtolido) discusses digital maturity, digital governance and the role of the chief digital officer (CDO), design principles and a digital transformation roadmap.
3. Digital Transformation ‐ AGENDA
1. The Basics
2 Digital Transformation framework2. Digital Transformation framework
3. Digital Maturity
4 Digital Governance4. Digital Governance
5. The Roadmap
6 Some relevant Technology Trends6. Some relevant Technology Trends
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6. … leading to several important insights …
2011 2012 2013
“Digital Transformation
k”
“Digital Transformation
f ”
“Digital Transformation
i ”
Research
themes
Framework” Performance” Execution”
Research
160 in‐depth interviews
in 50 companies (15
countries)
400 companies surveyed in
30 countries (5 continents)
11 industry sectors
> 2,500 companies
surveyed
Europe (54%), NA (35%),
APAC (16%)
11 industry sectors
benchmarked
Global scope
Understand the digital
Establish link between
digital leadership and Establish how digital
Objectives
g
phenomenon in $ billion
global organizations
Define a “digital
maturity” framework
financial performance
Understand digital maturity
at sector level
Define “DNA” of digital
leaders
g
transformation is managed
in practice
Understand execution
challenges
Outputs The
Execution
f DT
leaders
Deep dive on
governance
Digital
leaders cases
Deep dive on
digital vision
and
engagement
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of DT
g g
Digital leaders
cases
8. DIGITAL TRANSFORMATION IS THE USE OF DIGITAL
TECHNOLOGIES TO RADICALLY IMPROVE PERFORMANCE ORT CHNO OGI S TO RA ICA Y IMPROV P RFORMANC OR
REACH OF ENTERPRISES
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9. We are in midst of the third industrial revolution powered by digitization
3rd Industrial Revolution2nd Industrial Revolution1st Industrial Revolution
Electricity
Steam
Engine Digitisation
Shift to an economy based on Centralised manufacturing Machine‐based manufacturing
Driving
agent
Shift to an economy based on
information
Fuelled by advances in computer
miniaturisation, mobile, and
Internet
Centralised manufacturing
Revolved around steel, railroads,
electricity and chemicals
Machine based manufacturing
Centred on iron, steam
technologies and textile production
Technical
Innovation
PC
Internet and mobile networks
Smart devices
Internal combustion engine
Diesel engine
Telephone and telegraph
Cotton spinning
Fossil fuel
Large scale production of chemicals
Innovation
S i
Explosion in ICT‐enabled
productivity
Massive economic growth
I t i li i t d d
Creation of factory system and
trade unionsSocio‐
Economic
Impact
productivity
Globalisation of markets and
workforce
Growing income inequality
Improvement in living standards
Rising unemployment
Greatly increased international
trade
trade unions
Increased life expectancy
Massive urbanisation
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Source: Capgemini Consulting‐MIT Analysis
20. The MIT study shows that organisations are digitally transforming three key areas:
customer experience, operational processes and business models
Building blocks of Digital Transformation showing customer’s key challenges
Customer Operational
i d l
Customer understanding Digitally‐modified businessesProcess digitisation
Customer
Experience
e
Operational
Process
e Business Model
g
Analytics‐based segmentation
Socially‐informed knowledge
Product / service augmentation
Transitioning physical to digital
Digital wrappers
g
Performance improvement
New features
New Digital Businesses
Digital products
Reshaping organisational
boundaries
Worker enablement
Working anywhere anytime
Broader and faster communication
Community knowledge sharing
Top line growth
Digitally‐enhanced selling
Predictive marketing
Streamlined customer processes
Digital Globalisation
Enterprise Integration
Redistribution decision authority
Shared digital services
Customer touch points
Customer service
Cross‐channel coherence
Self service
Performance management
Operational transparency
Data‐driven decision‐making
Shared digital servicesSelf service
Digital Capabilities
Unified Data & Processes
Analytics Capability
Business & IT Integration
Solution Delivery
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Source: Capgemini Consulting‐MIT Analysis
23. The two dimensions spell out four different types of digital maturity
• Beginners do very little with advanced digital capabilities,
although they may be mature with more traditional
applications such as ERP or electronic commerce Although
nsity
applications such as ERP or electronic commerce. Although
companies may be Beginners by choice, more often than not
they are in this quadrant by accident.FASHIONISTAS
F hi i
DIGIRATI
Digital Inten
BEGINNERS
• Fashionista have implemented or experimented with many
sexy digital applications. Some of these initiatives may create
value, but many do not. While they may look good together,
they are not implemented with the vision of gaining synergies
among the items.CONSERVATIVES
Transformation Management Intensity
BEGINNERS among the items.CONSERVATIVES
• Conservatives favor prudence over innovation. They
understand the need for a strong unifying vision as well as for
governance and corporate culture to ensure investments are
managed well. However, they are typically skeptical of the
value of new digital trends, sometimes to their detriment.
