The document discusses how digital transformation is impacting corporate performance. It describes how the digital revolution is being driven by increased information availability, social connectivity, true mobility, and the merging of digital and physical worlds. This is transforming products/services, customer needs, competition, and business models. Companies can improve top-line and bottom-line performance by leveraging opportunities like business innovation, expansion, enrichment, process automation, flexibility, and control. Developing a digital agenda is important to successfully transform and improve corporate performance over time.

1. Te c h n o l o g y Tr a n s f o r m at i o n
The impact of DIGITAL TRANSFORMATION
on corporate performance
New ways, new markets

2. The world is transforming towards digital
The Digital Revolution
The world is embracing a new era
of digitalization. Within a short
time frame, digital innovations
increasingly transformed individual
behaviors and steadily redefined
enterprise realities. Through the wide
adoption of digital opportunities,
new product and services emerged,
customers now have broader product choices, market competition
intensified across industries, and
suppliers’ relationships have been
transformed. Digitalization transformed existing market structures,
enhancing the necessity for enterprises to respond to the current
vital market changes.
As Fig. 1 shows, this digital revolution is triggered by the abundance of
available information, social connectivity, the rise of true mobility, and
the emerging fusion of the digital
and physical world.
“In the 1930’s, the cumulative codified
knowledge base of the world doubled
every 30 years, today it doubles every
11 hours.”
The high internet adoption increased
the range of available information.
With over 270 million websites, over
12 million wikis, billions of videos
and blogs, a wide range of content is
available at digital users’ fingertips.
People increasingly communicate,
share knowledge, build opinions and
undertake shopping decisions via
social networks.
With over 800 million global users,
social networks now have tremendous impact on enterprises, influencing customer shopping decisions,
reshaping workforce communication
and revolutionizing supply chain
processes.
Furthermore, the true mobility of
services eliminating the boundaries
of time and location plays a crucial
role in our new era. Over 300 million
smartphones, 20 million tablets
and 12 billion mobile applications
already reached markets. Customers,
workforce and partners aim to be
connected everywhere at anytime.
The upcoming digital era will be additionally shaped by the emergence
of the digital-physical reality. Innovative applications such as Augmented Reality or Machine-to-Machine
communication will enrich physical
environments with context aware
services and valuable information.
To approach the digital revolution,
enterprises need a structured digital
agenda. This publication illustrates
digital impacts, opportunities and
strategies which are vital parts of a
digital agenda.
Figure 1: The digital revolution
The 90‘s digital acceleration
2000 – Present Digitalization
Future Digitalization
Digital Transformation Drivers
Information Advantage
+
+
True Mobility
Social
Connectivity
+
Digital-Physical Reality
Technology Hype cycles
Adoption
Adoption
Adoption
Social networks
Email
IM
Handy
PC
IM
E-Commerce
Adopted technologies
New emerging technologies
M2M
Smartphone
Fixed
phone
Tablets
Time
Digital
ID
Emails
Connected
car
E-Commerce
Adopted technologies
New emerging technologies
Social
networks
Tablet
Time
Adopted technologies
Smartphone
Time
New emerging technologies
Society use of Digitalization
© 2011 Capgemini Consulting
2

