Professional Documents
Culture Documents
Digital Vision 19thjunev5 Final
Digital Vision 19thjunev5 Final
101011010010
101011010010
2
Figure 1: Four levels of digital mastery
Fashionistas Digirati
Many advanced digital features (such as social, Strong overarching digital vision
mobile) in silos Good governance
No overarching vision Many digital initiatives generating business
Underdeveloped coordination value in measurable ways
Digital culture may exist in silos Strong digital culture
Digital Intensity
Beginners Conservatives
Management sceptical of the business value of Overarching digital vision exists, but may be
advanced digital technologies underdeveloped
May be carrying out some experiments Few advanced digital features, though traditional
Immature digital culture digital capabilities may be mature
Strong digital governance across silos
Taking active steps to build digital skills and culture
Digital intensity measures how advanced digital Transformation management intensity measures
initiatives are within an organization. This includes senior executives’ capability to drive change
investments in customer experience, operational throughout the organization. This includes creating
processes, business model transformation, as well and communicating a clear vision, establishing
as digital capabilities. governance mechanisms, facilitating cross-silo
coordination, and building a digital-ready culture.
Source: Capgemini Consulting and MIT Center for Digital Business – “Digital Transformation: A roadmap for billion-dollar organizations”1
3
Are executives paying increasing attention
to digital technologies?
We analyzed the annual reports of the
Figure 2: Percentage of digitally-aware companies, measured by mention
Forbes Global 100 companies from
of “digital” in annual reports, Forbes Global 100 companies, 2009-2011
2009-2011. Based on our analysis,
we found that awareness of “digital”
has grown by 19% between 2009
and 2011 (see appendix on research
43%
methodology). In 2011, 43% of Forbes 40%
100 companies referenced “digital” in 36%
their annual reports, compared with 36%
in 2009 (see Figure 2). This growth in
digital awareness shows that executives
are paying increasing attention to the
potential impact of digital transformation.
4
Figure 4: Having a transformational vision distinguishes the Digirati from their peers
18% 15%
26%
Digirati
25%
18% 17%
Non-Digirati*
25%
28%
47% 51%
57% 21%
25% 62%
24%
25%
Among the Digirati that we surveyed in our research, 82% of respondents agreed that
their senior leaders shared a common vision of digital transformation.
5
How are executives
expressing their digital visions?
In our research, we interviewed over 150 amount of data coming off of airplanes, Digitizing customer
executives to understand how they were using advanced analytics and airplane
experience
integrating digital transformation into their technology to take operational efficiency
strategic visions. Our results showed to the next level.”2 Many organizations have chosen the
that leaders typically express a digital customer experience as the focal point
vision from one of three perspectives: of their digital transformation. These
Boeing goes one step further by clearly
digitizing operational processes, organizations focus their digital efforts
defining what a “digital airline” means in
digitizing customer experience or a on improving understanding of customer
practice:
combination of the two. These different behavior through better use of analytics
approaches reflect both the priorities “The key to the digital airline is delivering and digital channels. There are three key
of the organization and the nature of secure, detailed operational and drivers for a customer experience-driven
competition in a given industry. maintenance information to the people digital vision: delivering an integrated
who need it most, when they need it customer experience, using digital
most. That means that engineering will to establish a better connection with
share data with IT, but also with the consumers and using digital tools to
finance, accounting, operational and understand customer behavior.
Boeing believes the future executive functions.”3
6
Burberry’s CEO Angela Ahrendts has a Changing business models Opportunity – not crisis – is the second
similar vision with a focus on ubiquitous driver of business model change.
access to the brand: A third category combines visions Companies with this type of vision seek
focused on operational process and to use digital technologies to extend their
“To create a company where anyone customer experience to create new reach. Banco Santander, for instance,
who wanted to touch the brand could business models. Organizations highlights a vision for how digital
have access to it.”7 with this approach embrace digital technologies can help it break into new
transformation, even if it represents market segments:
Equally, cosmetics giant L’Oreal a fundamental departure from their
current mode of operation. There are “Our objective for the coming years is
describes how digital capabilities
broadly two motivations for transforming to exploit the growth opportunities in
can enhance the emotional link with
business models. segments where the bank has a low
consumers:
presence, such as companies, insurance
“The digital world multiplies the ways and cards. Specifically, we are making
our brands can create an emotion-filled The first is often defensive, focused on
significant investments in IT systems
relationship with their customers.”8 preserving long-term survival. Services
and staff to be able to take advantage of
and information-based industries
these opportunities.”12
are now going through fundamental
The third driver for a customer structural changes. The rapid pace of
experience-driven vision is using digital change in these industries is forcing Others go one step further, seeing digital
tools to understand and influence companies to redesign their business visions as a way to prepare a company
customer behavior. For instance, models. for the next long term shift in their
Novartis says in its annual report: industry. General Electric, for instance,
“...the technologies we use in our daily focuses its vision on the coming wave of
lives, such as smartphones and tablet Take the case of the French directory
smart connected devices.
