DAZE Melbourne 2015: Leading Digital – Deconstruct your Industrial Model to reconstruct a Digital One

1. DECONSTRUCT
YOUR
INDUSTRIAL
MODEL
TO
RECONSTRUCT
A
DIGITAL
ONE!
LEADING DIGITAL
DAZE OF DISRUPTION
MELBOURNE, DECEMBER 3RD 2015

2. Copyright © 2014 Capgemini Consulting. All rights reserved.
When the rate of change on the outside exceeds
the rate of change on the inside...
1937
AVERAGE OF US MEN & WOMEN
61
75 75
15
2012 1930 2012
S&P 500 COMPANIES
HUMANS COMPANIES
LIFE SPANS
• From 1930 to 2010s
• Average lifespan of S&P 500 company
decreased from 75years to 15years
• From 2000 to 2014
• 52% of companies in the Fortune 500 have
either gone bankrupt, been acquired or ceased to
exist
• What predictions?
• At current rate, by 2027 > 75% of S&P 500
companies will be replaced

3. Copyright © 2014 Capgemini Consulting. All rights reserved.
Evolve to a digital
organization
Craft an effective digital
strategy to compete
Understand elements of
successful digital transformation
DIGITAL
TRANSFORMATION
DIGITAL STRATEGY
DIGITAL ORGANIZATION
Digital Journey: Fasten your seatbelts

4. Copyright © 2014 Capgemini Consulting. All rights reserved.
The Transformation Thing

5. Copyright © 2014 Capgemini Consulting. All rights reserved.
Leading Digital Transformation has become an
imperative for organizations
The new grand challenge:
• Digital Technology will continue to accelerate
• our skills, organizations & institutions are lagging behind
• business as usual will not help us get there
We need to reinvent our organizations to meet this challenge..a threat, but also the most
exciting time for management and organizational innovation

6. Copyright © 2014 Capgemini Consulting. All rights reserved.
Digital maturity combines two separate but related
dimensions: Digital Capability & Leadership Capability
The What: Digital Capability
investments in technology-enabled
initiatives to change how the company
operates – its customer engagements,
internal operations, and even business
models.
The How: Leadership Capability
consists in creating the conditions
necessary to drive digital transformation in
the organization
Leadership
Capability
Digital
Capability
BEGINNERS
FASHIONISTAS
CONSERVATIVES
DIGITAL
MASTERS

7. Copyright © 2014 Capgemini Consulting. All rights reserved.
The What: Clear Patterns In How And Where Digital
Masters Invest In Digital Capabilities
BUSINESS MODEL
CUSTOMER-FACING PROCESSES OPERATIONAL PROCESSES
Social Media
Internal
Collaboration
Mobile Channel
Customer
Experience
Process
Automation
Data Integration
Sensors
Analytics

8. Copyright © 2014 Capgemini Consulting. All rights reserved.
The How: Leadership Capabilities Turn Digital
Investment Into Digital Advantage
• Identify Strategic
Assets
• Transformative/
Think Big
• Intent and Outcome
• Evolve over Time
• Connect the
Organization
(Wire)
• Encourage
business Use
Cases (Adoption)
• Foster New Ways
of Working (Scale)
• Rethink IT/
Business
Relationship
• Build Digital Skills
• Digital Platforms
• Digital
Committees
• New Digital Roles
• Shared Digital
Units
IT/BUSINESS VISION
ENGAGEMENTGOVERNANCE

9. Copyright © 2014 Capgemini Consulting. All rights reserved.
* Average 2012 performance difference for firms in each quadrant versus the average performance of all large firms in the same industry for the 184 publicly-traded companies in our sample
The Why: Digital Masters Have Significantly Better
Financial Performance
Basket of indicators:
• EBIT Margin
• Net Profit Margin
DigitalCapability
Leadership Capability
REVENUE GENERATION EFFICIENCY
+6%
Basket of indicators:
• Revenue / Employee
• Fixed Asset Turnover
+9%
-10%-4%
DigitalCapability
Leadership Capability
PROFITABILITY
% +26%
+9%-24%
-11%

