The Inevitable Digital Opportunity

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Genís Roca
GFT Corporate Event
Munich, 11-Feb-2014

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  • And THESE ARE our three principal ideas for today:
    1- The digital transformation of business is in three big steps: customer experience, operational processes and business models
    2- The digital advantage is based on the digital intensity, and the capabilities in your management to have a vision and implementate this vision
    3- The pace of the digital changes IS SLOWER than SOME suppose…IT is A cultural change, and this needS some time.
  • We will talk about the digital transformation of business, and how this transformation is an opportunity FOR growth… or SURVIVAL
  • We are talking about tHe use of technology and networks to radically improve performance or reach of enterprises.
  • This transformation is about three big key areas
  • FirST about our customer experience, second about operational processes, and third about the business model.
    The financial companies are transforming a lot of things about the customer experience, but for example they have a lot of pending work in the comMercial results. Now all is around the conversation, services, and brand development, but not about how to sell more.
    In the operational processes you are DOING a good job, but now the companies are using for example data analysis to redesigN a lot of processes.
    And finally, all companies need TO rethink their business models, because the digital transformation can produce new oPportunities… or the DEATH of old businesses.
  • well, we talk about transforming customer experience
  • The first exAmple of this is customer understanding.
    Watching the net to discover and understand.
  • This is an example from the spanish financial sector.
    We are monitoring all conversations about financial cards on the spanish social networks, and we discover some facts.
    First: look the result for Sabadell… July and August are better than the rest of the months… one oscillation on the curve. We analize this anomalY we deduce: this is a marketing action to captURE new customers. We analYze the sensE of the conversation, and the opinions are ok. Good results. Duplicate the presenCe on the market conversations with good opinions.
    But… look Popular… from 4% In July to… 32% In October… A lot of conversations, good opinions about their purposal… this is a really good job.
    Better than Sabadell.
    This is a tool FOR Sabadell to evaluate their actions.
    MonitorinG the net to know more about every product, every competitor…
  • Or the new tREND… building communities.
    All people ARE building user communities for example in Facebook.
    In my opinion this iS a mistake, but at thE moment this is very usual in all marketing departments…
  • And this is the problem…
    What is my Santander communitiY?
    Sure all thESE communities are Official Communities?
    The social media is a moNUMentous trend, pending BEING put in order.
    In our opinion, the final position is with thESE communities in our own systems… not on Facebook. WHAT WE need are the ownerS of our client database, and we need have conversations in our spaces, not in the outdoor spaces
  • The digital transformation offers new opportunities FOR growth…
  • For example, offer new opportunities to build a personalized services.
    Every customer with a different setup, with a different option… and now this is an scalEAble option
  • Or now IT is possible to offer new services based on your localization…
    To offer our services when you are near us, and so on
  • And the king AT THE moment… the new customer touch points
  • Now EVERYTHING is multichannel…
    And we have a lot of channels.
    And maybe, the new channels are more important for business than the old channels.
    A lot of banks are considering openING new markets IN NEW countryIES with more focus on the digital channels and less focus on the typical HIGH STREET branch.
    Maybe a SMALL number of flagships, and a lot of digital resources to manage the customer touch ponts
  • redesigning the customer services.
    We are the authors of the project to adapt the customer services of Banc Sabadell to solve the incidences communicated BY Twitter or Facebook, for example…
    24 hours a day, seven days a week. If you have a problem and your option is PRESENT this problem on the net, Banc Sabadell have protocols to answer and offer solutionS
  • And finally, offering new services.
    For example, obtainING cash FROM aN ATM without your credit card, only with your phone…
    You ask for money using an app on your mobile and you receive a code, and with this code the ATM gives your money
    SimplE…
    New
  • IN A NUTSHELL…
    TransformING the customer experience is about customer understanding, top-line growth, customer touch points… and so on, because thESE ARE only some examples…
  • We start now with the second key area: the transformation of the operational processes.
  • The first and most obvious, IS TO reviEW all your processes, because you have a lot of opportunities to be more efFicient if you use the new digital and technological opportunities. And this is not only for mechanical processes, BUT also IT is available for recruitment processes, or internazionalitation processes, and so on
  • If IT is digital, IT produceS data.
    And the results is a new data flow. For example, this is a map of Madrid with transactions with a credit card. And I can ask this mapa How many young women, betweEn 18 and 25 years, are buying today some CLOTHES COSTING betweEn 100 and 200 euros?. In whICH zones?. What is the best street to open a new fashion shop?, what is the AVERAGE RESTAURANT BILL in Garmisch?, and so on…
  • This is the flow of economic transactionS with credit cards In Barcelona, hour by hour…
  • The digitalization of processes openS a door to revIEW the intranets, and all internal information systems, and offers a new opportunity to attack the historical problem about the knowledge management, but now with powerful tools to collaborate, share, and so on.
