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Digital transformation review no4 may 2013 accelerating digital transformation

Digital transformation review no4 may 2013 accelerating digital transformation



Organizations across sectors are realizing the transformative power of digital. However, while there ...

Organizations across sectors are realizing the transformative power of digital. However, while there
is increased appreciation of digital’s role, many organizations are struggling to take their
transformation initiatives to the next level. They are caught
struggling for pace, and risk falling in the chasm between
initiation and termination of transformation initiatives. In this
fourth Digital Transformation Review, we aim to help business leaders understand how to accelerate their efforts at transforming digitally.



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    Digital transformation review no4 may 2013 accelerating digital transformation Digital transformation review no4 may 2013 accelerating digital transformation Document Transcript

    • N° 04 MAY 2013Accelerating Digital Transformation• Allianz: Creating a Digital DNA - Joe Gross • Etisalat: Accelerating Transformation through a DigitalServices Unit - Khalifa Al Shamsi • Zurich: “The Department of YES” or the Evolving Role of a CIO- Markus Nordlin • Yammer: Driving Employee Engagement through Social Networks- Adam Pisoni • Being Digital: Engaging the Organization to Accelerate Digital Transformation- MIT and Capgemini Consulting • Badgeville: Helping Companies to Better Engage with Employees- Kris Duggan • UK Digital Champion: Driving a Nation Forward with Digital - Martha Lane Fox
    • Digital Transformation Review N° 04 3N° 04 MAY 2013Xavier Hochet CEOKen Toombs Deputy CEO and USA Regional HeadDidier Bonnet Global Head of PracticesJerome Buvat Head of ResearchAndrew McAfee MIT Research ScientistMichael Welch Visiting Scientist at MIT The Digital Transformation Research InstituteAccelerating Digital TransformationCapgeminiConsulting’sEditorialBoard
    • Digital Transformation Review N° 04ACCELERATIONTHROUGHSTRONGIT/BUSINESSRELATIONSHIPSZurich: “The Department ofYES” or the Evolving role of aCIO - Markus Nordlinpage 24EDITORIALAccelerating DigitalTransformation- Capgemini Consulting’sEditorial Boardpage 6STRATEGYAllianz: Creating a Digital DNA- Joe Grosspage 8ACCELERATIONTHROUGHGOVERNANCEEtisalat: AcceleratingTransformation through aDigital Services Unit- Khalifa Al Shamsipage 16CONTENTSBy Sergi Herrero, CEO, L’AtelierBNP Paribas USApages 15, 29, 57COMPANIESTOWATCH:VIEWFROMSILICONVALLEY
    • Digital Transformation Review N° 04Badgeville: Helping CompaniesEngage with EmployeesBetter - Kris Dugganpage 49ACCELERATIONTHROUGHENGAGEMENTYammer: Driving EmployeeEngagement through SocialNetworks - Adam Pisonipage 30SPECIALGUESTUK Digital Champion: Drivinga Nation Forward with Digital -Martha Lane Foxpage 58Being Digital: Engaging theOrganization to AccelerateDigital Transformation- MIT and Capgemini Consultingpage 37101011010010101011010010101011010010A major research initiative at the MIT Sloan School of Management
    • Digital Transformation Review N° 046Organizations acrosssectors are realizing thetransformative power ofdigital. However, while thereis increased appreciation ofdigital’s role, many organizationsare struggling to take theirtransformation initiatives tothe next level. They are caughtstruggling for pace, and riskfalling in the chasm betweeninitiation and termination oftransformation initiatives. In thisfourth Digital TransformationReview, we aim to help businessleaders understand how toaccelerate their efforts attransforming digitally.We open the Review withinsurance giant Allianz, which isinvesting aggressively in digitalinitiatives in a sector not knownfor being digitally-savvy. Weinterview Joe Gross, Head ofGroup Market Management atAllianz, who shares his views onwhy organizations should makedigital part of their DNA.To make digital part of thelifeblood of the organizationnot only requires strong visionand investment, it also requiresaccelerated deployment acrossthe business. In this Reviewwe look at three primarymechanisms for acceleratingthis needed adoption anddeployment.The first approach is accelerationthrough better governance.Organizations can creategovernance structures thatinherently allow for replicationof best practices and eliminationof capability redundancies.Leading UAE-based telecomplayer Etisalat recently launchedsuch a dedicated Digital ServicesUnit. We interview Khalifa AlShamsi, Chief Digital ServicesOfficer at Etisalat, who expandson how a Digital Services Unitis helping Etisalat accelerate itsdigital transformation.Technology plays a crucial rolein an organization’s digitaltransformation. It is imperativethat IT executives play a big rolein the transformation for it to besuccessful. This brings us to oursecond approach – accelerationthrough tighter linkagebetween IT and business. Andthis linkage has to start rightat the top with the CIO. Weinterview Markus Nordlin, theCIO of Zurich Insurance, tounderstand the evolving role ofa CIO in the context of a digitaltransformation.Digital transformation isan executive-led initiative.Nevertheless, any such large-scale initiative can only succeedif it has clear buy-in from rankand file employees across thecompany. The third approachwe examine looks at theimportance of engagement as atool for acceleration of digitaltransformation. Social media hasmade people more comfortablewith sharing, connecting andengaging with one another.Organizations are now willing toadopt such social networks insidethe enterprise in order to driveengagement. We interview AdamPisoni, Co-Founder and CTOof Yammer, to understand hisview of social networks withina corporate environment andhow they can drive employeeengagement.Employee engagement isindeed a significant challengefor organizations. Our earlierresearch proved that peoplechallenges are amongst theAccelerating Digital TransformationBy Capgemini Consulting’s Editorial BoardEditorialDigitalTransformationReview
    • Digital Transformation Review N° 04 7biggest obstacles to a successfuldigital transformation. Wepresent our latest researchwith the MIT Center forDigital Business on the roleof engagement. We expand onhow organizations can kick-startdigital engagement and use itas a tool for accelerating digitaltransformation.Engagement can also beachieved by understandingemployee activity off-duty andtrying to recreate similar cuesin the workplace. As a result,organizations are keen to seehow they can learn from popularconsumer digital services andapplications and apply theminside enterprises. In this context,gamification – or the applicationof game mechanics to helpbusinesses measure and influenceuser behavior – is growing inpopularity. We interview KrisDuggan, Co-Founder and ChiefStrategy Officer of Badgeville, aleading provider of gamificationplatforms. He shares hisperspectives on how companiescan use gamification techniquesto better engage with employees.Finally, digital transformation isnot just for companies. Societaltransformation towards a betterfuture that is digital-drivenis the next logical step. Thistransformation also requiresacceleration to ensure weempower the digital-citizen.Some countries have alreadyrecognized the role that digitalcan play in creating a betterand more informed country. Wespeak to Martha Lane Fox, theUK’s Digital Champion, on howdigital can help governmentsdrive change.Digital transformation,ultimately, is a matter ofexecutive vision and leadership.It is also an exercise thatrequires collective buy-in andengagement from all, leadersand line employees alike.In this edition of the DigitalTransformation Review, we haveshared perspectives and thinkingfrom around the world on howorganizations can accelerate thetake-up of digital transformation,building a true collective willbehind the leader’s digital vision.DigitalTransformationReviewEditorial
    • Digital Transformation Review N° 048llianz is one of the world’s top insurance companies with over 78million customers and 144,000 employees in over 70 countries. The group had a turnover of over €106 billion in 2012. It has investedaggressively in digital in recent years. Capgemini Consulting spoke to JoeGross, Head of Group Market Management at Allianz. Allianz: Creating a Digital DNAInterview with Joe Gross,Head of Group Market Management at AllianzDigitalizationatAllianzLast year you declared that digitalization would become part ofAllianz’s DNA. What has been the driving force behind Allianz’s moveto digitalization?We look at digitalization as a huge opportunity for Allianz. In terms ofwhat has gotten us on our digital journey, I think it is the new customertrends that have set things in motion. In our digital world, consumersexpect us to be available whenever they need our services – that’s 24/7anywhere in the world. They want convenience and the same high-quality technical standard as from other digital suppliers. Allianz needsto provide all of this. Digital is actually a tremendous opportunity totransform the customer experience.JoeGrossHeadofGroupMarketManagementatAllianzWe look atdigitalization as a hugeopportunity for Allianz.Allianz:CreatingaDigitalDNADigitalTransformationReview
    • Digital Transformation Review N° 04 9consistency and standardizationthroughout our processes acrossthe globe.A crucial step we took was toloop in our marketing and salesteams, right from the beginning.So, it wasn’t about only focusingon operations and IT agendas;we encouraged an inclusiveatmosphere that also took intoconsideration the perspectives ofmarketing and sales. We didn’twant an imbalance, where onefunction dominated another.So, what does Allianz’s digitalstrategy look like and what haveyou done so far?We’ve invested massively in thedigitalization of our businessover the past couple of years.We first defined a global digitaltarget picture, along with ourlines of business, and it hasbeen the guiding element in thetransformation process. This wassupported by an assessment ofour operational entities whichhelped them to define theirambition level for the next three-five years.Based on these results, theoperating entities and Grouphave set up initiatives to driverelevant topics, such as socialmedia and mobile, globallyand we are building Groupassets such as our global Webplatform “Allianz oneWeb”. Ouroperating entities are driving thetransformation and for instanceare providing more engaging andresponsive broker interfaces andmobile quoting apps to help ouragents with their everyday roles.Also, Germany, Brazil and Indiahave been actively using socialmedia to engage with clients andto generate sales leads.What are the key changes thatyou implemented?We didn’t want to reinvent thewheel. For example, in marketingand distribution functions,instead of replacing the waythings were being done, we triedto complement these processes.So, using social media togenerate sales leads or equippingour Allianz Germany agentswith homepages to engage withtheir clients were some of theways we tried achieving this.We also automated our back-office processes. We needed todrive centralization, automation,To really get thingsmoving, we needed todrive a sense of urgencyfrom the top.We first defined aglobal digital targetpicture, along withour lines of business,and it has been theguiding element inthe transformationprocess.DigitalTransformationReviewAllianz:CreatingaDigitalDNA
    • Digital Transformation Review N° 0410that level it’s primarily the CEO ofthe operating entity who drivesdigital efforts. That happened inAllianz Italy, for example, wherethe CEO created a committeecomprising the top managementexecutives who have been drivingchange across the unit. At thesame time, our central team alsohas to support the transformationefforts of our local entities. Theidea is to consolidate all ourefforts and bring in transparencyand consistency across all ourprocesses.DigitalOrganizationandGovernanceSo how did it all start – howdid you get the ball rolling inAllianz’s digital transformation?We realized that the insuranceindustry, as a whole, was late injoining the digital revolution.We didn’t have any benchmarkor company references to fallback on but we had to startsomewhere. So, we startedanalyzing customer behavior– what was the impact oninsurance when customers startedusing digital channels. We alsotried studying other industriesand their digital initiatives. Thiscollective learning formed thebasis of a rough groundwork ofsorts.To really get things moving,we needed to drive a sense ofurgency from the top. So, ourCOO, Christof Mascher, tookon an active role in drivingthe digital efforts, with theparticipation from our Allianz SEboard. Not only did we engageour board members, but mostimportantly our main operatingentities. Our objective was to geta local perspective and leadershipin the digital arena. So, it wasa two-way process of drivingdigital – not just top-down butalso bottom-up because in theinsurance sector local presenceplays a crucial role.It’s interesting that you mentionhaving a blend of local andorganization-wide digitalchange. How did Allianz strikethat balance?Winning the battle at the locallevel was extremely important tous. In insurance, almost all ouractivities are driven locally withagents tied to specific regionalregulatory environments, withina local product setup, local ITlegacy systems, and so on. So, atNot only did we engageour board members, butalso our main operatingentities to drive ourdigital initiatives. Itwas a two-way process. It is critical to establisha common ground – auniform understandingof what digitaltransformation means.Allianz:CreatingaDigitalDNADigitalTransformationReview
    • Digital Transformation Review N° 04 11of them. That was when we reallyhad a holistic picture across allfunctions of what digital meantat a granular level. We then askedour local operating entities toassess themselves based on thecriteria we had outlined. Thatestablished a baseline operatingentity. For every criterion, wealso had the operating entitycome up with an ambition levelY. So, if you were at level X, youeventually needed to reach Y.Once we had this in place,we went about looking at thebigger picture – at the Grouplevel. We needed to cherry-pick our priorities based onwhich dimension needed moreinvestment and focus. So,while we have been ensuring alocalized, granular approach todigital, we haven’t lost sight ofthe big picture.While we have beenensuring a localized,granular approach todigital, we haven’t lostsight of the big picture.With so many local entitiesdriving digital initiatives in theirrespective regions, how doesAllianz manage governance in itsdigitalization efforts?Digital transformation can bevery subjective, in the sensethat it means different thingsto different departments. If youask the IT folks, they wouldtalk about SAP standardizationor data warehousing. To themarketing guys, their idea ofdigital transformation wouldbe restricted to an app, ordigital marketing. For theclaims processing people, itwould mean digital straight-through processing to reducecosts and claims ratio. Withdigital meaning different thingsto different departments, itbecame critical to establish acommon ground – a uniformunderstanding of what digitaltransformation meant.To do this, we started byidentifying touch points thatdigital impacted, and of coursethese touch points spanned theentire spectrum of the valuechain – right from the customerawareness stage to distributionto actual sales, product offers topricing etc. Once we identifiedthese touch points, we devisedassessment criteria against eachOperationalExcellenceLarge-scale transformationprojects need different abilities.Do you see a marked differencein terms of skill sets required fordigital transformation initiatives?I think from the IT, automationand operational perspectiveswe are already doing very well.But in areas such as analyticsand predictive modeling, justlike everyone else, we too lookfor top-notch talent. We alreadyhave teams of highly talentedactuaries who have the necessarystatistical and analyticalDigitalTransformationReviewAllianz:CreatingaDigitalDNA
