New research from Capgemini Consulting and MIT Sloan Management Review reveals why organizations are struggling to drive Digital Transformation and the need for C-level leadership.
The study – involving over 1,500 executives in 106 countries – reveals that while the potential opportunity of Digital Transformation is absolutely clear, the journey to get there is not.
What are Swiss banks doing well, and where can they improve when it comes to their range of digital offering – and to the user experience of their customers?
"HFS envisions procurement as the ‘ecosystem builder’ for the enterprise, not just a cost-focused, back-office function. As the role of procurement radically transforms, the client expectations from third-party source-to-pay (S2P) services are also rapidly evolving.”
– Saurabh Gupta, Chief Research Officer
The digital revolution is coming to procurement. While many businesses have embraced eProcurement systems and cloud-based tools, digital procurement demands more than that. Is your business ready? Learn three considerations before you move forward.
Manufacturers were hard hit by COVID-19, but our research reveals the next best steps to take, based on the investments digital leaders in the industry have made and plan to make.
What are Swiss banks doing well, and where can they improve when it comes to their range of digital offering – and to the user experience of their customers?
"HFS envisions procurement as the ‘ecosystem builder’ for the enterprise, not just a cost-focused, back-office function. As the role of procurement radically transforms, the client expectations from third-party source-to-pay (S2P) services are also rapidly evolving.”
– Saurabh Gupta, Chief Research Officer
The digital revolution is coming to procurement. While many businesses have embraced eProcurement systems and cloud-based tools, digital procurement demands more than that. Is your business ready? Learn three considerations before you move forward.
Manufacturers were hard hit by COVID-19, but our research reveals the next best steps to take, based on the investments digital leaders in the industry have made and plan to make.
We conducted a ground-breaking survey of the UK’s data and business professionals to get a snapshot of the state of the world of data, uncover some of the issues facing the industry and get a sense of the changes on the horizon. The results were enlightening, and in some cases, very surprising.
The speed, volume and complexity of decisions – as well as the impact they have on customer experience – demand automated, real-time decision making. Digital decisioning is an emerging best practice for delivering business impact from AI, machine learning, and analytics. Digital decisioning is an approach that ensures your systems act intelligently on your behalf, making precise, consistent, real-time decisions at every customer touchpoint.
Audio on our YouTube Channel: https://youtu.be/cGxPYnE5PTM
Transforming finance through digitally-based systems is a priority for business leaders. Learn about how RPA, while important, is really just the beginning of digital transformation.
Managers need new measures for the new experiences they’re creating. Fortunately they can use social and unstructured data to measure the holistic customer experience performance over time, based on direct and unfiltered feedback from customers.
Analytics Trends 2015: A below-the-surface lookDeloitte Canada
Big Data is a big deal for everyone these days and only growing in importance, especially when it comes to analytics generating actionable insights. Deloitte has identified eight significant analytics trends to watch in 2015 – including one supertrend that will impact everything else.
Accenture's report explains how natural language processing and machine learning makes extracting valuable insights from unstructured data fast. Read more. https://www.accenture.com/us-en/insights/digital/unlocking-value-unstructured-data
Breaking Bad Data: The Journey to Data-fuelled Digital TransformationCapgemini
Jorgen Heizenberg explains how a business can harness data both from within and outside the organization to fuel its journey to digital transformation.
Presented at Informatica World 2016 by Jorgen Heizenberg, CTO Netherlands, Capgemini Insights & Data
Stewarding Data : Why Financial Services Firms Need a Chief Data OfficierCapgemini
The C-suite could soon start to feel a little crowded, with Chief Digital Officers, Chief Innovation Officers, Chief Risk Officers
and Chief Data Officers joining the more established functional leaders. To avoid C-suite proliferation, companies need to
decide whether to elevate a new functional role to “chief” based on the strategic importance of the issue for the organization and its sector. For example, in many organizations, marketing will be so essential to performance that few would deny the need for a CMO. In financial services, data has become so mission-critical that the role of Chief Data Officer is simply essential.
The ideal IT budget: Best Practice vs RealityCRMT Digital
Best practice and reality are often at odds when it comes to winning the ideal IT budget. But collaboration can bridge the gap and deliver great results for marketing and other key business areas.
Closer collaboration between Marketing and IT can help your business make better use of its IT budget, boost the impact and ROI of successful campaigns, and take IT to the strategic heart of the enterprise.
How to Reinvest to Reinvent: The Case for Intelligent Source to PayAccenture Operations
Transforming the source to pay process is the key to ensuring the continued success of you and your team. And it forges the growth filled digital path ahead for your company.
With intelligent source to pay, CFOs can uncover the value needed for growth.
The role of the CFO has evolved from accountant to forward-thinking business partner. Today, they are the CEO’s most trusted advisor, steering companies towards sustainable growth.
Presentation deck from a webinar with Comcast Business and Entrepreneur about collecting and using customer and prospect data to provide the best experience for customers.
A Stalker's Guide to Innovation ConsultingGokul Alex
Introduction to the world of innovation consulting paradigm. Some simple tools and techniques to carve your own identity as an innovation consultant for the next century!
We conducted a ground-breaking survey of the UK’s data and business professionals to get a snapshot of the state of the world of data, uncover some of the issues facing the industry and get a sense of the changes on the horizon. The results were enlightening, and in some cases, very surprising.
The speed, volume and complexity of decisions – as well as the impact they have on customer experience – demand automated, real-time decision making. Digital decisioning is an emerging best practice for delivering business impact from AI, machine learning, and analytics. Digital decisioning is an approach that ensures your systems act intelligently on your behalf, making precise, consistent, real-time decisions at every customer touchpoint.
Audio on our YouTube Channel: https://youtu.be/cGxPYnE5PTM
Transforming finance through digitally-based systems is a priority for business leaders. Learn about how RPA, while important, is really just the beginning of digital transformation.
Managers need new measures for the new experiences they’re creating. Fortunately they can use social and unstructured data to measure the holistic customer experience performance over time, based on direct and unfiltered feedback from customers.
Analytics Trends 2015: A below-the-surface lookDeloitte Canada
Big Data is a big deal for everyone these days and only growing in importance, especially when it comes to analytics generating actionable insights. Deloitte has identified eight significant analytics trends to watch in 2015 – including one supertrend that will impact everything else.
Accenture's report explains how natural language processing and machine learning makes extracting valuable insights from unstructured data fast. Read more. https://www.accenture.com/us-en/insights/digital/unlocking-value-unstructured-data
Breaking Bad Data: The Journey to Data-fuelled Digital TransformationCapgemini
Jorgen Heizenberg explains how a business can harness data both from within and outside the organization to fuel its journey to digital transformation.
Presented at Informatica World 2016 by Jorgen Heizenberg, CTO Netherlands, Capgemini Insights & Data
Stewarding Data : Why Financial Services Firms Need a Chief Data OfficierCapgemini
The C-suite could soon start to feel a little crowded, with Chief Digital Officers, Chief Innovation Officers, Chief Risk Officers
and Chief Data Officers joining the more established functional leaders. To avoid C-suite proliferation, companies need to
decide whether to elevate a new functional role to “chief” based on the strategic importance of the issue for the organization and its sector. For example, in many organizations, marketing will be so essential to performance that few would deny the need for a CMO. In financial services, data has become so mission-critical that the role of Chief Data Officer is simply essential.
The ideal IT budget: Best Practice vs RealityCRMT Digital
Best practice and reality are often at odds when it comes to winning the ideal IT budget. But collaboration can bridge the gap and deliver great results for marketing and other key business areas.
Closer collaboration between Marketing and IT can help your business make better use of its IT budget, boost the impact and ROI of successful campaigns, and take IT to the strategic heart of the enterprise.
How to Reinvest to Reinvent: The Case for Intelligent Source to PayAccenture Operations
Transforming the source to pay process is the key to ensuring the continued success of you and your team. And it forges the growth filled digital path ahead for your company.
With intelligent source to pay, CFOs can uncover the value needed for growth.
The role of the CFO has evolved from accountant to forward-thinking business partner. Today, they are the CEO’s most trusted advisor, steering companies towards sustainable growth.
Presentation deck from a webinar with Comcast Business and Entrepreneur about collecting and using customer and prospect data to provide the best experience for customers.
A Stalker's Guide to Innovation ConsultingGokul Alex
Introduction to the world of innovation consulting paradigm. Some simple tools and techniques to carve your own identity as an innovation consultant for the next century!
