MITSloan                                                                                                                  ...
Contents                                                          1 The Study 	                                           ...
Digital transformation (DT) – the use of technology to radically          that new technologies provide. Major digital    ...
Many popular stories of digital                      – and benefiting from – Digital                                      ...
2.1 Common pressures to                                                 Customers, too, are becoming more                 ...
Case Study                                                               industries, others expressed concern          or ...
is an honest assessment from people like myself….” The marketing people have          well-defined purpose, the firm is ta...
Case Study                                                                                                                ...
The companies interviewed are moving                       are changing. These nine elements                              ...
challenges that interfere with digital       educational digital tools aimed at          A medical device salesforce is   ...
However, problems remain as,              Process digitization                             Worker enablement              ...
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
Mit digital transformation a roadmap for billion $ companies 2011
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Mit digital transformation a roadmap for billion $ companies 2011

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Claire Calméjane is a dynamic executive with an international experience to lead complex, large transformation projects & teams, monitor IT budget at large scale and a strong expertise in Digital Transformation and Digital Banking. She worked for the last 7 years for Capgemini Consulting in Paris, Boston (US) and London, for several banks such as BNPP, MABanque, RBS and airline industries. She lead the phase 1 of a research program around digital transformation program at MIT working with the researchers.Her research paper has been ranked as one of top 5 thought leadership pieces http://lnkd.in/htyHdj across consulting publications by Source. She joined Lloyds Banking Group in October 2012 to lead the delivery of the Service to Customer portfolio and embrace operation challenges after a decade in consulting. She is specialized in Digital Transformation and IT Financial Services. She graduated from a Computer Science Engineering School and holds a Master degree from HEC Paris Business School.

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Mit digital transformation a roadmap for billion $ companies 2011

  1. 1. MITSloan MANAGEMENTAbout Capgemini ConsultingCapgemini Consulting is the Global Strategy and Transformation Consulting brandof the Capgemini group, specializing in advising and supporting organizations intransforming their business, from the development of innovative strategy throughto execution, with a consistent focus on sustainable results. Capgemini Consultingproposes to leading companies and governments a fresh approach which usesinnovative methods, technology and the talent of over 4,000 consultants worldwide DIGITAL TRANSFORMATION: A ROADMAPFor more information: www.capgemini-consulting.com FOR BILLION-DOLLAR ORGANIZATIONSFollow us on Facebook: http://www.facebook.com/capgemini.consulting.globalFollow us on Twitter: @CapgeminiConsul FINDINGS FROM PHASE 1 OF THE DIGITAL TRANSFORMATION STUDY CONDUCTED BY THE MIT CENTER FOR DIGITAL BUSINESS AND CAPGEMINI CONSULTINGAbout the MIT Center for Digital BusinessFounded in 1999, the MIT Center for Digital Business (http://digital.mit.edu)joins leading companies, visionary educators, and some of the best studentsin the world together in inventing and understanding the business value madepossible by digital technologies. We are supported entirely by corporate sponsorswith whom we work in a dynamic interchange of ideas, analysis, and reflectionintended to solve real problems. The Center has funded more than 50 facultyand performed more than 75 research projects focused on understanding theimpact of technology on business value, and developing tools and frameworksour sponsors can use for competitive advantage. 101011010010 101011010010 101011010010
  2. 2. Contents 1 The Study 06 2 Common pressures; different results 08 ••Common pressures to begin digital transformation ••Different digital transformation speeds and different results Case Study: Finding new opportunities for digital transformation across a hospitality company Case Study: Digital transformation in India 3 The shape of digital transformation 16 ••Transforming customer experience ••Transforming operational processes ••Transforming business models ••Digital capabilities Case Study: Digital transformation in an international banking group Case Study: Moving from separate to integrated digital initiatives in an apparel manufacturer 4 Digital technology usage 28 5 Challenges on the road to transformation 34 ••Initiation challenges ••Execution challenges ••Governance challenges Case Study: Evolving as a value chain orchestrator in mortgages Case Study: Digital transformation in an international airport 6 How can you make your digital journey successful? 46 ••Envision the digital future for your firm ••Invest in digital initiatives and skills ••Lead the change from the top Case Study: Driving digital transformation across a global media company 7 What is digital transformation maturity? 58 ••The What and the How ••Digital Maturity Matrix ••How to assess your digital maturity Case Study: Capitalizing on digital opportunities for a business directory 8 Conclusion 652 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 3
