digital transformation - encore business solutions
TRANSCRIPT
At the age of 4 years:
• 30 Million daily users
• Valuation: $1 Billion
• 13 employees
At the age of 4 years:
• 100 million daily users
• Valuation: $4-5 billion
• 20 employees
At the age of 4 years:
• 65 cities
• 1.5 Million drivers
• Valuation: $3.5 Billion
• Employees: 550
At the age of 7 years:
• 1.5 million rooms(largest lodging company on earth)
• 134,000 cities
• Valuation: $20 Billion
• Employees: 2,368*
*Hilton has over x40 more employees
Market Overview
HBR studied 30,000 public firms over a 50 year span:
• ½ of the companies listed in the year 2000, are no longer there
• An estimated ⅓ of companies expected to delist over next 5 years
• Life expectancy for companies has fallen from 56yrs to 18yrs
• By 2020 60% of all enterprises will have fully articulated an organization-wide digital platform strategy
• By 2021, enterprise apps will shift toward hyper-agile architectures, with 80% of application development on cloud platforms
• By 2021 organizations will spend more than 530 billion on cloud services and cloud enabling IT
• By 2020 50% of the workforce will be “digital native” connected 24/7 and work the way they want to
What’s in it for us?
Dig
ital In
tensity
Fashionista
• Many advanced digital features
(mobile, social etc) but in silos
• No overarching vision
• Underdeveloped coordination
• Digital culture may exist in silos
Digirati
• Strong overarching digital vision
• Good governance
• Many digital initaitves
generating business value in
measurable ways
• Strong digital culture
Beginners
• Management skeptical of the
business value of advanced
digital technologies
• May carry out some
experimentation
• Immature digital culture
Conservatives
• Overarching digital vision exists
but may be underdeveloped
• Few advanced digital features
though traditional digital
capabilities may be mature
• Strong governance across silos
• Taking active steps to build
digital skills and culture
Source: Capgemini: the digital advantage
Aligned leadership
What’s in it for us?
Dig
ital In
tensity
Fashionista Digirati
Beginners Conservatives
Revenue Generation
+6% +10%
-4% -10%
Source: Capgemini: the digital advantage
Aligned leadership
What’s in it for us?
Dig
ital In
tensity
Aligned leadership
Fashionista Digirati
Beginners Conservatives
Profitability
-11% +26%
-24% +9%
Source: Capgemini: the digital advantage © Digital Infusions Pty Ltd 2017
What’s in it for us?Revenue vs. Profitability
Source: Capgemini: the digital advantage © Digital Infusions Pty Ltd 2017
Repositioning IT
Core services
(Fulfillment driven)
Differentiator
(Function driven)
Innovation
(Outcome driven)
Traditional
Emerging
Attributes Traditional Emerging
Goal Stability Agility
Value Price for performance Revenue, Brand, Experience focus
Approach Waterfall, High ceremony Design Thinking, Agile, Lean StartUp
Governanc
e
Plan driven, approval based Empirical, Continuous, Process based
Talent Likes certainty Good with ambiguity
Culture IT centric, Removed from customer Business centric, close to customer
Cycle
times
Months Days/weeks
Innovation investments made
Business
model
Finance
Networking Channel
Delivery
Brand Customer
experienceCore
process
Process.
Enabling
process
Product
performance
Offering
Product
system
Service
Hi
Lo
Volume of innovation effortsLast 10 years
Source: Doblin analysis
Value Created
Business
model
Finance
Networking Channel
Delivery
Brand Customer
experienceCore
process
Process.
Enabling
process
Product
performance
Offering
Product
system
Service
Hi
Lo
Cumulative value creation—Last 10 years
Source: Doblin analysis
Definition
• Altimer Group • “Digital transformation entails the realignment of, or new investment in,
technology and business models to effectively engage customers at every touch point in the customer experience lifecycle.”
Capture Deliver
What is digital transformation?
Arrange NEEDVALUE
Mode 1: Efficiency thinking
Mode 2: Disruptive thinking
Capture Deliver
Bringing it together
Arrange NEEDVALUE
Mode 2: Disruptive thinking
Mode 1: Efficiency thinking
Mode 1: Top 5 Traps
Organisations often get stuck because they:
1.Forget to start at the beginning
2.Delude themselves by doubling-down on the things that are no longer working
3.Attempt to get house 100% in order before thinking about Mode 2
4.Forget to prioritise against future state
5.Forget to retire/divest
Mode 2 traps! • Failure to provide space from BAU:
• Todays work is more important than projects of ambiguous value
• No financials allocated
• Stringent requirements to complete a business case before launch
• Immediate KPI’s & Incentive structures don’t allow time for new initiatives
• Lots of politics required to gain sign off
• Wrong capability:
• Staff are trained to maintain lines of business not develop new ones
• Commercialisation is hard!
• Poor governance:
• No senior leader oversight (including board level)
• Run as a project within a department (usually IT), rather than approached as an all of business initiative
• No metrics or incentives around new revenue growth
• No filter mechanisms to identify a good idea
• Starting in the wrong place
• Poor market validation
• No clear understanding of “job to be done”
• Pain targeted is just not painful enough, or felt by enough people
• Companies struggle to determine where to disrupt
• How to lead the change with other commitments
• Organizations are built to resist disruption
• Change Management not understood/taken seriously
• Social is not being used properly in business setting
A Year from Now You Will WISH You Started Yesterday!
• Executive agreement
• Executive understands innovation (DX)
• Create a formal process for disruption in your organization
• Criticality of / methodology for Change Management
• Social to get your organization to acceptance faster