Didier Bonnet: Oracle Open World Presentation on #LeadingDigitalCapgemini
Didier Bonnet, Capgemini Consulting’s global head of digital transformation and coauthor (with MIT’s George Westerman and Andrew McAfee) of the upcoming book Leading Digital, delivered his keynote presentation at Oracle Open World on 30th September in San Francisco. In his keynote session "Leading Digital Transformation Now—No Matter What Business You’re In", Bonnet highlights how large companies in traditional industries—from finance to manufacturing to pharmaceuticals—are using digital to gain strategic advantage. Bonnet also highlights the principles and practices that lead to successful digital transformation based on a two-part framework: where to invest in digital capabilities, and how to lead the transformation.
Whirlpool EMEA presents: Digital school, lesson 3. The third part of an online course about social media and digital life. In these slides you will understand how the communication has changed, from radio, print and tv to websites and, now, social media. For an integrated marketing and communication system.
THE DIGITAL ADVANTAGE: HOW DIGITAL LEADERS OUTPERFORM THEIR PEERS IN EVERY INDUSTRY
By Didier Bonnet, Managing Director and Global Practice Leader, Capgemini Consulting
Expert talk strategic building blocks for the digital transformation strategyDavid Terrar
My expert talk from Enterprise 2.0 Summit Paris 2015 covering 3 things - a perspective of the current digital disruption and digital landscape, strategic building blocks for digital transformation, and a core message that is essential for any business if they want to survive (and thrive).
Digital Transformation ( DT) – the use of technology to radically improve and differentiate performance or reach of enterprises is becoming a hot topic for companies across the globe. Executives in all industries are using digital advances such as Analytic, Mobility, Social media and smart embedded devices and improving their use of traditional technologies such as ERP – to change customer relationships, internal processes, and value propositions. We continue to see how fast digital technology disrupted media industries in the past decade and it now spreading to all businesses irrespective of the domain and sectors.
How can top / senior management successfully lead digital transformation? While we all know and urge the team to get started on the digital transformation journey , few tell how to do it. This book gives a clear “ How” part .
I have also given in the summary few good case studies where digitization has impacted the business outcomes like Burberry , Asian Paints, Nike, Codelco, Starbucks , UPS etc.
The how part –Leading digital transformation
• Sharing a digital transformation vision across the enterprise ( not in piece mail – all businesses across the group need to envision the journey and be in sync)
• Gaining critical mass – inclusiveness
• Frame the digital challenges
• Focus investment on resources
• Sustaining the transformation
An excellent one to read.
A Portfolio Strategy To Execute Digital TransformationCapgemini
Senior Executives in pretty much all industries have now elevated digital transformation to the top of their strategic agenda. And they’re right to do so. The risk of falling behind the curve is so great that senior leaders are not debating whether digital technologies will affect their competitive position, but rather how to conduct an effective digital transformation and how fast it can be done.
However, an organization’s determination to get on the front foot with a bold digital strategy often falters when it comes up against the multi-dimensional complexity of the questions it faces and the risks it must manage. Should we prioritize short-term improvements at the expense of potentially larger strategic shifts? How fast will our industry be disrupted: months, years, or even decades? What level of risk are we willing to take on innovative new business models? Can we deliver our digital strategy in house or do we need to partner?
Building Blocks for the Enterprise of the Digital Age | Enterprise Digital Su...Dion Hinchcliffe
I gave the closing keynote to Enterprise Digital Summit Paris 2016 earlier this month to explore today's building blocks in creating a truly digital organization. People are the most important building block, but after that it's the key components of digital workplace, digital business, and the transformation it takes to get there. Lastly, we need a platform for change at scale. I increasingly believe that is online communities of change agents.
Embracing digital technology, a new strategic imperative 2013Ben Gilchriest
Companies routinely invest in technology, and too often feel they get routine results. Technology’s promise is not simply to automate processes, but to open routes to new ways of doing business. To better understand how businesses succeed or fail in using digital technology to improve business per- formance, MIT Sloan Management Review and Capgemini Consulting conducted a survey in 2013 that garnered responses from 1,559 executives and managers in a wide range of industries.
Their responses clearly show that managers believe in the ability of technology to bring transformative change to business. But they also feel frustrated with how hard it is to get great results from new technology.
The key findings from the survey are:
- According to 78% of respondents, achieving digital transformation will become critical to their organiza- tions within the next two years.
- However, 63% said the pace of technology change in their organization is too slow.
- The most frequently cited obstacle to digital transformation was “lack of urgency.”
- Only 38% of respondents said that digital transformation was a permanent fixture on their CEO’s agenda. Where CEOs have shared their vision for digital transformation, 93% of employees feel that it is the right thing for the organization. But, a mere 36% of CEOs have shared such a vision.
Digital transformation-of-business-harvard-business-reviewJerry Chen
Business value of Strategy for enterprise organizations
A Harvard Business Review report - The Digital Transformation of Business – demonstrates how leading organizations are getting creative with cloud, mobile, social and big data. Understand how 537 enterprise executives are using megatrend technologies to drive transformational impact for their business, their customers and their employees.
Organizational Change Management: A Make or Break Capability for Digital SuccessCognizant
To realize the full benefits of digital transformation programs, businesses must manage the impact of digital change on their operational structure, culture and employees.
To answer new digital challenges (faster business cycles, new risks and need for more firm-level integration), companies need firm-level governance around their digital initiatives. Too often digital is left to grow organically, generally in a series of silos or managed from just one perspective of the business. In this paper the importance of governance of digital initiative is explored in detail, with working models, and some case studies from companies across different industries.
Just as Amazon changed how we buy things and
Netflix transformed how we consume videos,
companies like AirBnB and Uber have shaken up the
hotel and transportation industries. With new disruptive
technologies, products, services and business models
being introduced almost daily, CIOs need to take charge
of their organization’s response now to secure long-term
business success.
Digital transformation can be defined as a process whereby an organization shifts their business models, processes, and organizational culture with digital technologies to adapt to changing customer behaviors. They adapt to meet ever-changing customer expectations and engage with consumers in innovative ways. Transformational journeys require acurate assessments, learning, growth, and monitoring of:
1) People and Culture;
2) Capacity and Capabilities;
3) Innovation; and
4) Technology.
Similar to Embracing Digital Technology: A New Strategic Imperative (20)
COVID-19 heightened chronic challenges within the global healthcare industry. It became a catalyst amid fierce competition and tight regulations for health providers and payers to focus on digital health, cybersecurity, patient data transparency, and a variety of customer-centric and operational enhancements. As a result, we found the 2022 trendline pointing to improvements in access and quality of care.
Healthcare challenges such as optimizing the cost of care while simultaneously enabling personalized interventions and consumer-friendly shoppable services are long-standing − but, historically, the industry has been slow to react.
Read our Top Trends 2022 report to examine the lingering ramifications of the pandemic, responses from medical and insurance organizations, and the worldwide impact of ever-changing regulatory standards and mandates.
A combination of factors − the pandemic, catastrophic weather events, evolving policyholder expectations, and insurers’ drive for operational efficiency and future relevance − are sparking P&C industry changes.
In a post-COVID, new-normal environment, the most strategic insurers are building resilient, crisis-proof enterprises poised to take advantage of emerging and future business opportunities. They are leveraging advanced data analytics and novel technologies to assure agility and achieve positive revenue and customer satisfaction outcomes. Competitive advantage will hinge on accelerated digitalization and faster go-to-market. Therefore, win-win partnerships and embedded services with InsurTechs and other ecosystem players are critical.
Read Capgemini’s Top P&C Insurance Trends 2022 for a glimpse at the tactical and strategic initiatives carriers are undertaking to boost customer-centricity, product agility, intelligent processes, and an open ecosystem to ensure profitable growth and future-readiness.
This analysis provides an overview of the top trends in the commercial banking sector as they shift to technology high gear to boost client efficiency and battle a volatile, uncertain, competitive, and evolving landscape.
First, it was retail banking. Now, advanced technology is shifting to – and disrupting − the commercial banking space. Many commercial banks, known for paperwork, red tape, and branch dependency, were unprepared to support clients during their post-COVID-19 ramp-up. But now, the digital pivot to new mindsets, partnerships, and processes is in overdrive.
As commercial banks grapple with competition from FinTechs, BigTechs, and alternative lenders, their inability
to fulfill SME demands and pandemic after-shocks necessitates transformative process changes and a move
to experiential, sustainable, and inclusive banking models. We expect banks to strive to meet the demands
of corporate clients and SMEs by digitally transforming critical workflows and improving client experience.
