The keynote kicks off with Dr. Didier Bonnet of Capgemini talks about leading digital transformation. He is a co-author of the book, Leading Digital (to be published shortly). He covered a lot of the themes of the book and gave a great presentation. His book will be worth a read.
We fundamentally believe we are at an inflection point where tech is the biggest thing in business today. It’s becoming much more difficult to do well in the marketplace without tech.
To do the book, they spoke to 500 companies while intentionally excluding the like of Apple, Amazon, etc. These other companies are about 96% of the overall revenue (vs the darling tech giants). They found that those that have embraced digital
- Caesars – entertainment
- Cdelco – mining
- Asianpaints – paints
- Not just here in San Francisco
Successful transformation depends much on how firms manage digital transformation than solely implementing new technologies. These companies can be classified as:
- Digital masters
- Fashionistas – they invest in everything. Lots of experiments. One bank had 17 mobile apps throughout the world with lots of overlapping functionality.
- Conservatives – drive transformation well but are doing it in a narrow area. Asian Paints did something in the supply chain and saw benefit….then did a lot more. Problem in scaling digital transformation.
Question: If you do digital transformation very well, do you make more money. (compare in industry sectors, not overall performance
Answer: in every single industry, there were digital masters already operating. Digital masters saw an average of 9% better in revenue efficiency generation and 26% better in profitability. In other words, Digital Masters have significantly better performance.
What is it?
- Customer understanding
- Top line growth
- Customer touch points
- Process digitization
- Worker enablement
- Performance management
This breaks operational constraints around knowledge, pager, time, coordination, risk, and distance. You break the constraints and get better employee collaboration, improved processes (safety, decreased cost), and of course, better decision making. They gave the example of 7-11 Japan with a lot of data that allows local stores to decide what to put on the shelf.
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- Digitally modified business
- New digital business
- Digital globalization
You have five archetype choices:
- Re-inventing industries
- Substituting products and services
- Crafting new digital businesses
- Reconfiguring delivery models – thinks about changing the broker /insured relationship or the car make / car dealer relationship and cutting out the middle man. One business did micro insurance. Insure me to drive a Ferrari for one hour for example.
- Rethinking value propositions
What do they do well?
- Design customer experience from the outside in
- Increase reach and engagement with smart digital investment
- Put customer data at the heart of the experience
- Seamlessly mesh the digital and physical experience
This digital transformation was not an “edge” king of thing. Transformation was top down and not pushed by gen y.
You create a transformative vision. Make real change. You then define clear intent and outcome. Finally, you allow that vision to evolve over time.
Three Stages of change
- Get the functionality like wikis, blogs, social networks, etc.
- get execs involved
- use digital champions
- Use reverse mentoring
Biggest Driver of the profitability number?
Governance – yes governance. This change is an un-natural act so you have to force it a little bit. You have to create digital leadership roles, share digital units and create digital governance committees. Sharing means the sharing of capabilities, people, processes etc.
Business and IT
Digital Masters changed the relationship between business and IT. They took down the traditional animosity.
Quote: Digital transformation is anything but linear.
Quote: Digital change is a little bit like running a marathon
Think about what’s coming in 3D printing, robotics, AI, sharing economies, wearables, and augmented reality. These disruptors will drive profit for those ready for it.