10. Copyright © 2014 Capgemini Consulting. All rights reserved.
The Strategy Thing

11. Copyright © 2014 Capgemini Consulting. All rights reserved.
The Great Reshaping of the Boundaries of
Competition…
Cost Leadership / Differentiation as Weapons
Closed / Internal Innovation
Consumption / Brand Control
Owned Resources / Assets, Erect Entry
Barriers, Lasting Competitive Advantage
Linear Industrial Value Chains
Sharp Industry / Category Definition
Product / Service Centric Model
Connected Digital Ecosystems / Platforms
Blurring industry Boundaries / Adjacency /
Lateral Competition
Experience Über Alles
Co-creation / Communities /
Collaborative Economy
Access, Loaned / Shared Assets /
Scale Effect is Advantage
Data Analytics / Optimization / Predictive
Open Innovation
(3rd Party, Co-Creation, Crowd sourcing)
SUPPLY-SIDE ECONOMICS DEMAND-SIDE ECONOMICS
Value is Primarily based on assets Value is Primarily based on Interactions & Scale

12. Copyright © 2014 Capgemini Consulting. All rights reserved.
The What: How to Manage Your Digital Transformation
Portfolio…
ReconfigureValue-Chain(CUEX+Ops)
Re-invent Business Offering / Model
VALUE-CHAIN TRANSFORMATION NEW DIGITAL BUSINESS
DIGITAL VALUE PROPOSITIONDIGITAL RE-ENGINEERING
• Core processes / cross organization boundaries
Ø Omnichannel transformation in retailing
• Single / end-to-end process improvement
Ø Scheduling & routing
• Product / services / data & analytics
Ø One-time lifestyle insurance
• Ecosystem / platfom transformation
Ø Industrial internet / IOT

13. Copyright © 2014 Capgemini Consulting. All rights reserved.
The How: Managing Execution, Speed…and Risk
BUY/
PARTNER
Time to Implementation
TRANSFORM THE CORE GREENFIELD
ACQUISITIONEDGE EXPLORATION
• Simplification, reshaping the core business
• Full business transformation
• Incubation
• Open organisation / learn
• Acquiring competences
• Buy a new business model
• « On the side » strategy
• Limited scope
MAKE/
INHOUSE
LONGER SHORTER

14. Copyright © 2014 Capgemini Consulting. All rights reserved.
The Organization Thing

15. Copyright © 2014 Capgemini Consulting. All rights reserved.
During Electrification, Productivity Surged Only After
Firms Had Radically Redesigned Their Operations

16. Copyright © 2014 Capgemini Consulting. All rights reserved.
Digital Dexterity, the Hallmark of a Digital
Organization, is Underpinned by Six Dimensions
Source: Capgemini Consulting and MIT Center for
Digital Business
0
Digital
Mindset
Digital
Mindset
Digital solutions-first
and high digital IQ
Detecting trends and
responding to
customer needs
rapidly
Boundary-crossing
collaboration to
innovate and solve
problems
Systemic analysis,
experimentation and
data-driven decision
making
Driving operations
efficiencies through
data
Encouraging adoption
of technology tools,
not deployment
Digital
Transfo.
Digital
Dexterity

17. Copyright © 2014 Capgemini Consulting. All rights reserved.
Digital Dexterity and Data Reduce or Eliminate
Traditional Constraints on Organizational Design
NO TOUCH HIGH TOUCHCUSTOMER INTERACTION
INDIVIDUAL BRAND RELATIONSHIP COMMUNITY MEMBERSHIPCUSTOMER RETENTION
ROUTINIZATION / AUTOMATION ADAPTABILITYOPERATIONS CAPABILITY
HIERARCHY NETWORKCOMMUNICATION & COLLABORATION
CUSTOMER EXPERIENCE
INTERNAL OPERATIONS
STANDARDIZATION PERSONALIZATIONSERVICE CUSTOMIZATION
CONSUMPTION CO-CREATIONCUSTOMER ENGAGEMENT
CENTRALIZED DIRECTION DECENTRALIZED DISCRETIONWORKER AUTONOMY
INTERNAL / SECRETIVE OPEN / TRANSPARENTINNOVATION & LEARNING

18. Copyright © 2014 Capgemini Consulting. All rights reserved.
Few truly digital organizations but many in the process
of becoming digital
§ Stalling – inflexible organizations without any
significant digital capability
§ Initiating – investing in digital expertise and
initiating partnerships
§ Engaging – transition underway
• Growing digital capabilities
• Able to respond to changing customer
needs
§ Self-Reinforcing – highly flexible digital
organizations.
• Rapidly re-organize or self-organize
• Advanced digital capabilities

19. Copyright © 2014 Capgemini Consulting. All rights reserved.
Digital Technology Will Remain The Endless Agitator Of The Business World
Augmented Reality
Robotics Artificial Intelligence
Sharing Economies Wearables
3D Printing
You Ain’t Seen Nothin’ Yet

20. Copyright © 2014 Capgemini Consulting. All rights reserved.
Thank you!
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