    • Digital Transformation Review N° 0412The digital journeymight be slower atAllianz but it issustainable becauseit involves granulartransformation acrossthe value chain.One of our keychallenges has been topercolate the digitalenthusiasm andwillingness from thesenior leadership tomiddle managementand operational levels.Allianz:CreatingaDigitalDNADigitalTransformationReviewbackground for data analysis.We’re trying to find effectiveways to tap into this in-housetalent.Recruiting people with analyticsskills is one aspect of drivingchange. But what are some ofthe other challenges you’vefaced when implementing digitalinitiatives?We started our digital journeyabout three years back andwe’ve been at it ever since. As ofnow, we have complete buy-in from our senior leadershipbut this represents only onelevel of engagement. One ofour key challenges has been topercolate this “digital enthusiasmand willingness” to middlemanagement and operationallevels. It’s all well and goodto say that digital has enabledus to have one-click access tocustomer touch points. But ifyou’re an operational entity thathas, up until now, only workedwith local agents via a call center,how does this change affect youroperations at the most granularlevel?I think encouraging a culture ofchange becomes easier when wedevelop necessary skills aroundthe transformation. The questionis how do you go about buildingthose skills – from within orexternally? It is most criticalto build internal talent and notjust attempt to “buy” skills. Inselected cases including externaltalent, of course, can augmentyour talent pool and cross-pollinate the organization.Would you like to share the keylessons that you have learnedover the last two to three years ofthis transformation journey?I think for a company ofAllianz’s size and complexitywe are well underway in thistransformation journey. We maynot be fast enough. But I findvalue in being evolutionary andnot revolutionary in Allianz. Itrust in our backbone of digitaltransformation. While thejourney itself might be slow it issustainable because it involvesgranular transformation of thiscompany throughout the valuechain. It’s similar to a structurethat has a solid support ground-up - it’s less likely to fall. If youdo not get a digital businessmodel right, all the fancier stuffyou do on apps, digital bannersand social media will have arisk of being experiments that
    • Digital Transformation Review N° 04 13If you do not get adigital business modelright, all the fancierstuff you do on apps,digital banners andsocial media willhave a risk of beingexperiments that willfizzle away or willnever result in a puretransformation of thecompany.will fizzle away or will neverresult in a pure transformationof the company. The reasonwe involved marketing, salesand local entities, and not justIT or operations in our digitaltransformation is becausewe needed everyone’s activeparticipation to drive change ofthis scale.DigitalFutureLooking ahead into Allianz’sdigital journey over the nextthree years, what do you thinkwill be the biggest challenges?I think the top challenge forAllianz will be to maintain andaccelerate the momentum that wehave already generated. It’s still anevolving process - we cannot hopeto see immediate results. It’s alsoeasy for organizations to slip backinto old, familiar patterns. TheDigitalTransformationReviewAllianz:CreatingaDigitalDNA
    • Digital Transformation Review N° 0414Allianz:CreatingaDigitalDNADigitalTransformationReviewchallenge for us is not to go backto our comfort zones, and insteadalways keep looking for newdigital opportunities.So, how do we sustain thistransformation drive without itbeing permanently pushed fromThe top challenge forAllianz will be tomaintain and acceleratethe momentum that wehave already generated.the top? We need to create bottom-up change momentum that passesacross people, culture, capabilitiesand tools. So, it is the entire changemanagement portfolio that wehave to use to drive change acrossevery entity, department andfunction.
    • Poshmark:Shop fromthe closets ofwomen all overthe worldCompanies to Watch:View from Silicon ValleyBy Sergi Herrero, CEO, L’Atelier BNP Paribas USAAccording to Vocus, by 2015, 50% ofweb sales will occur viasocial media. Social commerce maybring $30 billion every year by 2015. Already,about 20% of online shoppers say they prefer tobuy products through the Facebook page of abrand than its website.Poshmark is a mobile application that workslike a social network and allows you to buyand sell fashion. Thanks to a Pinterest-likeinterface, women all over the world are ableto put their closets online and thus buy andsell their clothes. Poshmark allows users to getinspired, choose a style mate whom they canfollow and connect to new inspiring style iconswhen they want. Poshmark is different fromother e-commerce platforms. The PoshmarkCommunity uploads about $1 million worthof inventory every day, providing users with aunique experience.ModernMeadow:Now you can 3Dprint your meatEach year, 300 million tonsof meatis consumed worldwide.By 2050, this amount will probably reach500 million tons. Meat is among the mostenvironmentally-draining resources andindustrial farming has been criticized forits consequences on food security, theenvironment and the well-being of theanimals.Modern Meadow has invented a tissueengineering technique based on bioprinting.They are now applying this 3D printingtechnology to culture leather and meat,suppressing the need for animals. Theirapproach includes cell culture, biofabricationand bioreactors. Modern Meadow now worksin collaboration with artists, designers andchefs to be able to make the highest qualitymeat and leather.Digital Transformation Review N° 04 15DigitalTransformationReviewCompaniestoWatch:ViewfromSiliconValley
    • Digital Transformation Review N° 0416Etisalat is a leading UAE-based telecom player with operations in15 countries across the Middle East, Africa and Asia. Etisalat hadrevenues of over $8.9 billion in 2012. The company recently launched astandalone unit to focus exclusively on Digital Services. Capgemini Consultingspoke to Khalifa Al Shamsi, the Chief Digital Services Officer at Etisalat.Etisalat: Accelerating Transformationthrough a Digital Services UnitKhalifaAlShamsiChiefDigitalServicesOfficeratEtisalatInterview with Khalifa Al Shamsi,Chief Digital Services Officer at EtisalatDigitalServicesLast year Etisalat created a Digital Services Unit. What factors havedriven the company to move towards digital?Our customers are becoming more technologically connected each dayand prefer using online channels. This may be perceived as a potentialthreat by certain traditional telecom players, but we view it as a greatopportunity for Etisalat. We believe that the positive aspect of changein consumer behavior is that they are now a lot more open to newservices in contrast to the recent past. For instance, when telecomcompanies launched the MMS (Multimedia Messaging Service) offering,it took a lot of time and marketing expenditure to convince consumersto use this service. Now, consumers are more eager and willing to trynew services.We established a DigitalServices Unit lastyear to accelerate ourtransformation.Etisalat:AcceleratingTransformationthroughaDigitalServicesUnitDigitalTransformationReview
    • Digital Transformation Review N° 04 17Our Digital ServicesUnit focuses ondeveloping digitalservices and thecapabilities requiredto deliver them tocustomers.Although telecom companiesneed to protect their core voiceand access services, we realizethat digital services offer adistinct growth opportunity.Moreover, being a telecom player,we already had the infrastructureand expertise in place to enterthe digital services space. So,we decided to focus on digitalservices and established aDigital Services Unit last year torevitalize our position within thedigital ecosystem and accelerateour transformation.What is the focus of this DigitalServices Unit?Our Digital Services Unitfocuses on developing digitalservices and the capabilitiesrequired to deliver them tocustomers. Within the B2Bspace, we are targeting areassuch as machine-to-machine(M2M) and cloud services. Inthe consumer segment, wefocus on content-related anddigital entertainment servicessuch as video services, music,gaming and applications. Digitalpayment, digital advertisingand advanced communicationsare also important segments forus. DigitalOrganizationConsidering your diversegeographic presence, how doyou accelerate your digitaltransformation across theorganization?One of the key challenges is thelimited availability of the rightdigital skills and capabilities. Asa result, it is not possible to havefull teams present locally to lookafter all digital services. To tacklethis problem, we consolidatethe activities centrally aroundour digital services portfolio –economies of scale make a bigdifference in the digital space.You have mentioned the scarcityof digital capabilities. How didyou go about building thesecapabilities? Was it mainlyinternal training or hiring?We have employed a combinationof both techniques. We had agood starting pool of resourcesfrom the many digital servicesinitiatives that were alreadyin progress before we formedthe Digital Services Unit. Thechallenge was to unite all ourdigital initiatives under oneumbrella and then build onthis consolidated portfolio. Forfurther requirements, we hiredresources with expertise across arange of services.We consolidate theactivities centrallyaround our digitalservices portfolio –economies of scale makea big difference in thedigital space.DigitalTransformationReviewEtisalat:AcceleratingTransformationthroughaDigitalServicesUnit
    • Digital Transformation Review N° 0418Basically, we wanted a good mixof people from different regionsand backgrounds – telecom aswell as non-telecom – to enrichthe team and, thus, drive aculture of innovation within thecompany.To accelerate the rollout of digitalservices, we have focused onbuilding a good blend of bothcommercial and technical skillsets in our unit. For instance,we need technology capabilitiesto implement and supportdigital services and commercialcapabilities to drive productinnovation, design and strategicalliances.As a telecom player, Etisalathas the dual task of enablingThe challenge was tounite all our digitalinitiatives under oneumbrella.Our CIO is responsiblefor Etisalat’s internaldigital transformation.To accelerate the rolloutof digital services,we have focused onbuilding a good blendof both commercial andtechnical skill sets in ourunit.digital transformation forother organizations, whiletransforming internally at thesame time. How do you approachinternal digital transformationand does the digital unit haveany role in it?We have an important mandateat the Group level to transformEtisalat into a digital enterprise.We have clearly defined rolesand responsibilities for achievingthis. Our CIO is responsiblefor Etisalat’s internal digitaltransformation while the DigitalServices Unit focuses on digitalservices for our customers.The CIO’s role is shifting froman IT-centric profile towardsinnovation and empowerment. Ina digital enterprise such as ours,the CIO empowers the businessunits to drive lean and efficientbusiness operations rather thansolely focusing on deliveringdiscrete IT projects.OperationalExcellenceWe found from our research withthe MIT that telecom companiesare investing in digital initiatives.However, they appear to bestruggling around transformationmanagement in aligning commonvision and governance acrosssilos and engaging differentteams to work together. What areyour views on such challenges?The internal acceptance forinvestments in technologies is notan issue within Etisalat. We havean ambitious digital vision andEtisalat:AcceleratingTransformationthroughaDigitalServicesUnitDigitalTransformationReview
    • Digital Transformation Review N° 04 19we will pursue it. For instance,we placed a lot of importanceon rolling out a nation-wideoptical fiber network while othercountries were still debating onwhether they should roll it out ornot.We are still at an early stage inour digital services journey. Wehave had good initial success,but there is a long way to go. So,at present we cannot claim anysuccess story but we have takenthe right steps at the right pace.Going forward, we understandthat we need to address multiplechallenges along this journey,most significant of which will bealigning and managing the rightresources and teams to focus ondigital services.Then, searching for the rightalliance partner is anotherchallenge. A right strategicpartner needs to have the sameambition and commitment levelsas we have while also beingwilling to take equal risk andgain similar rewards. So, weneed to continuously explore,evaluate and select the rightpartners (whether these includeother telecom companies or oursuppliers) that support our digitalservices initiatives across ourfootprint.Customizing digitalservices to localmarket realities isvery important.Thus, analyzing anddeveloping the ecosystemis vital for success.Apart from the challenge ofaligning the right resources andteams around digital services,what other internal or externalfactors would you say can proveto be pain points?Different digital services havevarying maturity levels ineach country. Customizingdigital services to local marketrealities is very important. Thus,analyzing and developing theecosystem is vital for success. Forinstance, while releasing digitalservices involving financialtransactions (m-commerce),one has to check the readinessand capabilities of a financialinstitution (bank), regulatoryauthorities and a centralbank. Similarly, for digitaladvertisement services, onehas to ensure that brands,aggregators and broadcasters arecorrectly aligned for the initiativeto successfully work.DigitalTransformationReviewEtisalat:AcceleratingTransformationthroughaDigitalServicesUnit
    • Digital Transformation Review N° 0420latest digital technologies?We tap into the collectiveknowledge of our resourcesto keep abreast of the latesttechnologies and trendsin digital. This collectiveintelligence comprises not justour internal knowledge databasebut also our highly-skillednewly recruited employeeswho share industry trends andbest practices. We also conductregular meetings and knowledge-sharing events that sharpen ourunderstanding around industrydevelopments. These meetingsinvolve interactions with ourpeers who are not just from thetelecom industry but from otherindustries as well. All these keySo, for these types of services,apart from our readiness,ecosystem development isabsolutely critical.How do you measure yourprogress towards the deploymentof digital services acrosscountries? What are the keymetrics applied?We have established differenttypes of Key PerformanceIndicators (KPIs) to measure ourprogress. For instance, thereare operational KPIs, whichevaluate the milestones, e.g.whether beta testing of a servicehas been conducted, evaluatingthe number of subscribersfor a particular service, theirsatisfaction levels and gaugingcustomer reaction towardsservice failures. In addition, wehave financial KPIs that assessthe contributions of a particularservice in retaining users orgenerating additional revenues.Etisalat has launched servicesbased on new technologies suchas M2M and Augmented Reality.With the rapid evolution oftechnologies, what processes doyou use to stay updated and keepyour team up to speed with theThe key priority for adigital entity such asours will be to deliverthe promise of keepingEtisalat relevant in thedigital space.learnings are then funneleddown into a few high-priorityareas that we start focusing onfrom the perspective of stayingrelevant in the market.Etisalat:AcceleratingTransformationthroughaDigitalServicesUnitDigitalTransformationReview
    • Digital Transformation Review N° 04 21One of the keychallenges will be torefine digital servicesbased on evolving needs– that might entaildiscontinuing existingservices and includingnew relevant ones.DigitalFutureLooking ahead, what are yourfuture priorities for the DigitalServices Unit?The key priority for a digitalentity such as ours will be todeliver the promise of keepingEtisalat relevant in the digitalspace. We can achieve this bydemonstrating the value-addDigitalTransformationReviewEtisalat:AcceleratingTransformationthroughaDigitalServicesUnitthat our unit delivers, innovatingand leveraging our telecomcapabilities, and providinga consistent revenue stream.Another priority for us will beto track and maintain the rightportfolio of digital services. Oneof the key challenges will beto refine digital services basedon evolving needs – that mightentail discontinuing existingservices and including newrelevant ones.
