Digital Transformation - Hype or sustainable revolution? Dirk Palder at PIP Conference Lausanne EPFL and UPU 2013-09-24

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The PIP Postal Innovation Platform Forum of the EPFL with UPU Universal Postal Union is the leading think tank for idea exchange to design the Postal Services of the future. The presentation shares insides the Capgemini MIT study with 400 companies in the world. What is "digital" impact in their business, how to structure the maturity of companies in the digital transformation and what is the benefit impact of different transformational approaches in the different industries.

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Digital Transformation - Hype or sustainable revolution? Dirk Palder at PIP Conference Lausanne EPFL and UPU 2013-09-24

  1. 1. Transform  to  the  power  of  digital   Digital  Transforma4on  –     Hype  or  sustainable  revolu4on?   “Findings  of  the  Digital  Transforma4on”       Dirk  Palder,  VP    Head  Postal  Services   Capgemini  Consul4ng   24.  September  2013   PIP  Postal  Innova4on  PlaMorm,  EPFL  &  UPU    
  2. 2. 1.  Digital  Transforma4on:  The  basics   “Why  digi4sa4on  fundamentally  transforms  businesses?”  
  3. 3. DIGITAL  TRANSFORMATION  IS  THE  INCREASING  ADOPTION  OF   DIGITAL  TOOLS  AND  PROCESSES  WITHIN  ALL  ASPECTS  OF  AN   ORGANIZATION  TO  RADICALLY  IMPROVE  PERFORMANCE   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   3  
  4. 4. Digital  Transforma4on  facts   As  opposed  to  previous  industrial  revolu4ons  Digital  Transforma4on  is  mainly  driven  by   consumer  behaviour  and  demands   4   Business   perspec?ve   Tipping  points   Digital  usage   $1.3  trillion   expected  global  e-­‐ commerce  revenues  in   2013   5.1  billion   searches  each  day  on   Google   6  billion  hours  of   videos  watched  each   month  on  YouTube   Amazon-­‐CEO   Jeff  Bezos  buys  the   world’s  most  renowned   newspaper,  the   ”Washington   Post”   Apple  announced  in  May   2013  that  its  App  Store   has  reached   50  billion  app   downloads   751  million  of  these   users  access  the  service   with  their  mobile  devices   Mobile  data  traffic  will   grow  26-­‐fold   between  2010  and  2015   More  than  50%  of  all   workloads  will  be   processed  in  the  cloud  by   2014   6  billion  mobile   users  in  2012,  China  and   India  account  for  30%  of   that  growth   80%     of  American   consumers  rely  on  their   social  networks  when   searching  for  products  to   buy   With  1.11  billion  members   the  user  base  of   Facebook  exceeds   the  popula4on  of   Europe    Source:  Press  releases  (2013);  company  websites;  Cisco  Visual  Networking  Index;  JP  Morgan;  Interna4onal  Telecommunica4ons  Union   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.  
  5. 5. Quotes  on  Digital  Transforma4on   Without  doubt:  Digital  Transforma4on  is  a  major  challenge  on  CXOs’  agendas   5   “People  have  a  tendency  to  overes4mate   technology  in  the  short  term,  and   underes4mate  it  in  the  long  term.”   (Bill  Gates,  Microso0)   “I  can’t  think  of  any  industry  sector  or  company   which  is  immune  from  Digital   Transforma4on.”  (Andrew  McAfee,  MIT)     Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.  
  6. 6. Digital  Transforma4on:  Research  coopera4on  with  the  MIT   Capgemini  Consul4ng  and  MIT  have  teamed  up  to  analyse  why  some  companies   successfully  embrace  Digital  Transforma4on  while  others  fail   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   6   EXCLUSIVE  COOPERATION  WITH     …OVER  450  INTERVIEWS  WITH  IT  AND   BUSINESS  EXECUTIVES   …OF  MORE  THAN  390  COMPANIES   …MOST  OF  THEM  ABOVE  BILLION-­‐DOLLAR  REVENUES   1  Source:  White  Space  –  a  leading  ins4tute  for  market  research  in  the  consul4ng  sector,  2012   …THREE  RESEARCH  PHASES  FOCUSSING  ON  CORE     QUESTIONS  FROM  STRATEGY  TO  CUSTOMER  TO     OPERATIONS  TO  SKILLS   „DIGITAL  TRANSFORMATION:  A  ROADMAP  FOR  BILLION-­‐DOLLAR  ORGANISATIONS“  IS  RANKED   AMONG  THE  TOP  FIVE  BEST  PUBLICATIONS  IN  THE  LAST  10  YEARS¹.  
