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Digitalbusiness
This document discusses the concept of digital business and how organizations can transition to become digital businesses. It defines digital business as an organization that incorporates digital technology to create revenue and results through innovative strategies, products, processes and experiences. It differentiates between digitizing resources by applying technology, and digitalizing by turning digitized resources into new sources of revenue and growth. The document outlines the key elements of becoming a digital business and discusses challenges corporate leaders may face in the transition. It also provides examples of how different industries can leverage digital opportunities. Finally, it positions Accenture as a partner that can help organizations set the direction and scale their digital business strategy.
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Digitalbusiness
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- 2. Becoming a DigitalBusiness is not just digitized marketing or digitized operations – it will be essential for survival What is a Digital Business Copyright © 2013 Accenture All rights reserved. 2 Definitions: Digital Business: an organization that incorporates digital technology to create revenue and results via innovative strategies, products, processes and experiences. Digitize: applying technology to resources. A digitally enabled sales force is an example of incremental digital improvement. Digitalize: the process for turning digitized resources into new sources of revenue, growth and operational results that generate a premium to your business. Definitions: Digital Business: an organization that incorporates digital technology to create revenue and results via innovative strategies, products, processes and experiences. Digitize: applying technology to resources. A digitally enabled sales force is an example of incremental digital improvement. Digitalize: the process for turning digitized resources into new sources of revenue, growth and operational results that generate a premium to your business.Internal Focus External Focus Digitize Processes Revenue Profit Margin Digitize Channels Digitize Marketing Digitalize Operations Digital Business Digital Transformation
- 3. The Digital Agerequires a rethink about traditional strategy formulation in discovering opportunities for our clients Evolution of technology and business Copyright © 2013 Accenture All rights reserved. B T BRequirem ents Enabling In the past, Business requirements drove Technology that then enabled the Business to advance… B T Today, technology creates new opportunities and fundamentally changes businesses… Opportunities Imperatives …with the objective of digitalizing processes and making products available through digital channels. …and transforms the business and operating models of almost every company in every industry. 3 B T= Business = Technology
- 4. Key technology trendscombined with enabling technologies presents dramatic opportunities for new players and real threats in all industries Key trends and technologies Copyright © 2013 Accenture All rights reserved. 4 The possibility to virtualize and consume infrastructure, platforms and applications as a service enables new levels of scalability, flexibility and responsiveness. Social media and collaboration technologies enable new ways and drive expectations of interacting, personalization and building relationships within and beyond the organization Technologies such as in-memory computing and appropriate information architectures which enable real-time decision making based on analytics Analytical methods and access to the right data enable the generation of new insights and decision-rich information. Big Data approaches allow to make use of the rapidly increasing amount of data from multiple sources Connected devices of all kinds and cheap sensors integrated nearly everywhere constantly create large amounts of data that need to be managed effectively. This also enables new ways of automated and personal interaction The uninterrupted trend towards using mobile devices impacts all areas of business and personal live by transforming how people interact, consume information and services, collaborate, and work CloudCloud Social media/ Collaboration Social media/ Collaboration Analytics/ Big Data Analytics/ Big Data Data VelocityData Velocity “Connected Everything” “Connected Everything” MobileMobile
- 5. Digital Business resultsin new challenges and new roles for Corporate Leaders as well as the speed of decision making required Changing role of Corporate Leaders (CEO, COO, CIO) Copyright © 2013 Accenture All rights reserved. COO CIO › How do I use digital to align the organization for increased speed to market and more flexibility? › How can I deploy digital solutions to improve business process efficiency? › Does digital change the level of vertical and horizontal integration? › Where does IT help create new business models & opportunities? › Does the IT organization have the capabilities to facilitate innovation and enable the business strategy? › Where do I need to invest in order to be ahead of the technology curve? CEO › What should I do about digital disruptions in my industry? › How does digital help me grow the business, enter new markets or strengthen the position? › How does it threaten my value chain ecosystem of customers, suppliers, business partners? Examples of big disruptions that requires actions from Corporate Leaders: Questions for Corporate Leaders Competitor can reduce their operating costs by 10 – 15% through digitalized operations New competitors are emerging from previously unrelated industries. The skills required by leaders and organizations to compete are different 5