    • Digital Transformation Review N° 0422A Digital Services Unit (DSU) is a centralized entity that delivers a broadcatalog of digital services and coordinates efforts across various units.Digital Services Unit as a Tool toAccelerate Digital TransformationFor instance, Nestlé’s centralized DSU is responsible for a wide range of digital services including e-commerceplatforms, digital marketing, social media, consumer relationships, m-commerce, Search Engine Optimization(SEO), analytics and Research & Development. A DSU, as a control unit, plays a critical role across functionsranging from formulating digital strategy, developing digital services for business units, brands or countries,facilitating innovation, monetizing digital assets and creating new avenues for digital businesses (see Figure 1).Fig. 1: Roles and key functions of a DSUSource: Capgemini Consulting AnalysisEvaluates new platforms such ase-commerce, social media, viral videoetc., to create new revenue generatingavenues and drive salesDigital Monetization Digital FactoryKey objective of DSU is to give back tothe brands and markets, the data andintelligence on their consumersFacilitates collaboration across variousresources in the organizationDigitalServiceUnitDigitalServiceUnitDigital Strategy & TransformationFocuses on ensuring seamless DigitalTransformation by aligning marketing,Finance, HR, Operations, Brandingfunctions with all digital channelsDigital InnovationPromotes online innovation andestablishes a culture of ideation andcollaboration in the companyDigital SkillsEnhances digital skills and capabilitiesacross the organizationAvoids silos of digital capabilitiesDigital Business CreationDevelops IT services to support internaland external clients such as marketing,sales, customers etc.Develops online content to facilitate newbusiness opportunitiesDigitalServiceUnitasaGovernanceTooltoAccelerateDigitalTransformationDigitalTransformationReview
    • Digital Transformation Review N° 04 23Enabling a Digital FactoryA DSU facilitates collaborationbetween the digital units andinternal clients. It also helps inmaximizing resource utilizationby creating a service catalog. Forinstance, Philips has a digitalcompetence center that providesservices to both Philips’ businessunits and countries, with themarketing service desk actingas a single point of contact formarketing.Fostering InnovationA DSU fosters innovationthrough the usage of digitaltechnologies and platformssuch as crowd sourcing, open-source platforms and socialmedia networks. These digitaltechnologies help reduceinnovation cycle times and drivethe ideation process even in largedistributed organizations.Building Digital SkillsA DSU plays a critical role indeveloping relevant digital skillsthrough organization-widetrainings and knowledge-sharingsessions. Since the DSU is alsothe umbrella unit, when it comesto digital development across allfunctions in the organization,Driving Digital StrategyA DSU is responsible fordefining clear guidelinesand responsibilities ofvarious business units forall digital initiatives withinan organization. It defines aclear digital transformationroadmap by analyzing customerrequirements, the company’sstrategy, the competition, andoperational competencies. TheDSU ensures that local and globaldigital strategies are alignedto achieve optimal results andto give a consistent experiencefor customers across digitalchannels. For instance, Spanishmedia major Prisa’s digital unitcoordinates all online activitiesand businesses across the firm.The unit has a digital strategysub-unit that drives digitalstrategy, sales, innovation andrevenue management.Our research showed thatover 80% of firms agreed thatestablishment of strategies andpolicies ranked high among theroles of a digital unit1.it can consequently play acritical role in centralizing anddeveloping relevant digital skills.This avoids skill build-up in silos.Monetizing OpportunitiesA DSU coordinates digitalefforts of all local businessunits. It provides advice on assetmonetization avenues rangingfrom selling digital content toleveraging paid advertisements,entering into e-commerceagreements with third parties, tocommunity management.Creating New Digital BusinessesA DSU helps develop newdigital businesses either in-house or through collaborationwith external third-partyorganizations. Technologiessuch as virtual prototyping,3-D renditions and modeling,business intelligence andBig Data analytics, provideopportunities for organizations todevelop new business offerings.All these offerings have thepotential to become businessventures, which can then beautonomously managed by theDSU.1 Capgemini Consulting andMIT- Center for Digital Business (CDB) ResearchDigitalTransformationReviewDigitalServiceUnitasaGovernanceTooltoAccelerateDigitalTransformation
    • Digital Transformation Review N° 0424Zurich is a global insurance company with over 60,000 employees andoperations in over 170 countries. The company is starting on a digitaltransformation of its customer experience. Capgemini Consulting spoketo Markus Nordlin, the CIO of Zurich, to understand the evolving role of a CIO.Zurich: “The Department of YES”or the Evolving Role of a CIOInterview with Markus Nordlin,CIO of Zurich InsuranceTheEvolvingRoleoftheCIOWhat have been your key focus areas over the past few years?At Zurich, our strategy has focused on leveraging our global presenceto drive efficiency and expense reduction. In my role as a CIO, I help tosimplify and improve our processes and systems thereby supporting ourstrategy. In support of these goals, Zurich’s IT organization has focusedextensively on IT infrastructure sourcing over the past few years. Thishas helped to free up resources, which can be reinvested to achieveanother key pillar of our business strategy – improved customer focusthrough digital transformation.MarkusNordlinCIOofZurichInsuranceOutsourcing helped tofree up resources, whichcan be reinvested toachieve another keypillar of our businessstrategy – improvedcustomer focus throughdigital transformation.Zurich:“TheDepartmentofYES”ortheEvolvingroleofaCIODigitalTransformationReview
    • Digital Transformation Review N° 04 25DigitalTransformationHow do you ensure that yourteam is aware of new digitaltechnologies?We are creating a technologyadvisory committee that Iwill chair, which will haveoutside members, from, forexample, technology and FMCGcompanies, to keep abreast of thelatest digital developments. Ineffect, this advisory committeewill consist of both IT andbusiness stakeholders to discuss“the art of the possible”.How about implementationof digital technologies? Doyou see a marked difference inthe skills required versus theskills available in the currentworkforce?What is driving your shifttowards digital?Digitization is set tofundamentally change businessesin the next few years, irrespectiveof the industry they operate in.This means it’s imperative forcompanies such as ours to drivethe evolution towards a digitalenterprise.Going forward, we see ‘bigdata’, mobility and social mediaplaying key roles in our drive toachieve customer centricity anddelivering the innovation neededto stay relevant in a crowded andever-changing market place.Zurich is just starting digitaltransformation journey. Howdoes it affect your role? Does itadd new responsibilities?There are new dimensions to myrole. As a CIO, I have to ensurethat my team of IT leaders isaware of new technologies andenabling solutions. I now giveregular technology updates to ourboard and our Group ExecutiveCommittee, and I present a planon how to respond to these newtechnologies: frameworks, pilotprograms and broad rollout ofsuccessful technologies group-wide.Sourcing has gone someway to reduce our internal ITorganization. We now need tobuild capabilities in the digitalarena and we are learning thatthis is a difficult task; especiallyin areas where there is a shortageof suitably trained professionals,such as data scientists forexample. But, on the bright side,there is tremendous energy in theorganization to pickup and learnnew technologies. This has led usto believe that we can re-skill orretrain some of our own peopleto successfully manage our keydigital transformation initiatives,such as the creation of a mobilitycenter of competence or ‘big data’efforts. We will also hire relevanttalent to drive our digital agendaand supplement these skills withtrusted partners.DigitalTransformationReviewZurich:“TheDepartmentofYES”ortheEvolvingroleofaCIOWe now need to buildcapabilities in thedigital arena and weare learning that this isa difficult task.
    • Digital Transformation Review N° 0426the IT department and workdirectly with external vendors?In such a large globalorganization, this kind of arisk always exists. But it is ourexpectation that business unitsinclude us early on in suchdiscussions; and we will be happyto help them go forward. Forinstance, if a business unit wishesto use a particular technology,we need to figure out the securityand support issues related to thistechnology. But to make sure wehave good relationships with ourbusiness units, I have to be thedepartment of `yes`and not thedepartment of `no’.I have to be thedepartment of yes, notthe department of no.The successful leadersof tomorrow are goingto be true hybridprofessionals who havespent some time inIT but have shifted tooperations and vice-versa.Zurich:“TheDepartmentofYES”ortheEvolvingroleofaCIODigitalTransformationReviewThis would be our three-prongedapproach to obtaining anddeveloping the skills that we needas we go forward.IT/BusinessRelationshipYou spoke about re-skilling. Doyou also see a need for cross-pollination between IT andbusiness?I believe that the successfulleaders of tomorrow, in anybusiness or industry, are goingto be true hybrid professionalswho have spent some time in ITbut have shifted to operationsand vice-versa. This will be verybeneficial for businesses, asbusiness and IT leaders will havecommon knowledge, commonunderstanding and somecommon and shared experiencesas they go forward.You spoke about the need fortechnologically-savvy businessprofessionals. Do you foresee arisk that business units staffed bythese professionals may bypassLooking ahead, do you foreseethe creation of new rolesdue to your focus on digitaltransformation?Social media is one area ofopportunity. These platformsmight give us the opportunityto append social data to ourexisting database, in order tomeet and exceed our customers’expectations - even ones thatthey don’t have yet!We are also looking at bringingmarketing and communicationspeople together to understandand harness the power of ‘bigdata,’ which comes from socialmedia and the Internet. We needto look at people who understandboth marketing and data andthese will be pretty unique skills.