  3. 3. Digital transformation (DT) – the use of technology to radically that new technologies provide. Major digital improve performance or reach of enterprises – is becoming transformation initiatives are centered on re-envisioning a hot topic for companies across the globe. Executives in customer experience, operational processes and all industries are using digital advances such as analytics, business models. Companies are changing how mobility, social media and smart embedded devices – and functions work, redefining how functions interact, and improving their use of traditional technologies such as ERP even evolving the boundaries of the firm. – to change customer relationships, internal processes, and EXECUTIVE value propositions. Other executives, seeing how fast digital • Successful DT does not happen bottom up. It must be technology disrupted media industries in the past decade, driven from the top. know they need to pay attention to changes in their industries now. • Focus on the “how” more than the “what.” The most successful transformations we have seen focus as much SUMMARY How can senior executives successfully lead digital transformation? (or more) on how to drive change as on the detailed While many experts urge companies to get started on the digital content of the change. A compelling transformative transformation journey, few tell how to do it. In this report we vision, with related engagement, governance and KPIs share the findings from a global study of how 157 executives in will allow people throughout the enterprise to identify 50 large traditional companies are managing – and benefiting new “whats” to meet or extend the vision. from – digital transformation. We will describe the elements of successful digital transformation and show how to assess your • Successful DT comes not from creating a new firm’s digital maturity. organization, but from reshaping the organization to take advantage of valuable existing strategic assets in new Our research shows that, although large traditional firms ways. are truly different from digital entrants, many are starting to transform their businesses successfully through digital • Companies can do much more to gain value from technology. Specifically, investments they have already made, even as they envision radically new ways of working. • Companies face common pressures from customers, employees and competitors to begin or speed up their Despite the hype around innovative digital technologies, most digital transformation. However they are transforming at companies still have a long way to go in their digital transformation different paces with different results. journeys. Leadership is essential. Whether using new or traditional technologies, the key to digital transformation • Successful digital transformation comes not from is re-envisioning and driving change in how the company implementing new technologies but from transforming operates. That’s a management and people challenge, not just your organization to take advantage of the possibilities a technology one.4 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 5
  4. 4. Many popular stories of digital – and benefiting from – Digital transformation involve digital start- Transformation. We are working to ups or high-tech firms such as understand how digital technology is Amazon, Apple, or Google. Executives changing the business of large leading in traditional companies often find firms. these examples hollow. Big traditional companies, with decades of history Phase 1 of this multi-year study is an and legacy, are simply different from exploratory investigation involving these newer digital entrants. Other 157 executive-level interviews in stories focus on exciting initiatives 50 companies in 15 countries (see by traditional companies, but are Figure 1). These companies are large, anecdotal and do not show how those with typically $1 billion or more in companies implemented the change. annual sales. We conducted in-depth These examples may be good triggers interviews to qualitatively explore the for other companies to take action, but nature of the digital transformation they give no advice on how or whether phenomenon with real executives in to do so. real companies. To provide balanced perspectives, approximately half of With that in mind, MIT Center for the interviewees are business leaders Digital Business and Capgemini such as CEOs, line of business Consulting set out investigate the ways managers, marketing heads, or in which large traditional companies COOs, while the other half are IT and around the world are managing technology leaders. Figure 1: Interviews cover a broad range of countries and industries Transport Retail & Energy, Utilities1 Americas Food services and Chemical & Canada Telecom, Media, and Entertainment 12% 30% 6% 12% Services 20% 54% 22% 16% 8% 12% 8% Europe Asia Pacifi c Pharmaceuticals Manufacturing Government Financial & Medical & distribution Services THE STUDY6 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 7