3. Digitalization impacts markets and businesses
Digitalization of markets
Figure 2: Impact of digitalization on market drivers
Business structures have been revolutionized by digital opportunities.
As Fig. 2 shows, the digitalization of
our society transformed product &
services, customer requirements,
competition and organization models.
New products & services
The emergence of digital technologies transformed product & service
offerings. Innovative internet-based
services emerged, providing customers
new dimensions of entertainment,
shopping experience, communication
and sharing.
Nowadays, the extension of existing
offering portfolio with new product
& services does not necessarily require ground-breaking innovations.
With business model innovation,
firms reshape existing eco-systems,
generating new customer experience
and increasing sales. For example,
enabling customers to access an unlimited range of multimedia content
at their fingertips, Apple revolutions
the music, video and gaming retail
industry.
Also, the rise of true mobility triggered the adoption of mobile services
and apps, where new services emerge
every day. The number of mobile apps
already surpassed 500 thousand,
generating global revenue of $2.2 billion in 2010.
“In 2003 Apple launched its music
store and sold over 1 million songs
in the first week. Seven years later,
the store served its 10 billionth song
download.”
New
products
& services
New
organization
models
New
customer
requirements
Digital
markets
Higher
market
competition
© 2011 Capgemini Consulting
Thus, innovative firms leveraging
digital opportunities can improve
their top-line with new product &
services offerings.
Additionally, with the wide adoption
of mobility, customers expect
service readiness regardless of time,
location and handset.
New customer requirements
Thus, enterprises neglecting mobile
services may lose market share.
The digital revolution impacts
customer behaviors and requirements.
With the high internet penetration
and the resulting information
advantage, customers now have a
wide range of new choices. The
existing information abundance
shifted the bargaining power towards
end-customers in most industries.
Customer decisions are increasingly
based on social network opinions,
where product or service experience,
popular marketplaces, videos, or
photos are widely shared.
Higher market competition
The wide internet penetration and
mobility adoption widens the geographic market and intensifies the
global competition. Also, in most
industries, online opportunities reduced market entry barriers,
eliminating the need for physical
sales forces, physical assets and
reducing traditional administration
costs.
The impact of DIGITAL TRANSFORMATION on corporate performance
3

4. “In 2005, Blockbuster was the
biggest US video rental store. While
in 2010 Blockbuster went bankrupt,
Netflix passed the 20 million subscriber mark with its on-demand
online rental.”
Digitalization enables firms to
improve process efficiency, become
more competitive and reduce market
entry barriers in most industries.
For example, a wide range of pure
online retailer such as Amazon,
Zalando1 or Mymuesli2 revolutionized traditional retail business models
and found a wide market acceptance.
These pure online retailers have high
cost advantage compared to traditional retailers, since they can save on
personal, facility and administrative
costs. The rise of pure online
offerings also represents a threat for
traditional banks. Bank of Scotland,
a purely online based bank has a
very slight administrative structure
with less staff, physical assets or
related expenditures. Through its
cost efficiency, Bank of Scotland can
provide attractive interest rate to its
clients which surpass traditional
banking rates.
Digitalization increases the importance
of service differentiation and cost
efficiency, raising the necessity for
supplier integration. Since customers
increasingly require full services on
one hand at their fingertips, competitors increasingly become cooperators
and conjointly participate to value
creation. For example, Amazon US
now integrated Facebook Connect in
its recommendation engine to
improve its recommendation results
based on social media information.
Fressnapf3 and Mars integrated their
sales data to optimize demand forecasts and reduce inventory costs.
Also, considering potential workforce
as knowledge supplier, digitalization
transformed recruiting processes,
with Enterprise 2.0. For example,
New organization models
Zalando is a German online retailer selling shoes
Mymuesli is a mass customization website enabling customers to create their breakfast by choosing own ingredients
3
Fressnapf is a German franchise selling pet food
1
2
4
social media is highly vital for talent
identification and brand reputation.
Digitalization also increases the
necessity of a digital organization
which can deliver digital capabilities
to the firm. The digital organization
delivers digital technologies with
expertise to the firm and supports
the transformation process. To transform to the full power of digital,
L´Oréal formed a team of 300 power
users with the goal of providing
digital expertise at strategic points
of the firm. Nissan and Deutsche
Bank extended their IT organization
with a social media sub-unit which
delivers social media opportunities
such as marketing or customers
support to the enterprise.
Thus, digitalization requires new
integrated processes and delivery
models.