  • EVERYONE in our organization needs digital skills. Front Desk, financial teamS, sales, marketing, operations… in all the departments we need workers with digital capabilities. To analyze competitors, to find new suppliers, to manage the UNION relations, to care FOR our customers, to open new markets, to develop our brand… no exceptions.
    In our opinion, the digitalization transforms thESE 6 typical management skills.
    WHen we say “Communication skill”… today IT is very diferent FROM 10 years ago. To communicate correctly, today you needs some digital skills. ThESE 6 skills can be redefined.
  • And one proposal: we suggest addING 2 new management skills.
    Digital culture, to understand the new possibilities, to NOT panic ABOUT the new gadgets…
    And information management: how do you find?, how do you select your fonts of information?, how do you decide the quality of information?, how do you save the most important information you have detected?, how do you recover information archived In the past?... And so on…
    TESE 2 new skills are necessarY in your basKET of skills… for every position in your company.
  • And third… when you transform your processes, you have new opportunities to improve your performance management
  • First, redesigning your dashboards.
    Now you have a lot of information (remember the new data flows) and you have a possibility to have VERY SPECIFIC dashboards … and in real time.
  • And with thESE tools… you have a possibility to make decisions in real time…
  • So…
    The transformation of operational processes is about the process reENgIneering, the new resource to work better, and the new tools to manage…
  • And let’s go to the third stage of the digital transformation…
    In our opinion… the most important, but not the more frequent in our customers…. The transformation of business models
  • digitalization IS modifying all business models.
    In some cases… very fast. In other cases, very slowLY. But the transformation is inevitable.
  • One new Law on management:
    “All products under digital pressure, are transformed into services”
    From buyING vinYL RECORDS, to monthly paymentS to listen TO Spotify
    From making insuline, to offerING services for diabetics
    From products, to services.
  • WHAT IS most common in Internet is to be an intermediary.
    Or you concentrate the offer, or you concentrate the demand.
    But with new rules, new tools, new models…
    For example… Tourism.
    On the left, the old players. On the right, the new players.
    The old players are dead… or dying.
    Today the most important Hotel operator in Mallorca is Booking. Not Tui. Incredible.
  • And this is an example about THE use of new data flows to offer new services: this is a payment service from Google, offering what the tourist destinations most wanted on Internet by German users ARE. This week London growS, and NewYork descends… and Iceland growS 87%...
  • And this is the catalog for A service named “Destination Trends”.
    You can ask for trends from Spanish people, Italian people, Norwegian people… if you pay.
    Think: what new business IS possible with the financial data?
    Remember the information about credit cards in Barcelona and Madrid…
  • The companies build gloBAL centers to attend their customers: the call centers. But now THEY are building new global centers for more and more typeS of operations, ALWAYS around the digItal operations. Data analysis, commercial operations… for example: why not a global center to find specific professional groups on the net to offer specific terms SO AS TO convert THEM INTO new customers?
  • Well… the digital transformation is a land of opportunities….
    If your company adoptS this Transformation, may be you have a digital advantage.
    How to obtain this advantage?: you need digital maturity
    And what is thIS digital maturity?
    We CAN explain this with an article from the Sloan MIT, a business school from US
  • FirST about our customer experience, second about operational processes, and third about the business model.
    The financial companies are transforming a lot of things about the customer experience, but for example they have a lot of pending work in the comMercial results. Now all is around the conversation, services, and brand development, but not about how to sell more.
    In the operational processes you are DOING a good job, but now the companies are using for example data analysis to redesigN a lot of processes.
    And finally, all companies need TO rethink their business models, because the digital transformation can produce new oPportunities… or the DEATH of old businesses.
  • The digital maturity is defined with 2 ideas.
    First: Digital intensity.
    And what is Digital intensity? IT Is when you have a lot of initiatives with technology enabled. The most common is initiatives around Customer engagement and Internal operations. If you remember, the two first key areas we talked ABOUT now, just a few moments AGO…
  • But the second idea to obtain the digital maTurity is a new concept: You need TransfoRmation management intensity.
    You need a leadership team with four capabilities:
    Vision, to understand how this technology will transform your business, what type of new opportunities are possible… what is the power of transformation…
    Governance: a capabilitiY to make decisions, to start the change, to make changes in your organization…
    Engagement: to convince the rest of the mermbers in your organization around this decisions and your vision
    IT BusinesS relationships: to discover very early what are the new developments, new prototypes, new ideas and the new opportunities, because you are talking normally with the IT teams
  • If you use this two parameters, AND PUT THESE two in your company, you have 4 general positions, with more or less digital maturity….