  7. 7. Transforma?on  Management  Intensity   Digital  maturity   The  research  shows  that  digital  maturity  is  a  combina4on  of  two  separate  but  related   dimensions  –  digital  intensity  and  transforma4on  management  intensity   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   7   Digital  Intensity   Technology-­‐enabled  iniJaJves  in:   •  Customer  Engagement   •  Internal  Opera4ons   Leadership  capabiliJes  including:   •  Vision   •  Governance     •  Engagement   •  IT-­‐Business  Rela4onships   The  “What”   The  “How”  
  8. 8. Digital  Transforma4on  framework   Key  result  of  the  partnership  is  the  Digital  Transforma4on  framework  which  incorporates   all  elements  of  the  “What”  and  the  “How”  needed  to  reach  Digital  Excellence   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   8   Itera?ve  Transforma?on  Roadmap   Digital  Governance   Transforma?ve  Digital  Vision   Digital  Engagement   Source:  Capgemini  Consul4ng-­‐MIT  Analysis  –  Digital  Transforma4on:  A  roadmap  for  billion-­‐dollar  organisa4ons  (c)  2011       Digital  Building  Blocks   Strategic  Assets   Digital  Investment   The  “What”   The  “How”  
  9. 9. Digital  building  blocks   The  MIT  study  shows  that  organisa4ons  are  digitally  transforming  three  key  areas:   customer  experience,  opera4onal  processes  and  business  models   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   9   Customer   Experience   Opera?onal     Process   Business   Model   Digital  Capabili?es  &  Governance   Customer   understanding   Customer  touch   points   Top  line  growth   Worker  enablement   Performance   management   Process     digi?sa?on   Digital     globalisa?on   New  digital   business   Digitally-­‐modified   business   Digital  Building  Blocks  
  10. 10. Digital  maturity  assessment   Digital  best-­‐in  class  companies  are  called  “Digira4”:  they  succeed  to  excel  in  the  applica4on   of  innova4ve  technology  and  manage  their  Digital  Transforma4on  simultaneously   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   10   Digital  Intensity   Transforma?on  Management  Intensity   FASHIONISTAS   DIGIRATI   CONSERVATIVES  BEGINNERS   ...have  advanced  digital   features  in  silos  but  no   overarching  vision  and   coordinaJon     ...strong  vision  and   governance.  Digital   iniJaJves  generaJng   measurable  benefits.   …  few  advanced  digital   projects,  coordinated  but   underdeveloped  vision     …  carry  out  some   experiments,  immature   digital  vision  and  culture,   liUle  innovaJons   “How is the firm managing this transformation?” “What is the firm doing with Digital Technologies?”
  11. 11. Benefits  of  digital  maturity   Digitally  mature  companies  achieve  berer  financial  performance  and  outperform  their   compe4tors  by  top  line  growth   11   *  Industry-­‐adjusted  average  performance  of  companies  in  each  quadrant  compared  to  sample  average.   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   Basket  of  indicators:   §  Revenue  /  Employee   §  Fixed  Assets  Turnover  (Revenues  /   Property,  Plant  &  Equipment)   Basket  of  indicators:   §  EBIT  Margin   §  Net  Profit  Margin   COMPANIES  WITH  STRONGER  DIGITAL   INTENSITY  (WHAT)  DERIVE  MORE   REVENUE  FROM  THEIR  PHYSICAL  ASSETS*   COMPANIES  WITH  STRONGER   TRANSFORMATION  MANAGEMENT   INTENSITY  (HOW)  ARE  MORE  PROFITABLE   Revenue  Genera?on   Profitability   Transforma?on     Management  Intensity   Digital  intensity   Transforma?on     Management  Intensity   Digital  intensity   FASHIONISTAS…   DIGIRATI…   BEGINNERS…   CONSERVATIVES…   +26%*   COMPANIES  CLASSIFIED  AS  “DIGIRATI”  HAVE  A  26%  HIGHER  PROFITABILITY  AND  9%  HIGHER  REVENUE   Source:  Capgemini  Consul4ng-­‐MIT  Analysis,  2012  
  12. 12. Percentage  of  firms  by  digital  maturity  quadrant   Some  industries  are  moving  faster  than  others,  but  in  every  industry  there  are  digira4   already  outperforming  their  compe4tors   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   12   Percentage  of  firms  in  each  industry  by  quadrant:  
  13. 13. InnovaJon  challenges   Prisa’s  Digital  Unit   Digital  DNA   Digira4  have  a  common  digital  DNA,  they  invest  in  100%  of  the  transforma4on   management  elements   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   13   Vision   IT/   Business   Engagement   Governance   •  Transforma?ve  Vision   •  Shared  Vision   •  Digital  Tsar   •  Digital  Units   •  Investment  Commigees   •  Promo?ng  Change   •  Employee  Par?cipa?on   •  Inves?ng  in  Skills   •  Shared  understanding  between  IT   and  business  execu?ves  on  role  of  IT   Digital  ecosystem  Digital  Year   “The  IT  Team  (...)  now  work  hand  in  hand  with  the  CreaJve  Media  team.”   “DigiJzing  P&G  will  enable  us  to  manage   the  business  in  real  Jme  and  on  a  demand-­‐ driven  basis.  We’ll  be  able  to  collaborate   more  effecJvely  and  efficiently,  inside  and   outside  the  Company”  
  14. 14. 2.  Digital  Transforma4on:  The  drivers   “What  are  the  drivers  behind  Digital  Transforma4on?”  