    • Digital Transformation Review N° 04 27investments. But we will needto set aside some resources forexperimenting in these topics ofmobility, cloud, ‘big data’, andsupporting analytics. We need tolearn what can actually drive realbusiness value because this is notclear today in the industry.One of the keyinitiatives that we aredriving is our DigitalWorkplace.Going forward, what challengesdo you foresee? What are thehurdles that you will have toovertake?In terms of future challenges,one of my predictions is thatcloud might become the nextlegacy. Those who are movinginto the cloud space are quicklyrealizing that governing a clouddeployment, knowing wherethis data is, what data is leavingan enterprise is actually verydifficult to manage. I believecaution is required and wewill move carefully into cloudcomputing only when and if it isappropriate.DigitalTransformationReviewZurich:“TheDepartmentofYES”ortheEvolvingroleofaCIOFutureChallengesGoing forward, what are themajor changes that you want todrive in the next two years?One of the key initiatives thatZurich IT is driving is our DigitalWorkplace initiative. Ultimately,our ambition is to ensure that ouremployees, wherever in the worldthey are, have full access to all ofour technology resources; click tocall, click to chat, click to videoconference; on any device. Thisyear, we’re rolling out the abilityfor all of our employees to bringtheir own iOS device—iPad oriPhone.What are the other changes youwould like to implement?Another key focus for us in thisnext year will be ‘big data’. Wewill create our target frameworkand do some pilot projects.Do you see any difficulty inconvincing stakeholders aboutthe business case for ‘big data’ orsocial media?We are still firmly looking atbusiness cases for all of our IT
    • Digital Transformation Review N° 0428Do you see the CIO giving way to,say, Chief Digital Officer or ChiefData Officer in the next two-threeyears?For the large financial servicesfirms, I see the role of the CIOremaining as before. The legacy,the volumes, the budgets areso large that it’s hard for me toforesee that role would disappear.But yes, we will start havingenhancements in roles whetherthey fit in IT or next to IT asThe CIO will haveadditional roles andchallenges but they willnot eliminate the coreresponsibilities of acorporate CIO.partners in the business. ChiefDigital Officer or Chief DataOfficer are emerging roles thatwill definitely be key. But I thinkthat the organizational constructsfor these roles are still beingexperimented with. My feeling isthat the CIO will have additionalroles and challenges but theywill not eliminate the coreresponsibilities of a corporateCIO.Zurich:“TheDepartmentofYES”ortheEvolvingroleofaCIODigitalTransformationReview
    • Companies to Watch:View from Silicon ValleyBy Sergi Herrero, CEO, L’Atelier BNP Paribas USAAmplify:A tablet tomonitor K-12classroomsLyft:Drive and shareyour car withpeople aroundyouAs many as 81% ofAmerican teachers believetablets enhance learning. However, access tosuch tools is fairly unequal and disparities existbetween students coming from higher andlower income families. Approximately 41% ofteachers consider those disparities to result inlearning gaps between students. Among otherthings, the price of tablets is a serious concern.Amplify - a product from News Corporation’seducation unit - is a 10-inch Android tabletdesigned to bring connectivity to the classroomand to enable blended learning. It is preloadedwith educational material for students, such aslessons, exercises and Khan Academy videos.With the tablet, the teacher can monitorstudents’ devices, unlock and lock specificapps and run short tests to check if studentsunderstood the lesson. Amplify, which can beused for blended learning, costs $299 and canbe used by an entire school or district for a morehomogeneous learning experience.In 2012, 17 million cars weresold in the U.S.This number isexpected to reach the 20 million mark by 2019.A growing number of people are buying carseach year and Americans have been estimatedto drive nearly 3 trillion miles annually.However, not all of these cars are filled to theircapacity and this impacts transportation.Lyft is an app launched in 2012 that allows itsusers to do carpooling within cities for shortdistances, similar to taxi rides. Lyft cars wearpink moustaches and can be localized througha map available with the application. So if youdon’t want to pay as much as a taxi or cannotfind one, just ask for a Lyft ride!DigitalTransformationReviewCompaniestoWatch:ViewfromSiliconValleyDigital Transformation Review N° 04 29
    • Digital Transformation Review N° 0430ammer is a pioneer in the Enterprise Social Networking space. Itis used by over 200,000 organizations globally, including 85% ofFortune 500 companies. By end of 2012, it had more than 7 millionregistered users. The company was founded in 2008 and was acquired byMicrosoft in 2012. Capgemini Consulting spoke to Adam Pisoni, Co-Founderand CTO of Yammer to understand social networks in the enterprise and theirrole in employee engagement.Yammer: Driving EmployeeEngagement through Social NetworksAdamPisoniCo-founderandCTOofYammerInterview with Adam Pisoni,Co-founder and CTO of YammerSocialNetworksforEnterprisesSocial networks have registered a rapid adoption in the consumersegment. What do you think is the key difference between consumerand enterprise social networks?In a consumer social network you’re primarily interested in the peopleyou already know. But in an enterprise social network, you need theinformation to do your job regardless of whether you know the personwho has it. This creates all sorts of fundamental changes in the way youthink about creating these networks. Over time, I think we are going tocontinue to see a divergence in how enterprise social networks evolvecompared to consumer social networks.YLeadership is nomore about cascadingdirectives from topto bottom, but abouthearing from bottom totop and across.Yammer:DrivingEmployeeEngagementthroughSocialNetworksDigitalTransformationReview
    • Digital Transformation Review N° 04 31What do you think are the keydrivers for adoption of enterprisesocial networks?I believe the fundamental driveris the current pace of change.I think that the way in whichwe organize and communicatewithin companies today ischanging. The job of a companyis no longer to do the same thingas consistently as possible, butto figure out how to innovateand provide value as soon aspossible. Social networks createtight feedback loops betweendisseminating information andgetting feedback from acrossthe organization. By doing so,they help companies better alignpeople to this goal.ImpactonDigitalOrganizationHow do you think theimplementation of enterprisesocial networks changes the roleof leaders in an organization?I think that the role of leaders isgoing to change the most in thisdigital revolution. Today, leadershave to understand the influx ofchanges that are occurring andact on feedback from people whointeract with end-customers. So,they are involved in building andadjusting the offerings accordingto this feedback and ensuringthat the field force conveysinformation back to customers.This is a different model than theconventional approach whereit was just all about cascadingdirectives from top to bottom.Now, it is about hearing frombottom to top and across theorganization and being able topush information down quickly.So what do you see as the keybenefits of social networks in anenterprise?I believe enterprise socialnetworks have three fundamentalbenefits. First, they help youget the information you needto make better decisions. Youcan get that information fromyour co-workers, customers ormanagers. Second, they helpyou share information that otherpeople need to be successful. Thisinformation could be from themanager to their employees tomake sure that they are alignedor know recent directionalchanges. Finally, social networkshelp in communicatinginformation amongst employees.This information exchange couldbe from the bottom to the topmanagement. But ultimately, it’sall about getting your work donemore efficiently.We have seen companiesthat adopt socialnetworks with a focusedapproach benefit from itwithin months.In a consumer socialnetwork, who youknow matters; inan enterprise socialnetwork what youknow makes yourelevant.DigitalTransformationReviewYammer:DrivingEmployeeEngagementthroughSocialNetworks
    • Digital Transformation Review N° 0432Social Networks keepemployees involvedand retained becausethey feel more connectedto the organization’smission.How about the Return onInvestment?I think when social networkswere introduced in enterprises,their impact was not clear amongmany senior leaders. At that time,a lot of discussions were aroundemployee engagement and otherbenefits to the company but theywere not directly attributableto ROI. However, now we arebeginning to understand andrecognize the value-for-moneybenefits of social networks.Today, we are beginning to seethat social networks can havea positive impact on customerretention. For example, socialnetworks help customer serviceagents to connect with oneanother and rapidly pull theinformation they need to makebetter decisions in real-time.So, customer service and salespeople can reach out to socialtools at the right moment to helpcustomers and retain them.Similarly, enterprise socialnetworks also help in drivingrevenues. We have seenmultiple retailers who havetracked increased performanceto increased participation onsocial networks such as Yammer.These retailers have evolved andadapted faster to measurableAnother interesting benefit ofenterprise social networks is thatthey allow employees to sharetheir opinion and experiences,helping drive up their motivation.It keeps employees involved andretained because they feel moreconnected to the organization’smission and that they are able toinfluence the results.results because their employeeswere able to rapidly shareinformation within and betweenthe stores using social tools.AcceleratingSocialTransformationHow long do you thinkcompanies will take to realizesuch returns once they launch anenterprise social network?Enterprise social networks are anew concept and implementingthem successfully requires alot of change management. Iforganizations do not see itsvalue quickly they will not makethe kind of investment that isneeded for its success. So, withinYammer, we have the customerengagement team, which helpscustomers throughout theadoption journey by sharing bestpractices, providing technicalsupport during deploymentand offering educational andtraining services. One of the keyobjectives for this team is toempower organizations to derivequick value out of their enterprisesocial network.Yammer:DrivingEmployeeEngagementthroughSocialNetworksDigitalTransformationReview
    • Digital Transformation Review N° 04 33We are beginning to seethat social networks canhave a positive impacton customer retention.Are there any big stumblingblocks that companies should beaware of?I think one of the initial mistakesthat organizations make is tothink that adoption of socialnetworks will happen by itself.It’s also often assumed thatonce launched, an enterprisecollaboration platform will beable to fix every problem withinthe company without any supportfrom top management. However,there are several changemanagement and cultural issueswhich occur while adoptingsocial networks. Focusedinitiatives from top managementand technology solutions playa key role in rising above theseissues.What are some of the culturalissues that you have mentionedas a major challenge?It’s true that a lot of socialdeployments have failed. There’sone big reason why the majorityof enterprise social rolloutsfail, and it goes back to what Iwas saying before about how itdoesn’t happen on its own. If acompany is going to have a socialnetwork, it has to be comfortablewith transparency and peoplehave to feel comfortable doingtheir work in public. That’s ahuge cultural change for a lotof companies where they sortof err on the side of privacy orpeople may be afraid to pointout problems or talk about theDigitalTransformationReviewYammer:DrivingEmployeeEngagementthroughSocialNetworksOne of the initialmistakes thatorganizations makeis to think that socialnetwork adoption willhappen by itself.
    • voluntary adoption. It is hardto mandate people to use socialnetworks and employees willnot use them if there is no valueattached.Beyond measuring adoption,we help companies find andimprove KPIs that are meaningfulto their goals. For instance, amajor hamburger chain neededto change its menu frequently.One of the things they trackedwas to check how quickly a menuchange was understood by theserving staff, and they have a KPIfor that. We were able to track theimprovement in that KPI by usingYammer as a social tool. Theyalso used Yammer to circulate theinformation of improvement inKPIs among employees.Digital Transformation Review N ° 0434Considering the culturalchallenges you mentioned,can you share any interestinginstance of successful enterprisesocial network deployment?Let me tell you about NAB, anAustralian bank that leveragedtheir social network to driveimprovements in their processes.They deployed principles ofcontinuous improvement(Kaizen) on their social network.So, whenever employees identifyareas that need to be improved,they share it on the network andsolutions can then be crowd-sourced. By doing so, they wereable to drive real results in amatter of hours as opposed tothe months that it took themearlier. NAB is driving a culturalshift by spreading the messagethat improving a company iseveryone’s job.If a company is going tohave a social network,it has to be okay just totalk more openly withinthe company aboutthings.Technology is reallya minor part of theproblem.Yammer:DrivingEmployeeEngagementthroughSocialNetworksDigitalTransformationReviewthings that aren’t working.People may be rewarded forhoarding information as opposedto sharing. It’s not somethingwhere you can just have asocial network and hope that itgives you the benefits you needbecause the technology is really aminor part of the problem.So do you think employeeengagement or adoption can beconsidered as success metrics foran enterprise social network?I think that different companieshave different objectives thatthey try to improve internally.However, I do believe thatemployee engagement andadoption can be used assubstitutes to measure valuebecause social networks requireAt NAB, socialnetworks are drivinga cultural shift byspreading the messagethat improving acompany is everyone’sjob.
