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A Custom Technology Adoption Profile Commissioned By Salmon and Rackspace | February 2016

Prepare Your Business For The Digital Future

Digital Experts Showcase Key Tactics To Help Organizations

Remain Relevant In Today’s Digital World

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OVERVIEW SITUATION APPROACH OPPORTUNITY CONCLUSIONS



How Digital Experts In Retail, CPG

And B2B Drive Results

Digital technologies are essential for transforming customer

experiences and streamlining existing operations. But while most

organizations have some form of digital strategy, many struggle to

transform their digital ambition into genuine competitive advantage.

This study sets out to explore key learnings and best practices from

Digital Experts. We found that the keys to their success are that they:

› Focus on benefits to their customers rather than on company

process improvements.

› Consolidate digital knowledge from across the organization into

a center of excellence (COE).

› Define clear KPIs to measure success and drive ongoing

investment.

This study of 150 IT and business decision-makers, commissioned

by Salmon and Rackspace in December 2015, outlines the state of

digital strategy and execution in retail, consumer packaged goods

(CPG), and business-to-business (B2B) companies and examines

the key success strategies that separate the Digital Experts from the

Digital Laggards.

Number of employees:

› 75% Between 1,000 and

4,999 employees

› 19% Between 5,000 and

19,999 employees

› 6% More than 20,000

employees

Headquartered in:

› 35% UK

› 23% Benelux

› 22% US

› 20% Germany

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One in five organizations has

established centers of

excellence that bring together

resources and skills from across

the business to address

customer needs.



Business Leaders Acknowledge The

Importance Of A Digital Strategy

Digital is not a new phenomenon. Digital technologies like mobile,

cloud, big data, and the Internet of Things (IoT) have a direct impact

on how organizations engage with customers and their workforce.

So its comes as no surprise that 81% of surveyed organizations

highlighted that they have clearly defined and articulated a digital

strategy. Almost three-quarters of respondents believe that their

business has the right structure, skills, and processes to deliver and

manage digital projects.

In addition, 61% of respondents stated that their CEO champions

their digital strategy. So organizations understand and prioritize

digital, but does that mean they are succeeding with their digital

transformation?

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Digital Projects Are Both Externally

Focused And Process-Driven

The survey revealed that the main objectives for investment in digital

projects fell into two categories:

› External/customer focus. The highest-ranked objectives focused

on improving how organizations can leverage digital to better

deliver external services. Nearly 40% of organizations highlighted

the main digital objectives as being able to gain new customers,

get better customer insights, and drive market share and

international growth.

› Internal/process focus. Over a quarter of respondents

demonstrated a preference for more internal focus for digital

initiatives, telling us they leverage digital to improve workforce

productivity, reduce costs, and improve operational effectiveness.

In general, organizations are meeting or exceeding their objectives,

with 41% of firms exceeding their objectives in improving processes

and operational effectiveness.

So, digital expectations are being met and digital has the C-level

focus it deserves, but which approach is right and how far along are

organizations on their digital journey?

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Digital experiences designed to

only enhance existing services

do not fundamentally change

how the company delivers value

to the customer.



Only 11% Of Firms Execute Digital Well

To assess an organization’s maturity, Forrester asked respondents

to assess their digital strategy, organization, and technology,

examining dimensions such as executive support, vision, resourcing,

and operational effectiveness. Based on the results, we segmented

respondents into four categories: 1) Digital Experts (11%); 2) Digital

Operators (6%); 3) Digital Strategists (26%); and 4) Digital

Laggards (57%).

Despite digital being a top priority, only a few organizations surveyed

are executing digital successfully by demonstrating competence

across all dimensions to maximize business value from investments

in digital solutions. Digital Experts have the right vision, and they also

have the processes, tools, and resources in place to execute their

digital strategy and the KPIs to measure success.

Organizations began their digital evolution by launching departmental

efforts in marketing, eBusiness, or technology management and

bolting them onto the existing business processes. Only Digital

Experts provided results that demonstrated a commitment to embed

digital into their entire organization to deliver customer value. The

vast majority of companies (89%) are still playing catch-up.

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Conflicting KPIs between

departments was a greater

concern among CPG and

distribution organizations.

Forty-five percent of CPG and

B2B organizations stated this

as a key challenge when

executing their digital strategy.



Funding And Measurement Are The

Key Challenges

The delivery of great digital experiences is an organization-wide

task that demands unprecedented collaboration between teams and

departments. But while the C-suite may back digital strategy, only

half of the organizations surveyed agreed that their current

organization model encourages cross-functional collaboration.

In addition, technology and business leaders overwhelmingly rated a

lack of funds allocated to their digital strategy as their No. 1

challenge. Other top challenges included conflicting KPIs between

departments, resulting in a lack of alignment on digital objectives

(38%); pushback from compliance and legal teams (35%); and

poorly integrated legacy systems that make it difficult to share

information across different platforms (33%).