Additionally, incremental process improvements in the middle and back-office that leverage intelligent
automation will keep the competition at bay because engaged clients are loyal.
Adopting newer methods to mine data and moving to as-a-Service models will prepare commercial banks
to flexibly respond to newcomers and find ways to co-exist through effective collaboration. The time has come for commercial banks to put transformation on the fast track as lending losses in wallet and market share could spill over to other functions!
How incumbents react and respond to 2022 trends could determine their relevancy and resiliency in the years ahead.
The Covid-19 pandemic necessitated the payments industry undergo a facelift, sparked by novel approaches from new-age players, fostered by industry consolidation, and customers’ demand for end-to-end experience. Crossing the threshold, the industry is entering a new era – Payments 4.X, where payments are embedded and invisible, and an enabling function to provide frictionless customer experience. As customers make a permanent shift to next-gen payment methods, Digital IDs are critical for a seamless payment experience. The B2B payments segment is witnessing rapid digitization. BigTechs, PayTechs, and industry newcomers are ready to jump in with newfangled solutions to help underserved small to medium-sized businesses (SMBs).
As incumbents struggle with profits, new-age firms are forging ahead to take the lead in the Payments 4.X era by riding the success of non-card products and services. The new era demands collaboration, platformification, and firms can unleash full market potential only by embracing API-based business models and open ecosystems. Data prowess and enhanced payment processing capabilities are inevitable to thrive ahead. The clock is ticking for banks and traditional payments firms because the competitive advantage is not guaranteed forever. As industry players seek economies of scale, consolidations loom, and non-banks explore new territories to threaten incumbents’ market share. While all these 2022 trends are at play, central bank digital currency (CBDC) is emerging globally and might open a new chapter in the current payments landscape.
As we slowly move out of the pandemic, financial services firms have learned the criticality of virtual engagement to business resilience. Wealth management firms will need capabilities to cater to new-age clients and deliver new-age services. This report aims to understand and analyze the top trends in the Wealth Management industry this year and beyond.
A year ago, our Top Trends in Wealth Management report emphasized how the pandemic sparked disruption and digital transformation and changing investor attitudes around Environmental, Social, and Corporate Governance (ESG) products. As we begin 2022, many of those trends continue to hold as COVID-19’s wide-reaching effects continue to influence the wealth management industry.
As wealth management (WM) firms supercharge their digital transformation journeys, investments in cybersecurity and human-centered design are becoming critical to building superior digital client experience (CX). Another holdover trend − sustainable investing – is gaining mainstream attention and generating increasingly sophisticated client demands. Data and analytics capabilities will become ever more essential for ESG scoring and personalized customer engagement. As large financial services firms refocus on their wealth management business while new digital players make industry strides, competition is becoming historically intense. Not surprisingly, client experience is the new battleground.
This analysis provides an overview of the top trends in the retail banking sector driven by the competition, digital transformation, and innovation led by retail banks exploring novel ways to create and retain value in evolving landscape.
COVID-19 caught banks off guard and shook legacy mindsets to the core. With 20/20 (2020) hindsight, firms are more aware, digitally resilient, and financially stable as they head into 2022. The trials of the past 18 months forced firms to shore up existing business and consider new models and revenue streams.
Customer-centricity remains at the top of most FS agendas and is a 2022 focal point. Banks will focus on achieving operational excellence as diligently as delivering superior CX. In 2022 and beyond, it will be paramount for FIs to explore and invest in new technologies to remain relevant and resilient.
Banking 4.X will arrive in full force in 2022 with platform-supported firms monetizing diverse ecosystem capabilities and aggressively harvesting data to create experiential customer journeys through intelligent and personalized engagements. The new era will compel future-focused banks to finally abandon legacy infrastructure and collaborate with third-party specialists to solidify their best-fit, long-term roles. Increasingly, open platforms will make banks invisible as banking becomes embedded into customer lifestyles. At the same time, banks will shed asset-heavy models and shift to the cloud for greater agility, speed to market, and faster innovation. The shift will act as a precursor to adopting new technologies on the horizon – 5G and Decentralized Finance.
The recent past was filled will extraordinary lessons for financial institutions. Now is the time to act on those learnings and move forward profitably.
While COVID-19 has sparked the demand for life insurance, it has also exposed the operating model vulnerabilities in distribution, servicing, and customer retention. In a post-COVID, new-normal environment, insurers need to enhance their capabilities around advanced data management and focus on seamless and secure data sharing to provide superior CX and hyper-personalized offerings. Accelerated digitalization and faster go-to-market are vital to remaining competitive, and win-win partnerships with ecosystems are critical in the journey.
Read our Top Life Insurance Trends 2022 to explore the tactical and strategic initiatives carriers undertake to acquire competencies around customer centricity, product agility, intelligent processes, and an open ecosystem to ensure profitable growth and future readiness.
Property & Casualty Insurance Top Trends 2021Capgemini
The Property & Casualty insurance landscape is evolving quickly with the changing risk landscape, entry of new players, and changing customer expectations. The ripple effects of COVID-19 on the P&C insurance industry and natural disasters such as forest fires have adversely impacted insurance firm books.
In this scenario, to ensure growth and future-readiness, the most strategic insurers strive to be ‘Inventive Insurers’ – assuming a customer-centric approach, deploying intelligent processes, practicing business resilience and go-to-market agility, and embracing an open ecosystem.
Read our Property & Casualty Insurance Top Trends 2021 report to explore the strategies insurers are adapting to remain competitive amidst the evolving business landscape and how they can explore new ways to enhance their profitability.
A combination of factors such as demographic changes, evolving consumer preferences, and desire to become operationally efficient were already spurring changes in the life insurance industry. Enter 2020 – the COVID-19 pandemic is having a significant impact on the industry.
At the peak of disruption, the focus was on ensuring business continuity, but new initiatives are cropping up to tackle the challenges as the industry is adapting to the new normal.
Furthermore, COVID-19 has acted as a catalyst, pushing life insurers to prioritize their efforts on improving customer centricity, developing go-to-market agility, making processes intelligent, building business resilience, and embracing the open ecosystem.
Read our Life Insurance Top Trends 2021 report to explore the strategies insurers are adopting to manage the changing market dynamics.
The uncertainty of 2020 is setting the global tone for the immediate future in the financial services industry. So it is no surprise banks are laser-focused on business resilience, emphasizing both financial and operational risks. The need to adapt quickly to new normal conditions through virtual customer engagement is clear.
Customer centricity continues to drive commercial banks’ solution designs. And, the pandemic compelled products that deliver immediate client value ‒ quick digital onboarding, seamless lending, and support for small and medium-sized enterprises (SMEs). The onus is now on banks to go to market more quickly, which requires the implementation of intelligent processes and integrating corporates’ enterprise resource planning (ERP) systems with banking workflows.
To achieve go-to-market agility, banks across the globe are investing in and collaborating with FinTechs. Many of these partnerships are focused on boosting digital lending and providing seamless support to anxious small-business clients in need of assurance.
With newfound impetus for FinTech collaboration, commercial banks have picked up their step on the path toward OpenX. COVID-19 made it evident that survival during turbulence is manageable through collaboration with ecosystem players.
Read our Top Trends in Commercial Banking 2021 report to explore the strategies banks are adapting to transform their businesses from a product-led, siloed model to an experiential and agile plan.
When we published the Top Trends in Wealth Management 2020, little did we foresee the pandemic that would sweep through the world and disrupt life as we knew it. Yet, when we reviewed last year’s trends, we found that many still hold and some have taken on even greater relevance. One such trend is sustainable investing, which had begun to gain prominence as investors became more aware of ESG considerations, and firms rolled out more sustainable investing offerings. Another trend that has accelerated in the post-COVID world is the importance of investing in omnichannel capabilities and technologies such as artificial intelligence (AI) to enhance personalization and advisor effectiveness. The pandemic has driven wealth management firms to accelerate their digital transformation journey, with some immediate focus areas being interactive client communications and digital advisor tools.
There is no denying that time is of the essence. Yes, budgets are tight, but the Open X ecosystem offers wealth management firms opportunities to reimagine their operating models and deliver excellent customer experience cost-effectively.