devices, could make a real difference services provider, Pages Jaunes. Facing
in helping patients to manage their own a 10% annual decline in its core markets,
the company was reliant on a dying “I don’t see GE as a software company.
health. We are exploring ways to use
business model based on thick yellow However, we will lead in the productivity
these tools to improve compliance rates
books. Pages Jaunes’ CEO articulated a of our installed products and their
and enable healthcare professionals to
clear vision of how the company would ecosystems. This will require leadership
monitor patient progress remotely.”9
transform its business model through of the ‘Industrial Internet,’ making
digital. The company was not in the infrastructure systems more intelligent.”13
Similarly, Commonwealth Bank of business of producing paper directories;
Australia sees new digital technologies it was in the business of connecting small According to our research, there is no one
as a key way of integrating customer and medium-sized businesses to local right way to express a vision for digital
inputs in its co-creation efforts: customers. Paper is just an outdated transformation. Executives articulated
“We are progressively applying new technology; digital is a better one.11 a vision based on the existing core
technology to enable customers to play capabilities of their organizations, and/or
a greater part in product design. That This vision set the stage for a radical the specific industry context they faced.
helps us create more intuitive products redesign of the company and its Nevertheless, our research shows that
and services, readily understandable to products. The company’s strategic focus digirati craft an inspiring vision of the
our customers and more tailored to their is now on digital advertising, website future in which digital technologies play
individual needs.”10 design and mobile directories, not thick a fundamental role.
paper books.
7
How can executives frame
a transformative digital vision?
Digital transformation is a tectonic shift, specific as possible. For instance, Pages industrialization, the second on creating
causing companies to rethink how they Jaunes’ CEO clearly stated his intent a customer-centric organization, and
structure themselves and compete in the to move beyond thick paper directories the third on automation. The original
market. Leaders can help negotiate this while retaining the company’s valuable vision remains a key inspiration behind
transition by proactively defining what a role in connecting small to medium improvements in operations and the
radically different, digital future will look businesses with local customers. He customer experience, even as the
like. To begin crafting this vision, leaders coupled that intent with a concrete company has extended its vision through
must first identify the benefits they want outcome: the company would earn successive waves of capability.
to gain through digital technologies, and 75% of its revenues from digital services
which strategies will engage customers, within the next 3 to 5 years. This
Evolve the vision over time
employees and investors. combination of intent and outcome gives
everyone in the organization a clear set Organizations in all industries are still
Creating a vision is never a completely of guidelines to envision new ways of struggling to understand the long-
linear process. However, our research working. It also ensures that the focus term impact of digital technologies.
shows that Digirati companies go of the transformative vision is not on Moreover, the vision of the changed
through three distinct steps to formulate the technology itself but on different organization will evolve in concert with
their digital visions: ways of operating – identifying new the new possibilities created by technical
ways for digital technology to improve advances and improved capabilities.
Define a clear target performance and customer satisfaction.
Engage the organization Procter & Gamble started with a vision
Evolve the vision over time Engage the organization to be completely digitized. By 2011, the
company evolved its vision to create a
After articulating the intent and outcome real-time operating and decision-making
of a digital vision, the next step is to environment. “...we are accelerating
engage the organization in achieving that innovation by using digital technology to
outcome. While they have the important create visibility from molecule-creation to
Leaders need to keep task of sketching out a clear picture of the the store shelf...”15
the vision specific enough future, executives should let the broader
organization fill in the details. Leaders
to give employees a clear need to keep the vision specific enough
A company’s digital vision is not the
sole responsibility of its senior leaders.
direction, while giving to give employees a clear direction, while Nor should that vision remain static
giving them the flexibility to innovate and
them the flexibility build upon it.
over time. Executives need to provide a
direction that is clear enough to mobilize
to innovate and build their organization, but that also allows
upon it. Asian Paints, India’s largest paint employees to actively participate in its
company, formulated a vision that refinement. In that way, the vision will
combined operational efficiency with evolve in concert with the implementation
developing new ways to serve its of the company’s digital transformation.