5. Digitalization can be leveraged
Opportunities
A coherent understanding of the
digitalization and its impact can be
translated into opportunities.
This potential value of the Digital
Transformation affects both the topline as well as the bottom-line of an
enterprise, while both dimensions
have dedicated value drivers that
present avenue to leverage the digitalization. Fig. 3 provides an overview of Digital Transformation value
drivers.
Top-Line Value Drivers
Considering the top-line dimension,
business enrichment represents
the extension of existing offerings
to increase customer satisfaction
and brand value perception. BSkyB
enriched its business by digitalizing
its customer interaction from service
acquisition, over support to billing.
BSkyB ensured a transparent relationship with the customer, enabled
customer to control service interactions
and adapted its services towards
customer behaviors. As, result, BSkyB
improved its customer satisfaction,
brand reputation and customer value
perception.
Additionally, digitalization enables
business expansion that can be
achieved by the identification of new
customer segments to enable business
growth. Further expansion can be
permuted by the integration of digital
leaders or targeted dissociation from
partners to leverage the advantages
of the digital world. The targeted
recommendation engine of Amazon
US coupled with Facebook Connect
represents an example of partner integration leveraging synergies.
Business growth can be also achieved
with business innovation. Enterprises fostering the opportunity to
deliver digital value through innovative customer-driven products
& services can expand towards
completely new markets. Additional
value can be attained through the
re-adaption of the current market
approach to the new digital market
spaces, with business model innovation.
For instance, Pages Jaunes in France
offered new digital services by shifting
the business model from traditional
printed media to digital and mobile
services. As benefit, Pages Jaunes
created new revenue streams offering
new services within new platforms.
Figure 3: Value drivers of digitalization
Top-line value drivers
Bottom-line value drivers
Society use of Digitalization
Business
Innovation
Business
Expansion
Business
Enrichment
Business Process
Automation
Digital
Business
Model
Business
Flexibility
Business
Control
© 2011 Capgemini Consulting
The impact of DIGITAL TRANSFORMATION on corporate performance
5

6. Figure 4: Action toolkit top-line improvement
Business
Innovation
Business
Expansion
Business
Enrichment
n
Digital business model
n
E-commerce
n
Digital customer support
n
Digital innovation radar
n
Digital sales channels
n
Mobile services
n
Digital enabled workforce
n
Portfolio digitalization
n
Digital customer integration
n
Digital customer innovation
n
Digital marketing
n
Digitalized user experience
© 2011 Capgemini Consulting
Figure 5: Action toolkit for bottom-line improvement
Business
Control
Business
Flexibility
Business Process
Automation
n
Digital integrated value chain
n
Digital flexibility
n
Customer insight
n
Supplier collaboration 2.0
n
Process on the Fly
n
Digital integrated forecasts
n
Enterprise 2.0
n
Scenario Driven processes
n
Business Intelligence
n
Digital processes
n
Digital monitoring
n
Digital efficiency
n
Reporting dashboards
© 2011 Capgemini Consulting
As Fig. 4 shows, specific actions
across top-line value drivers can be
realized to improve revenues with
digitalization.
“In 2007 Amazon launched its
eReader kindle. In 2011, Amazon
sold 3x as many ebooks for its kindle
platform as it sold hardcovers.”
Therefore, digitalization top-line
drivers enable enterprise to expand
their business, acquiring new
6
customer segments, extending their
offerings and growing towards completely new markets.
Bottom-Line Value Drivers
On the other hand, digitalization can
also be leveraged on the bottom-line
by improving productivity and reducing costs. This can be accomplished
by the automation of business processes. Business process automation
represents the use of digital technologies to digitalize business tasks
and reduce operative costs. The
digitalization of business processes
reduces media interruptions, data
losses and optimizes processes.
Furthermore, with the current volatility of markets, enterprises increasingly need to be flexible. Business
flexibility can be enabled by “Processon-the-Fly”, which represents the
shift from fixed processes towards
the use of innovative technologies
to enable ultra-flexible and ultramanageable processes. An EU transaction bank transformed its countryspecific operating model based on
a flexible digital platform. Using a
single and flexible platform for
business processes, the transaction
bank aims at a cost per transaction
reduction of 30%. Beside the benefit
to realize cost reductions by means
of flexibility, digital technologies also
improve the required flexibility of
organization structures. For instance,
enterprise 2.0 tools can release
knowledge transfers from the rigid
process view, enabling new better
ways which need to be flexibly adapted
to existing processes.
Lastly, digitalization facilitates the
business monitoring process for
business control. Bombardier saved
9 million $US by digitalizing its
manufacturing monitoring process.
As Fig. 5 shows, specific actions
across bottom-line value drivers can
be realized to improve margin with
digitalization.

