Digital transformation involves using digital technologies to enable major business improvements like enhancing the customer experience and creating new business models. While some retailers and consumer packaged goods companies have achieved digital maturity, most are still in the early stages. Truly digitally mature "Digirati" companies invest equally in their digital capabilities and transformation management to execute a clear digital vision. They strategically focus on domains like customer experience, mobile channels, and analytics to drive excellence.

1. Ben Gilchriest
Digital Transformation Lead, ANZ
Capgemini Consulting
@BenGilchriest
DIGIRATI'
AND$THE'
+26%'DIGITAL'ADVANTAGE'
March,'2014'

2. In'the'past'decade'the'world'Australian'customers'and'retailers'operate'in'has'
fundamentally'changed,'we'have'entered'the'2nd'Machine'Age'
LEAPS IN
CONNECTIVITY
%$of$Australian$
households$with$
internet$
Max.$internet$
connecLon$speed$
(residenLal)$
RISE &
DIGITIZATION
RISE OF
MOBILITY
OF
INTERACTIONS
No.'of'Users'by'PlaCorm,'
2013E'2014'
%'of'Australian’s'with'a'mobile'
phone'
100$
2003'
2014'
2003'
1.46
Mps
60$
OF THE MICROMULTI-NATIONAL
Achieving'scale'without'mass'
1200$
Facebook$
80$
53%$
DAWN
1000$
40$
20$
800$
0$
%'of'Australians'transac<ng'on'
mobile'
2014'
+80%$
100
Mps
12%$
2012'
400$
37%$
2011'
TwiRer$
600$
Combining'digital'innova<ons'at'
tremendous'pace'
200$
Google+$
MySpace$
0$
2003'
2014'
Source:$Capgemini$analysis;$“Our$Digital$Future”,$Capgemini,$2013;$“The$Second$Machine$Age:$An$Industrial$
RevoluLon$Powered$by$Digital$Technologies”,$Capgemini,$2014.$
$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
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3. This'has'driven'a'major'shiK'in'the'expectaMons'customers'have'of'how'they'can'engage'
with'retailers'
REQUIRED$
INTERACTION$
MODEL$
CUSTOMER$
POSITION$
THE PAST
IN'THE'DARK'
InformaLon$poor.$
Limited$choice.$
Faceatoaface$the$preference.$
“TELLING”'
Mass$markeLng.$
Outbound$blast$communicaLons.$
ReacLve,$inbound$service$model.$
NOW
EMPOWERED$
Pull$content,$benchmark$on$trust,$
authenLcity$and$value.$
Constantly$changing$&$sharing.$
High$trust$in$peer$review.$
Benchmark$across$industries$&$
geographies.$
“CONVERSING”'
Embrace$social$(P2P)$&$coacreaLon.$
Onaline$and$mobile$at$the$core.$
Constantly$changing$needs.$
Source:$Capgemini$analysis.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
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4. With'your'customers'demanding'more'and'more'it'can'be'easy'to'just'jump'in'
MOBILE
SOCIAL
ANALYTICS
Digital'transforma<on'is
$
the$use$of$ NEW
digital$technologies$to$
enable$major'business'
EMBEDDED DEVICES
$
IMPROVEMENTS
$
$
$
ENHANCED CUSTOMER
EXPERIENCE
$
$
$
CREATING NEW BUSINESS
MODELS
STREAMLINING$
OPERATIONS$
$
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
4$

5. WHAT'is'the'
organisaMon'
doing''
(digital'
investments'&'
assets)'
DIGITAL INTENSITY
Digital'maturity'is'a'combinaMon'of'“what”'and'organisaMon'does'and'“how”'they'approach'
it'
HOW'is'the'
organisaMon'
doing'it'
(vision,'governance'
&'roadmap)''
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
5$

6. WHAT'is'the'
organisaMon'
doing''
(digital'
investments'&'
assets)'
DIGITAL INTENSITY
‘Beginners’'may'be'carrying'out'some'experiments'though'are'largely'skepMcal'of''value'of'
digital'
BEGINNERS
This is not for us!
HOW'is'the'
organisaMon'
doing'it'
(vision,'governance'
&'roadmap)''
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
6$