customers.14 This vision did not define
Define a clear target
every step of the transformation. It
First, executives need to lay out clearly provided a clear mandate for change
the intent of the vision (what needs to while enabling people throughout the
change) as well as the outcome (the company to refine the details over
resulting benefits for the company, its time. The company embarked on its
customers and its employees). This digital transformation several years ago
will help employees visualize what the and has been through three waves of
future of the organization will look like. transformation - each building on top
Here, leaders should strive to be as of the other. The first wave focused on
8
Conclusion
An inspiring digital vision is the on implementing new technologies. for digital transformation is a journey.
cornerstone of successful digital Instead, they illustrate how organizations Executives plant the seed at the top,
transformation. Though many executives can enhance the experience of their but then they must engage people at all
appear to be aware of its impact on their customers, streamline their operations levels in the company to make the vision
business, few have incorporated digital or transform their business models. This live and grow.
into a compelling strategic vision of the is no small task, and it should not be left
future. These visions do not focus simply to senior leaders alone. Crafting a vision
Research Methodology
This research is part of a three-year collaboration between the MIT Center for Digital Business and Capgemini Consulting aimed
at investigating the ways in which large traditional companies around the world are managing – and benefiting from – digital
transformation. In Phase 1, we spoke to over 150 senior executives from large enterprises around the globe. For further details
and insights from this research, please refer to Digital Transformation: A roadmap for billion-dollar organizations.16 This led to
our insights about the importance and characteristics of transformative digital vision. In Phase 2, we extended our research to
benchmark digital practices around the globe. We gathered surveys from 469 senior executives in 391 large companies around
the world. For further details on the insights from this phase, please refer to The Digital Advantage: How digital leaders outperform
their peers in every industry.17
To gauge awareness of the digital phenomenon, we analyzed organizations in the Forbes Global 100 list. Using the 2012 list, we
measured digital awareness as the number of times that an organization used the word ‘digital’ in its annual report in the period
2009-2011 in the context of industry trends, company initiatives or the CEO/Chairman’s letters to shareholders.
9
References
6 Venture Beat, “How Starbucks is turning itself into a tech company,” June 2012
7 CNN, “Burberry’s Angela Ahrendts: High tech’s fashion model,” June 2012
8 Capgemini Consulting Digital Leadership Series, An interview with Marc Menesguen, Managing Director, Strategic Marketing
for L’Oreal http://ebooks.capgemini-consulting.com/Marc-Menesguen-Interview/index.html
10 Commonwealth Bank of Australia CEO Ian Narev in Annual Report 2012, Page 5
11 Capgemini Consulting and MIT Center for Digital Business – “Digital Transformation: A roadmap for billion-dollar
organizations” http://www.capgemini-consulting.com/digital-transformation-a-road-map-for-billion-dollar-organizations
12 Banco Santander CEO Alfredo Saenz in Letter from CEO 2012, Page 17
14 Capgemini Consulting Digital Leadership Series, An interview with Manish Choksi, Head of Strategy and Chief Information
Officer of Asian Paints http://ebooks.capgemini-consulting.com/Manish-Choksi-Interview/index.html
16 Capgemini Consulting and MIT Center for Digital Business – “Digital Transformation: A roadmap for billion-dollar
organizations” http://www.capgemini-consulting.com/digital-transformation-a-road-map-for-billion-dollar-organizations
17 Capgemini Consulting and MIT Center for Digital Business –“The Digital Advantage: How digital leaders outperform their
peers in every industry” http://www.capgemini-consulting.com/ebook/The-Digital-Advantage/index.html
10
Authors
Jerome Buvat and Subrahmanyam KVJ from the Digital Transformation Research Institute worked on this paper.
Capgemini Consulting is the global strategy and transformation With more than 125,000 people in 44 countries, Capgemini
consulting organization of the Capgemini Group, specializing is one of the world’s foremost providers of consulting,
in advising and supporting enterprises in significant technology and outsourcing services. The Group reported 2012
transformation, from innovative strategy to execution and with global revenues of EUR 10.3 billion. Together with its clients,
an unstinting focus on results. With the new digital economy Capgemini creates and delivers business and technology
creating significant disruptions and opportunities, our global solutions that fi t their needs and drive the results they want. A
team of over 3,600 talented individuals work with leading deeply multicultural organisation, Capgemini has developed its
companies and governments to master Digital Transformation, own way of working, the Collaborative Business ExperienceTM,
drawing on our understanding of the digital economy and and draws on Rightshore®, its worldwide delivery model.
our leadership in business transformation and organizational
change. Learn more about us at www.uk.capgemini.com
Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group. The information contained in this document is proprietary.
© 2013 Capgemini. All rights reserved.