    • Digital Transformation Review N° 04 35So, there are different KPIsfor different companies. Thefundamental question is howdoes a company measureinnovation and engagement atthe front-end and that is differentfor each company.DigitalFutureWhat do you see as the future ofenterprise social networking?I think that employees incompanies of all sizes, sectorsand geographies are going tocommunicate internally usinga lot more social tools in thecoming years. There will be asocial transformation and all ourkey digital tools will be aroundsocial networks. It is going to bethe default and fundamental waywe all will work internally.DigitalTransformationReviewYammer:DrivingEmployeeEngagementthroughSocialNetworks
    • Digital Transformation Review N° 04 37DigitalTransformationReviewBeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformationEngagingEmployeesthroughDigital-ADouble-EdgedSwordAsk any executive who hasled an organization through alarge, transformative change,and he or she will tell you thata company’s strategic vision isonly as good as the people behindit. Digital Transformation is nodifferent. Making new digitalways of working stick is a matterof winning the hearts and mindsof people at all levels in theorganization. Instead of offeringresistance, employees who areengaged and invested in a sharedvision of the company’s digitalfuture help make that vision areality.Many of the concepts in theexecutive’s change managementplaybook still apply to DigitalTransformation. But, howexecutives are engaging theirorganizations is dramaticallydifferent. Digital tools helpleaders connect with employeesat unprecedented scale andin new ways. Blogs provide aforum to share regular, candidperspectives and collect feedback.Digital videos help createricher, more personal executivecommunications. Enterprisesocial platforms offer employeesthe opportunity to share theirideas, collaborate with colleaguesand be recognized for theircontributions.Yet these new digital channelsare a double-edged sword;technology often poses oneof the biggest hurdles whenengaging employees in DigitalTransformation. Where differentgenerations of workers havedifferent levels of familiaritywith digital, executives struggleto reach everyone in theorganization. Adoption of digitalcollaboration platforms alsoremains low in many companies(see infographic on page 41),despite significant investment(and considerable hype).Being Digital: Engaging the Organization toAccelerate Digital TransformationBy Andrew McAfee, MIT and Michael Welch, Capgemini ConsultingIT and Capgemini Consulting, as part of their 3-year researchcollaboration, have identified engagement as one of the key successfactors of any Digital Transformation.M101011010010101011010010101011010010A major research initiative at the MIT Sloan School of ManagementSimply put – the bestway to become digital, isto be digital.
    • Digital Transformation Review N° 0438The stakes for digital engagementare high. Capgemini Consulting’sjoint research with the MITCenter for Digital Business showsthat digital engagement is amajor driver of success in DigitalTransformation1. Rather thanjumping headfirst into digitalengagement, executives needto lay the groundwork to makesure those efforts are effective.This means taking a proactiveapproach to many of the commonchallenges that organizationsface, and leveraging strategiesthat many leading companiesare already taking in their ownDigital Transformations.DigitalEngagementPresentsCommonChallengesOver the course of our research,we interviewed over 150executives across a broadrange of industry sectors andgeographies. Many executivesnoted challenges that they facedin engaging their employeesin Digital Transformation.Among these issues, a number ofcommon themes emerged:A Generational DivideYounger workers today have fargreater familiarity with digitaltools and ways of working thantheir more tenured counterparts.Many executives highlighteda growing gap between olderand younger workers in theirexpectations and work habitsaround technology. Whereolder employees face a learningcurve, Generation Y workersare often underwhelmed by thedigital tools available to them.One executive comments, “thesepeople coming into the company,mid 20’s, late 20’s, even early30’s, they do everythingelectronically. They say ‘Comeon, I know the company isover 100 years old, but ourinformation and IT capabilitiesdon’t have to match the age ofthe company!”Executives also noted thatyounger workers are oftenfrustrated by a slow pace ofchange. “The woman that isin charge of our social mediapolicies is pushing, right up to theCEO, saying, ‘We are way behind.You better move now. We areway behind. Move now.’ It’s verypersistent as well. Really trying tobring the company forward”.Finding the rightcommunications strategy,incentives and pace of changeamidst this generational dividehas proven a challenge for manycompanies.1 Digital Transformation: a roadmap for billion-dollar organizations, MIT-CDB and Capgemini Consulting 2011The Digital Advantage: how digital leaders outperform their peers in every industry, MIT-CDB and Capgemini Consulting 2012Come on, I know thecompany is over 100years old, but ourinformation and ITcapabilities don’t haveto match the age of thecompany!BeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformationDigitalTransformationReview
    • Digital Transformation Review N° 04 39of] opportunities aren’t lookingat [our company] for them”.Without the digital talent torealize them, ambitious visionsfor Digital Transformation maylack credibility or – worse –overreach the capabilities of theorganization.Digital Platforms: High Potential,Low AdoptionSome of the executives weinterviewed reported successin using platforms such asenterprise social networks orcollaboration tools; othershighlighted challenges. GivenI need a charismaticquant – somebody who’san influencer and cancarry their weight in asenior meeting, but atthe same time, someonewho could roll up theirsleeves and look at datatables and build modelsand enjoy it.And this issue shows no signsof abating. Within just the nextfew years, college graduatesentering the workforce will haveno memory of life before theInternet. Just as a house dividedcannot stand, a widening digital(and cultural) divide betweenemployees may frustrate effortsto engage the entire organizationin transformation.The Scarcity of Digital TalentDigital Transformation is aboutturning technological potentialinto real business outcomes, andit demands a different mix ofskills. Finding people with equalparts digital savvy and businessacumen has proven a challengefor many of the executives thatwe interviewed. Accordingto one executive, “I need acharismatic quant – somebodywho’s an influencer and cancarry their weight in a seniormeeting, but at the same time,someone who could roll up theirsleeves and look at data tablesand build models and enjoy it”.When these skills do not alreadyexist within an organization,executives also noted difficultyfinding them externally, “Ourrecruiters don’t know where togo find these people, and peoplewho are looking for [these kindsthe investment made in thesesystems, lack of adoption is aserious concern. One CFO states,“We’ve spent an awful lot ofmoney on technology, but I stillsee people working in the oldway”.On the user side, executivesreported a lack of understandingand unclear business value asmajor issues. A leader in thefood service industry explains,“I think people are apprehensiveabout new technologies. Theydon’t understand them, there isa fear of unknown. They don’treally fully understand howthey’re going to drive businessoutcomes”.Executives also pointed outchallenges in managing theimplementation of theseplatforms. When success criteriaare focused on IT deployment,actual user adoption can take aback seat to tactical milestones.Implementation goals definedin terms of active licenses orlive deployment locations missthe true ROI of enterprise socialplatforms: actively engagedusers. The result is a widelydeployed system that no oneactually uses.DigitalTransformationReviewBeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformation
    • Digital Transformation Review N° 0440One hospitality industryexecutive also voiced challengesin shifting technology strategies:“We were looking at one tool.We got a decent user base in it.And then we found out that wedidn’t like their pricing model…And so, we said, ‘OK, we’re goingin another direction now, we’retrying a different tool,’ and [wehad to] to regain the momentumthat we had with the previousone”. When employees haven’tadopted new digital tools, theyoften cannot contribute to animproved business process,much less a successful DigitalTransformation.Management Roles in a DigitalOrganizationNew digital tools, automationof business processes andan increasing role of data indecision-making can increasetransparency in an organization.But, as conversations moveonline and information ismore freely available, someexecutives noted resistancefrom management employees.Managers may view these trendsas a threat to their autonomyor influence. Explaining salesmanagers’ reactions to theintroduction of a real-timereporting platform, one executivecomments,Implementation goalsdefined in terms ofactive licenses or livedeployment locationsmiss the true ROIof enterprise socialplatforms: activelyengaged users.“That kind of transparency,they’re not used to, so there’s aninitial pushback”.Middle managers are often thefront lines of introducing changeto an organization, as they havethe important task of translatinga strategic vision into everydayoperations. Where engagedmanagers can be a cornerstoneof cultural change, resistantmanagers can stop DigitalTransformation in its tracks.Where engagedmanagers can be acornerstone of culturalchange, resistantmanagers can stopDigital Transformationin its tracks.BeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformationDigitalTransformationReview
    • Digital Transformation Review N° 04 41DigitalTransformationReviewBeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformationSuccessfulCompaniesareMobilizingtheirOrganizationsthroughDigitalFaced with common challenges in engaging their organizations, many companies are leveraging similarstrategies to mitigate them. Our recent report: “The Digital Advantage: how digital leaders outperform theirpeers in every industry”, The Digital Advantage also highlighted specific areas where digital leaders arefocusing their engagement efforts as the infographic below illustrates.82% of respondents inleading companies agreed that theircompany is promoting the necessaryculture changes forDigital Transformation.Digital Leaders supporting open conversationsaround Digital TransformationWe are investing in thenecessary digital skillsDigiratiAll OthersDigirati All othersDigirati All others82%38%Digital leaders are proactivelycommunicating the culturalchanges required inDigital Transformation82% of respondents from Digirati agreed, compared to 40% in other firms71% of respondents from leading companies agreed that there areopportunities for everyone in the company to take part in conversationsaround Digital Transformation. A majority disagreed in other firms.82%40%
    • Digital Transformation Review N° 0442Taking leadership onlineGone are the days of executiveshaving assistants print out emailsfor them to read. Today, manydigital-savvy CEOs are activebloggers, podcasters and Twitterusers. Many of the executiveswe interviewed are using similardigital platforms to communicatewith their organizations aroundDigital Transformation. In doingso, they are leading by exampleand setting expectations forthe rest of the organization. Amedical technology companywe interviewed used digitalvideo broadcasts to reportthe progress of a multi-dayexecutive strategy workshop (seeBroadcasting Accountability).Kraft Foods’ employees canaccess podcasts (dubbed “Kraftcasts”) from the CEO and otherexecutives to stay on top of thelatest corporate strategies andbranding initiatives. Accordingto one executive, this allows thecompany to “communicate withour employees in a way that ismore visual than having them sitand read text”2.Inviting contributionsAccording to our research,the strategic vision for DigitalTransformation must be led fromthe top. However, the collectiveingenuity of the “crowd,” canbe an insightful source offeedback as well as a powerfultool to engage employees.2 http://www.apple.com/iphone/business/profiles/kraft-foods/3 MIT-CDB and Capgemini Consulting researchBroadcastingAccountabilityA medical technology companywe interviewed hosted closeto 300 executives and seniormanagers in a multi-daystrategy workshop. Eachafternoon, the companyrecorded digital video debriefsfrom executives sharingwhat was discussed and whatdecisions were made. Thesevideos were then broadcastto the rest of the organizationso employees could followthe progress of the workshop.Moreover, the broadcasts helpedhold the attendees accountablefor the decisions and actionsthat were taken in the session.According to one attendee,“You’re broadcasting, ‘Here’swhat we’re working on, day one’back to their organizations. Sowhen [executives] walk out ofthe meeting, people know thatthey were there and what theywere working on. And all of asudden the organization has anexpectation of follow-up. It’sreally interesting”3.BeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformationDigitalTransformationReviewGone are the days ofexecutives havingassistants print outemails for them to read.Today, many digital-savvy CEOs are activebloggers, podcasters andTwitter users.
    • Digital Transformation Review N° 04 43DigitalTransformationReviewBeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformation4 Capgemini Consulting and MIT-CDB, The Digital Advantage: how digital leaders outperform their peers in every industry, 20125 Management Exchange, InnovationLive: Engaging 3M’s Global Employees in Creating an Exciting, Growth-Focused Future, 20116 Digital for all, L’Oreal websiteto trade digital know-how forcareer coaching (see Bridging theGenerational Divide). L’Oreal,a global cosmetics firm, alsolaunched its own “Digital ReverseMentoring” program. As part ofits “Digitall” campaign to raise“digital IQ” across all employeesOnline innovation contests oraward programs give employeesthe opportunity to contributefeedback or new ideas; they alsogive leaders the opportunity topublicly recognize and rewardengagement. For example,Codelco engaged its employeesearly through innovationcontests to foster a culture ofchange4. Similarly, 3M leveragedEnterprise 2.0 technologiesto “crowdsource” ideas fornew market strategies fromthousands of its employees (seeCrowdsourcing Engagement).Driving change with new rolesand relationshipsOne of the most effective vehiclesof change in an organizationcan be employees themselves.Companies are leveraging theirdigital “champions” throughboth informal and formal rolesto facilitate skills transferand engage the rest of theorganization. A medical devicecompany paired GenerationY team members with moretenured managers and executivesand brands, the companypaired 120 younger workerswith management committeemembers. The pairs workedtogether to identify trendsand understand new customerbehaviors6.Crowdsourcing EngagementTo innovate the way it conducted strategic planning and engageworkers, 3M turned to Enterprise 2.0 tools and crowdsourcing.The company hosted an online innovation jam, dubbed“InnovationLive,” and invited over 20,000 employees from its Sales,Marketing and R&D units. Over the course of the two-week event,3M collected 736 ideas, 6,799 votes and 1,084 comments frommore than 1,200 participants in over 40 countries. By the end of theevent, the company had identified nine new strategic opportunitiesand made a significant impact on employee engagement. In fact,the InnovationLive format itself was the most discussed “idea” ofthe event. Reflecting on the event, one participant stated, “....Thishas been an absolutely amazing exercise. For one thing, it certainlymade me feel part of the global 3M and showed me that one’s ideas,comments, vote is important to the potential solutions that couldaffect in a POSITIVE WAY our economics, people, lifestyles, planetand urbanization…Thank you ever so much for the opportunity toexpress my view, comments and ideas”5.