- 6. Changing role ofCorporate Leaders (CFO, CDO, CMO) Copyright © 2013 Accenture All rights reserved. CDO* CMO › Which roles and responsibilities does a CDO have in the new era? › How does digital strategy integrates with business & IT strategies? › How digital opportunities can be used to innovate the business model and increase market share? › Does our marketing strategy exploit the opportunities of new technologies to improve our digital consumer value proposition? › Do I have sufficient insights about how customers use digital technologies? › How does digital facilitate customer retention? CFO › How can digital help me to improve financial performance? › Where is the profitability of our products/services threaten by digital e.g. new market entrants with much lower costs structures? › How can I better control the business with real-time information? Examples of big disruptions that requires actions from Corporate Leaders: Questions for Corporate Leaders Competitor can reduce their operating costs by 10 – 15% through digitalized operations New competitors are emerging from previously unrelated industries. The skills required by leaders and organizations to compete are different CDO = Chief Digital Officer 6 Digital Business results in new challenges and new roles for Corporate Leaders as well as the speed of decision making required
- 7. 7 Value tree ofa digital business Copyright © 2013 Accenture All rights reserved. Metrics Improved Value of Digital Business Growth through Digitalization (Revenue levers) Efficiency through Digitization (Cost optimization) ObjectivesValue levers Investments in new Digital Capabilities New customers • Analytics-driven and dynamic customer segmentation • Improved digital customer experiences linked to segments • Faster time to market with targeted offerings New & optimized products & services • Monetize information assets • Create new digital products, services and offerings • Rapid prototyping with customer interaction • Integrate products and services into solutions that have digital components • Convergence of products enabled by digital technologies New & optimized channels • Omni-channel marketing, selling and servicing provide seamless integration across channels • Customize digital channels to customer segments and experience to optimize the cost-to-serve levels New pricing and earnings models • New earnings (subscription, licensing, credit, “freemium”, etc.) models • Rapid prototyping of earnings models on sample customers • Combine portfolio of digital and non-digital products and services with customized earnings models and pricing New cost models • Analytics-based commercialization (marketing, commissions, trade promotions) to target investments and track returns • Customer self service • XaaS opportunities to digitize the technology and infrastructure assets Supporting technologies: Analytics, Mobility, Cloud, Virtual networks, Social, Sensors • Customer acquisition/churn • Sales conversion • Customer profitability • Cross-sell and Up-sell • Decrease time to market • Revenue per customer • Product development costs • Portfolio management costs • Cross-sell and Up-sell • Revenue per customer • Customer satisfaction • Customer profitability • Cross-sell and up-sell • Decrease % of time spent on non-selling activities • % handle by self service Process efficiency • Digitized and automated process processes • Improved process governance & efficiency through real time insights Asset utilization • Optimized production/inventory planning based on demand forecasting • Data-based preventive asset maintenance • Task automation optimization through digital technology such as sensors Agility • Utilize remote access and collaboration and mobility tools for employees • Integration with partners in digital ecosystem to optimize service delivery • Virtual organizations enabled by mobility and seamless cooperation • Customer satisfaction • Process efficiency • Production costs • Inventory costs • Employee productivity • Customer support costs • Training costs
- 8. Challenges Digital ValueLevers • Underutilized assets (down time, demand) • Competitors offer significantly lower price • Exclusive IP has limited market value • Licensing is not part of our business model • Customers abandoning non-digital channels • Sales and serve costs consuming margins • Current customers are not future customers • Customers valuing experience over product • Today’s data is not tomorrows insight • What matters, when we know everything? • Current products face limited future potential • New product migration paths are uncertain • Customers gaining control of our brand • Technology performance equals brand promise • Limited availability of business services • Weakest link limits ability to change and scale • Our rate of innovation falling behind the market • Collaboration trapped between silos • Lead times for internal mobilization