Top trends in Payments: 2020 highlighted the payments industry’s flux driven by new trends in technology adoption, innovative solutions, and changing consumer behavior. The pandemic has tested the digital mastery of players, who are already grappling with transition. Non-cash transactions are on a robust growth path, accelerated by increased adoption during COVID-19. Regulators are working to instill trust and address non-cash payments risk amid unparalleled growth as players collaborate to quell uncertainty. Regional initiatives, such as the P27 (Nordics real-time payments system) and the EPI (European Payments Initiative), are gaining traction in response to country-level fragmentation and competition.
Investment in emerging technologies is looked upon as an elixir to mitigate fraud, data-driven offerings are being considered for providing value-added propositions, and distributed ledger technology is in focus for digital currency solutions, efficiency enhancement, and cost gains. New players, such as retailers/merchants, are integrating payments into their value chains while technology giants are upscaling their financial services game by weaving offerings around payments as a center stage. Constrained by budgets, firms consider business models such as Platform-as-a-Service (PaaS) to provide cost-effective and superior customer experience.
A combination of factors, including demographic changes, evolving consumer preferences, and regulatory and compliance mandates, were already spurring change in the health insurance industry. Enter 2020 and the COVID-19 pandemic, which is having sweeping implications for the industry.
At the peak of disruption, the focus was on ensuring business continuity, but new initiatives are cropping up to tackle the challenges as the industry adapts to the new normal.
Furthermore, some changes are here to stay, and it will be prudent for the industry players to be resilient to the market shifts by being agile, improving member centricity, making processes intelligent, and embracing the open ecosystem.
Read our Health Insurance Top Trends 2021 report to explore the strategies insurers are adopting to manage the external pressures.
The banking industry’s resilience is being tested as banks navigate through a remarkable 2020 filled with uncertainties. The impact of COVID-19 has been about setting the tone for future operational models. Retail banks have shifted focus towards integrated risk management with a more holistic view of operational risks. Adapting to the new normal, banks have prioritized cost transformation while engaging customers virtually. Incumbents sought to be more responsible within fast-changing environmental conditions and ESG remained a critical focus.
To provide more experiential services, banks are leveraging techniques such as segment-of-one to hyper-personalize offerings while aiming to humanize digital channels for increased engagement. Banks are also revamping middle and back offices, going beyond the front end leveraging intelligent processes. Open X is enabling banks to play on their strengths and use the expertise of ecosystem players. Going forward, banks are poised to become an enhanced one-stop shop by providing consumers value-adding FS and non-FS experiences.
To acquire customers in cost-effective manner, retail banks are tapping value-based propositions ‒ such as POS financing and mortgage refinancing. Further, Banking-as-Service provides incumbents a way to provide their high-value offerings to other players. In preparation for the future, banks will be looking to improve their go-to-market agility by leveraging the benefits of cloud. This analysis outlines the top 10 trends in retail banking for 2021.
Explore how Capgemini’s Connected autonomous planning fine-tunes Consumer Products Company’s operations for manufacturing, transport, procurement, and virtually every other aspect of the supply-value network in a touchless, autonomous way.
Financial services is undergoing a paradigm shift that is forcing incumbent retail banks to rethink growth strategies as they struggle to remain relevant. Growing competition from BigTechs, FinTech firms, and challenger banks has added to the complexity created by increasingly stringent regulatory and compliance requirements. Customers now expect a seamless customer journey and personalized offerings because they have become accustomed to top-notch individualized service from GAFA giants Google, Apple, Facebook, and Amazon. The changing ecosystem offers established banks new, unexplored opportunities and encourages a transition beyond traditional products to meet the exacting requirements of today’s customers. Bank collaboration with FinTech and RegTech partners is becoming commonplace. Incumbents are exploring point-of-sale financing and unsecured consumer lending, while they also boost their digital channel competencies to reach a broader customer base. Banks are beginning to accept open APIs and are working with third-party specialists to create an open shared marketplace. Technological advancements such as AI are fueling efforts to evolve customer onboarding and touchpoint processes. Increasingly, banks are turning to design thinking methodology to understand the customer journey, extract deep insights, and develop a more refined user experience across the customer lifecycle.
Our analysis of the top retail banking trends for 2020 offers a glimpse into the fast-changing banking ecosystem and explores the tools and solutions being used to face new-age challenges.
Aspects of the life insurance industry have remained constant for years – and so have premiums. Traditional savings products have taken a huge hit in terms of attractiveness because low interest-rates prevail. Meanwhile, the risk landscape is shifting, and insurers need to align better with the emerging business environment, manage changing customer preferences, and improve operational efficiencies. Within today’s scenario, industry players are undertaking tactical and strategic shifts in attempts to manage unpredictable market dynamics. Insurers must develop alternative products to breathe new life into policies and leverage emerging technologies (artificial intelligence (AI), analytics, and blockchain) to improve efficiency, agility, flexibility, and customer-centricity.
Read Top Trends in Life Insurance: 2020 for a look at the innovative steps future-focused insurers are considering to meet industry challenges and opportunities.
The health insurance industry is evolving and undergoing significant changes. As the risk landscape shifts, insurers are working to improve operational efficiencies, meet evolving customer preferences, and align better with the changing business environment. Accordingly, payers must adapt and align business models and offerings. An incisive tactical approach is required to accommodate members’ needs and related emerging risks — medical, health, and environmental. Advanced technologies such as artificial intelligence, analytics, automation, and connected devices are enabling insurers to manage these changes proactively, partner with members, and help to prevent risks, all the while continuing to fulfill payer responsibilities.
Read Top Trends in Health Insurance: 2020 to learn which strategies insurers are adopting to navigate and align with today’s challenges.
Similar to other financial services domains, payments is evolving into an open ecosystem. The EU’s Payment Services Directive (PSD2) pioneered open banking by encouraging banks and established payments players to securely open the systems to foster competition, innovation, and more customer choices. In tandem with non-cash transaction growth, regulations are driving banks and payments firms to expand their array of payment methods and channels. Governments are encouraging financial inclusion by also promoting the adoption of non-cash payments. Increasingly, merchants and corporates seek to offer alternative payment systems because of widespread popularity among consumers. Alternative payments also enable merchants to provide real-time and cross-border payments to boost business efficiency.
Banks, payment firms, card firms, BigTechs, FinTechs, and other players are continuously developing new technology to cash in on market changes. However, data breaches and fraud continue to hinder innovation as firms devote countless resources each year to address security issues. Many governments are also designing new regulations to reduce ecosystem threats. All these measures are expected to make the current ecosystem much more secure and simple for players as well as customers.
Top Trends in Payments: 2020 explores and analyzes payments ecosystem initiatives and solutions for this year and beyond
Improving profitability for small businessBen Wann
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3. sloanreview.mit.edu Embracing Digital Technology • MIT SLOAN MANAGEMENT REVIEW 1
Contents
RESEARCH
REPORT
2013
2 / Executive
Summary
3 / Introduction
•Brewing Up Change
at Starbucks
•About the Research
3 / Digital
Immaturity: A Wide-
spread Problem
•The Digital Imperative
•Technology Everywhere
5 / The Benefits
of Digital
Transformation
6 / The Trouble
with Digital
Transformation
•Leadership: Defining
the Agenda
Lack of urgency
The vision thing
Picking a direction
8 / Institutional
Challenges
Attitudes of older
workers
Legacy technology
Innovation fatigue
Politics
Sidebar: Intel Gets Urgent
10 / Executing
the Change
•Making a Case for Digital
Transformation
•Incentives
12 / Conclusion
4. Executive Summary
Companies routinely invest in technology,and too often feel they get routine results.Technology’s promise is
not simply to automate processes, but to open routes to new ways of doing business.
To better understand how businesses succeed or fail in using digital technology to improve business per-
formance, MIT Sloan Management Review and Capgemini Consulting conducted a survey in 2013 that
garnered responses from 1,559 executives and managers in a wide range of industries.Their responses clearly
show that managers believe in the ability of technology to bring transformative change to business. But they
also feel frustrated with how hard it is to get great results from new technology.
Thisreport(aswellasthesurvey)focusesondigitaltransformation,whichwedefineastheuseof newdigital
technologies (social media, mobile, analytics or embedded devices) to enable major business improvements
(such as enhancing customer experience,streamlining operations or creating new business models).
The key findings from the survey are:
According to 78% of respondents, achieving digital transformation will become critical to their organiza-
tions within the next two years.
However, 63% said the pace of technology change in their organization is too slow.
The most frequently cited obstacle to digital transformation was“lack of urgency.”
Only 38% of respondents said that digital transformation was a permanent fixture on their CEO’s agenda.
Where CEOs have shared their vision for digital transformation, 93% of employees feel that it is the right
thing for the organization. But, a mere 36% of CEOs have shared such a vision.
