11/2/2018 1 Digital Transformation Finance 2018 Oleg Vojtíšek, Actum+ Prague, 6.11.2018 Agenda 1. Say hello to your new boss: The Digital Customer 2. How to evaluate and understand Digital Maturity? 3. How do we achieve Digital Transformation? 4. Transformation Mental Models 5. Digital transformation checklists (backup slides)
19
Embed
Digital Transformation Finance 2018 · Digital Transformation Finance 2018 Oleg Vojtíšek, Actum+ Prague, 6.11.2018 ... Digital transformation checklists (backup slides) 11/2/2018
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
11/2/2018
1
Digital TransformationFinance 2018
Oleg Vojtíšek, Actum+
Prague, 6.11.2018
Agenda
1. Say hello to your new boss: The Digital Customer
2. How to evaluate and understand Digital Maturity?
3. How do we achieve Digital Transformation?
4. Transformation Mental Models
5. Digital transformation checklists (backup slides)
11/2/2018
2
Before we start
Digital Transformation
Is it a buzzword?
YES NO
What is it then?
▪ The idea stems from few businesses that managed to rethink the world.
▪ Uber built a taxi company without owning cars or employing drivers.
▪ Airbnb built a hospitality service without owning rooms or hotels.
▪ Media and retail (e.g. Amazon, Ebay) has been transformed by digital.
▪ We call such a business a “Digital Business”.
▪ They use digital technologies to fundamentally rethink the way businesses are done.
Path to become such a business is called DIGITAL TRANSFORMATION.
Let me give you one example…
11/2/2018
3
Owned film photography
In the 1990sEmployed 150,000 people
In the 2000sLargest seller of digital cameras in the US
Revenue reaching $5.7bn
2012Files for bankruptcy after 124 years of its existence
06. 10. 2010App Store
Cater to digital customers needs
03. 04. 2012Google Play
09. 04. 2012Sold for $1bn to Facebook, had a mere 13 employees
How we think about digital transformation
▪ As you see businesses come and go. Industries come and go. We’re taking more and more of business online. Businesses using
digital technology to operate more efficiently, reduce costs, go mobile.
They’re transforming, right?
No, this is different.
▪ Digital transformation isn’t about becoming more efficient. It’s not about digitizing your processes so you can save money
and increase the bottom line. Those are 20th-century ideas. They are still valid goals, of course. Managing costs and
increasing efficiency are always good objectives. It’s just that they won’t prevent disruption, and they’re not what digital
transformation is about.
▪ Companies can’t avoid disruption by simply becoming more efficient. That would not have saved Kodak, just as it could not
save travel agents, which have been wiped out by the likes of Travelocity, Expedia, and Kayak. Other companies like
Amazon, Uber, and Netflix are disrupting markets today and either putting competitors out of business or forcing them into
highly defensive postures. Every successful 20th-century company must adapt, or watch its market values stagnate while tech
start-ups command extraordinary valuations before they see even $1 in net profit.
▪ We believe that Digital Transformation (DX) offers an opportunity for strong, long-term growth through new business models, new
revenue streams, and ultimately more satisfied and engaged customers. Companies that truly transform themselves through digital
technology will become the new leaders, the “built to last” organizations of the future.
11/2/2018
4
Recap of few definitions that provide a framework for better understanding of Digital Transformation
▪ DIGITAL TRANSFORMATION
The process of evolving from analogue processes (often physical or paper-based) to 100% digital processes in all aspects of the business,
positioning the organization to be more competitive, agile, and innovative. When executed well, digital transformation enables companies to
disrupt markets, as Uber and Amazon have done.
▪ DIGITAL ENTERPRISE
A company that embraces information technology to support new business models, enable more effective engagement with the digital customer,
and ultimately capture a share of the digital customer’s wallet.
▪ DIGITAL ECONOMY
A.k.a., the Internet economy, which is quickly evolving into the mobile economy. The digital economy is a product of, and is driven by, the
empowered digital customer. To thrive, companies in a digital economy must shift their attention to these new customers.
▪ DIGITAL CUSTOMER
A person who primarily or solely uses Internet resources to research and purchase products and services, increasingly on a mobile device.