increasing • Upgrading skills without downgrading focus Example Target KPI’s and Metrics • Customer interest, participation, satisfaction, retention and referrals • Revenue per customer • Purchase frequency and size • New product revenue contribution • Sales & channel productivity • Product portfolio yield • Customer satisfaction – net promoter • Brand awareness and reach • License revenue growth • Share of IP-based products • Increasing variable to fixed expense ratio • Greater ROA • Greater margin contribution from new products and improved operations. • Reduced time to results & profitability • Retention of ‘best people’ and skills • Reduced restatements and • Increase in fact based decisions • Reduced activity cost and cycle time. • Rising EBITA per employee • Lower unit infrastructure and operations costs Leaders should recognize specific challenges which can be addressed through digital value levers Customers and their experiences Product and Service features and functions Sales and service channels Brand equity and perception Trading partner relationships & alliances Intellectual Property and Licensing Operational scale. Facilities and locations Information and understanding Organizational agility and workforce engagement Innovation and collaboration RevenueOperations Brand,IPand Intangibles Copyright © 2013 Accenture All rights reserved. 8
- 9. Digital technologies impactsindustries in different ways and presents unique as well as shared opportunities across industries Digital examples by industry Copyright © 2013 Accenture All rights reserved. Industries 1. Digital Revenue Growth 2. Cost-efficiency through digitization 3. Digital Business Resources • Chemical company provides online portal for partners to manage orders for a fee • Energy companies apply analytical methods to improve asset maintenance resulting in reduced number of unplanned downtimes • Chemicals extend their portfolio with solutions combining classical products with value adding services (e.g. BASF) Communications, Media and Technology • Telco partners with retailers (for a fee) to push offers to shoppers who opt-in • Media companies digitize their operational value chain resulting in time improvement and reduced costs (e.g. Warner Bros.) • Telcos extend their business model by integration mobile payment solutions (e.g. African mobile payment trend) Financial Services • Retail banks offer additional services like mobile payment or advanced wealth mgmt. for normal customers • Retail banks optimize their process and leverage customer self service opportunities (e.g. BBVA artificial intelligence supported self service) • Crowd-funding based loan options, allowing retail banks to reduce their risk exposure (e.g. kickstarter) Products (divide into Automotive, Pharma, IE, Retail & CGS) • Office supply company sells its products through its ecommerce platform • Inventory optimization due to analytical driven demand forecast and supplier integration in value chain (e.g. WalMart) • Individually customized products instead of mass production (e.g. cereals customization via webportal) Health, Life Sciences and Public Service • Pharmaceutical company uses analytics to customize products • Public services reduces process costs by digitization of administration processes and customer self service options • Life sciences extends business into lifestyle nutrition supplies based on individual analytical results 9
- 10. 10 Accenture’s Digital BusinessStrategy Offering addresses the issues, decisions, actions and investments required in creating a digital business Digital Business Strategy Framework & Critical Questions Copyright © 2013 Accenture All rights reserved. Vision, Opportunities and Outcomes Digital Operations & Platforms Digital Products, Services and Offerings Customer Experiences and Workforce Abilities Digital Ecosystem and Business Process Operating Model and Future of Work Information and Applications • What are digital’s disruptive opportunities, threats and outcomes? • How will enabling technologies and trends support differentiation and sustainable growth? • What are the changes digital creates in go-to-market and business economics? • What combinations of strategic information, interactions and ability drive compelling customer experiences? • Who has the required capabilities internally and externally? • What is the most effective structure to drive creativity, collaboration and adaptability? • What is the most valuable information and where will it come from? • What are the requirements for a digital platform delivering efficient speed and scale? Innovation and IP BusinessModel OperatingModel
- 11. Accenture is aDigital Business partner that can set the right path and accompany an organization in every step of the journey Accenture’s Value proposition Copyright © 2013 Accenture All rights reserved. 11 Your Digital Business Journey Plug-in capabilities Set the direction You need a digital business partner that can set the right strategy for your organization, based on an understanding of your industry and the available technologies. A partner that you can leverage key capabilities from that seamlessly integrate into your business to launch your Digital Business faster and more effectively. A partner that is connected to and can connect you with all the different parts of your ecosystem. A partner that has the breadth of expertise, footprint and people to bring your digital business to scale, no matter what your ambition. Ecosystem Scale