Previous research with executives by the MIT Center for Digital Business and Capgemini Consulting
showed that many companies struggle to gain transformational effects from new digital technologies, but
also that a significant minority of companies have developed the management and technology skills to real-
ize the potential of new technologies. Our current survey deepens this research by getting frontline
perspectives as well as high-level ones, from staff to board member. (See About the Research, p.3.) It shows
that frontline corporate employees believe they face a strategic imperative to successfully adopt emerging
new technologies. Almost no organization is sheltered from the competitive disruption wrought by of the
widespread adoption of digital technologies.
But the survey also shows that organizations are finding ways forward by taking steps such as developing
business cases for technology adoption, creating cross-department authority for digital initiatives and re-
aligning incentives to include metrics relevant to digital transformation. This report will delve into the
challenges of digital transformation and how companies are meeting them to achieve competitive advantage.
2 MIT SLOAN MANAGEMENT REVIEW • Capgemini Consulting sloanreview.mit.edu
R e s e a r c h R e p o r t E m b r a c i n g D i g i ta l T e c h n o l o g y
5. sloanreview.mit.edu Embracing Digital Technology • MIT SLOAN MANAGEMENT REVIEW 3
Introduction
E
very company wants the technology it uses to transform its business. Executives see the
potential for using digital technologies to achieve transformation,but they’re unclear on
how to get the results. They look at high-profile examples of companies using technol-
ogy to galvanize their business, and wonder what they need to do to follow suit.
Brewing Up Change at Starbucks
One company that has succeeded is Starbucks. In 2009, after dismal performance cut the company’s
stock price in half, Starbucks looked to digital to help re-engage with customers. It created a vice
president of digital ventures, hiring Adam Brotman to fill the post. His first move was to offer free
Wi-Fi in Starbucks stores, along with a digital landing page with a variety of digital media choices,
including free content from publications like The Economist. It sounds simple, but as Brotman says,
“we were not just doing something smart around Wi-Fi, but we were doing something innovative
around how we were connecting with customers.”
Brotman is now chief digital officer at Starbucks, where he and Curt Garner, Starbucks’ chief in-
formation officer, have formed a close working relationship, restructuring their teams so that they
collaborate from the very start of projects. Last year, they cut 10 seconds from every card or mobile
phone transaction, reducing time-in-line by 900,000 hours. Starbucks is adding mobile payment
processing to its stores, and is processing 3 million mobile payments per week. Soon, customers will
order directly from their mobile phones.
Using social media, mobile and other technologies to change customer relationships, operations
and the business model has helped Starbucks re-engage with customers and boosted overall perfor-
mance. Its stock price has also bounced back up from roughly $8 in 2009 to nearly $73 in July 2013.
DigitalImmaturity:AWidespreadProblem
Many companies want Starbucks-like results,but most are far from achieving them,according to
our survey (see About the Research). At the end of the survey, respondents answered a set of
questions about their companies’digital maturity.Using an index of digital maturity developed by the
Embracing
Digital
Technology
About the
Research
The survey uses a definition of
digital transformation that
came from research done by
MIT’s Center for Digital Busi-
ness (CDB) and Capgemini
Consulting, which focused on
how digital transformation
plays out at traditional large
companies, those having more
than $1 billion in revenues. To
complement that research,
which involved interviews with
executives at 450 large compa-
nies, MIT Sloan Management
Review and Capgemini
Consulting conducted a broad-
based online survey. It was
completed by 1,559 people in
106 countries (the five with the
most respondents were:
United States, 37%; India, 11%;
Canada, 5%; United Kingdom,
4%; Australia, Brazil and Mex-
ico, 3% each). They represent
companies and organizations
across the business spectrum
— nearly half (47%) work at
companies with less than $250
million in revenues, 10% work
at mid-sized companies with
between $250 million and $500
million in revenues, 9% at com-
panies with $500 million to $1
billion in sales, and 33% work
at organizations with more
than $1 billion in revenues, in-
cluding 11% at companies with
more than $20 billion in sales.
Respondents span the gamut
of functions, from CEO to staff.
The survey asked the
respondents’ views on a
number of topics related to
achieving digital transforma-
tion. Respondents also took
a separate digital maturity
assessment, based on prior
CDB research, to determine
their digital maturity. Organi-
zations were categorized
either as Digirati (mature at
both technology adoption and
management), Fashionistas
(early adopters of technology
but without effective manage-
ment skills), Conservatives
(slow to adopt technologies
but effective at managing
them) or Beginners (possess-
ing neither advanced
technology or the ability to
manage it).
6. 4 MIT SLOAN MANAGEMENT REVIEW • Capgemini Consulting sloanreview.mit.edu
R e s e a r c h R e p o r t E m b r a c i n g D i g i ta l T e c h n o l o g y
MIT Center for Digital Business and Capgemini
Consulting, we found that only 15% of respondents
were in the most mature category alongside Star-
bucks. Sixty-five percent of respondents are in
organizations that rank as least mature — the cate-
gory the index refers to as Beginners (see Figure 1).
The world is going through a kind of digital trans-
formationaseverything—customersandequipment
alike — becomes connected. The connected world
creates a digital imperative for companies.They must
succeed in creating transformation through technol-
ogy, or they’ll face destruction at the hands of their
competitors that do.
The Digital Imperative
Even in a connected world, it takes time, effort and
willpower to get major transformative effects from
new technology. Executives need to lead the process
and make sure they’re managing and coordinating
acrossthecompany.Employeesknowthattechnology
matters:afull78%of respondentssaidachievingdigi-
tal transformation will become critical to their
organizations within the next two years.Less than 5%
of respondents say digital transformation will never
become important for their organizations. Mean-
while, 81% said their organizations were already
tryingtoachievedigitaltransformation(seeFigure2).
“The big thing is, technology change is happen-
ing so rapidly that every industry is being affected
by this,” said George Westerman, research scientist
at MIT’s Center for Digital Business, and one of the
investigators leading the Center’s Digital Transfor-
mation Research.
Previous research by Capgemini Consulting and
MIT’s Center for Digital Business found that compa-
nies that invest in important new technologies and
manage them well are more profitable than their in-
dustry peers. Respondents to our survey corroborate
this view — they overwhelmingly believe that failure
to effectively conduct digital transformation will
harm their company’s ability to compete.
Of those working at organizations where digital
transformation is a permanent fixture on the execu-
tive agenda, and a core strategic consideration, 81%
believe their companies will be somewhat or much
more competitive in two years. That’s a stark con-
trast from those at organizations where leadership
is not focused on digital transformation — only
18% believe their companies will increase their
competitiveness, and nearly half (46%) project a
grim, less competitive future.
Despite growing acknowledgment of a digital
imperative, few companies are responding. Only
38% of respondents said that digital transformation
was a permanent fixture on their CEO’s agenda. Of
the rest, 65% of respondents thought it needed to be
more important than it currently is.
Technology Everywhere
The pervasive nature of technology in consumers’
lives is causing rapid change in the business land-
scape. Lori Beer, executive vice president of
information technology and specialty business at
WellPoint,the nation’s largest Blue Cross/Blue Shield
licensee, said that “[i]t’s not like we’re a consumer
Rated D for digital
Most companies lack experience with
emerging digital technologies.
Figure 1
Beginners
Conservatives
Fashionistas
Digirati
Digital
Maturity
15%
6%
14%
65%
01
Beginner companies probably use email, Inter-
net and various kinds of enterprise software. But
they have been slow to adopt, or are skeptical of,
more advanced digital technologies like social
media and analytics.
Conservative companies deliberately hang back
when it comes to new technologies, although
their management has a vision and effective
structures in place to govern technology adoption.
Fashionista companies are very aggressive in
adopting new technologies, but do not coordinate
well across departments or have an effective vi-
sion in place for dealing with digital business.
Digirati companies have executives that share a
strong vision for what new technologies bring, in-
vest in and manage digital technologies quickly
and effectively, and gain the most value from digi-
tal transformation.
7. sloanreview.mit.edu Embracing Digital Technology • MIT SLOAN MANAGEMENT REVIEW 5
products company, where you can put that product
on the shelf. Our products and services really are
supporting consumers,providingcapabilitiesforem-
ployers,information,data,much more like a financial
services type of scenario.Technology has always been
important to our business, but it really is becoming
much more strategic, especially today, when you’re
seeing the emergence of new technologies.You’re see-
ing a transformation of how consumers are engaging
withtechnologies.”