    • Digital Transformation Review N° 0444Formal, dedicated roles canalso help drive engagementin Digital Transformation.Prisa – a major Spanish mediacompany – unified differentregional operations under acommon strategy and platformby formally naming a ChiefDigital Officer in each region.These individuals liaise with thecompany’s central digital unit toalign top-down digital strategieswith regional requirements. Indoing so, they also ensure thatregional operations remainengaged and that their needs andcontributions are represented atthe corporate level.Management Roles in a DigitalOrganizationTo meet the growing need fortechnical and managerial skillsin new digital disciplines, manycompanies are making significantinvestments in digital skills.Procter & Gamble establisheda baseline for all its employeesthrough a “digital skillsinventory,” and set proficiencyexpectations for specificroles and career progression7.Similarly, Pepsi launched its“digital fitness” program to keepits marketers’ digital skills up topar. According to one executive,“There’s a gap, and we have towork relentlessly to close thatgap. We’ve looked for a way todescribe it, and that’s fitness. Youcan’t just work out once”8.7 Forbes, The Matrix of Soap, 20118 AdAge, Digital Fitness Is Latest Craze in Building up Your Marketing Ranks, 2011BeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformationDigitalTransformationReviewPrisa – a major Spanishmedia company –unified differentregional operationsunder a commonstrategy and platformby formally naming aChief Digital Officer ineach region.There’s a gap, and wehave to work relentlesslyto close that gap. We’velooked for a way todescribe it, and that’sfitness. You can’t justwork out once.
    • Digital Transformation Review N° 04 45Kick-startingDigitalEngagementDigital Transformation is oftena multi-year journey, andbuilding employee engagementbehind it takes time. Winningthe employees’ hearts and mindswill not happen overnight.Once executives have defineda vision for leading DigitalTransformation, they shouldbe proactive about engagingemployees. The followingchecklist includes actions thatexecutives can take tomorrowmorning, as well as others tothink about within the next sixmonths:Tomorrow morning:Start (and sustain) a two-wayconversationBlogs, internal social networks,and streaming video representmore than just a biggermegaphone. The real value ofthese platforms is in their abilityto capture feedback and facilitate9 MIT-CDB and Capgemini Consulting research10 AdAge, Digital Fitness Is Latest Craze in Building up Your Marketing Ranks, 2011Bridging the Generational DivideTo bridge the generational divide between employees, the samemedical technology company introduced an informal “XYZnetwork”. Within this network, employees pair with colleaguesfrom different generations to share their respective experienceswith one another; senior employees provide career coaching, whileyounger employees contribute digital skills and perspectives onhow to leverage technology better. Describing the junior membersof the group, one executive says, “We’re really attempting tobe responsive to that group. They have a whole different set ofexpectations about what information they need to do their job, howthey want that information, and just as importantly, how they wantto communicate with others in the company”9.Keeping (Digitally) FitAcknowledging a widening gap between society’s use of digitaltechnology and the digital skills inside the organization, Pepsihas instituted a “Digital Fitness” program for its marketing teams.The program leverages online learning courses and hands-on“experimental” sessions to keep Pepsi’s marketers up-to-date onthe latest digital tools. According to one executive, “As we look atwhere our customers are going in the future, [we realize] everythingfrom supply chain to sales needs to understand how to operate inthis digital world. And it’s going to happen really quickly. It’s not 20years out, it’s four years out”10.DigitalTransformationReviewBeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformation
    • Digital Transformation Review N° 0446discussion with employees.Executives should leverage oneor more of these channels tofoster an open online discussionwith employees. Not only isthis “leadership by example”good practice, it engagesemployees and can help leadersmaintain a finger on the pulseof the organization as thetransformation progresses.Be upfront about requiredcultural changesThere is no way around it: newdigital ways of working willrequire cultural changes in manyorganizations. According to anexecutive at Prisa, “If there’sany one thing that’s going toaccelerate the change in thisorganization and develop a one-team culture, it is the degree oftransparency”. Address requiredcultural changes head-onand discuss expectations withmanagers and other affectedgroups.Identify your digital championsDigital Transformation shouldbe driven top-down, but itsstrongest ambassadors will oftennot come from senior ranks in theorganization. Identify the teammembers with digital acumenand position them to share theirknowledge and enthusiasm withcolleagues. Where new formalroles (e.g. Digital Liaisons) areneeded, understand how theseindividuals can contribute toyour digital governance strategy,in addition to being agents ofchange11.Over the next month:Create opportunities for people tocontributeTap into employees’ innovativepotential, and simultaneouslyprovide them an opportunityto become invested in DigitalTransformation. Launch aninnovation contest or awardprogram to recognize and rewardengagement in your DigitalTransformation.Raise the bar for digital skillsEmployees can only engage inDigital Transformation if theyhave the right digital skills. Raisethe expectations for all employeesaround digital skills – not justthose whose roles will be mostimpacted. Identify where digitalskill gaps exist and make thenecessary investments in training,internal support communities orexternal hires.11 MIT-CDB and Capgemini Consulting, For more information on formal digital leadership roles, see “Governance: a central component of successful DigitalTransformation”, 2012BeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformationDigitalTransformationReview
    • Digital Transformation Review N° 04 47Within the next six months:Provide the Right IncentivesOrganizational culture andindividual behaviors are difficultto change without the rightincentives in place. Identify whichlevers are the most effective, adaptreward systems, and communicatechanges openly. At senior levels,tying personal performanceKPIs to Digital Transformationmilestones can help focusexecutive attention.Focus on Behavior Change, NotToolsIntroducing digital collaborationplatforms needs to focus onusing the tools, not having them.Measure success and frame KPIs interms of actual user adoption andactivity on the platform, not interms of how widely available orfeature-rich the tool is. Executivescan also leverage creative newsolutions to sustain adoption. Forexample, “gamifying” new digitaltools by embedding rewards,achievements and recognitioncan create a more engaging userexperience14.12 Case Study: EMC Drives Employee and Customer Engagement with Badgeville, Presentation by Tyler Altrup13 Case Study: EMC Drives Employee and Customer Engagement with Badgeville, Presentation by Tyler Altrup14 Capgemini Consulting, For more information on the potential of game mechanics to accelerate user adoption, see “Let the Games Begin: Using GameMechanics to Drive Digital Transformation”, 2013Winning the Adoption GameHigh-tech company EMC had implemented an enterprise socialplatform, called the EMC Community Network (ECN), to connect itsecosystem of employees, partners and customers. But, getting usersto adopt and use the platform proved a challenge. EMC embeddedgame mechanics through a program it called “RAMP” (RewardAwards and Motivation Program) to increase overall activity on theplatform and reward desired user behaviors.The company piloted this “gamification” strategy during its annualEMC World conference, with the goal of making the event “a moreinteresting, more engaging, online-connected-to-offline experiencethan it’s ever been before”12. To do this, the RAMP team prioritizedthe real-world attendee behaviors they wanted to promote, anddesigned corresponding game mechanics and rewards into the ECN.For example, the team designed check-in “missions” to encourageattendees to visit multiple event booths. By the end of the event,more than 350 attendees had earned ECN profile achievements forchecking-in at fifteen or more booths.Since the integration of RAMP into the EMC Community Network,the company has seen a nearly 20% increase in communityinteractions and profile page views have more than quintupled13.It has also extended RAMP integration to EMC|One, its internalemployee community, as well as external social media channels.DigitalTransformationReviewBeingDigital:EngagingtheOrganizationtoAccelerateDigitalTransformation
    • Digital Transformation Review N° 0448A US insurance giant was struggling with inefficient claims processing leading to longturnaround times for its customers. It wanted to streamline its complex processes andused a gamified social innovation tool to draw ideas from its employees. The initiativesaw self-driven participation without any attached reward component. The chanceto collaborate on simplifying their workflow was the primary driving factor for theparticipants. The activity resulted in a new, simplified process, which saved the company$18 million a year and increased worker satisfaction1.Over-hyped or duly justified, enterprise gamification — the application of game designtechniques to a business setting in order to make tasks more fun and engaging — isgarnering attention from business leaders, world over. Enterprise gamification is expectedto exponentially increase over the next couple of years. Research indicates that by 2015,more than 40% of global 2000 organizations will have at least one application wheregamification will be used2.Gamification is an Enabler for Digital TransformationWhile organizations have ramped up their investments in digital tools and technologies,two-thirds of digital transformation projects fail mainly due to workforce behavioralissues3. Our research with the MIT Center for Digital Business indicates that 55% ofcompanies surveyed cited company culture, particularly employee resistance to jobchanges, to be a major hurdle to digital transformation4.We believe that enterprisegamification, when designed and implemented effectively, can help accelerate digitaltransformation by driving employee engagement and supporting change management.1 Gamification Facts & Figures: www.enterprise-gamification.com2 Gartner, “Gartner Predicts Over 70 Percent of Global 2000 Organisations Will Have at Least One Gamified Application by 2014”, November 20123 Capgemini Consulting, “Transform to the Power of Digital - Digital Transformation as a Driver of Corporate Performance”, 20114 Capgemini Consulting and MIT Center for Digital Business, “Digital Transformation: A Roadmap for Billion-Dollar Organization”, 2011Why Gamification Matters Now?WhyGamificationmattersNow?DigitalTransformationReview
    • Digital Transformation Review N° 04 49Badgeville: Helping Companies to BetterEngage with EmployeesBadgeville is one of the leading vendors of gamification platforms thathelp businesses measure and influence user behavior through theusage of game mechanics. The company, based in Redwood, California,was founded in 2010 and has over over 250 customer organizations thatemploy its solutions. Capgemini Consulting spoke to Kris Duggan, Co-Founderand Chief Strategy Officer of Badgeville.KrisDugganCo-FounderofBadgevilleGamification helpsaddress a key challengewith employees andcustomers - improvingengagement levels.Interview with Kris Duggan,Co-Founder of BadgevilleGamificationTechniquesforEnterprisesGamification is the flavor of the season. Why do you thinkorganizations are looking towards it?There are two fundamental changes that are leading to the rapidadoption of gaming techniques. The first change is the impact thatdigital footprints and evolving technologies are having on the behaviorthat we are trying to drive. Behaviors that were difficult to measureearlier can now be tracked and measured. For instance, in the pastcompanies determined customer loyalty by only focusing on a behaviorof repeat purchase. But today, with the use of digital tools, we are ableto determine what customers purchase, review, refer and whether theypurchase across multiple product categories. So, there are multiple setsof behaviors that we can now actually examine and use to determinecustomer loyalty.DigitalTransformationReviewBadgeville:HelpingCompaniestoBetterEngagewithEmployees