  5. 5. 2.1 Common pressures to Customers, too, are becoming more begin digital transformation demanding. An airport executive described an “ever-rising tide of The executives we interviewed customer expectations” for service and report feeling pressure to transform convenience. For a manufacturer/ from forces inside and outside the retailer, “People’s expectations have company. Figure 2 shows that most changed. They want to be more in charge. executives expressed at least moderate They expect that we know them more... pressure to change. Employees are their online behavior is developing asking why they cannot collaborate expectations and behaviors that they apply with coworkers the way they can in other contexts as well.” with friends. One executive quoted younger employees as saying “Come Nearly every executive (72 percent) on. I know the company’s more than cited competitive pressures to change. 100 years old, but our IT capabilities This relates closely to increases in the don’t have to match the age of the pace of business. Respondents rated company.” Other employees are the current pace of business relative Executives rated incorporating their personal practices to five years ago as 5.6 on a scale from into their work lives without waiting the pace of business for corporate practices to catch up. 1=very much slower to 7=very much faster. Most indicated the pace will compared to five According to one CIO, “Officially iPads continue to increase, leading to further are prohibited by our policies. Yet 50 years ago as percent of our employees are using them pressure to transform their businesses. While several executives indicated 5.6 out of 7* at work.” this was “the new normal” for their *Scale: 1=very much slower than 5 years ago, 7=very much faster than 5 years ago Figure 2: Pressures for change* High Medium2 72% 70% M M 32% H H M H Customers Competitors Employees * Percentage of companies experiencing moderate or high pressure to transform from customers, competition, or employees as mentioned by their executives. Some firms mentioned more than one pressure. COMMON PRESSURES; DIFFERENT RESULTS8 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 9
  6. 6. Case Study industries, others expressed concern or other technology-enabled changes, that the acceleration would not be but obtained only basic levels of value HOTELCO: FINDING NEW OPPORTUNITIES sustainable. from the investments. They can obtain much more value by continuing the FOR DIGITAL TRANSFORMATION Executives on average rated their effort – envisioning new capabilities and ACROSS THE ENTERPRISE H innovation culture at only 4.2 on a process changes to reap larger returns 7-point scale. Although few companies from their foundational investments. strive to be as high as seven on the Manufacturers’ ERP systems have otelCo is one of the world’s ten largest hospitality scale, none of the executives felt their improved process efficiency and are companies. The firm constantly strives to improve innovation culture was as strong as it providing better financial data for operational efficiencies and customer service both within should be. strategic decisions, but companies have and across properties. The firm’s loyalty program is the not yet retrained buyers in how to use centerpiece of the company’s approach to understanding, Some executives expressed other, less the information in negotiating with serving, and selling to customers. common, pressures. Globalization suppliers. Retailers and other service is a driver for seven firms. These firms are gathering detailed information HotelCo executives, who have always believed in companies have a strategic need on buyer behavior, but lack the analytics the power of technology to improve processes and to expand globally or are facing capabilities to truly understand the increase customer intimacy, see further opportunity for digital transformation. pressures to generate information and power of the data. A hospitality Opportunities exist not only in new technologies such as social media and process synergies across their global company is conducting experiments mobile, but also in the firm’s more traditional areas like transactional IT and enterprises. Executives in three firms in mobile marketing in two different analytics. HotelCo is actively pursuing digital transformation in many areas and mentioned M&A as a pressure to business units, and building digitally- is working to innovate further. Because HotelCo experiences organizational and transform. enhanced customer service apps in IT challenges common to many large global enterprises, it seeks to take a rational,Executives rated another, but is not conducting a unified well-defined approach to its digital transformation initiatives wherever possible. 2.2 Different digital digital transformation of the customertheir innovation transformation speeds and experience. HotelCo has created opportunities for digital transformation in three areas: onlineculture as 4.2 on a different results presence, mobile customer engagement, and internal operational processes. These companies are gaining some7-point scale. A few companies in our study are using value from transforming parts of their Online: HotelCo continually evolves its online presence. It has integrated the digital technologies, old and new, to truly businesses, but are only part of the way website presence of all its properties on a common platform, enabling marketing transform their businesses. However, toward achieving the potential of digital across properties within a market. It also added new capabilities. For example, these companies are in the minority. transformation. Still others have not property managers using the firm’s corporate digital marketing tools can control yet begun their digital transformation their property content, e.g., events, independently of other properties, while not Despite internal and external pressures, journeys. having to build and maintain their own online capabilities. Further extending very few businesses are gaining the full online capabilities, HotelCo has begun to implement social media and mobile value of technologically-enabled change, In the following sections, we will marketing capabilities. Employees actively monitor social media for negative even with technologies they already describe how firms are digitally information and can respond. However, organizational questions remain about own. Many companies we interviewed transforming, the challenges they are how to improve the response capability as volumes continue to grow: “Who took on the significant effort and facing, and the levers executives can use handles it? Marketing? Product support? Customer support?” expense of implementing ERP, CRM to drive digital transformation. In addition, HotelCo is integrating social media information onto its websites. The website allows user comments on select pages, and the firm is working to extend comments to additional pages. HotelCo is also incorporating third-party social media onto the site. For example, tripadvisor.com ratings feed directly into property web pages, despite the initial hesitation of some property managers. “First off, this conversation is happening and most of the customers are now savvy enough they’re going to tripadvisor anyway. Let’s bring the content right to our site, positive or negative. Customers see that and they say ‘OK, well this10 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 11