  • And MIT Sloan analyzeD nearLY two hundred companies, and the companies with more digital maturity have more revenue generation….
  • …. More profitability…
  • …. Best market Evaluation….
  • And look what is the sectorial distribution:
    Banking IS in the right corner…
    Insurance HAS some little problems with the digital intensity in their processes….
    Pharma are in the bad corner…
    And so on…
  • We are moving…
    We are in the middle of the process of digitalization.
    We are transforming our processes, our business….
    But we need TO talk about what is the pace of this change
    What is the pace of the digital area
  • And now we are introducing a new step in this evolution: the things are starting their activity on Internet.
    And the Internet oF things will change radically the Internet
  • First stage: The Internet of companies. In black in this graph
    SecoNd stage: The internet of people, in grey
    Third stage: The internet of thingS, in white
    Every stage IS a very very very important change, and they define new rules, new opportunities… and new businesS changes and opportunities
  • In our HUMBLE? opinion, the stageS of the enterpises ARE defined BY the commerce opportunities.
    The present stage, the social Internet, IS defined by the conversation.
    But the nexT stage, Internet of things, IS defined by the services… and consequently, the monetization.
    The present stage, social Internet, is a little disaster: a lot of work to manage the conversations, but poor economic results. More work, less money.
    But the principal idea:
    The first IBM PC is from 1981. Today is 2014… 33 years.
    The digital transformation is a process, and they will need thESE 30 years, and 30 years more (in my opinion).
    The digital transformation is a procesS for 70 or 80 years.
    And this is is very fast.
    The industrial revolution, our last big technological change, needs 175 years.
    And may be this digital change will be defined in “only” 75 years.
    But we need time to make this changes, because is not only technology. We are living an important cultural change, sociological change… and this need some time…
    Imagine: change your society in only 75 years… it’s very fast.
    But this is the pace: every change needs 10 or 15 years,
  • And THESE ARE our three principal ideas for today:
    1- The digital transformation of business is in three big steps: customer experience, operational processes and business models
    2- The digital advantage is based on the digital intensity, and the capabilities in your management to have a vision and implementate this vision
    3- The pace of the digital changes IS SLOWER than SOME suppose…IT is A cultural change, and this needS some time.
  • And if you need TO read something to understand, we suggest readING sociolOGy. Zygmunt Bauman, Liquid times. EVERYTHING is liquid. Nothing is solid, nothing is stable.
    No doubt ABOUT IT: TO be modern, read classics.
  • If you need read something to make a decIsions: READ Leading Change by John Kotter, from 1994.
  • Thank you very much.
  • The Inevitable Digital Opportunity

    1. 1. the inevitable digital opportunity genís roca @genisroca
    2. 2. 1 the digital transformation of businesses 2 where is the digital advantage? 3 the pace of the digital era
    3. 3. the digital transformation of businesses 1
    4. 4. the digital transformation of businesses the use of technology and networks to radically improve performance or reach of enterprises
    5. 5. the three key areas for digital transformation
    6. 6. the three key areas for digital transformation 1 . transforming customer experience 2 . transforming operational processes 3 . transforming business models
    7. 7. the three key areas for digital transformation 1 . transforming customer experience
    8. 8. the three key areas for digital transformation 1 . transforming customer experience a . customer understanding
    9. 9. the three key areas for digital transformation 1 . transforming customer experience a . customer understanding monitoring social media
    10. 10. the three key areas for digital transformation 1 . transforming customer experience a . customer understanding building communities
    11. 11. the three key areas for digital transformation 1 . transforming customer experience a . customer understanding building communities
    12. 12. the three key areas for digital transformation 1 . transforming customer experience b . top-line growth
    13. 13. the three key areas for digital transformation 1 . transforming customer experience b . top-line growth personalization
    14. 14. the three key areas for digital transformation 1 . transforming customer experience b . top-line growth geolocated proposals
    15. 15. the three key areas for digital transformation 1 . transforming customer experience c . customer touch points
    16. 16. the three key areas for digital transformation 1 . transforming customer experience c . customer touch points moving to the multichannel
    17. 17. the three key areas for digital transformation 1 . transforming customer experience c . customer touch points redesigning customer services
    18. 18. the three key areas for digital transformation 1 . transforming customer experience c . customer touch points offering new services
    19. 19. the three key areas for digital transformation 1 . transforming customer experience a . customer understanding monitoring social media building communities b . top-line growth personalization geolocated proposals c . customer touch points moving to the multichannel redesigning customer services offering new services
    20. 20. the three key areas for digital transformation 2 . transforming operational processes