7. Digital Agendas need to be created
Capgemini Consulting’s Offering
Portfolio
Technology Strategy &
Transformation
Capgemini Consulting developed a
core competency defining the Digital
Agenda together with our clients.
Capgemini Consulting enables across
sectors to successfully develop the
DIGITAL AGENDA i.e. business
strategies considering digitalization
drivers, and supports firms transforming their technology landscape to
the full power of digital.
Capgemini Consulting uses its stateof-the-art and in depth insight into
valuable technology innovations
to help clients develop technology
innovation radars, build strategic
roadmaps to the power of digital
and re-organizes the IT organization
according to new technology
challenges.
Digital Strategy &
Transformation
Capgemini Consulting addresses
growth and productivity challenges
for enterprises, by re-designing
business models and formulating
winning value propositions utilizing
digital innovation. A transformation
strategy outlines the path for state-ofthe-art implementation.
Digital Customer Experience
Capgemini Consulting supports the
digital transformation of marketing,
sales and service processes. Our
highly-experienced professionals
help clients in identifying consumer
behavior, developing targeted multichannel presences and optimizing
the provision of after-sales support.
Digital Operations and
Organization
Capgemini Consulting jointly
developed the operating model of
hundreds of global clients. With its
broad expertise on digitalization,
operating model and efficiency,
Capgemini Consulting helps clients by
leveraging new digital opportunities.
Connected Workforce
Capgemini Consulting combines
its strong understanding of people
and digital opportunities to
empower workforce productivity,
communication and optimize talent
management.
Partnership/ Ecosystem
Capgemini Consulting assesses the
business potential of partnerships
and supplier integration by means of
their value proposition. In addition,
Capgemini Consulting help to
manage existing partnerships and
evaluates potential collaboration
opportunities.
In summary, Capgemini Consulting
is your optimal partner to transform
your business to the full power of
digital.
Figure 6: Capgemini Digital Transformation Framework
Digital Customer Experience
Digital Operations
and Organization
Digital Strategy
& Transformation
Connected
Workforce
Technology Strategy
& Transformation
Partnership/ Ecosystem
© 2011 Capgemini Consulting
The impact of DIGITAL TRANSFORMATION on corporate performance
7

8. Digitalization impacts corporate performance
Figure 7: Impact of Digital Transformation on corporate performance
Performance
Digital impact oncorporate performance
n
n
n
n
Think digital and build on a digital agenda
Leveraged value of digital operating model
Leveraged value of digital markets
Digitalized customer lifecycle
Common trajectory of corporate
performance
Implementation launch
of the digital agenda
n
n
n
n
Support business processes with IT
Reduce operative costs with IT
Meet budget and schedule
Predict the future and redirect
Time
© 2011 Capgemini Consulting
Digital Transformation
Digital transformation is happening,
but not at the pace of hype. Traditional industries are not moving as
fast as the media would seem to
demand, but they are moving.
Companies in all industries and regions are experimenting with – and
corporate performance is benefiting
from – digital transformations.
and on provided managerial balance
between top-down control and
bottom-up autonomy of actions
contribute to the rise of corporate
performance. While the prediction
of the future is a part of a good
management, the difference to a
performance leadership in any
industry is the creation of the digital
future by means of a customized
digital agenda.
“Digitalization drives both;
employee productivity and
company’s competitiveness.”
“Digital Transformation accelerates
exponentially and improves corporate
performance.”
Fig. 7 depicts this positive impact
of digital agendas on corporate
performance. As not to be neglected,
common management approaches,
those focus on negotiated goals
These digital transformations enable
the leverage of digital value drivers
and change the trajectory of corporate performance from a mere “rise”
to a digital boost.
Whether it is in the way individuals
8
work and collaborate, the way
business processes are executed
within and across organizational
boundaries, or in the way companies
understand and service customers,
digital technology provides a wealth
of opportunity to those willing
to change their businesses to take
advantage of it.