The rise of the tech-savvy, connected consumer
across all facets of society changes the expectations
consumers have of companies, regardless of their
business, said Curt Garner, the chief information
officer at Starbucks.“IT and digital is pervasive in
people’s lives now. So the advice I would give some-
body starting it now is, think of yourself like a
consumer technology company.”
How do consumer technology companies act?
One key point is, they update frequently. For non-
tech companies, this translates into adapting by
streamlining product cycles.Quicker product cycles
often lead to adding some features later.Adding fea-
tures into new versions of products can become a
strategic move for non-tech companies, as well.
Respondingeffectivelyandquicklytonewtechnol-
ogies affects the bottom line, and ultimately business
survival.Effective management of new technologies is
already creating winners and losers in measurable
ways,likemarketshareandprofits—bothareaswhere
Digirati outperform their rivals.Business leaders who
embrace the digital imperative will see boosts in their
operations, customer relations and business models,
asdescribedinthenextsection(seeFigure3).
TheBenefitsofDigital
Transformation
Companies that effectively manage digital tech-
nology can expect to gain in one or more of
three areas: better customer experiences and engage-
ment, streamlined operations and new lines of
business or business models.Though innovative new
business models are what every CEO dreams of,
companies more often see digital technologies help
transform their customer experience or operations.
Business model transformation is difficult, and far
less prevalent,according to survey respondents.
Customer experiences reflect the clearest impact
of digital transformation. The survey found that
A current affair
Almost half of employees think digital transfor-
mation is upon us, and a third say it looms.
Figure 2
Within the next 2 years
That time has passed —
it is already a matter of
survival
27%
This year18%
33%
3 years or more13%
It’s never going to
become important
across the entire
organization
5%
When will it
become critical to
implement Digital
Transformation
across your
organization?
02
Digital cash register
Digirati — the best companies at managing digital
technology — get the best financial results.
Figure 3
BeginnersConservativesFashionistasDigirati
Revenue
creation
Profitability
Market
Valuation
+9%
+6%
-11%
-12%
+7%
+9%
-10% -4%
-24%
-7%
+26%
+12%
07
Percentages don’t add to 100% due to exclusion of those
responding “don’t know.”
Source: MIT’s Center for Digital Business and Capgemini re-
port “The Digital Advantage: how digital leaders outperform their
peers in every industry (http://ebooks.capgemini-consulting.com/
The-Digital-Advantage/index.html)”
8. 6 MIT SLOAN MANAGEMENT REVIEW • Capgemini Consulting sloanreview.mit.edu
R e s e a r c h R e p o r t E m b r a c i n g D i g i ta l T e c h n o l o g y
improving customer relationships was the area where
companies were having the most success with digital
technology.Most prominent was improving the over-
allcustomerexperience,followedcloselybyenhancing
productsandservicesincustomer-friendlyways.
Survey respondents said their organizations also
are seeing improvements in operations,in part in au-
tomating operations.A number or respondents said
internalcommunicationsaresharplyimproved,espe-
cially through using social media. For example, Jon
Bidwell, chief innovation officer at Chubb, a large
specialty insurer,told us that social business tools and
processes had transformed the company’s innovation
culture, helping it develop products and understand
risks as rapidly as new markets emerged.
The opportunity for digital technologies to create
new businesses is real, and a quarter of respondents
expect digital transformation to launch new prod-
ucts and services. General Electric is pushing an
Internet of Things service strategy that will help it tell
customers how to schedule maintenance and avoid
part failures, improving operations. The company
expects it will sell services related to maintaining its
products.
Of course,more efficient products may well reduce
demandfornewGEgoods.ButWilliamRuh,vicepres-
ident of software at General Electric,notes that“there’s
upside for us in the services. We can grow on the
servicesside,andthey’rewinningandwe’rewinning.”
But business model transformation is also elusive.
A mere 7% of respondents said that their company’s
digital initiatives were helping to launch new busi-
nesses, and only 15% said new business models were
emerging thanks to digital technology (see Figure 4).
It could be that these technologies are so new that
they simply haven’t had time to be turned into new
business opportunities. One respondent noted that
in his company,“the belief is that digital technologies
arenotthateffectiveyetinourmarketplace.”Another
said customers weren’t ready for new models yet,
because they are“highly conservative and resistant to
change.”
TheTroublewithDigital
Transformation
Despite growing acknowledgment of the need
for digital transformation, most companies
struggle to get clear business benefits from new
digital technologies. They lack both the manage-
ment temperament and relevant experience to know
how to effectively drive transformation through
technology.
Even companies where leadership has demon-
strated it can effectively leverage technology can
run into challenges with new digital technologies.
Today’s emerging technologies, like social media,
mobile, analytics and embedded devices, demand
different mindsets and skill sets than previous waves
of transformative technology.
There is no one factor that impedes digital trans-
formation.Lackof visionorsenseof urgencyplagued
many companies, culture at others, and organiza-
tional constraints problems at still others. Our
Enhance our existing products and services
08
Enhance our
existing
products and
services
Improve the
customer
experience
Launch new
products and
services
Ensure
cross-channel
consistency
Automate our
operational
processes
Enhance the
productivity of
our workers
Improve
internal
communication
Expand our
reach to new
customers
and markets
Launch new
businesses
Develop new
business models
Transition
physical products
/ services to
digital products /
services
Customer
experience
Operational
improvements
Business model
change
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Number of responses
1876
1255
1087
Our digital initiatives
are helping us to:
(Select up to three.)
What has digital done for us lately?
Companies are using technology to create real, transformative effects across
customer experiences, internal operations and new business model.
Figure 4
9. sloanreview.mit.edu Embracing Digital Technology • MIT SLOAN MANAGEMENT REVIEW 7
research highlighted nine specific hurdles in the
broad areas of leadership, institutional obstacles and
execution that companies need to overcome to
achieve digital transformation.
Leadership: Defining the Agenda
Manymanagersfeelnourgencytoachievedigitaltrans-
formation. This may be because so few leaders offer a
vision and a road map for digital transformation,
leavingmanagerswithnomotivationforachievingit.
Lack of urgency Complacency affects more com-
panies than any other organizational barrier cited
in our survey, with almost 40% of respondents say-
ing that lack of urgency/no sense of burning
platform is the biggest single obstacle to digital
transformation. One survey respondent working in
higher education said “The organization has a long
(70 years) history of success ... the need to change is
not clear to some members of the old guard” (see
Figure 5).
The survey shows a clear split in perception of
urgency between the top managers at companies
and those below them. In fact, the further down the
organizational ladder one goes, the less satisfied
workers are with the pace of digital transformation
at their organizations. A third of C-level executives
and board members think the pace of change is
about right,and another 10% think it is fast,or even
very fast. CEOs are particularly bullish — 53%
think the pace is right, fast, or very fast, the highest
of any category (see Figure 6, p.8).
CEOs might know something their colleagues
don’t, of course. Or it could be that as one gets into
the trenches of transformation, conditions change.
Only 25% of managers think the pace is right, and a
mere 22% of staff agree. Of these, product develop-
ment staff are the most positive — just over 40% say
the pace is very fast, fast or just right. Management
was guilty of “complacency, ignorance of modern
technology,” said one respondent. “Clueless man-
agement,”commented another.
But employee skepticism can also impede pace —
even when leadership is on board to promote digital
transformation.“There is too much hype,” said one
CEO.“I can’t push harder because of all the hype and
the overselling from suppliers. I lose my credibility if
I push it too hard. So we take a slower approach just
to make sure we don’t give the naysayers their way.”
The vision thing Digital transformation starts
with a vision from top leadership. Where senior
leaders had shared their vision, it had huge buy-in
— fully 93% of employees agreed that digital trans-
formation was the right thing right now for their
companies to do, and 73% strongly agreed.
“This idea that a thousand flowers will bloom and
we will all be okay is a great way to get some ideas,but
we have not seen any transformations that happen
bottom up,” said George Westerman. “They’re all
being driven top down. The big difference between
the companies that are just doing technology initia-
tives and the companies that are leading a
technology-based transformation is how they’re put-
ting the leadership frameworks in place.”
30%
27%
28%
33%
39%
28%
24%
9%
16%
19%
No “burning platform” / no sense of urgency
Not enough funding
Limitations of IT systems
Roles and responsibilities are not clear
Lack of vision
Unclear business case
Business units implementing independently in silos
Culture not amenable to change
Lack of leadership skills
Regulatory concerns
What are the most
significant
organizational
barriers to Digital
Transformation in
your organization
as a whole?