  15. 15. Key  technology  trends   These  emerging  technologies  redefine  the  rela4onship  between  humans  and  machines   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   15   INTERNET  OF  THINGS   Market  size  will  be   $290  billion  by  2017     and  31  billion   internet-­‐connected   devices  will  exist  by   2020   Sources:  Research  and  Markets,  Mobile  Health  Trends  2013;  Intel  2013;    ABI  Research  July  2013;   AUGMENTED  REALITY   Es?mated   investments  of  $670   million  into   applica4ons  in  2013   and  could  reach  $2.5   billion  in  2018   AUTONOMOUS  VEHICLES   Nissan  promising   autonomous  car   produc?on  by  2020   BIOMETRIC  AUTHENTICATION   “Redefining  security:   Using  only  your   fingerprint,  IPhone   adds  a  new  layer  of   security  never  seen   before”  
  16. 16. 3.  Digital  Transforma4on:  The  impact   “How  organisa4ons  transform  to  the  power  of  digital?”  
  17. 17. Examples  of  Digital  Transforma4on  in  different  industries   Digital  Transforma4on  has  entered  industries  such  as  Consumer  Products  and  Retail,  but   does  it  also  impact  the  mining  industry?   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   17   “Be  the  first  company  to  be  fully   digital  end  to  end”   “Digital  has  been  a  catalyst  for  everything     in  the  company”   Angela  Ahrendts,  CEO   • Engaging  customers  with  social  media   • Digitally  enhancing  the  in-­‐store   customer  experience   • Strengthening  the  online  presence   • Unifying  data  globally   WHAT  HAVE   THEY  DONE?   • Governing  cross-­‐channel  consistency   • Engaging  employees  in  the   transforma4on   • Developing  new  skills   • Strengthening  IT-­‐Business   rela4onships   HOW  HAVE   THEY  DONE  IT?   “From  a  physical-­‐intensive  model  to  a   knowledge  and  technology-­‐intensive  one”   “Our  company  is  very  conservaJve,  so  changing   the  culture  is  a  key  challenge.  We  created   internal  innovaJon  awards  to  promote  new  ideas   and  encourage  our  workers  to  innovate”   Marco  Antonio  Orellana  Silva,  CIO   WHAT  HAVE   THEY  DONE?   • Developed  a  radical  digital  vision   • Invested  in  cultural  change   • Developed  new  skills   • Constantly  monitor  and  coordinate   ini4a4ves   • CIO  is  leading  the  change  in  concert   with  CxOs   HOW  HAVE   THEY  DONE  IT?   • Codelco  2.0   • Trucks  driving  themselves   • Opera4ons  controlled  remotely   • Informa4on  shared  real-­‐4me  
  18. 18. Nike:  From  separate  ini4a4ves  to  firm-­‐level  transforma4on   Nike  has  already  started  to  develop  advanced  digital  features...     Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   18   1   DIGITAL  INTENSITY   2   TRANSFORMATION  MANAGEMENT   INTENSITY   §   SOCIAL  MEDIA   §   DIGITAL  PRODUCT  DESIGN   §   CUSTOMIZED  MANUFACTURING   DIGITAL  DIVISION:  NIKE  DIGITAL  SPORTS   §  Digital  Product  Innova4on   §  Digital  Marke4ng   §  Digital  Technologies    
  19. 19. 4.  Digital  Transforma4on:  The  conclusion   “Why  Digital  Transforma4on  is  a  sustainable  revolu4on?”  
  20. 20. Summary   Behind  the  hype  Digital  Transforma4on  is  a  sustainable  revolu4on  fundamentally  changing   the  way  companies  do  business   Copyright  ©  2013  Capgemini  Consul4ng.  All  rights  reserved.   20   Hype   Revolu?on   Digital  Transforma?on  is  hyped   Digital  Transforma?on  presents  a  challenge   Digital  Transforma?on  is  an  enabler  for  business  transforma?on   Digital  Transforma?on  holds  poten?al  for  all  industries  
  21. 21. Dirk  Palder   Global  Vice  President  Postal  Markets     Phone:  +49  151  4025  2222   E-­‐Mail:  dirk.palder@capgemini.com  

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