  7. 7. is an honest assessment from people like myself….” The marketing people have well-defined purpose, the firm is taking a slow approach to widespread internal found that such content is much more compelling than internally generated use of social media instead of targeted efforts. information. The firm is midway through a set of initiatives aimed at rationalizing processes Mobile: Realizing that most customers now carry cell phones, HotelCo has across the enterprise. When complete, HotelCo will have a set of shared services made mobile a key part of its marketing strategy. The company offers multiple that are available to all properties, but which can be tailored by properties for smartphone apps and is making preparations for a future in which more people their own use, much as the online platform is today. IT, while a significant access sites via mobile than from a personal computer. enabler of the firm’s capabilities, remains a challenge as the company changes. For example, the loyalty database is not optimized for multi-channel interactions, HotelCo actively engages in mobile marketing. The company realizes the making it difficult to integrate information that arrives from, or is sent via, customer intimacy it can achieve through mobile because customers react multiple media. Another challenge is integrating information and processes from to messages almost instantly. SMS and WAP sites are a core part of mobile acquired companies into the firm’s core IT backbone. marketing because of their ubiquity. The different properties are in charge of their own mobile marketing messages, but the messages are delivered through a At HotelCo, analytics is “something we do a ton of.” Executives are proud of unified corporate-level system. the firm’s ability to understand drivers of customer and operational metrics. HotelCo is now investigating how to move analytics capability further out to the The company is also experimenting with location-based services. Innovation edges of the company. However, executives expressed the desire to make good activities that initially focused on embedded devices and RFID have been choices about where to apply analytics. Analytics is “absolutely a different way facilitated by mobile phones. For example, customers arriving at some properties of thinking… we don’t need every role to do it, but we definitely want the skills can receive mobile coupons for restaurants, shows, and other services in the in certain places. “ For example, analytics may enable the firm’s customer-facing hotel. Customers can also receive personalized service and information from employees to further personalize the customer experience, but executives are digital displays located around the properties using phones or their loyalty cards. aiming to do it in a way that doesn’t disempower those workers. While mobile and location-based services show promise, they have challenges. The firm is trying to balance a tradeoff between the capabilities of location-based devices and their potential intrusiveness. For example, when building a digital customer service display, HotelCo opted to ask customers to place their loyalty cards on the device rather than have the device automatically read who they are. Additional challenges are technological and organizational. The firm wants to “support experimentation by all parties, but also clearly delineate their roles and scopes.” For example, multiple groups conducting mobile experiments meet regularly to coordinate activities. And the company is starting to examine how it coordinates its use of vendors so that knowledge is not fragmented across multiple digital transformation initiatives. Internal operations: HotelCo is investigating how to incorporate emerging technologies into internal processes. Compared with the device-agnostic policy for customers, HotelCo aims to use standard devices for internal processes and to make them available only to those employees who need mobile capability for their jobs. The firm is trying to take the same measured process to implementing social media in internal processes as it does in other areas. One obstacle stems from security and cost: free platforms are not seen as secure, and the firm wants to be careful about investing large amounts of money to in license a secure platform for an uncertain goal. Another challenge is organizational: who would own the internal collaboration process? Until there is a clear internal owner and a12 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 13