▪ DIGITAL WORKPLACE
An organization that takes advantage of digital user productivity tools to maximize employee efficiency and effectiveness.
▪ DIGITAL PLATFORM
A complete technology stack that provides the capabilities and services necessary for digital transformation.
Say hello to your new boss: The Digital Customer
11/2/2018
5
We start with changing Customer journeys…
Choosing
Purchasing
Touch Feel Features
Recommendation Comparison
Poor experience
2000
Low price
2018
Great experience in every possible
touchpoint, price is not so important
anymore
Touch Feel Features
Recommendation Comparison
Choosing
Purchasing
Comparing
Servicing
Loyalty
By 2020, customers will manage 85% of their relationship with brands without interacting with a human
Everyone is regularly checking Telco service payments. Why am I not getting personalized offers how to optimize my plan?
Usually not regularly visited, or self-care system is not existing. Why am I not getting personalized offers for prepaid channels, or watch a
movie suggestions? Because that’s the only way how to compete and catch up with online streaming services.
Currently making any changes in contracted utilities is usually very complicated. Why am I not having self-care services to change parameters
of my contract?
In my internet banking most of the operations are repetitive. Why my internet banking is not learning what I’m usually doing and not adjusting
to be more comfortable?
When I need to take my car to a regular service check, personalized communication becomes a key activity. Why am I not getting proposals of
dates and places nearby I can go to?
I’m travelling or commuting on a regular basis. Why am I not getting personalized optimization offers from transport companies how to manage
my Customer Experience well?
I’m part of many loyalty programs. Do they really offer personalized self-care to maximize my purchases? Almost all promotions are targeted
to masses. Why am I not getting a personalized loyalty offer with easy way how to claim my benefits?
11/2/2018
6
… and brands should be reflecting those changes too
▪ Today’s increasingly digital customer creates demands for new ways how to interact while brands need to succeed in an
environment that looks completely different. In a world where brand is experienced through platforms and ecosystems other
than its own; where touchpoints and channels multiply daily; where interfaces become invisible; where machines are
increasingly responsible for deciding preference. In this new ecosystem of data, algorithm and context, the role of a brand has to
change.
▪ The change itself is a call for new approach — from a static, two-dimensional (PDF) system across physical spaces to a new
dynamic system that connects brands across and between experiences and ecosystems. A system encompassing the tools,
policies and processes that create the internal infrastructure needed to develop and deliver responsive, adaptive and
intelligent brand behaviours and experiences in market.
▪ It is the ability to aggregate data longitudinally from many sources that becomes the “sensing” mechanism for brands at their
“interface” that feed back into value propositions, business models, product development, services and experiences. This is
how the new system (with a purpose/ positioning/ brand architecture “core”) is brought to life, this sensing/feedback
mechanism is the key element to make a brand look real and relevant.
▪ The relevance is key to customer hearts promoting a better brand management approach with no more “pillars and
pyramids and promises”, but brand management structures and tools that require better sensing of the role of the brands in
people’s lives and mechanisms that allow to respond more dynamically, faster to market with offers and experiences that
deliver in a more relevant way as a more “living brand” with intelligence.
But, how to go about making necessary changes?
is active, loyal and happy to return. And even
more, is willing to cooperate
A satisfied customer is the foundation for
business success of any brand.
Satisfied customer
A modern digital platform provides capabilities and services necessary for digital
transformation
boosts customer experience, but
Technology without people being able to use
it is a dead investment.
Also people without a defined process cannot
deliver results efficiently.
Modern digital platform
People
Processes
Technology
>
creates satisfied customers
Customer experience must be relevant and
consistent across multiple digital
touchpoints.
Great experience >
11/2/2018
7
A modern digital platform that delivers on the digital customers needs through a great experience
EMAILER
SOCIAL MEDIA
CRM(Customer
Relationship Management)
BI(Business
Intelligence)
CMS(Content
Management System)
DAM(Digital Asset Management)
MCM(Multi-Channel
Marketing)
SELF SERVICE
A true modern digital platform integrates information, processes, work and people so that the entire organisation can collaborate more efficiently
and effectively, and therefore produce more valuable products and/or services.
