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DIGITAL TRANSFORMATION
BEYOND THE HYPE
What do these companies have in common?

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

2
What is digital mastery?
Digital Capability

Leadership Capability

Technology-enabled initiatives in:
Customer Experience

Leadership capabilities including:
Vision

Internal Operations

Governance
Engagement
IT-Business Relationships

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

3
Mastering both dimensions is the key to achieving the digital
advantage
Nike: From Separate Initiatives to Firm-Level Transformation
1
1

DIGITAL CAPABILITY
Digital Product
Digital Product
Design
Design

Social Media
Social Media

Customized
Customized
Manufacturing
Manufacturing

+
2
2

FIRM-LEVEL
TRANSFORMATION

LEADERSHIP CAPABILITY
Digital Division:
Digital Division:
Nike Digital Sport
Nike Digital Sport







Digital marketing
Digital product innovation/design
Digital commerce (e/m-commerce)
Digital technologies (GPS, mobile, etc.)
Customer analytics
The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

4
Four levels of digital mastery
FASHIONISTAS
Many advanced digital features (such
as social, mobile) in silos
No overarching vision
Underdeveloped coordination
Digital culture may exist in silos

DIGITAL MASTERS
Strong overarching digital vision
Good governance
Many digital initiatives generating
business value in measurable ways
Strong digital culture

BEGINNERS

CONSERVATIVES

Management skeptical of the business
value of advanced digital technologies
May be carrying out some experiments
Immature digital culture

Overarching digital vision exists, but may
be underdeveloped
Few advanced digital features, but
traditional capabilities may be
Strong governance across silos
Taking active steps to build digital skills
and culture

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

5
Digital mastery varies widely
FASHIONISTAS

BEGINNERS

DIGITAL MASTERS

CONSERVATIVES

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

6
Digital Masters have significantly better financial performance
than their peers
Revenue Generation
Efficiency

Profitability

Market Valuation

+6%

+9%

-11%

+26%

-12%

+12%

-4%

-10%

-24%

+9%

-7%

+7%

Basket of indicators:
Revenue / Employee
Fixed Asset Turnover

Basket of indicators:
EBIT Margin
Net Profit Margin

Basket of indicators:
Tobin’s Q Ratio
Price / book ratio

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

7
Some industries average higher mastery than others…

Telecoms
Travel and
hospitality

High
Technology

Average industry
digital mastery:
Retail

Pharmaceuticals

Banking

Consumer Packaged Goods
Insurance
Utilities

Manufacturing

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

8
…but every industry already has digital masters
Percentage of firms in each industry by quadrant

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

9
Digital Masters have a common Digital DNA
They invest in 100% of the elements of Leadership Capability…
 Transformative Vision
 Shared Vision

“Digitising P&G will enable us to manage
the business in real time and on a
demand-driven basis. We’ll be able to
collaborate more effectively and efficiently,
inside and outside the Company”

Vision
Chief Digital Officer




CDOs & Digital Unit

Chief Digital Officer
Shared Digital Units
Investment Committees

Governance

 Promoting Change
 Employee Participation
 Investing in Skills

Engagement

IT /
Business
Innovation challenges
“The IT Team (...) now work hand in hand
with the Creative Media team.”

Digital Year

 Shared understanding between IT
and business executives on role of IT
The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

10
Digital Masters have a common Digital DNA
…and they make strategic decisions on where to excel with digital capabilities
Focus Investments on
Where they Choose to
Excel Digitally

+
Combine Digital
Capabilities to Exploit
Synergies

Customer
Experience

In-store
Online

Social
media

Mobile channel

Unified Processes / Integrated Data

Process
Excellence

Supply-chain
Integration

Customer experience

Centralized
Ordering

New business models

Unified Processes / Integrated Data

Analytics
capabilities

Personalized Customer
experience

Online
On-premise

Unified Processes / Integrated Data
The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

11
How to drive digital transformation

Sustain the Transformation

Frame the Digital Challenge

Build Capabilities
Align Incentives & Rewards
Measure, Monitor & Iterate

Understand the Impact
Assess Digital Maturity
Develop Vision & Align Around It
Sustain

Engage

Engage the Organisation
Signal the Change
Mobilise at Scale
Evolve Culture & Adapt Work Practices

Frame

Focus

Focus Investments
Build a Digital Roadmap
Build Investment Case
Set up Governance Model

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

12
In conclusion
DIGITAL MASTERY MATTERS
DIGITAL MASTERY MATTERS
IT MATTERS IN EVERY INDUSTRY
IT MATTERS IN EVERY INDUSTRY
ANY COMPANY CAN BUILD DIGITAL DNA
ANY COMPANY CAN BUILD DIGITAL DNA
TAKE ACTION NOW TO
TAKE ACTION NOW TO

CREATE YOUR OWN DIGITAL
CREATE YOUR OWN DIGITAL
ADVANTAGE
ADVANTAGE
The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

13
The
New
t al
Digi rs
te
Mas

The Digital Advantage - Dreamforce_M
Copyright © Capgemini 2013. All Rights Reserved

14
About Capgemini
With more than 125,000 people in 44 countries, Capgemini is one
of the world's foremost providers of consulting, technology and
outsourcing services. The Group reported 2012 global revenues of
EUR 10.3 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.capgemini.com

www.capgemini.com
The information contained in this presentation is proprietary.
© 2013 Capgemini. All rights reserved.
Rightshore® is a trademark belonging to Capgemini.