  8. 8. Case Study In India, Asian Paints has begun to sell services (such as a painted wall) instead of ASIAN PAINTS: DIGITAL products (a can of paint). The services strategy has benefits beyond new revenues. TRANSFORMATION IN INDIA Selling services helps to ensure that high-end products are applied properly, A thereby improving customer satisfaction. Services also help the firm to get closer to the end-consumer, understand core consumer choices, and launch high- sian Paints, India’s leading manufacturer of coatings, end texture finishes. Additionally, having a contractor in a client’s house yields has digitally transformed its business step by step. The information that marketing staff can use to understand both customer preferences firm has been able to maintain fast growth and globalize and potential demand. Gaining better knowledge of end-customer preferences is a while increasing efficiency and reducing its impact on the high priority for the company, since its business model – operating largely through environment. retailers – means that customer involvement has been traditionally very low. In the early 2000s, as part of an effort to reduce debt The relationship between IT and business executives has traditionally been very and increase internal efficiencies, the firm implemented strong. The IT team consists of business graduates with a deep understanding an enterprise-wide ERP and advanced Supply Chain of the underlying business processes. They act as internal process consultants. Management system. This helped to create an enterprise-wide platform that was Governance is centralized and top down, with a strong executive-level the basis for further improvements in sales and customer processes. The change understanding about the importance of standardization and coordination. also liberated working capital that helped fund acquisitions in emerging markets. Although business executives suggest many digital investments, IT executives Asian Paints gained further efficiencies by linking subcontractors and suppliers on originate others such as the firm’s new analytics initiative. a B2B portal. In 2003, the firm invested in a CRM system. Corporate growth and new technology demands have increased the challenges of In 2010, Asian Paints centralized its order taking process into a single corporate digital governance. The firm is in the first year of a new portfolio planning process. call center. This change helped the company further improve operational “We have enjoyed great equity with the business because we have delivered solutions. But efficiencies and sustain its growth. In customer-facing processes, the move entailed seeing so many projects coming at us, we felt that now we need to establish processes to much more than just creating the call center. Retailers were encouraged to place match expectations and resources whilst taking on innovative projects,” says Mr. Manish orders through the call center, where they could receive a more consistent service Choksi, CIO and Chief of Strategy. level than they could through the firm’s 100 local depots. Centralized data also enabled delivery of products to large institutional customer job sites, giving the Asian Paints’ investment in strong IT capabilities, combined with organizational company a capability that competitors could not provide. and process changes intended to leverage those investments, will serve as a foundation upon which the organization can continuously envision and implement The biggest change resulting from centralizing order taking was in the way new forms of digital transformation. salespeople interacted with retailers. Liberated from routine order collection, the sales team could focus on building stronger relationships. To enable a more meaningful dialogue between the sales team and each retailer, the company provided salespeople with vital customer data in the field using mobile devices. A rollout of tablet devices, which is currently underway, will further mobile-enable the sales staff. Asian Paints’ digital transformation also extended to internal production processes. High growth in paint demand creates the need to set up new manufacturing plants every three years. Given the scale and size of these plants, the firm has begun to focus on creating highly automated plants. Automation has led to greater scalability, better quality and stronger safety and environmental protections. The new plants are fully integrated from an information management perspective. Data from shop floor control systems and automated warehouses are linked seamlessly to the ERP. This has helped to further sustain the firm’s operational efficiencies.14 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 15
  9. 9. The companies interviewed are moving are changing. These nine elements forward with digital transformation form a set of building blocks for digital at varying paces and experiencing transformation. Currently, no company varying levels of success. Some are in our sample has fully transformed transforming many parts of their all nine elements. Rather, executives organizations while others are still are selecting among these building doing only the basics. Others are blocks to move forward in the manner encountering organizational issues or that they believe is right for their other challenges that prevent them organizations. The tenth element– from transforming successfully. digital capabilities – is an essential enabler for transformations in all areas. Analysis of the interviews shows clear patterns. Executives are digitally In this section, we explore how transforming three key areas of their companies in our study are enterprises: customer experience, implementing each transformational operational processes and business building block. Subsequent sections models (see Figure 3). Within each examine adoption of four key of the three pillars, different elements technologies and then common Figure 3: Building blocks of the digital transformation Customer Operational Business Model Experience Process Customer understanding Process digitization Digitally-modified businesses • Performance improvement • Product/service augmentation • Analytics-based segmentation • New features • Transitioning physical to digital • Socially-informed knowledge • Digital wrappers3 Top line growth Worker enablement New digital businesses • Digitally-enhanced selling • Working anywhere anytime • Digital products • Predictive marketing • Broader and faster communication • Reshaping organizational • Streamlined customer processes • Community knowledge sharing boundaries Customer touch points Performance management Digital globalization • Customer service • Enterprise integration • Operational transparency • Cross-channel coherence • Redistributing decision authority • Data-driven decision-making • Self service • Shared digital services Digital Capabilities • Unified Data & Processes • Business & IT Integration • Analytics Capability • Solution Delivery THE SHAPE OF DIGITAL TRANSFORMATION16 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 17