Examples how great customer experience helps with business results?
How to sell tickets
for the half
occupied flight with
16% margin in just
one week?
How to optimize
content of a
welcome email to
increase first
purchase ratio
by 25%?
How to increase
sales of goods with
30% margin with
no additional
negative impact?
How to optimize
inventory to
maximize profit
from selling product
during summer?
How to maximize
profit of the
seasonal sale for
the chain of 10
shops?
1. NEEDS OF MY CUSTOMERS?
2. WHO TO TARGET?
3. WHAT PRODUCTS?
4. RIGHT PRICING?
5. DESIRED MARGIN?
6. TIMEBOUND?
Satisfied customers needs and answered
customer wants brings
BETTER BUSINESS RESULTS
1. Highly personalized comm.
2. Automatically triggered comm.
3. Real-time product/service offers
4. Predictive analytics
5. Data/business intelligence
6. Relevant digital channels
11/2/2018
8
What are the essentials for achieving a great customer experience?
Designing the right benefit for
correctly identified consumer,
offered in an enticing
environment
In terms of delivery: a
company’s ability to focus the
entire team across various
functions and roles to deliver
proposed experience
Development ultimately
determines a company’s success,
with an emphasis on developing
consistency in execution
Great Customer Experience
Highly
Personalized Communication
Excellent
Products and Services
Continuous
Optimization across Channels
HAPPY, RETURNING CUSTOMERS
How to evaluateand understand Digital Maturity?
11/2/2018
9
Three Dimensions and Five Stages toward Digital Maturity
Digital
Strategy
PEOPLE
TECHNOLOGY PROCESS
PEOPLE PROCESS TECHNOLOGY
5.OPTIMISED
▪ Deep Knowledge
▪ Knowledge Sharing
▪ Agile and Innovative Culture
▪ Pervasive Technology
▪ Capabilities
▪ Interdisciplinary agility
▪ Cross-functional nimble teams
▪ Tolerance to errors
▪ Entrepreneurial environment
▪ Fast-moving environment
▪ Customized dashboards
▪ Data and Technology sharing
▪ Cloud Scalability
▪ Omnichannel Strategy
▪ Digital and online/offline
Integration
▪ Real-time decisions
4.QUANTIFIED
▪ High Level of Collaboration
▪ Full proficiency in the use of new
technologies
▪ Cross-functional Centres of
Excellence/Digital Teams
▪ SCRUM
▪ Test & Learn
▪ Agile processes and
Development
▪ Advanced Analytics and
Predictive Modelling
▪ Internal Social Networks tools
and/or Communication Platforms
▪ Multichannel Strategy
▪ Starting the process of different
channels integration
3.DEFINED
▪ Specialists and Generalists
▪ Tech skills
▪ Fluid Structure
▪ Collaborative Environment
▪ Agile Development
▪ Fast releases
▪ Fast prototyping
▪ SaaS Technologies
▪ Joining up data
▪ Multichannel Strategy
▪ Flexible workplace Technologies
▪ Mobile Technologies
2.MANAGED
▪ Tech Skills
▪ Independent teams with medium
level of collaboration
▪ Periodic Training
▪ Shortage of Digital Talents
▪ Waterfall processes and Project
Management
▪ Irregular releases
▪ Presence of some redundancies
▪ Traditional/Legacy systems
▪ Partial data process automation
▪ Partial data joining between BUs
1.INITIAL
▪ Isolated Knowledge
▪ Vertical Skillsets
▪ Poor Training
▪ Dispersed Team Structures
▪ Inflexible and slow-moving
structure
▪ Infrequent release cycle
▪ Technological and legal
restrictions
▪ Basic analytics
▪ Siloed data sources
How do we achieve Digital Transformation?