    21. 21. the three key areas for digital transformation 2 . transforming operational processes a . process digitalization
    22. 22. the three key areas for digital transformation 2 . transforming operational processes a . process digitalization process reeingineering
    23. 23. the three key areas for digital transformation 2 . transforming operational processes a . process digitalization new data flows
    24. 24. the three key areas for digital transformation 2 . transforming operational processes a . process digitalization new data flows
    25. 25. the three key areas for digital transformation 2 . transforming operational processes b . worker enablement
    26. 26. the three key areas for digital transformation 2 . transforming operational processes b . worker enablement collaborative workspaces
    27. 27. the three key areas for digital transformation 2 . transforming operational processes b . worker enablement development of digital skills 1 Strategic vision 1 Strategic vision 2 Digital leadership 2 Digital leadership 3 Digital communication 3 Digital communication 4 Customer orientation 4 Customer orientation 5 Continuous learning 5 Continuous learning 6 Teamwork 6 Teamwork
    28. 28. the three key areas for digital transformation 2 . transforming operational processes b . worker enablement development of digital skills 1 Strategic vision 1 Strategic vision 2 Digital leadership 2 Digital leadership 3 Digital communication 3 Digital communication 7 Digital culture 7 Digital culture 4 Customer orientation 4 Customer orientation 8 Information management 8 Information management 5 Continuous learning 5 Continuous learning 6 Teamwork 6 Teamwork
    29. 29. the three key areas for digital transformation 2 . transforming operational processes c . performance management
    30. 30. the three key areas for digital transformation 2 . transforming operational processes c . performance management redesigning dashboards
    31. 31. the three key areas for digital transformation 2 . transforming operational processes c . performance management decision making in real time
    32. 32. the three key areas for digital transformation 2 . transforming operational processes a . process digitalization process reengineering new data flows b . worker enablement collaborative workspaces development of digital skills c . performance management redesigning dashboards decision making in real time
    33. 33. the three key areas for digital transformation 3 . transforming business models
    34. 34. the three key areas for digital transformation 3 . transforming business models a . digitally modified businesses
    35. 35. the three key areas for digital transformation 3 . transforming business models a . digitally modified businesses from products to services
    36. 36. the three key areas for digital transformation 3 . transforming business models b . new digital businesses
    37. 37. the three key areas for digital transformation 3 . transforming business models b . new digital businesses new intermediaries
    38. 38. the three key areas for digital transformation 3 . transforming business models b . new digital businesses data
    39. 39. the three key areas for digital transformation 3 . transforming business models b . new digital businesses data
    40. 40. the three key areas for digital transformation 3 . transforming business models c . digital globalization
    41. 41. the three key areas for digital transformation 3 . transforming business models c . digital globalization global operations centers
    42. 42. the three key areas for digital transformation 3 . transforming business models a . digitally modified businesses from products to services b . new digital businesses new intermediaries data c . digital globalization global operations center
    43. 43. the digital maturity where is the digital advantage? 2 Source: “The Digital Advantage: How digital leaders outperform their peers in every industry” MIT Sloan, nov 2012
    44. 44. the digital madurity 1 . digital intensity 2 . transformation management intensity Source: “The Digital Advantage: How digital leaders outperform their peers in every industry” MIT Sloan, nov 2012
    45. 45. the digital madurity 1 . digital intensity
    46. 46. the digital madurity 2 . transformation management intensity
    47. 47. the pace of the digital era 3
    48. 48. 2015 - things things inside services pm 2005 - 2015 people people mobile social mk 1995 - 2005 enterprises enterprises desktop commerce itc infrastructure infrastructure mainframe engineering r+d - 1995
    49. 49. …-… … … … … … 2015 - things things inside services pm 2005 - 2015 people people mobile social mk 1995 - 2005 enterprises enterprises desktop commerce itc infrastructure infrastructure mainframe engineering r+d - 1995
    50. 50. 1 the digital transformation of businesses . transforming customer experience . transforming operational processes . transforming business models 2 where is the digital advantage? . digital intensity . transformation management intensity 3 the pace of the digital era
    51. 51. Internet is not about marketing
    52. 52. Internet is not about marketing Internet is about process redesign
    53. 53. Internet is not about marketing Internet is about business redesign
    54. 54. Internet is not about marketing Internet is about business redesign move your customer experience move your operational processes move your business models
    55. 55. Internet is not about marketing Internet is about business redesign move your customer experience move your operational processes move your business models and first… move your management
    56. 56. the inevitable digital opportunity TIC TIC genís roca @genisroca Barcelona – Madrid - Bogotá @RocaSalvatella www.RocaSalvatella.com

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