  10. 10. challenges that interfere with digital educational digital tools aimed at A medical device salesforce is processes through a digital plug- transformation. The paper concludes helping clients invest more safely. replacing in-person interactions with in. A retailer automatically loads with a set of key levers senior These tools, while not selling the firm’s digital interactions. When visiting a customer’s last online shopping executives can use to successfully products directly, aligned closely with a doctor’s office, a salesperson list into its e-commerce site. This transform their organizations. the firm’s reputation for conservatism leaves an iPad with video and other streamlines the shopping process, and safety. information on new products. The allowing customers extra time to 3.1 Transforming customer aim is to get the doctor’s attention look at other products. Customers experience Companies are also building new and gain a 10 minute conversation can then decide whether to use home online communities to advise and when the salesperson returns to delivery or a drive-through service build loyalty with clients in medical, retrieve the iPad. with a specific pick-up time. A Customer understanding real estate or financial services mortgage company also developed an products. Others are building products Better understanding helps firms integrated multi-channel experience Companies are starting to take that improve branding in lifestyle to transform the sales experience. to help investors set their realistic advantage of previous investment communities. A consumer sports Companies are integrating customer expectations quickly. Then, processes in systems to gain an in-depth equipment manufacturer enables purchasing data to provide more can cross-sell or up-sell products. understanding of specific geographies individuals to publish their sport personalized sales and customer and market segments. performance to communities and stay service or even to offer customized Customer touch points connected with other customers who product packages. One executive Other firms are exploring social Customer service can be enhanced have similar interests. commented “Analytics help us to segment media to understand customer significantly by digital initiatives. Fast our clients and to connect SME offerings satisfiers and dis-satisfiers. A and transparent problem resolution Many firms are building analytics and clients in a predictive way.” A mortgage executive noted “We builds trust for customers. A bank capability to understand customers in hospitality firm engaged in location- launched a non-profit real estate established a twitter account to answer more detail. Some insurance firms, for based marketing uses analytics to community to help our customers. As client complaints quickly, helping example, are improving their portfolios send personalized mobile coupons an unplanned benefit this helps us to customers avoid going physically to and cost structures through analytics- to customers as they near a facility understand them better. We launched a branch. This digital initiative also based underwriting and pricing. Other and can track uptake in real time. A special products, such as a special loan leveraged an expert community, companies are conducting analytics- mortgage firm is setting up a CRM offering for divorced people, following allowing crowd sourcing with several based experiments to drive customer strategy to link customers to local real several customer questions.” employees and other customers. behavior. In one case, a restaurant firm estate references. This system proposes is actively conducting experiments new offers in real time via the internet. In addition, companies are learning to Companies with multiple channels to in pricing and promotion across a set promote their brands more effectively the customer are experiencing pressure of franchised stores. The experiment Other firms are using concept stores through digital media: to provide an integrated experience. dynamically adjusts product prices as flagships for their digital selling in response to demand, weather, innovations. A mortgage company A hospitality executive commented “I • A medical device firm is launching think consumers still respond in the same inventory levels, and proximity to offers investors an integrated process a social media campaign to promote way, but consumers are now looking in so closing time. combining real estate and bank a radically new class of products in many different places that’s it’s now hard services with external services, and an online community of medical to get that message across efficiently.” Top-line growth showcases the overall process in a specialists. Executives expect Many firms, especially in retail and concept megastore. A bank created awareness to grow in weeks rather Companies are using technology financial services, are making strong a concept store in a major city to than years. to enhance in-person sales inroads in integrated multichannel innovate customer relationships and conversations. Financial services offer a different experience. Customers activity. However, multichannel • A media company has teamed with firms are using tablet-based services require envisioning and could connect their experiences in product manufacturers for social presentations instead of paper-based implementing change across customer concept stores to social community media-based brand enhancement slide decks to make sales pitches. experience and internal operational initiatives like Facebook. tied to in-person events. Some are going beyond. Insurance processes. Many retailers now offer firms are introducing mobile tools Some firms try to make the life of home shopping with the option to • After the 2009 economic downturn, to help sales people and customers receive products by mail or in a store. the customer easier, simplifying their a financial firm built a set of engage in analytics-based planning.18 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 19