11/2/2018
10
First we evaluate and compare with industry leaders usingDigital Maturity Matrix
DIGITAL BETTERS
▪ Lack of a clear Top-down digital
strategy
▪ Digital governance may be present
in silos
▪ Digital initiatives expression of
single BUs
DIGITAL LAGGARDS
▪ Lack of a digital strategy and
vision
▪ Traditional process and legacy
systems and technologies
▪ Immature digital culture
DIGITAL FOLLOWERS
▪ Full developed digital strategy
▪ Still investing in right mix of digital
tools and capability
▪ Digital culture may be present in
silos
DIGITAL LEADERS
▪ Full developed digital strategy
▪ Right mixture of digital vision,
governance and investments
▪ Strong digital culture
TECHNOLOGY + PROCESS + PEOPLE
DIG
ITA
L STR
ATE
GY L
EVEL
SUB-CLUSTER DIGITAL STRATEGY LEVEL PEOPLE PROCESS TECH
Digital StrategistsA corporate digital strategy is present, but it is not yet
implemented across the enterpriseDEFINED MANAGED MANAGED
Digital Planners
There is not yet an overall strategy, but we are preparing it
and it will become operational within the next 12 months MANAGED MANAGED MANAGED
Digital
Independents
We still have not an overall strategy, but it is expected in the
medium term: in the meantime the BUs and business functions
are moving in random order
MANAGED MANAGED MANAGED
Randomly digital
Currently, the company doesn’t believe in the necessity of a
global strategy: each BU or business function could have one
or already has its own
MANAGED MANAGED MANAGED
AnalogicsWe do not believe that our company needs a strategy for
Digital TransformationINITIAL MANAGED INITIAL
Digital Laggards sub-clusters
SUB-CLUSTER DIGITAL STRATEGY LEVEL PEOPLE PROCESS TECH
Top Players
A digital vision extends from Top Management to Operations,
a Top-Down or Bottom-Up approach is present, digital
strategy is agile and adaptive
QUANTIFIED DEFINED QUANTIFIED
Full Digital
There is a global strategy and a strong digital vision
influencing organizational priorities, processes and KPI DEFINED DEFINED QUANTIFIED
Digital Adopters
Digital Transformation is a fundamental point on Top
Management Agenda and it influences all BUs and corporate
functions
DEFINED MANAGED DEFINED
Digital Midfielders
Digital Transformation is a fundamental point on Top
Management Agenda and it is being implemented within the
company
DEFINED MANAGED DEFINED
Digital Leaders sub-cluster
By following the O.P.P.O.S.I.T.E. approach, digital transformation becomes identifiable, approachable, and attainable
ORIENTATION Establish a new perspective to drive meaningful change.
PEOPLE Understand customer values, expectations, and behaviors.
PROCESSES Assess operational infrastructure and update (or revamp) technologies, processes, and policies to support change.
OBJECTIVES Define the purpose of digital transformation, aligning stakeholders (and shareholders) around the new vision and roadmap.
STRUCTURE Form a dedicated digital experience team with roles/responsibilities/objectives/accountability clearly defined.
INSIGHTS & INTENT Gather data and apply insights toward strategy to guide digital evolution.
TECHNOLOGY Re-evaluate front- and back-end systems for a seamless, integrated, and native customer (and ultimately employee) experience.
EXECUTION Implement, learn, and adapt to steer ongoing digital transformation and customer experience work.
11/2/2018
11
TransformationMental Models
Digital Transformation Mental Models (inspired by David Rogers)
THEME CONCEPT COMPANY
CUSTOMERS Harness customer networks
• reinvented marketing funnel
• new path to purchase
• customer communities
Airbnb
Uber
Nejřemeslníci
COMPETITION Build platforms, not just products
• platform business models
• network effects
• (dis) intermediation
• competitive value trains
Apple
Amazon
Nike
DATA Turn data into assets• real data-driven decisions
• big data or even statistic methods
Facebook
Seznam
The Weather Channel
INNOVATION Innovate by rapid experimentation
• minimum viable product
• divergent and convergent
experimentation
• 5 days design sprint
Netflix
Alza
Google Ventures
VALUEAdapt your value proposition
again and again
• nonstop proposition evaluation
• paths out of a declining marketEncyclopedia Britannica
Nokia
11/2/2018
12
Basic Steps of any Transformation (inspired by John P. Kotter)