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Is your business ready for a Digital Transformation?
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Alex Novadnieks
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This is a deck I prepared with insights from the Enterprise Readiness team here at SAP.
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Is your business ready for a Digital Transformation?
1.
Customer Is Your Business
Ready for a Digital Transformation? Insights from SAP Performance Benchmarking
2.
2Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ 1. Why Digital Matters? 2. What Organizations Want From DX? 3. The Reality of Digital Transformation Maturity • A Perspective Across Industries 4. Lessons from Digital Leaders • Reimagine Business Models • 10 Attributes Driving Higher Digital Maturity and Stronger Performance 5. Key Takeaways and Next Steps Agenda Assessment Overview | Why Digital |DX Objectives| The Reality | Lessons from Leaders | Next Steps DX = DigitalTransformation
3.
3Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ +43% HIGHEROPERATING MARGIN +49% +118% Organizations where the CEO and Board are executive sponsors of digital innovation Organizations that leverage cloud computing to rapidly innovate without the stress of managing software, platform, or the underlying infrastructure Organizations that leverage their strengths and work with partners / broader ecosystem to drive successful business models Source: Enterprise Digital Readiness Assessment: 2016, N=114 Why Digital Matters Digital Transformation Maturity Drives Higher Financial Performance Assessment Overview | Why Digital | DX Objectives| The Reality | Lessons from Leaders | Next Steps
4.
4Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ Want to improve Customer Experience through DX 50% Want to Drive Innovation through DX 36% Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation, Participants were asked to pick top 2 objectives for Digital Transformation Want to Increase Revenue through DX 32% Want to Transformthe Business through DX 17% Want to improve business decision making through DX 41% Want to Improve Agility through DX 29% Want to Reduce Costs through DX 66% While different industries have different goals they want to achieve out of DX; Reducing Costs and Improving Customer Experience are consistent as top objectives across most industries Reducing costs should not just be read in the traditional sense of increasing the bottom line but organizations’ intent to “shrink to grow” while shifting this funding to digital transformation initiatives Improving Customer Experience is not just a top objective for Consumer-driven industries but also conservative/ asset-intensive industries like Mill Products, IM&C and EC&O Adoption of cutting edge technologies like Robotics, AI, IOT can help organizations achieve all of the above What Organizations Want From DX? Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
5.
5Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ Organizations are aggressive and disruptive in use of digital technologies Only 6% Organizations are focusing on DX as part of their strategy 89% Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation * - Compared to organizations with ‘One-off initiatives” The “aggressive and disruptive” organizations: have a dedicated budget in place to support digital transformation initiatives leverage large-scale in-memory computing leverage cloud computing have a culture of innovation and risk taking within the organization supported by fast and agile methodologies like Design Thinking connect people, data, and devices seamlessly 35% 35% 41% 38% 44%* There is awareness and intent to go on a DX journey but huge gaps remain in execution The Reality of Digital Transformation Maturity Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
6.
6Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ 14% 26% 33% 39% 52% 59% Shared economy Compete as an ecosystem Expand to new industries Outcome-based business Digitization of products and services Digital platform Monetizing a large, captive communityof users and customers by charging transaction fees and opening access to marketers Disruptingvalue chain by rethinking how products/services can be delivered faster and cheaper Moving beyond sellingproducts and services to delivering on measurable business outcomes Entering and disruptingother industries or markets by leveraging core assets and capabilities Digital and seamless connections of productsand services from several companiesdeliver better outcomes for the end customer Facilitatingpeer-to-peer-based sharing or access to underutilized resources through a community-based digital platform Siemens Customer Examples Hagleitner Under Armour Shell and Volkswagen Kaiser EasyPark Top New Business Models Being Focused on by Enterprises Lessons From Digital Leaders Reimagine Business Models Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey
7.
7Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ Machine Learning Digital Leaders are 84% more mature in machine learning adoption to eliminate waste, risk, and downtime Blockchain Digital Leaders are 75% more mature in leveraging Block chain technologies to document transactions in a secure manner with no intermediaries Alberta Treasury Bank (ATB Financial) - ATB Canada successfully transferred CA$1,000 to ReiseBank (Germany) using a network built on SAP technology and Ripple’s Lab’s network of enterprise blockchain solutions. The payment, which would typically have taken between 2 to 6business days to process, was completed in around 20 seconds. eBay decided to partner with SAP to gain real-time insights through an early pattern detection system powered by predictive analytics on the SAP HANA platform. eBay now leverages these predictive analytics to power its early signal detection system for the marketplace – all to gain insights into its virtual economy, identify opportunities, and take corrective action Customer Examples +84% 1 +75% 2 Lessons From Digital Leaders 10 Attributes Driving Higher Digital Maturity and Stronger Performance Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey Digital Maturity Score
8.
8Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ Brooks Brothers partnered with SAP and IBM to create an omni-channel system that provided visibility into talent, and create a true performance culture. With new systems in place, Brooks Brothers not only has a full view of internal systems and processes, they also have a 360° view of their talent pool and how people are performing, growing, and comparing to one another at any given time, anywhere in the company. The shift away from a paper-based culture has allowed the environment and Public Spaces Ministry of the City Government of Buenos Aires to make an immediate impact. Claims and complaints are responded to in a matter of days, rather than weeks or months. Bottlenecks can be quickly identified and resources shifted to address specific needs. Culture of Innovation Digital Leaders are 75% better in culture of innovation and risk taking enabled by fast and agile methodologies like Design Thinking Digital Talent Enablement Digital Leaders are 75% more mature in enabling talent with the right business and technology skillsets and digital technologies to succeed in today’s digital age Lessons From Digital Leaders 10 Attributes Driving Higher Digital Maturity and Stronger Performance Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey Customer ExamplesDigital Maturity Score +75% 3 +75% 4
9.
9Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ Siemens MindSphere is a cloud system to help manufacturing companies leverage power of IoT, and optimize and automate chain of processes for mass production. This open IT ecosystem powered by SAP allows OEMs and application developers to access the platform via open interfaces and use it for their own services and analyses To quickly resolve issues when customers contacted its call centers, CenterPoint Energy Inc. needed to provide customer service reps with fast access to up-to-the-minute, accurate customer data across all lines of business. CenterPoint chose SAP and with the help of predictive analytics, customer service reps can more quickly identify customer needs and efficiently route calls to the appropriate agent or other destination. As a result, CenterPoint has reduced average call-handling time and created a superior customer experience. The company has also achieved 15% increase in call handled by the IVR system rather than an agent, thanks to predictive analytics. Predictive Business Digital Leaders are 74% more mature in combining information from assets, sensors and other externalsources with internal data and transactions to move from a reactive to a more predictive business Technology Platforms & Agile Development Digital Leaders are 71% more mature in leveraging technology platforms that include open APIs and agile development capabilities to enable people to collaborate, add services with ease and drive innovation Lessons From Digital Leaders 10 Attributes Driving Higher Digital Maturity and Stronger Performance Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey Customer ExamplesDigital Maturity Score +74% 5 +71% 6
10.
10Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ Cox Communications is the third largest cable entertainment and broad bad provider in United states. To improve service and bring more people's digital experience to life, Cox needed to personalize offers for more than 6 million subscribers across 28 regions. Cox chose SAP and reduced customer churn by 28% and increased products per customer household by 14%. Plus the solution is scalable, so it can support the company’s short- and long-term marketing strategy, including predictive modeling for customer acquisitions, retention, lifetime valuation, and event-based marketing. Mass Personalization Digital Leaders are 70% better in shifting from a focus of mass “everything” to mass personalization based on each individual customer’s needs and marketing, sales, service, and commerce act in unison to provide the personalization demanded by today’s consumer Dedicated CDO Digital Leaders are 70% more mature in driving digital transformation across the organization by having a dedicated digital transformation leader (Chief Digital Officer or equivalent) “In our view, digitization strategies that are integral to corporate strategy should be “owned” by a C-level executive: the chief digital officer.” Strategy &, Formerly Booz & Company Lessons From Digital Leaders 10 Attributes Driving Higher Digital Maturity and Stronger Performance Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey Customer ExamplesDigital Maturity Score +70% 7 +70% 8
11.
11Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ City of Cape Town, South Africa, consolidates data from different state divisions, data sources “on the ground,” and social media. By sharing this data with the police department and other emergency services, it can respond quickly, efficiently, and even proactively to threats and incidents. Hyper Connectivity Digital Leaders are 67% better in enabling people, data, and devices to seamlesslyand instantly interconnect from any device, any moment, anywhere Executive Sponsorship Digital Leaders are 66% better in digital innovation sponsorship. CEO and Board executives ensure that digital transformation is on the management agenda and clearly articulating a vision focused on the customer Senior Management intertest or desire to drive digital outcomes is the highest chosen factor of success and lack of it the highest chosen factor of failure. Bullish on digital: McKinsey Global Survey results Lessons From Digital Leaders 10 Attributes Driving Higher Digital Maturity and Stronger Performance Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey Customer ExamplesDigital Maturity Score +67% 9 +66% 10
12.
12Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ With our survey, we discovered that many commonperceptions about digital transformation were actually myths as stated below. These myths can lead senior executives to make unfortunate and costly decisions. Our global survey of 439 large firms provides fact-based answers: Digital maturity matters. Digital leaders are more profitable than their competitors (+41% higher operating margin) and the markets reward them. No firm and no industry is immunefrom digital transformation. The future digital tsunami is coming quickly.Since it takes time to become digitallymature, senior executives in every industry should take active steps immediately to consider the opportunitiesand threats available through digital transformation. Digital is primarily about the customer experience Digital primarily matters only to technology or B2C companies Digital transformation approach is different for every industry and company In our industry we can wait and see how digital develops 1 2 3 4 In addition to customer experience, efficiency and productivity remain a priority with huge opportunities Opportunities exist in all industries with no exceptions Digital Leaders exhibit a commonDNA, Business Capabilities and Technology Adoption There are digital leaders disrupting and outperforming their peers in every industry today Myths Realities Key Takeaways Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
13.
13Customer© 2017 SAP
SE or an SAP affiliate company. All rights reserved. ǀ Take action now to create your own digital advantage. Let’s connect and get a personal baseline of where you think your organization stands – alexander.novadnieks@sap.com Next Steps Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps Thank you.
14.
No part of
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