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Digital Transformation - Beyond the Hype #DF13

  • 2. What do these companies have in common? The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 2
  • 3. What is digital mastery? Digital Capability Leadership Capability Technology-enabled initiatives in: Customer Experience Leadership capabilities including: Vision Internal Operations Governance Engagement IT-Business Relationships The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 3
  • 4. Mastering both dimensions is the key to achieving the digital advantage Nike: From Separate Initiatives to Firm-Level Transformation 1 1 DIGITAL CAPABILITY Digital Product Digital Product Design Design Social Media Social Media Customized Customized Manufacturing Manufacturing + 2 2 FIRM-LEVEL TRANSFORMATION LEADERSHIP CAPABILITY Digital Division: Digital Division: Nike Digital Sport Nike Digital Sport      Digital marketing Digital product innovation/design Digital commerce (e/m-commerce) Digital technologies (GPS, mobile, etc.) Customer analytics The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 4
  • 5. Four levels of digital mastery FASHIONISTAS Many advanced digital features (such as social, mobile) in silos No overarching vision Underdeveloped coordination Digital culture may exist in silos DIGITAL MASTERS Strong overarching digital vision Good governance Many digital initiatives generating business value in measurable ways Strong digital culture BEGINNERS CONSERVATIVES Management skeptical of the business value of advanced digital technologies May be carrying out some experiments Immature digital culture Overarching digital vision exists, but may be underdeveloped Few advanced digital features, but traditional capabilities may be Strong governance across silos Taking active steps to build digital skills and culture The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 5
  • 6. Digital mastery varies widely FASHIONISTAS BEGINNERS DIGITAL MASTERS CONSERVATIVES The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 6
  • 7. Digital Masters have significantly better financial performance than their peers Revenue Generation Efficiency Profitability Market Valuation +6% +9% -11% +26% -12% +12% -4% -10% -24% +9% -7% +7% Basket of indicators: Revenue / Employee Fixed Asset Turnover Basket of indicators: EBIT Margin Net Profit Margin Basket of indicators: Tobin’s Q Ratio Price / book ratio The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 7
  • 8. Some industries average higher mastery than others… Telecoms Travel and hospitality High Technology Average industry digital mastery: Retail Pharmaceuticals Banking Consumer Packaged Goods Insurance Utilities Manufacturing The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 8
  • 9. …but every industry already has digital masters Percentage of firms in each industry by quadrant The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 9
  • 10. Digital Masters have a common Digital DNA They invest in 100% of the elements of Leadership Capability…  Transformative Vision  Shared Vision “Digitising P&G will enable us to manage the business in real time and on a demand-driven basis. We’ll be able to collaborate more effectively and efficiently, inside and outside the Company” Vision Chief Digital Officer    CDOs & Digital Unit Chief Digital Officer Shared Digital Units Investment Committees Governance  Promoting Change  Employee Participation  Investing in Skills Engagement IT / Business Innovation challenges “The IT Team (...) now work hand in hand with the Creative Media team.” Digital Year  Shared understanding between IT and business executives on role of IT The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 10
  • 11. Digital Masters have a common Digital DNA …and they make strategic decisions on where to excel with digital capabilities Focus Investments on Where they Choose to Excel Digitally + Combine Digital Capabilities to Exploit Synergies Customer Experience In-store Online Social media Mobile channel Unified Processes / Integrated Data Process Excellence Supply-chain Integration Customer experience Centralized Ordering New business models Unified Processes / Integrated Data Analytics capabilities Personalized Customer experience Online On-premise Unified Processes / Integrated Data The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 11
  • 12. How to drive digital transformation Sustain the Transformation Frame the Digital Challenge Build Capabilities Align Incentives & Rewards Measure, Monitor & Iterate Understand the Impact Assess Digital Maturity Develop Vision & Align Around It Sustain Engage Engage the Organisation Signal the Change Mobilise at Scale Evolve Culture & Adapt Work Practices Frame Focus Focus Investments Build a Digital Roadmap Build Investment Case Set up Governance Model The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 12
  • 13. In conclusion DIGITAL MASTERY MATTERS DIGITAL MASTERY MATTERS IT MATTERS IN EVERY INDUSTRY IT MATTERS IN EVERY INDUSTRY ANY COMPANY CAN BUILD DIGITAL DNA ANY COMPANY CAN BUILD DIGITAL DNA TAKE ACTION NOW TO TAKE ACTION NOW TO CREATE YOUR OWN DIGITAL CREATE YOUR OWN DIGITAL ADVANTAGE ADVANTAGE The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 13
  • 14. The New t al Digi rs te Mas The Digital Advantage - Dreamforce_M Copyright © Capgemini 2013. All Rights Reserved 14
  • 15. About Capgemini With more than 125,000 people in 44 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The Group reported 2012 global revenues of EUR 10.3 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.capgemini.com www.capgemini.com The information contained in this presentation is proprietary. © 2013 Capgemini. All rights reserved. Rightshore® is a trademark belonging to Capgemini.