7. WHAT'is'the'
organisaMon'
doing''
(digital'
investments'&'
assets)'
DIGITAL INTENSITY
‘ConservaMves’'have'a'digital'vision'and'strong'governance'though'have'few'advanced'
digital'features'
BEGINNERS
CONSERVATIVES
This is not for us!
Analogue focus
HOW'is'the'
organisaMon'
doing'it'
(vision,'governance'
&'roadmap)''
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
7$

8. ‘Fashionistas’'have'many'advanced'digital'features'though'they’re'run'in'silos'and'there'is'
no'over]arching'vision'
FASHIONISTAS
WHAT'is'the'
organisaMon'
doing''
(digital'
investments'&'
assets)'
DIGITAL INTENSITY
Digital
Digital
Digital Digital
Digital
BEGINNERS
CONSERVATIVES
This is not for us!
Analogue focus
HOW'is'the'
organisaMon'
doing'it'
(vision,'governance'
&'roadmap)''
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
8$

9. ‘DigiraM’'have'a'strong'vision'and'clear'governance'with'many'digital'iniMaMves'generaMng'
business'value'in'measurable'ways'
FASHIONISTAS
DIGITAL INTENSITY
Digital
Digital
Digital Digital
Digital
DIGIRATI
Strong$digital$vision$
Good$governance$
Strong$digital$culture$
DIGIRATI'OUTPERFORM'
THEIR'PEERS*'
'
+9%'Revenue'
+26%'Net'Profit'
+12%'Market'Valua<on'
BEGINNERS
CONSERVATIVES
This is not for us!
Analogue focus
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$2011;$
“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$
publicaLon,$2012.$*$Average$performance$difference$for$firms$in$each$quadrant$versus$the$average$performance$of$
all$large$firms$in$the$same$industry$for$the$184$publiclyatraded$companies$in$our$sample.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
9$

10. On'average'Retail'and'CPG'sectors'are'making'good'ground'but'only'a'quarter'of'companies'
are'in'the'‘DigiraM’'quadrant'and'many'are'falling'into'transformaMon'traps'''
The'Biggest'Transforma<on'Traps'
Retail'&'CPG'Digital'Maturity'
• A$decadealong$history$with$digital$disrupLon$has$seasoned$
retailers,$producing$a$number$of$DigiraL$(26%).$
• For$CPG,$less$than$25%$are$‘DigiraL’,$with$many$other$
companies$lagging$far$behind.$
• The$most$significant$barriers$to$Digital$TransformaLon$are$desire,$
money,$and$tools.$
No'“burning'plaCorm”'/'sense'of'urgency'
FASHIONISTAS
39%$
DIGIRATI
“We'don’t'have'
<me'for'this'right'
now”'(53%)$
Not'enough'funding'
The “What”
33%$
RETAIL (global)
Limita<ons'of'IT'systems'
30%$
Roles'&'responsibili<es'not'clear'
CPG (global)
28%$
Unclear'business'case'
BEGINNERS
CONSERVATIVES
The “How”
27%$
Business'units'implemen<ng'in'silos'
24%$
“We'don’t'know'how'
to'do'that”'(52%)$
“I’ll'lose'influence'in'my'
company”'(23%)$
“It’s'not'worth'the'
risk”'(18%)$
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$
publicaLon,$2012;$“Embracing$Digital$Technology$a$a$New$Strategic$ImperaLve”,$Capgemini$–$MIT,$2013.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
10$

11. The'race'to'respond'means'that'some'fundamentals'are'at'risk'of'being'missed'
54%
INFORMATIONAL$
46%
$
44%
TRANSACTIONAL$
$
$
$
$
$
$
SOCIAL$
$
$
$
$
$
$
$
Shopping$cart,$home$
delivery,$online$
payment,$inastore$
availability$etc.$
$
Product$catalogue,$
product$search,$store$
informaLon,$store$
locaLon$etc.$
30%
RELATIONAL$
$
Related$items,$
product$
recommendaLons,$
user$history,$website$
personalizaLon$etc.$
$
$
$
$
Reviews,$raLngs,$
social$media$
integraLon$etc.$
Increasing'complexity'
Informing$customers$about$
product,$service$and$
business$offerings$
FacilitaLng$and$supporLng$
the$enLre$buying$and$
fulfillment$process$$
Building$1atoa1$
relaLonships$with$
customers,$loyalty$and$
repeat$purchases$
Engagement$with$a$wider$
customer$group$via$
integraLon$of$social$media$
plaqorms$$
Source:$“Digital$Commerce;$a$commentary$on$the$Australian$Retail$Sector”,$DT$AU$Lab,$2013.$A$Capgemini$–$
University$of$Sydney$Business$School$publicaLon.$Assessment$of$89$Australian$retailers$across$63$separate$
criteria$for$Digital$Commerce..$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
11$