• Digirati truly understand how to drive value with digital
transformation. They combine a transformative vision, careful
governance and engagement, with sufficient investment in
new opportunities.
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24. Codelco
Revolutionizing Mining Through Digital Technologies
“Shifting from a physical‐intensive model to a knowledge and technology‐
intensive one”intensive one
Codelco, the largest copper
producer in the world, has its
t b k i th 1800
Today, four mines in
• Developed a radical digital vision
(“envision the future of mining”)
roots back in the 1800s.
Owned by the Chilean State, it
operates internationally and
employs over 18,000 people.
Chile are operated
automatically: trucks
drive themselves,
operations are
controlled remotely
• Invested in cultural change
(innovation challenges)
• Developed new skills
• Constantly monitor, assess and
controlled remotely,
information is shared in
real‐time, and so on
y ,
coordinate initiatives
“Our company is very conservative, so changing the culture is a key
h ll W t d i t l i ti d t tchallenge. We created internal innovation awards to promote new
ideas and encourage our workers to innovate”
Marco Antonio Orellana Silva, CIO
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25. We quantified the digital maturity of 391 companies and analyzed their financial
performance
We analyzed financial data
from all the publicly‐traded
companies in our sample*companies in our sample*
Digitally‐mature companies
are achieving statisticallyare achieving statistically
significantly better financial
performance**
* Of the 391 companies in our sample, 184 were publicly traded
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** Industry adjusted FY2011 financial performance for 184 publicly traded firms, controlling for geography
29. Digital transformation is moving more rapidly in some industries than in others…
Digital maturity, by industry, for our survey
Each dot represents the average maturity of industries for
hi h h 20 d i
Hi hT h l
Telecomm
Travel and
hospitality
which we have 20 or more data points.
BankingRetail
High Technology
Banking
Consumer
Packaged Goods
Pharmaceuticals
Retail
Insurance
Utilities
Manufacturing
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34. Nike
Connecting Digital Silos to Create Synergies
“From Separate Initiatives to Firm‐Level Transformation”
Nike is the world’s leading
maker of athletic shoes,
l i t d
• Strong presence in social
media – usages include
open innovation and
customer service
• Created a dedicated unit – Nike Digital
Sports – to provide skilled resources,
budget, and coordination across the
enterpriseapparel, equipment, and
accessories.
customer service
• Offers mass
customization
• Brand dedicated to
digitally enhanced
enterprise.
• The unit leads most customer‐facing
digital projects, and releases products
under the Nike+ brand.
• IT and business people work togetherdigitally‐enhanced
products
• Strongly developed
digital design
• IT and business people work together
in the unit, developing new products
“Connecting used to be, ‘Here’s some product, and here’s some
d ti i W h lik it ’ C ti t d i di l ”advertising. We hope you like it.’ Connecting today is a dialogue”
Mark Parker, CEO
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45. Digital Transformation is driven by emerging technologies ..
• TechnoVision categorizes technology trends in 6
distinct clusters aiming to better understand anddistinct clusters, aiming to better understand and
position an abundance of new technologies
• In the 2013 edition, each cluster consists of 5
technology trendstechnology trends
• Each trend is described through actions to take,
tools to consider and insights to gather
• There are also 7 design principles (Design forg p p ( g
Digital) that should be considered and applied
throughout
• Depending on the challenge an enterprise wants to
address, relevant building blocks are selected and
woven together in Digital Transformation story lines
DESIGN FOR DIGITAL
• These story lines can be used to discuss, test,
validate and strategize
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DESIGN FOR DIGITAL
46. Overview: 7 Design Principles and 30 Trends
Design For Digital Invisible Infostructure Thriving On Data We CollaborateDesign For Digital