Select up to 3.
ppt15 (09)
The biggest transformation traps
Desire, money and tools are the three big reasons organizations fail to use
technology to make their business better.
Figure 5
Percentages refer to respondents who clicked this option versus total number of respondents who
answered this question.
10. 8 MIT SLOAN MANAGEMENT REVIEW • Capgemini Consulting sloanreview.mit.edu
R e s e a r c h R e p o r t E m b r a c i n g D i g i ta l T e c h n o l o g y
But only 36% of respondents said that senior
leaders had shared a vision for digital transforma-
tion across their organization. Why would
two-thirds of executives fail to articulate a vision for
digital transformation? At least part of the reason
comes from choosing the right way forward.
Picking a direction Creating a road map towards
digital transformation is challenging. The survey
showed impressive alignment around the idea that
digital transformation is important — more than
80% of leaders at companies categorized as Digirati
and Fashionistas, and more than 90% at Conserva-
tive-level companies, say leadership is “completely”
or“somewhat”aligned.
There is much less alignment when it comes to
the road map. Fewer than 25% of respondents at
Conservative, Fashionista and Beginner companies
thought leadership was completely aligned on a
road map (it was less than 5% at Beginners), com-
pared to a bit over 40% at Digirati companies.
Digirati and Conservative firms were notably better
overall at alignment, but such firms represent only
29% of all companies in the sample.
Developing a road map for digital transforma-
tion presents hard challenges because digital
transformation takes many forms. For instance,
executives must decide what to transform first: Cus-
tomer relationships? Internal operations? The
business model? Any individual step requires mul-
tiple, coordinated actions. It can also require
executives to reframe what they think about their
business.
WellPoint’s Lori Beer recalled that when she ran
operations for the company, it could only begin to
transform customer service when it stopped look-
ing at traditional service metrics like average speed
of answer, and started asking questions like why
customers who had talked to customer service
would then call back. Reframing questions about
the business is a real challenge, because doing so re-
quires a company to challenge its own assumptions
about itself.
InstitutionalChallenges
Corporate behavior among line staff reflects a
company’s history, its people, its leaders and
the ideals they hold. Some of these reflect broader
societal ideas about gender, age, education and
other factors, which can be unspoken issues that af-
fect every aspect of a company, including digital
transformation. We will look at four major institu-
tional barriers to change.
Attitudes of older workers Responses to the sur-
vey suggest a deep-rooted perception that older
people will have trouble reframing. Bill Gates may
be 58, and Gordon Moore of Moore’s Law fame is
84,but there’s still a perception that older people are
technophobic, and older managers don’t want to
deal with technologic change. “I sincerely doubt
that managers who are over 50 share the same
enthusiasm and excitement when it comes to digi-
tizing business segments when compared to a
younger person,” wrote a survey respondent in the
construction industry.
Another respondent complained that “Manage-
ment is composed of old people from 55 years and
above, they know nothing about technology and
its benefits and also don’t want to learn.” Another
called management, “Dinosaurs [who] don’t
Off the pace
The pace of digital transformation is too slow — unless you’re the CEO.
Figure 6
ppt11
50%
40%
30%
20%
10%
0%
C-level
executives and
board members
CEO/
President/
Managing
Director
Managers Staff
Very fast
Fast
About right
Slow
Very slow
From your perspective,
how would you rate the
pace of implementation of
digital transformation in
your organization?
11. sloanreview.mit.edu Embracing Digital Technology • MIT SLOAN MANAGEMENT REVIEW 9
understand the opportunity and are reluctant [to
change] old ways.”
Perhaps younger people haven’t seen the pile of
bones built up from myriad obsolete technologies.
Older colleagues know that technology projects
often fail to deliver what they promise.“Is this Y2K
all over again?”one survey respondent asked of dig-
ital transformation. Older executives and managers
need to understand that their age can undermine
faith in their ability and interest in leading digital
transformation, and develop approaches to make it
clear that they want to see transformation occur.
Legacy technology That older people are technol-
ogy-averse could be, at least in part, stereotyping.
But problems arising from older systems are a legiti-
mate issue. For one, such systems can be complex to
update, especially when connecting to new kinds of
technology. Limitations of IT systems ranked third
on the list of significant organizational barriers to
Digital Transformation, cited by 459 people.
As one respondent said,“senior leaders seem to
understand the importance/relevance — they’re
not dummies — but they seem to be paralyzed by
business systems and business processes that will
take a good deal of effort and cash to change/adapt.”
Said another of an issue with a digital project,
“Our implementation has vastly outpaced prob-
lems that it’s trying to solve and has turned into
numerous headaches and distractions for basically
every team; doubly because we haven’t replaced any
of the existing systems, so everything is now being
duplicated (or triplicated).”
Even companies in which the entire business is
digital may not use technology very effectively. One
executive responded to the survey by saying “Our
service offering is digital collaboration solutions, so
we know how to talk about it and how our clients
should use it. Internally, we have not kept up the
pace.”Said another,“We are an online (SaaS) org, so
we built our infrastructure and tools on hosted
tools, embraced social media, etc. all on day one.
That said, we used a lot of disjointed, free or low
cost offerings. To get to the next level, we need to
migrate many of our digital operations/infrastruc-
ture items to more integrated solutions.”
Innovation fatigue For people of any age, there is
also the possibility of technology fatigue.“I get the
impression sometimes that a lot of the management
teams at companies say,‘would you please stop the
technology innovation? We can take a break from
thisandjustdigestwhatwe’vebeendoingforthepast
few years,’” said Andrew McAfee. “Unfortunately,
that’s not going to happen,so a critical skill at the top
of a company is to have someone who can keep scan-
At Intel, there is no lack of a sense of ur-
gency; the company knows mobile
technology is upending its market. The com-
pany has failed multiple times to become an
important provider of mobile processors, in-
cluding turning down the opportunity to
provide chips for the original iPhone. Intel’s
culture has long been built around maintain-
ing market dominance through intense
internal competition, said Kim Stevenson, its
chief information officer. Now, Intel believes
it needs a more collaborative culture to help it
gain an edge in mobile processors.
To start this cultural change, Intel’s top 25
executives gathered for a strategy discussion
led by Stevenson and the head of human re-
sources. First, the group had to agree on the
overall vision, the need for cultural change in
order for Intel to compete effectively in the
emerging mobile market. Then it had to cre-
ate ways to bring people together. That
would mean breaking down barriers to com-
munication that existed in the company’s
culture of rivalry.
Among steps Intel took to improve com-
munications were adding 220 video
conferencing rooms, electronic white board-
ing, and adding search functions to its
SharePoint implementation. All company em-
ployees are now on an internal social
network. Intel has also set up teams based
on accounts, not internal departments.
Intel is taking small, concrete steps to-
wards changing its culture, rather than
massive, risky leaps. The small-step strategy
is one many companies could adopt when try-
ing to transform. As one survey respondent
said, “The kind of transformation being ad-
opted does not give much leeway for failure
and the cost to the organization’s reputation
and brand is great. A thoughtful and piloted
approach needs to be adopted.” Small steps
do not mean companies lack urgency.
According to Stevenson, “We had the top
25 executives in the company buy in to the
strategy. You have to admit that your compet-
itive culture needs to change to be
successful in the future, and we want to
change before it’s evident on the outside that
we need to change, right? And I think that’s a
really key premise.”
Intel gets urgent
12. 10 MIT SLOAN MANAGEMENT REVIEW • Capgemini Consulting sloanreview.mit.edu
R e s e a r c h R e p o r t E m b r a c i n g D i g i ta l T e c h n o l o g y
ning the technology landscape and explaining it to
the rest of the management team to say, gang, this is
the cloud; it’s actually a big deal. Inertia and compla-
cency are deadly in the world that we live in today.”
It’s hard not to get complacent, said Stevenson,
Intel’s CIO. “They’ve gone through ERP, they’ve
gone through BYO,and they’ve gone through cloud,
and they think they’ve done it all. But the reality is,
we’re only at the very, very beginning of this next
generation of computing, and I think that every in-
dustry leader will be the ones that transform first. I
don’t care what industry you’re talking about.”
Similar attitudes came up in the survey, where
barriers like “information overload,”“the human
capacity for implementation” and the need to “bal-
ance between conveniences,speed and superficiality
of digital tools and human-brain thinking pro-
cesses”were cited.