12. DigiraM'have'a'common'Digital'DNA,'they'invest'100%'in'the'“how”'
VISION'
Digital$Units$
Investment$CommiRees$
Chief$Digital$Officers$
GOVERNANCE'
TransformaLve$Vision$
Shared$Vision$
IT'/'BUSINESS'
CAPABILITY'
Shared$understanding$between$
IT$and$business$execuLves$on$
the$role$of$IT.$
PromoLng$change,$invesLng$in$
skills,$employee$parLcipaLon.$
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$
publicaLon,$2012.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
12$

13. In'addiMon,'they'make'strategic'decisions'on'where'to'dominate'in'digital'
Domains'of'Excellence'(&'most'common'linkages)'
CUSTOMERaFACING$
PROCESSES$
‘Digira<’'make'strategic'decisions'on'where'to'excel'
OPERATIONALa$
FACING$PROCESSES$
Social$Media$
Customer$
Experience$
Mobile$
Channel$
AnalyLcs$
Process$
DigiLzaLon$
Internal$
CollaboraLon$
Data$IntegraLon$
Sources:$Capgemini$ConsulLngaMIT$Analysis$–$Digital$TransformaLon:$A$roadmap$for$billionadollar$organizaLons$©$
Capgemini,$2012;$Capgemini$ConsulLng$–$MIT,$“The$Digital$Advantage:$How$digital$leaders$outperform$their$peers$
in$every$industry”$©$Capgemini,$2012.$*$a$charts$represent$percentage$of$companies$that$exhibit$Excellence$in$one$
or$more$of$the$six$digital$intensity$domains.$We$define$excellence$as$an$average$score$>$6$(on$a$1a7$scale)$on$all$
quesLons$of$a$given$domain,$ater$dropping$the$quesLon$with$the$lowest$score.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
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14. And'they'apply'pragmaMc'approaches'that'balance'customer]driven'design'with'
investments'that'may'have'unclear'ROIs'
OUTSIDE-IN THINKING
INSIDE-OUT DESIGN
Business'
TradeOffs
OUTSIDE-IN DESIGN
Customer'
Customer'
Customer'
Business'
Technology'
Technology'
TradeOffs
Define$customer$needs$&$
design$endatoaend$
experience$
THINK LIKE A START-UP
Business'
Technology'
Define$business$value$and$
Design$/$adjust$/$
where$tradeaoffs$need$to$ implement$technology$to$
be$made$
support$customer$
TECHNOLOGY AS INFRASTRUCTURE
Technology as infrastructure
Technology as a tool
*!
!
value
Path 2; start-up
thinking approach
*!
*!
*!
*!
Path 1; traditional
approach
!
!
•
!
•
time
•
Design technology for a highly
specific purpose.
For example, capture
timesheets.
Opportunity for innovation is
limited as technology has a
highly specified purpose.
•
•
•
Design technology to enable
multiple uses.
Open architecture that can be
adapted by end users.
For example, installing smart
sensor grids, or building
community platforms.
Source:$“Our$Digital$Future”,$Capgemini$Australia,$2013;$Assoc.$Professor$Kai$Riemer,$University$of$Sydney$Business$School.$$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
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15. In'summary,'
WE ARE IN THE 2 MACHINE AGE
ND
DIGITAL MATURITY MATTERS; +26%
ANY COMPANY CAN BUILD A DIGITAL DNA
TAKE ACTION NOW TO CREATE YOUR DIGITAL ADVANTAGE

16. Ben Gilchriest
Digital Transformation Lead, ANZ
Capgemini Consulting
@BenGilchriest
THIS'PRESENTATION'&'THE'MAIN'STUDIES'
REFERENCED'ARE'AVAILABLE'ON'SLIDESHARE'
'
SLIDESHARE.NET/BENGILCHRIEST'
March,'2014'

17. Copyright$©$2014$Capgemini.$All$rights$reserved.$
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