    • Digital Transformation Review N° 0450The other fundamental changeis how digital technologieshave expanded traditionalways of incentivizing users foradopting desired behaviors. Inthe traditional arrangement,the reward program was onlyabout discounts, coupons andsavings. But now companies arerecognizing that there can be alot of other rewards and some ofthem can entirely be intangible.These are things like status,reputation, expertise, recognition,and privileges. So there is anexpanded set of rewards andincentives that marketers canuse to improve customer loyaltyor managers can apply to driveemployee productivity.What are some key benefitsthat organizations can aim toachieve through usage of gamingtechniques?Gamification addresses one of thekey problems that organizationsare facing with both theircustomers and employees today;the challenge of improvingengagement levels. The keybenefit of gamification on thecustomer side is that it helps inimproving customer relationshipand loyalty. On the employeefront, it is more about enhancingemployee productivity andbuilding more productive teams.Are these business benefits easilyquantifiable?It depends on how you wantto measure the gamificationprogram. It is aboutunderstanding the behaviorsthat you are trying to drive.So if you want to increase thefrequency of some desiredbehavior then I think it is easilymeasurable. Using analyticswe can compare the increase infrequency of a particular activity.Typically, implementation ofgaming mechanics on top ofexisting systems results in about30% - 50% increase in thefrequency of activities. Take thecase of Autodesk (see Exhibit 1overleaf). It registered increasedengagement levels in terms of10% more trial downloads and40% increase in trial usagethrough usage of gamificationtechniques. Similarly, Samsungrecorded a 500% increasein reviews and 200% morecomments across the site bygamifying their corporate website(see Exhibit 2 page 53).On the internal process efficiencyfront, gaming techniques canhelp in optimizing specificworkflows. It can be about howto ensure that people submit theirexpense reports on time or tomake them use a new software.ImpactonDigitalOrganizationHow does the implementation ofgamification techniques impactthe role of managers?The two fundamental changesthat we discussed make it aninteresting time for managingcustomers and employees. Now,managers have to prioritizewhat kind of behaviors theywant to motivate – qualitativeor quantitative and how theyshould be measured. They alsoneed to select the right rewardsystem – be it about expertise,reputation or recognition andhow to effectively implement it.These are the key challenges formanagers.Badgeville:HelpingCompaniestoBetterEngagewithEmployeesDigitalTransformationReview
    • Digital Transformation Review N° 04 51DigitalTransformationReviewBadgeville:HelpingCompaniestoBetterEngagewithEmployeesBackgroundAutodesk, a leading 3D design and engineering software company, wanted to provide an engagingexperience for software trial users. Due to the complexity of Autodesk’s software, a user license canbe a significant investment, making software trials a critical component of a customer’s purchasingdecision. With millions of online visitors every week looking for software trials, the company intendedto reward and encourage these users to explore the robust features and functionality of its software.InitiativesAutodesk included game mechanics to create a new software experience for trial users. Utilizinggamification techniques, the trial was contextualized within a ‘race-against-time’ narrative.Participants competed against their peers to earn the most ‘Points’. The top performers receivedAutodesk’s Entertainment Creation Suite.Autodesk identified and configured the key behaviors it wanted to drive with gamification elements.For instance, the company designed a series of learning tracks or ‘Missions’ to guide users throughthe various features of software. Users were rewarded with points and ‘Achievements’ for completingmissions or specific behaviors. They could also share their achievements on social networks such asFacebook and Twitter to earn additional points. A ‘Leaderboard’ showed trial users how they rankedagainst their peers and who won the game.BenefitsAutodesk created their 30-day trial into a more engaging and fun experience by using game mechanics.The company registered increased engagement levels in terms of 10% more trial downloads and 40%increase in trial usage.Exhibit 1: Autodesk Registered 40% Increase in SoftwareTrial Usage with Gaming Mechanics
    • Digital Transformation Review N° 0452engagement and thus yield betterbusiness results.So what kind of advice wouldyou give to companies thatare starting their gamificationinitiatives?The key advice would be to getstarted and do something now.They need to understand the twofundamental concepts – whatare the behaviors that they aretrying to derive and what are thecombinations of rewards they canprovide. The first year could beabout experimentation, learningwhat works. The second year isabout applying the learning. Thethird year can then be a potentialrollout, but it is going to takemultiple years to master gamingconcepts. Also, the requiredexpertise and technologies inthis space are still limited anddeveloping.AcceleratingDigitalTransformationDeployment of digital tools istypically a drawn-out process.What role does gamification havein a digital transformation?Gamification concepts shouldbe bundled early-on whileimplementing any digitalinitiative in an organization. Ibelieve that gamification is likean insurance policy because ifpeople do not use your digitaltools and there is no adoption,then there is no business result.In order to get business results,you need adoption. Gamificationhelps in changing people’sbehavior by offering them aplatform to do what motivatesthem and thus drives overalladoption of digital tools.Who does gamification appeal tomost? HR, business managers oris it the CIO?It boils down to any leader witha defined goal. For example, asales leader wants to ensure thatthe CRM has been used and anHR leader tries to drive adoptionof training programs. In essence,most department leaders careabout adoption. They might notcall it adoption but would needtheir employees to be productive.In most organizations, CIOs aretypically responsible for overalladoption of business systems.They would be most interestedin gamification as there arelarge numbers of unused andunderutilized enterprise software.For instance, researchers haveestimated that billions of dollarsare wasted annually on unusedsoftware licenses. So if we canidentify these systems and adda gamification layer on top,they can drive adoption andCompanies needto understandbehaviors that theyare trying to deriveand combinationsof rewards they canprovide.Mastery of gamificationconcepts will takemultiple years.Badgeville:HelpingCompaniestoBetterEngagewithEmployeesDigitalTransformationReview
    • Digital Transformation Review N° 04 53BackgroundSamsung.com acts as a central portal for customers to check thousands of products and read andwrite reviews. Social sharing functionality is embedded throughout the website and the ‘Bazaarvoice’conversations platform provides user generated content alongside each product. The website registeredmillions of users per month but its design was catalog driven. Most users visit the website to research forpurchase validation before going to the store and then didn’t return. In other cases, they accessed the siteto voice a complaint or ask a support question. So, Samsung customers needed a compelling reason tocome back to the site. Moreover, the company wanted to leverage customer advocates and get them topromote Samsung products to their network.InitiativesSamsung rolled out a social loyalty program, Samsung Nation, based on gamification. Using gamingtechniques the company identified key customer behaviors it wanted to measure, recognize and rewardacross the Samsung.com portal. The company also integrated the ‘Bazaarvoice’ conversations platform toreward customers for submitting reviews or commenting on product Q&A. Also, to maximize customerengagement across the site, Samsung identified the key motivators of its customer base that visited thesite. They then build engagement mechanics in the platform that mapped these needs.They rewarded customers with ‘Points’ for performing key behaviors and scaling them appropriately basedon the effort required to do them. A ‘Leaderboard’ displayed the users with leading points. There, customeradvocates could check their name, rank and status and be eligible for product coupons at the end of eachmonth. Customers could also earn ‘Achievements’ for demonstrating loyalty and aptitude in multipleproduct areas.BenefitsThe gamification program helped Samsung to turn passive Web visitors into brand advocates thatsupported Samsung in user-generated content and through sharing on popular social networks. Sincedeploying Samsung Nation, Samsung.com has quadrupled its number of customer advocates to more than50,000 at present. Further, the company recorded a 500% increase in reviews and 200% more commentsacross the site. This resulted in improved engagement and critical conversations around the company’sproducts on the ‘Bazaarvoice’ platform, that drive product purchases.Exhibit 2: Samsung Benefited with Four TimesMore Brand Advocates Using GamificationDigitalTransformationReviewBadgeville:HelpingCompaniestoBetterEngagewithEmployees
    • Digital Transformation Review N° 0454Increasingly,organizations willstart investing inengagement managersor similar positions.Gamificationrequires an ongoingcommitment.Is game fatigue a real challengefor organizations and how canthey overcome it?I believe that if you do nothave gamification then manyimportant tasks would be boringand non-engaging. Organizationscan deliver better results interms of engagement by addinggaming mechanics and we haveclear business cases to support it.However, gamification requiresan ongoing commitment as itis a program and not anotherproject. Organizations need todefine responsibilities to manageits demand, rules, content andexperience. They also need toupdate it continuously becauseif everybody levels up or reachesthe maximum stage then theyhave won and it is game over. Butif you keep adding more contentand layers then you keep themengaged. This is one of the majorreasons we do not see gamefatigue as a challenge.DigitalFutureHow do you see gamificationworking its way inside theenterprise?Going forward, I believe thatan individual’s performanceinside gamification programswill be tied to tangible thingssuch as the career path insidean organization, promotionsand ultimately compensation. Inaddition, today we are talkingabout gamification of onedepartment, whether sales, HRor collaboration tools. But overthe next few years I believe mostdepartments will get gamified.Then we are going to see differentkinds of point and rewardsystems inside one company.For instance, I picture a worldwhere there is a profile page ofthe employees and it shows all ofthe systems that they are using.It will also display all of theirachievements, levels and scoring.What is your vision for the futureof gamification?I think over the next 5-10 years,it won’t be called gamification.I do not know what it wouldbe called, maybe behaviormanagement or something aboutengagement. But I think thatgaming concepts are going tobe very critical for companies. Ibelieve that organizations willstart investing in engagementmanagers or similar positions.Today, it seems 1 in 100companies are interested inbuying a global reputationsystem for the entire company. Ithink in the next few years 30 to50 companies out of 100 wouldbuy global enterprise reputationsystems to enhance gamingcapabilities.Badgeville:HelpingCompaniestoBetterEngagewithEmployeesDigitalTransformationReview
    • Digital Transformation Review N° 04 55What are the Key Success Factorsfor Enterprise Gamification?Enterprise gamification plays a crucial role in helping address the firm’scultural and skill-based gaps for a successful digital transformation. Based onour experience, there are six distinct key success factors that determine theadoption/failure of gamified processes.Identify a clear goalGamification finds its applicationacross multiple business areas-engagement, compliance, andlearning. However, organizationsshould ideally pick only one goal at atime in order to achieve best results.Picking multiple focus areas forapplication of gamification dilutesthe goal of a gamified environment.Define the user group upfrontUnderstanding the behavior of thepeople performing the task, their skilllevels and abilities, their intrinsicand extrinsic motivators and theirtriggers will aid in choosing theright game mechanics and keepingthe players engaged. For instance,motivation and rewards for a groupof senior research scientists wouldtypically be different from those ofcall-center employees.Key Success Factors for Enterprise GamificationKeySuccessFactorsAdopt anIterative ApproachIdentifya Clear GoalContinuouslyMeasureand AdjustSet up InternalCapabilitiesDefinethe UserGroupProactivelyManageGameCompletionDigitalTransformationReviewWhataretheKeySuccessFactorsforEnterpriseGamification?