1. Born In The Cloud
2. Build Social
3. SMAC It Up
Invisible Infostructure
1. Virtual Lego
2. What Would Amazon Do?
3. Bon Risk Appetite
Thriving On Data
1. My Data Is Bigger Than Yours
2. Intelligence Inside
3. Real Real Time
We Collaborate
1. Social Is The New Oil
2. Profile As A Currency
3. Social Workers
4. Business, Mon Amour
5. No Requirements
6. From Train to Scooter
7 Think Design
4. Let’s Get Physical
5. Orchestrate for Simple
S t A A S i
4. Data Art
5. Data Apart Together
P O Th Fl
4. No Work
5. Friend Your Vending Machine
Y E i7. Think Design Sector As A Service
1. Vanilla Tastes Good
2. Enterprise Candy Store
3. Elastic Business
Process On The Fly
1. Shades Of Process
2. Process Is The New App
3. No Process
You Experience
1. Object Of Desire
2. Zen Of The Task
3. Sweat The Assets
4. Close To The Edge
5. No Apps Apps
4. String of Silos
5. Co‐Process
4. Bring Your Office Device
5. End User, End Producer
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47. The Cloud has set a new benchmark for how quick flexible cost‐effective and
Born In The Cloud
The Cloud has set a new benchmark for how quick, flexible, cost effective and
scalable solutions should be available. This has a transformative impact on the
demand and supply sides, as expectations shift. Many organizations are not ready
to get all their solutions from the Cloud, but the new normal is already there and g , y
particularly the expectations at the business side have considerably changed. For
new solutions, the Cloud should be the default scenario, only then to be ‘softened’
by pragmatic considerations around integration, security, legislation and y p g g y g
manageability.
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48. Social is not something to be added at the end on top it is a ubiquitous design
Build Social
Social is not something to be added at the end on top, it is a ubiquitous design
principle that should be applied from the very beginning of creating solutions. If you
start designing your processes and applications as social by default you’ll see that
solutions are likely to become more flexible, connected and user/team‐centered. You y , /
unleash the power of outside by thinking outside‐in. But privacy and trust are key and
mobilizing the social network around you is all a matter of creating tangible value for it.
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49. Although the drivers of Social Mobile Analytics (or ‘Big Data’) and Cloud all have
SMAC It Up
Although the drivers of Social, Mobile, Analytics (or Big Data ) and Cloud all have
powerful transformation impact as themselves, the real breakthroughs are created by
bringing them all together. In this powerful melting pot, the drivers amplify each other,
creating something much more compelling than the sum of the parts. So whenever you g g p g p y
consider a solution in one of these areas, systematically look in the other areas as a
default for synergetic inspiration.
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50. Business, Mon Amour
The consumerization of IT and the availability of Cloud solutions has brought technologyThe consumerization of IT and the availability of Cloud solutions has brought technology
closer to the business than ever before. True Digital Transformation creates a fusion
between digital capabilities and business change, rather than just aligning it. The IT
function in an organization is successful if the business side happily takes the stage to g pp y g
testify about its benefits, also takes the lead in business/IT projects and holds a
significant part of the budget for innovation. A continuous dialogue is crucial for this,
together with an architected platform to enable digital change and a shared, end‐to‐end g p g g
transformation approach.
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51. Too much focus on requirements creates an artificial boundary between the Business
No Requirements
Too much focus on requirements creates an artificial boundary between the Business
and IT sides of an organization. It’s a bridge, but one that cannot be crossed. Instead, IT
should be providing a flexible, scalable catalogue of secure and compliant enterprise
services and solutions. It inspires the business to assemble their own, unique solutions p , q
from it. Such a catalogue is the foundation and inspiration for business solution
‘hypotheses’ that can quickly be validated, turned into executable plans and deployed.
Think Catalogue First!g
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52. The next generation of Business Technology solutions have a short time to market are
From Train to Scooter
The next generation of Business Technology solutions have a short time to market, are
created and delivered in an agile way and are developed and owned in the nearest
proximity of the business. They are much like Scooters and Cars, where the current
applications landscape is populated with Trains and Buses. Think about when to apply pp p p p pp y
the right rhythm and start to explore new, flexible ways to build solutions, applying
agile approaches such as SCRUM and rapid development tools.
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53. ‘Digital’ now is a synonym for the use of IT to create new ways to engage with
Think Design
Digital now is a synonym for the use of IT to create new ways to engage with
customers, optimize operations and completely transform business models. It brings
fresh options to connect to better informed customers, using a variety of volatile
channels and much closer to the dynamics of business. To fully reap the benefits, the y y p ,
Business Technology landscape needs to be designed from the integrated, end‐to‐
end, outside‐in perspective of the customer. Creating this experience requires
‘Design Thinking’, which is all about finding the right mix between empathy, g g g g p y
creativity and good analytical skills.
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54. Digital Transformation ‐ AGENDA
1. The Basics
2 Digital Transformation framework2. Digital Transformation framework
3. Digital Maturity
4 Digital Governance4. Digital Governance
5. The Roadmap
6 Some relevant Technology Trends6. Some relevant Technology Trends
all credits