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Thinking and behaving digitally

A one-hour lecture by Duncan Chapple on:
- Growing need for digital thinking
- What produces digital success or failure?
- Forrester’s three levers
- Improving core businesses
- New possibilities from digital
- Developing the capacity to change
- Paths to digital

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Thinking and behaving digitally

  1. 1. Thinking and Behaving Digitally Duncan Chapple University of Edinburgh Business School Duncan.Chapple@ed.ac.uk 1
  2. 2. Highlights: Around FinTech in 20 years Customer Relationship Marketing researcher Financial systems market analyst Business Group Director, Brodeur Worldwide Senior Manager, European Comms Research and teach innovation 2
  3. 3. Growing need for digital thinking 3
  4. 4. Digital business strategy • 4 (Bharadwaj et al 2013)
  5. 5. Getting in the game • Managers are increasingly nervous about the lack of progress in their digital initiatives. • Too often, organizations merely add digital pixie dust to traditional processes. • They need to address current opportunities while preparing for more fundamental medium- to long-term moves. 5
  6. 6. Mapping the Action Space • Defining the strategy focuses on building competitive advantage in the double game. It provides insight into short-term “no regrets” moves as well as more- transformative plays. These decisions establish the path for the other five layers. • Reshaping the customer experience explores how to eliminate pain points and how to surprise customers with new levels and forms of service today while achieving quantum improvements in customer experience tomorrow. • Reimagining offerings and business models prepares companies to create novel products and services, often by exploiting new data and powerful analytics. • Reengineering business processes entails adopting flexible and intuitive digital technologies to simplify processes and increase efficiency. • Building capabilities, often by working with outside partners and creating new platforms, enables companies to develop new ways of working, new business models, and other building blocks of digital transformation. • Accelerating the transformation involves devising new approaches to speed up learning, ramp-ups, and transformational plays. Source: BCG 6
  7. 7. The ‘double game’ 7
  8. 8. WRITE A QUESTION ABOUT DIGITAL TRANSFORMATION Activity 8
  9. 9. What is the good news? 9
  10. 10. Six ways to win with digital Source: McKinsey 10
  11. 11. Digital transformation in UK insurance 11Source: PAC Consultants
  12. 12. Bimodal tensions in businesses 12Source: Forrester Research
  13. 13. Bimodal in the boardroom • COO & IT focusses on back office – Standardisation – Crush complexity • Business to employee • B2B • B2B2C: insurance – IoT opens conversations • CEO focusses on front office for new revenue streams – B2C: e.g. retail banking; automotive – C2C 13
  14. 14. Bimodal: The transition 14Source: Gartner
  15. 15. Impact of changes: IoT 16
  16. 16. ASK A QUESTION OF YOUR NEIGHBOUR Activity 17
  17. 17. What can insurers do? 20
  18. 18. Dual challenges • Digital capacity challenges – Growing awareness of digital opportunities – Innovation happens outside IT – Vendors develop solutions • Leadership challenges – Differences between countries • Risk tolerance • Market openness • Managers have to develop strategy 21
  19. 19. Steps to digital leadership • Digital resister – Not doing anything. Production oriented. Often not • Digital explorers – Islands of innovation disconnected from IT. Uses case-based • Repeatable innovators – Platforms (sometimes disconnected) to deliver services – Often using labs that involve external partners • Digital transformers – Monetizing portfolios of new services • Disruptors – Moving platforms to new industries (Uber, BBVA, Capital One) Source: IDC 24 82% of European enterprises. Initial focus on internal efficiencies
  20. 20. Redesign customer experience • How to start from client experience? – Which products come first? – Mobile consumer hubs to engage ad- hoc with consumers’ frustrations – Primary research • Design thinking? – Think about apps and artefacts • New solutions? • New industries? – Controlled openness • Hackathons • Innovation labs 25
  21. 21. How to progress • Think out use cases – Understand digital is a race • Develop potential production environments – Start: design, strategy and business case – Later: security and high performance – Finally: Go/No go/Loss leader 26
  22. 22. The use-case journey • Many races into market – Speed matters • Start from the customer – 1 at a time – Find the ingredients • Map the use case • Find partners • Agile approach – Combine business and IT – Fail fast • Especially when resources are lacking • Speeds up testing – Rethink – Fast rollout 27
  23. 23. SILENT REFLECTION: FIND A PROBLEM FOR A USE CASE Activity 28
  24. 24. Where are we now? 29
  25. 25. Global comparison: UK stalling? 30 Source: Digital Evolution Index, Tufts University
  26. 26. Europe: More complex than in US • 2/3rds of CTOs in Europe see digital transformation as their key goals – Governance and data sharing rules create inhibition – Harder to find European examples • Furthermore, there’s push-back in many organisations – Especially on the mainland – What level of failure is allowed? – How to work externally? 31
  27. 27. Uneven, accelerating capacities • Different regulatory and technical challenges • Customers and colleagues in different countries work at different paces 32
  28. 28. Europe: efficiency versus growth 33Source: Everest Group
  29. 29. Building digital capacity 34
  30. 30. Building leadership capacity 35
  31. 31. 36 But…
  32. 32. DISCUSS THESE DIFFERENT PERCEPTIONS WITH YOUR NEIGHBOURS Activity 37
  33. 33. What is success? 38
  34. 34. BBVA’s take on incumbents Many obstacles • Legacies – IT platforms, costly networks, pain points • Conservative risk approach – Risk aversion as a standard within the industry Context for success • New competencies – Lack of capabilities necessary to compete (Design, UX, Big Data) • Cultural shift – Transformation requires embracing cultural change 39Source: BBVA presentation at Money20/20 Europe
  35. 35. What does it look like? “Being a Disruptor is a Privilege and a Responsibility” Nigel Wilson CEO, Legal & General • 5 million customers in six months – IndiaFirst micro- insurance JV – $3pm for $3k cover – 3 minutes to policy issuance 40
  36. 36. What produces digital success or failure? 41
  37. 37. Prototyping culture • Agile – Lean – Design thinking • Systems that support testing – Plugging in to external systems – Thinking about use cases • But... start from customers not technologies 42
  38. 38. MAKE A ROUGH, LEGIBLE PLAN FOR AN OPPORTUNITY (YOU WILL SWAP LATER) Activity 50
  39. 39. Developing the capacity to change 51
  40. 40. Bite-sized opportunities for success • 52
  41. 41. What is the journey? 53
  42. 42. From thought to action (1) • 54(Saul Berman 2012)
  43. 43. Vendors provide more IP 55Source: PAC Consultants
  44. 44. Digital Compass 56 (Westerman et al, 2012)
  45. 45. SWAP YOUR PLANS AND DISCUSS Activity 57
  46. 46. Discussion 58
  47. 47. Summary 59

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