    • Digital Transformation Review N° 0456Set up internal capabilitiesfor gamificationGamification is more than justimplementing a digital tool.It is a capability that requiressignificant investment in people(game designers, developers, andchange managers), processes(methodology, performance) andtechnology (gaming platforms,analytics)1. Firms need toplan along these aspects andevaluate which capabilities needto be built in-house, which topartner for and identify peopleto champion the gamificationinitiative internally in orderto effectively implementgamification.Continuously measure andadjustFirms need to put in placethe systems and processesto capture and accuratelyinterpret gamification data.Measuring output from gamifiedapplications is an ongoingeffort and is needed to ensurecontinued relevance and tomonitor and adjust gamificationapplications. Continuousmeasurement of results,such as adoption rates, gameabandonment stage, numberof visits in a day, etc. providesinsights into the efficacy ofthe gaming mechanics. Thisallows for real-time tweakingof gamification parameters(levels of complexity needed,collaboration, point systems, etc.)leading to higher success rates.This continuous measurementis also essential for periodicbenchmarking against predefinedperformance parameters and forunderstanding ROI impact.Proactively manage gamecompletionEach gamification initiative hasits own shelf life but eventuallyengagement of the user groupdeclines over time as “gamefatigue” sets in. Good gamemechanics design and continuousfeedback help determine theoptimal time for running theinitiative. Subsequently, thecompletion should be managedproactively and quickly toprevent active disengagement or“loyalty backlash”.Adopt an iterative approachto gamificationInitial failures in gamificationare OK and should be embracedas learning experiences.Gamification is a complex areawhich needs customized gamemechanics based on the goal andthe user group. It is usually notpossible to achieve the desiredresults in a one-shot manner,but requires an approach ofconstant feedback, adjustmentand learning. Development of aculture of testing and iterativelearning is key to the creation ofa digitally-enabled enterprise.Enterprise gamificationrequires thorough planning,considerable investment andmanagement commitment. Byaltering organization culture,gamification has the potentialto change the overall employeeexperience. The scope ofgamification, in an enterprisecontext, can indeed be vast –from recruitment right up tomanaging alumni networks.There are pitfalls to getting itright; however, the benefitsclearly outweigh implementationchallenges. We believe thatgamification and DigitalTransformation are a winningcombination that firms cannotafford to ignore.1 Bala Iyer, “Understanding Gamification: From Commercial to Social”, February 2012WhataretheKeySuccessFactorsforEnterpriseGamification?DigitalTransformationReview
    • Companies to Watch:View from Silicon ValleyBy Sergi Herrero, CEO, L’Atelier BNP Paribas USAAsthmapolis:Track asthmasymptoms thanksto inhalatorsPeek:Get local help to“book amazingthings to do”According to the Center for Disease Controlaround 26 million peoplesuffer from asthma in the USA. Every year,the USA spends $50 billion on medical costs.Another $6 billion can be added to this amountdue to indirect costs resulting from misseddays of work and school. A large part of theseexpenses are due to insufficient use or misuseof asthma inhalers.Asthmapolis has developed a technology thatcan help asthma patients successfully followtheir treatment with doctors being able toeffectively monitor their patients. Thanks toa little sensor placed on the top of the inhalerand linked to a mobile application, patientscan better control how they use their inhalersand doctors can advise them on proper usage.Moreover, the app is able to collect precise dataon environmental conditions under which thepatients used their inhalers and thus improveresearch in this field.In 2012, people all overworld took 6.8 billion trips.According to the ITB World Travel TrendsReport, Domestic Travel was to grow by 2%reaching 5.77 billion trips, while internationaltravel was expected to increase by 4% to1.03 billion trips. Of all these trips, 54% werebooked over the Internet while travel agenciesaccounted for 24% of these reservations.Peek has transformed this industry to give it amore local and social flavor. When people booka trip their first concern is about how to get totheir destination and where to stay. However,they might find it challenging to identifyplaces of interest and holiday activities. Peekhas taken the challenge to put local peoplein contact with tourists in order to help themdiscover places of interest while providingthem with useful travel advice so that theyhave a glimpse of what the true country lookslike.DigitalTransformationReviewCompaniestoWatch:ViewfromSiliconValleyDigital Transformation Review N° 04 57
    • Digital Transformation Review N° 0458artha Lane Fox is the UK Digital Champion. She co-foundedLastMinute.com, an online travel and gift business, in 1998. The company went public in 2000 and was acquired by Sabre Holdingsin 2005. Capgemini Consulting spoke with Martha to understand her role andhow digital can help governments drive change.UK Digital Champion: Driving a NationForward with DigitalMarthaLaneFoxUKDigitalChampionInterview with Martha Lane Fox,UK Digital ChampionDigitalChampionHow would you define the role of the UK digital champion?This role involves two key responsibilities. The first part is aboutencouraging and thinking of ways to help the millions of people inthe UK who do not have digital skills and acquaint them about thebenefits of getting online. The second part is more internally focused ongovernment operations. It is about how the government can use digitaltechnologies to deliver public services more effectively.M16 million people don’thave basic digital skillsin the UK.UKDigitalChampion:DrivingaNationForwardwithDigitalDigitalTransformationReview
    • Digital Transformation Review N° 04 59DigitalTransformationReviewUKDigitalChampion:DrivingaNationForwardwithDigitalonline applications. Addressingthe challenges of the 16 millionpeople who don’t have basicdigital skills is the emphasis ofthis initiative.So, we think just being online oroffline is too simplistic a measureand you want to get the benefitof being online. The objectiveof ‘Go ON UK’ is to have everyindividual and small business tohave the skills and confidence tobenefit from new digital services.How do you influence thegovernment to implement digitalinitiatives?We can influence at multiplelevels. Over the last four years Ihave talked to many ministersand civil servants about whatwe are doing. I tried to showthe cost effectiveness of digitalinitiatives as the spending partcan have the biggest influenceon the government. Finally, I usethe media to put pressure back ongovernment. I feel it’s importantto build a coalition of support toinfluence government authoritiesand accelerate digital initiatives.How has the focus on digitalinclusion evolved over the lastfew years?We have got a broad coalitionnow with many business partnersin our initiative, which is nowcalled ‘Go ON UK’. This hashelped in shifting the focus fromjust being about whether peoplehave gone online or not to alsoimproving their basic digitalskills. There are many peoplewho have never been online butwhose lives can be made simplerby using these digital skills. Someof these skills include the abilityto use a search engine, send andreceive emails, and completeWhat was the rationale behind thecreation of this role?In 2009, I was appointedby the government to helpdisadvantaged groups go online.At the time there were 11 millionpeople who had never been onlineand we wanted to bridge this‘digital divide’. The authoritiesdecided that they needed someoneto focus on digital inclusion. Thisbecame the genesis of my roleduring that time. A year later,in 2010, the new governmentexpanded my role to advise onhow delivering public services onthe Internet can help to streamlinethese services while getting morepeople online.How do you interact with thegovernment on digital matters?Initially, the government wasinvolved in kick-starting thecampaign. However, as withmost quasi-autonomous non-governmental organizations, oncethe public money started to dryup, the commercial sector steppedin. Gradually, my role has becomemore autonomous. Of course Istill report to the Prime Ministerfrequently and we have joint-conferences and events with otherministers to discuss their digitalagendas.The role of the UKdigital championinvolves tworesponsibilities: helpingthe millions of peoplein the UK who donot have digital skillsand advising thegovernment on thedelivery of digital publicservices.
    • Digital Transformation Review N° 0460DigitalTransformationforCountriesThe UK is well positioned in thedigital space as compared toother countries. For example,The World Wide Web foundationplaced the UK at number 3 outof 61 countries in its Web Indexresearch. What do you think arethe major reasons behind thislead?I believe there are a number ofreasons for this achievement.First, being an English speakingcountry plays an importantrole in our success. We havehad the advantage of manyUS-based digital companiesexpanding here first and drivingthe digital market. For instance,Amazon’s expansion in the UKhelped grow a number of smallbusinesses in the digital domain.Second, we have relatively goodinfrastructure and we had startedtransforming the telecom sectorearly on. The initial deregulationpolicies encouraged competitionand improved infrastructure,which proved beneficial to digitalgrowth. Finally, it may soundsurprising but, I would say thatA reliable networkinfrastructure, digitalskills and businesscapabilities are the threelevers countries shoulduse to drive their digitaltransformation.the BBC’s reach has helped createand drive digital services growth.Due to the BBC’s extensivepresence there has always beengood local digital content thathas driven people online.Based on the UK’s experience,what are the key levers that acountry can utilize to drive itsdigital transformation?I think there are mainly threelevers that are important. First,it is about having a reliablenetwork infrastructure, whetherwireless or wired broadband. Theability to stay connected to anetwork at some minimum speedis vital.Secondly, I would consider digitalskills as another very importantfactor. You need to place anemphasis on the disadvantagedcommunities and help themacquire these skills to benefitfrom being online. This requiressetting-up training networksacross the country. For instance,we have established a network ofonline centers in the UK. Thesecenters are effective in reachingthe disadvantaged communitiesand it can be an interesting leverfor other countries too.Finally, it is about buildingbusiness capabilities. It isimportant that the governmentencourages more privatebusinesses to drive digitizationacross sectors, including smallerbusinesses. For instance, a seniorpolicy advisor in the UK put a lotof emphasis on digital start-ups.UKDigitalChampion:DrivingaNationForwardwithDigitalDigitalTransformationReview
    • Digital Transformation Review N° 04 61But I think that the governmentcan also play an important rolein the adoption of digital skillsthrough a renewed emphasis bothin schools and supporting onlinecenters.Governments should also takeadvantage of digital technologiesto deliver simpler and moreeffective services to users. Forinstance, the UK governmenthas set up a team, which isfocusing on delivering digitalpublic services as part of thegovernment digital initiative.It involved creating a ‘gov.uk’site, which is a central portalfor all government services andinformation. The UK is becomingone of the leading countriesin how it has approached itsdelivery of multiple digitalservices.DigitalVisionanditsMeasurementYou have discussed multipledigital initiatives that the UKgovernment has launched. Couldyou highlight the key digitalpriorities of the government?In the same context, the role ofthe government in improvingnetwork infrastructure is evident.How can governments help driveimprovement across these areas?I might be biased but I do thinkthat having a role such as‘Digital Champion’ is helpful forcountries. So, I would encouragegovernments to find a digitalchampion. Each country mayhave its own viewpoints onwhat this champion should do.Some may include changingthe infrastructure for socialdevelopment while others maychoose to develop digital skills,which I opted for. It is helpful tohave someone with technologyexperience who is outside thegovernment.Having a digitalchampion withtechnology expertiseand who is outside thegovernment will helpcountries accelerate theirdigital transformation.Although we rate wellon the creation of start-ups, we are strugglingto create scale of digitalbusinesses when theystart hitting the £100million mark.I may not be the best personto talk about that as my role isoutside the government. So, I canshare my opinion about a fewkey priorities. The government isplacing an emphasis on creatingmore digital start-ups. A “digitalby default” agenda is also a keypriority to create better publicservices using the governmentdigital services. However, I wouldargue that the government isnot placing the same emphasison the adoption of digital skills.So, through ‘Go ON UK’ weare attempting to capture thecorporate sector interaction andcombine it with the public sectorinitiatives to drive digital skillsadoption in the UK.DigitalTransformationReviewUKDigitalChampion:DrivingaNationForwardwithDigital
    • Digital Transformation Review N° 0462DigitalFutureThe scarcity of talent arounddigital technologies is one ofthe major issues that companiesand governments will continueto face over the next few years.What do you recommend forcountries such as the UK toattract the best digital talent?We have to do both – attract andgroom talent within the countryand that is an ongoing process.We also need to place moreemphasis on both digital skillsand creativity. It is important totrain students on this early on- in schools - to be a successfuldigital country in the future. Forinstance, countries such as SouthKorea and Estonia have followedthis more effectively than we areable to do. Education of that typeis considered fundamental inthose countries.In the same context, I also thinkthat we need to encourageentrepreneurs to start upbusinesses in the UK, particularlye-business ventures. But wedon’t only need entrepreneurs,we also need people who havethe experience of scaling-upWe should be lookingat countries such asSouth Korea andbuild a world-classinfrastructure.Teaching digitalskills in schools isfundamental. Countriessuch as South Korea orEstonia are doing iteffectively.So what are the major challengesthat authorities in the UK arefacing while working towardsthese priorities?I think that despite majorchallenges we have done wellin the UK. However, 16 millionpeople lack the basic digital skillsto fully benefit from Internetusage. Another challenge is thatwe don’t create scale of digitalbusinesses when they start hittingthe £100 million mark, althoughwe are rated well on start-ups.So, for me the emphasis now is tobuild a world-class infrastructureand we should be looking atcountries such as South Korea forinspiration. To me, there is still along way to go before becominga digitally world-class nation.the businesses. Such initiativeswill help us in developing andretaining digital talent.Going forward, how do you seeyour role as a digital championevolving in the coming years?At present, I am not sure howthis role will evolve. But I thinkthat there is still a significantopportunity for an independentrole, such as Digital Champion,to highlight and act on the keydigital trends. The key task forthe next stage of developmentwould be to roll out majortransactional services acrossplatforms. Online transactionalservices present the biggestopportunity to save people’s timeand the government’s money.UKDigitalChampion:DrivingaNationForwardwithDigitalDigitalTransformationReview
    • About Capgemini ConsultingAbout CapgeminiCapgemini Consulting is the global strategy and transformationconsulting organization of the Capgemini Group, specializing inadvising and supporting enterprises in significant transformation, frominnovative strategy to execution and with an unstinting focus onresults. With the new digital economy creating significant disruptionsand opportunities, our global team of over 3,600 talented individualswork with leading companies and governments to master DigitalTransformation, drawing on our understanding of the digital economyand our leadership in business transformation and organizationalchange.Find out more at: www.capgemini-consulting.comWith more than 125,000 people in 44 countries, Capgemini is one ofthe world’s foremost providers of consulting, technology and outsourc-ing services.The Group reported 2012 global revenues of EUR 10.3billion.Together with its clients, Capgemini creates and deliversbusiness and technology solutions that fit their needs and drive theresults they want. A deeply multicultural organization, Capgemini hasdeveloped its own way of working, the Collaborative BusinessExperienceTM, and draws on Rightshore®, its worldwide deliverymodel.Learn more about us at: www.capgemini.com