9. The impact of DIGITAL TRANSFORMATION on corporate performance
9

10. References
Acision Analysis: “Mobile Advertising 2020 Vision”, 2009
AllFacebook.com: “Facebook and
Amazon Join Forces For Social
Shopping”, http://www.allfacebook.
com/facebook-amazonrecommendations-2010-07,
07/27/2010
Booz&Co Analysis: “The Rise of
Mobile Application Stores: Gateways
to the World of Apps”, 2010
Capgemini Analysis: “Mobile Payments:
Are you Ready for the Early Majority?”
Telecom & Media Insights, 2008
Capgemini Analysis: “Mastering Social
Media: The 21st Century challenge
of consumer information”, Business
Information Management, 2011
Capgemini, The Royal Bank of Scotland,
European Financial Management&
MarketingAssociation: “World
Payments Report 2010”, 2010
eWeek.com: “Smartphone Shipments
to Hit 850 Million Units by 2015:
In-Stat”, http://www.eweek.com/c/a/
Mobile-and-Wireless/SmartphoneShipments-to-Hit-850-Million-Unitsby-2015-InStat-422416/, 01/25/2011
Forrester Research: “European Mobile
Media Forecast, 2008 to 2013:
Identifying Revenue Growth in a
New and Challenging Ecosystem”,
2008
Forrester Research: “Predictions
2010: Enterprise Mobility Accelerates
Again”, 2009
Forrester Research: “Welcome To the
Empowered Era”, 2010
Forrester Research: “BT 2020: IT’s
Future in the Empowered Era”, 2011
Forrester Research: “The M2M
Market Is A Blossoming Opportunity”,
2010
Gianvito Lanzolla & Jamie Anderson:
“Digital Transformation”, Business
Strategy Review, Vol. 19 (2), 2008
KPMG Analysis: “The Digital Bubble:
balancing Operational Challenges
with Growth”, Information,
Communications & Entertainment,
2007
Michael E. Porter: “Strategy and
Internet”, Harvard Business Review,
Vol. 79 (3), 2001
Michel Krauch: “Noch kaum Realität:
Wann Unternehmen fit fürs digitale
Zeitalter sind“, http://www.cio.de /
strategien/analysen/2268577/,
03/23/2011
Portio Research: “Worldwide Mobile
Market Growth 2000-2020: Analysis
of the past, present and future
growth of the worldwide mobile
industry”, 2009
Renub Research: “Worldwide Tablet
PC Present and Future Market Scope
(2010 – 2015) and its Impact on
Various Sectors”, 2011

11. About Capgemini Consulting
Capgemini Consulting is the Global Strategy and Transformation Consulting brand of
the Capgemini Group, specializing in advising and supporting organizations in transforming
their business, from the development of innovative strategy through to execution, with
a consistent focus on sustainable results. Capgemini Consulting proposes to leading companies and governments a fresh approach which uses innovative methods, technology and
the talents of over 3,600 consultants world-wide. For more information:
www.de.capgemini-consulting.com
About Capgemini
With more than 115,000 people in 40 countries, Capgemini is one of the world‘s foremost
providers of consulting, technology and outsourcing services. The Group reported 2010 global
revenues of EUR 8.7 billion. Together with its clients, Capgemini creates and delivers business
and technology solutions that fit their needs and drive the results they want. A deeply
multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.
Learn more about us at www.de.capgemini.com
Rightshore® is a trademark belonging to Capgemini.
Contact
Dr. Guido Kamann
Vice President
Phone: +49 151 4025-2115
E-Mail: guido.kamann@capgemini.com
Serdal Sivri
Consultant
Phone: +49 151 4025-0688
E-Mail: serdal.sivri@capgemini.com

12. Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group
DE 1110-17-0078
Capgemini Deutschland GmbH
Karolinen Karree
Karlstraße 12
D-80333 Munich
Tel. : +49 89 9400-0 – Fax: +49 89 9400-1111
www.de.capgemini-consulting.com