Andrew McAfee,principal researcher at the Cen-
ter for Digital Business, told us in an interview that
“[the] vexing thing about innovation and disrup-
tion is, they don’t stop once you do it.” Neither will
competitors. Companies have to develop a continu-
ous process for digital innovation.
Politics Internal power centers, controlled by de-
partments or individuals, can inhibit changes that
dictate less power or different ways of working.
More than 20% of respondents said that internal
politics, including fear of losing power in the orga-
nization, impeded adoption of digital technology
(see Figure 7).
Many companies work to limit the power of a
single individual or department — 60% of compa-
nies, in fact, report using one of several governance
mechanisms to manage and foster their digital in-
vestments. Cross-functional steering committees
are the most popular, the choice at 19% of respon-
dents’ organizations. Other approaches include
specific digital leadership in individual business
units (15%) and cross-functional innovation
groups (14%). Only 13% have adopted the much-
hyped position of chief digital officer (CDO).
This diverse set of approaches shows that com-
panies can follow many paths to structuring their
digital transformation efforts. But it also creates
problems for companies.There is enough resistance
from organizational and cultural factors that not
having clear structures makes it risky for workers to
push for digital transformation.
ExecutingtheChange
Among the obvious obstacles to digital trans-
formation is lack of clarity about the pay-off.
Companies want to know that they are getting
something beneficial from investment in new tech-
nologies.Corporate leaders need to leverage metrics
to help make digital transformation happen.
Making a Case for Digital Transformation
Only half of the companies surveyed said they create
business cases for their digital initiatives. It can be
hard to gauge a return on investment for emerging
technologies. “It is still difficult to compute ROI
on many social media activities (at least to the satis-
faction of the executive board)” said one survey
respondent.
Many organizations struggle to compute ROI.
Merely one-fourth report having established key
performance indicators to help them measure the
impact of their digital transformation. The three
biggest reasons why: companies have trouble defin-
Figure 7
Culture clash
Entrenched attitudes of fear and ignorance beat down digital transformation
within many corporate cultures.
40%
18%
21%
52%
53%
23%
Competing priorities – “we don’t have time for this right now”
Lack of familiarity with digital – “we don’t know how to do that”
Resistance to new approaches – “this is the way we’ve always done it”
Digital Transformation threatens current power structures – “I will lose influence in my organization”
Internal politics – “it doesn’t have the right political support”
Risk aversion – “it’s not worth the risk”
What are the most
significant cultural
barriers to Digital
Transformation in
your organization?
Select up to 3.
ppt19 (10)
Percentages refer to respondents who clicked this option versus total number of respondents who
answered this question.
13. sloanreview.mit.edu Embracing Digital Technology • MIT SLOAN MANAGEMENT REVIEW 11
ing how to successfully define key performance
indicators (KPIs), lack of management skills to
carry through on KPIs, and needing cultural
changes to make KPIs work (see Figure 8).
Those that do measure can be guilty of using
fuzzy math. “We are not honest with ourselves
about where our capabilities really lie, nor about
how we are going to ensure there is accountability
for instituting real, competitive change,” wrote one
survey respondent. “We want to make it seem like
we‘get digital’but our Digital Transformation is not
holistic,and tends to occur in isolated incidents that
are always positioned as‘successful’ even when they
really aren’t.”
Digital transformation is successful when the
entire company aligns around a vision, but only a
slight majority of companies have given cross-
functional committees (37%) or a shared digital
units (17%) enterprise-level authority on
digital investments. Digirati do much bet-
ter, at 66%.
Incentives One obvious way for executives
to clear a path for digital transformation is
to give employees incentives. Bonuses, raise
structures, promotions and performance
reviews are some of the tools that compa-
nies could use, but don’t. For Beginners,
61% of companies do not tie rewards to
digital transformation efforts. The compa-
nies that do best at digital transformation
also do the best job of aligning incentives with digi-
tal transformation efforts: 68% of respondents at
Digirati companies do connect digital transforma-
tion to incentives. Interestingly, these incentives
tend to be based on“soft” factors (recognition, per-
sonal advancement) rather than “hard” financial
factors (see Figure 9).
Better incentives might help ease employee
concerns about digital transformation. One sur-
vey respondent noted that“at the operational level,
there are some benefits (to digital transforma-
tion), but much of the day-to-day experience is the
feeling of being reduced to being a Victorian
machine minder: instead of the software servicing
the people, it is the other way around.” Another
said that the pace of digital transformation de-
manded such speed that it is “at risk of diluting
employee morale.”
Metric systems
More than half of companies fail to set key performance
indicators to gauge digital transformation …
… even though they know they matter.
Figure 8
Defining the
right KPIs
Changing the
culture
Limitations of
IT systems
Concerns with the
integrity of the data
Lack of
management skills
Too much
data
Not enough
data
Very
significant
Somewhat
significant
Neither Not
at all
significant
Don’t
know
Don’t
know
Not
very
significant
How significant are each of the following in managing Key
Performance Indicators (KPIs) around Digital Transformation?
Have Key Performance Indicators
(KPIs) been established to track the
progress of Digital Transformation?
YesNo
0% 20% 40% 60% 80% 100%
26%
17%
57%
Market rewards
Most companies fail to tie incentives to digital transformation
Figure 9
new 9
68%
48%
65%
39%
35% 39%
22%
4%
Reward structures are aligned in
some way to digital transformation
goals in my organization.
Beginners
Reward structures
among the Digirati
Personal
advancement
Awards and
recognition
Financial
incentives
Other
ConservativesFashionistasDigirati
Defining the
right KPIs
Changing the
culture
Limitations of
IT systems
Concerns with the
integrity of the data
Lack of
management skills
Too much
data
Not enough
data
Very
significant
Somewhat
significant
Neither Not
at all
significant
Don’t
know
Don’t
know
Not
very
significant
How significant are each of the following in managing Key
Performance Indicators (KPIs) around Digital Transformation?
Have Key Performance Indicators
(KPIs) been established to track the
progress of Digital Transformation?
YesNo
0% 20% 40% 60% 80% 100%
26%
17%
57%
14. 12 MIT SLOAN MANAGEMENT REVIEW • Capgemini Consulting sloanreview.mit.edu
R e s e a r c h R e p o r t E m b r a c i n g D i g i ta l T e c h n o l o g y
Conclusion
If companies could give their relationship to digital
transformation a Facebook status, it would be“it’s
complicated.” It is complicated, but it can be man-
aged.Thestakesmakedigitaltransformationadigital
imperativeforcompanies.Digitaltransformationisa
wide-open area,one that gives CEOs broad leeway to
act.But the CEO and senior leadership must develop
a vision to articulate to the staff, create a road map
and commit to it, and then rally the organization
with measurable goals and incentives to reach them.
Digital transformation needs to come from the
top, and companies should designate a specific ex-
ecutive or executive committee to spearhead efforts.
Companies should take small steps, via pilots and
skunkworks, and invest in the ones that work. Cor-
porate leadership needs to tweak its road map based
on these smaller projects, and update its digital
vision as these smaller projects refine the vision.Ex-
ecutives and employees need clear rewards for
making digital transformation a priority.
“There are two wrong ways to approach (digital
transformation),”MIT’s George Westerman told us.
“One is to say,‘just go off and do something.And we
don’t need to worry about coordination.’Another is
to hire a bunch of people and say‘make this happen.
I don’t need to be involved.’”
“If you’re an executive leading a company looking
atthesetechnologies,youneedtoleadthetechnology
— don’t let it lead you,”Westerman added.“You want
to think about, how is your company going to be dif-
ferent because this is here? And then, put in a
framework, so you’re not just buying technology,
you’re actually pushing your company forward in a
different way,because the technology is there.”
The only wrong move for executives,then,would
be not making any move.
MIT Sloan Management Review
MIT Sloan Management Review leads the discourse among academic researchers, business executives and
other influential thought leaders about advances in management practice that are transforming how people
lead and innovate. MIT SMR disseminates new management research and innovative ideas so that thought-
ful executives can capitalize on the opportunities generated by rapid organizational, technological and
societal change.
Capgemini Consulting
Capgemini Consulting is a global strategy and transformation consulting organization of the Capgemini
Group, specializing in advising and supporting enterprises in significant transformation, from innovative
strategy to execution and with an unstinting focus on results.With the new digital economy creating signifi-
cant disruptions and opportunities, our global team of over 3,600 talented individuals work with leading
companies and governments to master Digital Transformation, drawing on our understanding of the digital
economy and our leadership in business transformation and organization change.