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Digital Experts Deliver Unified

Customer Experiences

To explore how organizations are overcoming these challenges, we

identified the key practices among the Digital Experts versus those

lagging behind. Assessing the organizations’ top digital objectives by

digital maturity revealed that the Expert group focuses more on

external- or customer-facing initiatives (69%), whereas lagging

organizations focus digital efforts on employee-facing and internal

digital projects (31%).

The study revealed that many organizations saw a range of

unexpected outcomes from their digital projects. As a consequence

of their customer focus, the top unexpected positive outcomes for

Digital Experts were the ability to create a unified digital experience

for customers across all channels, as well as enabling their

organizations to be more competitive.

Despite being more internally focused on their digital initiatives,

Digital Laggards also saw unexpected benefits for customer-facing

objectives. While improved customer satisfaction and customer

insight was a top expected benefit for Digital Experts, more than half

(56%) of Digital Laggards saw it as an unexpected outcome.

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Digital Experts Tackle Challenges Head-

On, While Laggards Play Catch Up

Analyzing the Digital Experts’ responses to the survey uncovered

some unique tactics that firms embarking on the same journey can

learn from. Digital Expert firms demonstrated a need for a:

› Well-defined funding model. The key challenge for many

organizations is the lack of funds. A key tactic for over half of the

Digital Experts is to define an appropriate funding and financial

model to support their digital strategy. Engaging with financial

teams to define investment profiles and success criteria, allocating

the right budget, tracking expenses, and optimizing resources help

Digital Experts ensure funding is available for future projects.

› Focus on data analytics and measurement. The other key

tactic that Digital Experts showcased was a focus on enhancing

data analytics capabilities for better decision and business

planning. With data analytics, Digital Experts are able to both

demonstrate the value of their digital initiatives and better

understand and anticipate their customers’ needs.

Despite their internal focus of digital objectives, 41% of Digital

Laggards understand that to catch up, they must reorganize to focus

on their customers rather than on their products.

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All Digital Expert organizations

agreed that their CEO personally

champions and clearly articulates

their company’s digital strategy.



Deep Cross-Function Collaboration

Underpins Success For Experts

Exploring the role of different teams in setting and executing the

digital projects reveals that Expert organizations foster deep cross-

business collaboration. For Digital Laggards, IT is the primary role

involved in setting the digital strategy. Experts equally involve IT,

finance, and C-level management. Experts are also more likely to

involve human resources in setting digital strategy than Laggards.

Experts show similar collaboration in executing digital, with IT taking

charge, but operate with more involvement from other functions like

marketing, sales, and procurement when compared with Laggards.

Almost a third of the Digital Experts that we identified had

established a digital center of excellence (COE), compared with only

16% of Digital Laggards. These teams help Digital Experts by

consolidating digital resources and skills to break down

organizational silos and focus on delivering customers’ unique

needs. Over 40% of Digital Laggards are structured by traditional

functional alignment (for example, by offline and online teams).

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Become A Digital Expert

To close the gap and become Digital Experts, organizations need to:

› Focus on their customers rather than on process improvements. The study revealed that Digital

Experts were more customer focused than internally process focused. A clear definition of your digital

customer experience must be your North Star. Customer journey maps help challenge functional

perspectives and are a vital tool to define a vision for a unified digital experience for your customers.

› Consolidate digital know-how to kick-start action. Bring together cross-functional digital talent to

hot-house it, spur action, and break away from legacy ways of operating. A digital center of excellence

(COE) combining business knowledge, customer experience, and technology expertise, supported by

HR, supply chain, and other operational functions, is a great start.

› Define clear KPIs that link investment to business outcomes. Customer-centric metrics like

customer lifetime value are vital measures of digital success. This means instrumenting digital

experiences to gather analytical and behavioral data about your customers. Identifying KPIs upfront,

aligning teams around those KPIs, and rewarding personal and team success based on those

measures is critical. Work with finance teams to define a funding model for digital initiatives and to link

the results of digital investment to the customer outcomes they drive.

ABOUT FORRESTER CONSULTING

Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their

organizations. Ranging in scope from a short strategy session to custom projects, Forrester’s Consulting services connect you

directly with research analysts who apply expert insight to your specific business challenges. For more information, visit

forrester.com/consulting.

© 2016, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on

best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®,

Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other

trademarks are the property of their respective companies. For additional information, go to forrester.com. [1-W6JGHE]

METHODOLOGY

This Technology Adoption

Profile was commissioned by

Salmon and Rackspace.

Forrester conducted an online

survey of 150 retail, CPG, and

B2B IT and business decision-

makers in Benelux, Germany,

the UK, and the US. The

custom survey was conducted

in December 2015.

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