- 12. 12 Accenture’s assets andexperiences supports every part of the journey and accelerates delivery while reducing risk Copyright © 2013 Accenture All rights reserved. • Accenture provides actionable recommendations • Accenture is a trusted partner with senior leadership from strategy design to detailed execution- transformation • Accenture provides actionable recommendations • Accenture is a trusted partner with senior leadership from strategy design to detailed execution- transformation Set the direction Grounded in expertise across 40+ industries, 163,000 industry SME’s across 54 countries Grounded in expertise across 40+ industries, 163,000 industry SME’s across 54 countries • Dedicated practices that provide comprehensive offerings • History of successful partnerships in the marketplace with clients • Dedicated practices that provide comprehensive offerings • History of successful partnerships in the marketplace with clients Plug-in capabilities In Cloud, Analytics, Big Data, Mobility, Social and Interactive Marketing In Cloud, Analytics, Big Data, Mobility, Social and Interactive Marketing • Global presence in nearly all industries and markets to meet the region-specific strategy and operating requirements of 4,000+ clients • Global presence in nearly all industries and markets to meet the region-specific strategy and operating requirements of 4,000+ clients • As one of the largest system integrators and technology consulting firms globally, Accenture has relationships across almost every industry’s ecosystem that can be leveraged for optimized strategy, execution and ongoing operations • As one of the largest system integrators and technology consulting firms globally, Accenture has relationships across almost every industry’s ecosystem that can be leveraged for optimized strategy, execution and ongoing operations Ecosystem Relationships across almost every industry’s ecosystem Relationships across almost every industry’s ecosystem 270,000 consultants located across 200+ cities 270,000 consultants located across 200+ cities Scale Accenture’s capabilitiesHow Accenture can help
- 13. 13 Accenture is uniquein covering the business & technology components of a integrated digital strategy from strategy to execution, incorporating agility in simulations, prototyping and delivery of business outcomes How Accenture’ approach is different Copyright © 2013 Accenture All rights reserved. Business Model Technology Model Operating Model PrototypeOutcome Vision Capabilit y Direction Opportunity Simulation Proof of Concept Pilot Solution Minimum Viable Solution
- 14. 14 Proctor & Gambleuses real-time decision-making to drive business success supported by real time analytics Case Study: P&G – Real Time Copyright © 2013 Accenture All rights reserved. What P&G Did •Identified 88 business process covering $79bn of the company’s operations •Realized that a time gap between information origination and application to business decision hinders decision making •Applied analytical models to compress the time needed for decision making •Scaled analytical decision making by giving over 50,000 employees access to their customized “Decision Cockpit” •Focused on how to best apply and visualize information instead of discussion if the information is true Outcome Reduction of $900m in cost over 8 years
- 15. 15 BASF grew atraditional business through digital value-adding solutions Case Study: BASF – Growth by digitalization Copyright © 2013 Accenture All rights reserved. What BASF did •Identified the need of customers to better understand the application options of agro chemicals •Developed an mobile online tool which was enabled the digital disease identification of plants in the field •A direct connection between the most applicable BASF products and the disease is then established to treat the affected plants Outcome Increased sales and market share in South America
- 16. Thought Leadership (1/2) ThoughtLeadership Topic: Cloud computing Where the Cloud Meets Reality: Scaling to Succeed in New Business Models 16 Topic: Multichannel marketing Seamless Multichannel Retailing—Customize. Conn Topic: New role of CMOs From Marketing Communications to Expe Topic: Social Networks Influence at Scale: How Companies Can Harness the Power of Social Networks Topic: Digital Consumer Winning and Retaining the Digital Consumer Copyright © 2013 Accenture All rights reserved.
- 17. Thought Leadership (2/2) ThoughtLeadership 17 Topic: Mobility The New Age of Mobility Topic: From Analog to Digital How to transform the business model Topic: Analytics, Marketing A new path to growth: How to stay a step ahead of changing consumer behavior Topic: Mobility, workforce Embracing the consumer IT revolution – at work Topic: Ecosystem strategy Cross-industry ecosystem: growth outside the box Copyright © 2013 Accenture All rights reserved.
- 18. The time forcompanies to become Digital Businesses is now - what is your strategy? Digital Business Strategy 18 Digitalize Processes Digitize Channels Digital Transformation The industry disruptions are happening. New growth opportunities are available. Your competitors are adapting. What is your Digital Business strategy? Copyright © 2013 Accenture All rights reserved.