  11. 11. However, problems remain as, Process digitization Worker enablement they are in the office, sit near people for example, one retail executive with whom they are temporarily described customers being angry that Companies historically have used Once-novel technologies such as collaborating. Meanwhile, the firm’s customer service representatives in automation to make processes more mobile e-mail, collaboration tools, collaboration and networking tools a store could not access online order efficient and scalable. ERP for example and video conferencing have now allow employees to talk with anyone history. has enabled significant efficiency and become the norm in many companies. in the company from wherever quality gains in core transactional, Employees routinely collaborate they are sitting. This is setting the Some firms are moving beyond simple financial, and supply chain processes. with people whom they have never stage for further changes related to multi-channel models to enable new An insurance firm has created a central met in person, in regions they have globalization. forms of digital strategy. A mortgage digital platform for core claim processes never visited. Mobile devices allow company, for example, is offering and deployed the model across several employees to stay connected with the In a broader sense, digital B2C offerings in one channel to countries. Employee self-service systems, office at all hours and to work from transformation replaces limited one- complement its existing B2B offerings especially in areas like HR, are also home when not able to be in the office. way vertical communication with in another. It supplements the becoming widespread. Individual level work has, in essence, broad communication channels that multichannel experience through a been virtualized – separating the work are both vertical and horizontal. CxOs new type of storefront. Some firms are going beyond simple process from the location of the work. can engage in 2-way communication automation to gain additional benefits. quickly at scale. Employees can Several companies are offering self- Automation can enable companies to Some companies are starting to collaborate in ways that were service via digital tools. These tools refocus their people on more strategic examine new possibilities for previously not possible. The tools allow the customer to save time, while tasks. A manufacturer has begun to virtualizing individual work processes. that virtualize individual work, saving the company money. Classic centralize the HR function, allowing A financial services firm rearranged while implemented for cost reasons, mobile apps allow bank customers to economies of scale through self-service its headquarters so that nobody had have become powerful enablers for access account information or media while freeing HR people to “focus on an assigned desk, even the CEO. knowledge sharing. Salespeople and customers to have electronic rather enlarging manager skills, rather than counting Employees now work from home front line employees, for example, are than paper subscriptions. Many firms days off.” A specialty materials company one or two days per week and, when beginning to benefit from collaborative are now offering customer apps to has automated many R&D processes. enhance customer touch points. In Automation allows researchers to focus a hospitality firm, smart phone apps on innovation and creativity rather than are linked to the customer’s profile, repetitive efforts. It also creates streams Figure 4: Digital transformation creates a virtuous cycle of knowledge sharing enabling integration across SMS, of data that can be useful in later data apps, and social media efforts. A mining efforts. dge sharin media company offers apps with geo- owle g Kn localization and augmented reality to New technologies are extending this trend help customers find interesting places of gaining benefits beyond efficiency. A CxOs to visit and provide special offers via paint manufacturer has created fully- vouchers and e-couponing. automated plants that significantly reduce Communication at scale labor requirements, improve product 3.2 Transforming quality and enhance environmental, Virtualization of work operational processes health, and safety performance. An Remote working, Collaborative tools, Knowledge platforms, Cloud Computing apparel company has moved to digital Although transformed customer design processes when collaborating with Internal experiences are the most visible – and manufacturing partners. Going digital Crowdsourcing arguably the most exciting – aspects eliminates most need to ship physical Employees of transformation, firms are also prototypes back and forth, reducing the realizing very strong benefits from product development lifecycle by 30 transforming internal processes. Kn percent. It allows the firm to be much owl edge sharing more agile, changing designs quickly in response to market changes.20 © 2011 MIT Center for Digital Business and Capgemini Consulting © 2011 MIT Center for Digital Business and Capgemini Consulting 21
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