Guest lecture TU/e , December 2014, Arjan Kramer

Digital Transformation

You haven’t seen anything yet…Digital. Two steps ahead

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Digital Transformation

You haven’t seen anything yet…

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About me

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Papa Music

Cycling

Digital

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People

Experience

Customer

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About Capgemini

Capgemini Group

Headquarters in Paris, France

140.000 employees in 40 countries worldwide

Group Global revenue in 2013: 10.1 Billion

Blue logo – primary focus on application services

Capgemini Consulting

Approx. 3600 Consultants Specialized in

Business consultancy services on

Digital Strategy & Transformation

Capgemini Digital Customer Experience

Combination of Application and Consulting Services

Focus on improving Digital Customer Experience

Primarily in Customer, Content and Commerce Management

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Digital Transformation: a 3 year long research journey

by MIT and Capgemini

RESEARCH

THEMES

OBJECTIVES

RESEARCH

Define

“Digital Mastery”

50 Companies

160 Interviews

2011Digital Transformation

Framework

Performance /

Sector Maturity /

DNA

500 Companies

2012Digital Transformation

Performance

Uncover execution

challenges

> 2,500

Companies

2013Digital Transformation

Execution

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Digital Transformation: Why should you care?

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What Do These Great Companies Have In Common?

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The DNA of Digital Masters

Dig

ital C

apabili

ty

Leadership Capability

Using digital technology to transform the

customer experience, operational processes

and business models

Successful transformations depend as much

on how firms manage digital transformation

than solely on implementing new technologies

The What:

The How:

Research by MIT & Capgemini

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4 Levels of Digital Mastery

Dig

ital C

apabili

ty

Leadership Capability

Fashionistas Digital Masters

Beginners Conservatives

Research by MIT & Capgemini

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The Time To Act Is Now:

Digital Masters Have Significantly Better Financial Performance

Basket of indicators:

• Revenue per Employee

• Fixed Asset Turnover

Dig

ita

l C

ap

ab

ility

Leadership Capability

Fashionistas Digital Masters

Beginners Conservatives

+9%+6%

-4% -10%

Dig

ita

l C

ap

ab

ility

Leadership Capability

Fashionistas Digital Masters

Beginners Conservatives

+26%-11%

-24% +9%

REVENUE GENERATION EFFICIENCY PROFITABILITY

Basket of indicators:

• EBIT Margin

• Net Profit Margin* Average performance difference for firms in each quadrant versus the average performance of all large firms in the same industry for the 184 publicly-traded companies in our sample

Research by MIT & Capgemini

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“Be the first (fashion) company to be fully digital end to end”

WHAT HAVE THEY DONE?

• Engaging customers through social media

• Fusion of the online and instore experience

• Unifying data globally

HOW HAVE THEY DONE IT?

• Governing cross-channel consistency

• Engaging employees

• Developing new skills

• Strengthening IT-Business relationships

“Digital has been a catalyst for everything in the company” Angela Ahrendts, CEO

DIGITAL

CAPABILITY

LEADERSHIP

CAPABILITY

“Burberry’s flagship

stores feel like a

walk-in webshop”

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“Get closer to our customers and the community around us”

WHAT HAVE THEY DONE?

• Start with listening to the main Social Media (FB & Twitter)

• Interact and share on these media and others

• Specific approach and focus per media

HOW HAVE THEY DONE IT?

• Global team of Local Social Media managers

• Insourcing > own people with a “heart” for MAERSK

• Defined global set of house rules of engagement

“We see Social Media as a means of communication, not means of marketing”

DIGITAL

CAPABILITY

LEADERSHIP

CAPABILITY

“Getting closer to our customers”

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“From a physical-intensive model to a knowledge and technology-intensive one”

WHAT HAVE THEY DONE?

• Real time view of operations (1.0)

• Automation of processes & machinery (2.0)

• Intelligent mining model (3.0)

HOW HAVE THEY DONE IT?

• Developed a radical digital vision

• Invested in cultural change

• Developed new competencies

• Strong governance & execution

“Our business in the past was related to physical labor.

Today our business is more related to knowledge and technology”

Marco Antonio Orellana Silva, CIO

DIGITAL

CAPABILITY

LEADERSHIP

CAPABILITY

But where do you start?

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Start with why…

Simon Sinek – The Golden Circle

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Ever wondered why Apple is doing so well?

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They don’t sell: what and how…

Great camera, longer battery life, etc… Our products are just brilliant…

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…Apple sells: why!

At Apple, in everything we do…

...we believe in challenging the status quo

… we believe in doing things differently

And the way we challenge the status quo is by:

…making our products beautifully designed

…easy to use and userfriendly

WE JUST MAKE GREAT PRODUCTS

WHY

HOW

WHAT

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Start with why…

Simon Sinek – The Golden Circle

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A companies “Why” & Digital Customer Experience

Access Experience Price Product Service

Friendly and clean

storeEasy to reach stores

Easy to navigate

storesCompelling

promotionsFreshness/ Quality

Maximum opening

hours

Availability

(no stock-outs)

No damaged goods

in store

Inspirational

Atmosphere

Customer Service

Complaints

handling /

return policy

Loyalty program

Wide and deep

assortment

Competitive pricing

Traditional

Relevancy

Criteria for

Physical Channels

Dynamic Pricing

Mobile in-store

Shopping support

Advanced /

visualized product

information and

(usage) advice

Product

Comparison

e-Commerce

(mobile, social,

web)

Flexible delivery-

options ( home,

store-pick-up etc.)

Personalized

Pricing

Additional

Relevancy

Criteria for

Digital Channels

Personalized offers

Technology-

enabled staff –

support in-store

Interactive service

via digital channels

(e.g. click-to-chat,

social media)

Wider and deeper

assortment

Solution Pricing

Inspirational

Content

Community

engagements

(share

experiences)

Social Shopping

Location-based

pricing

Price

Comparison

From: “The myth of Excellence”

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How can you be most Relevant by applying Digital?

Successful companies dominate on one attribute, differentiate on a second and compete

at parity on the remaining three

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3 3

5

3

Access Experience Price Product Service

2. Differentiate on a compatible

value attribute

3. Maintain parity on others

1. Dominate on one value attribute

Illustrative

Now you know why, but what’s next?

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Capgemini Engagement model for Digital Transformation

Focus the Transformation

ROADMAP – Outside Digital Masters,

only 25% have leadership aligned

around a roadmap

INVESTMENT CASE - Only 50% of companies

create business cases for digital initiatives

• Create framework for transformation, roadmap

and focus action two steps ahead

• Shape and run proof of concepts

• Iterate your business model

Frame the Digital Challenge

IMPACT – 78% of executives view digitaltransformation as critical...

... But 40% of companies say that

“lack of urgency” is the most important

obstacle to digital transformation

• Understand the Impact

• Assess Digital Maturity

• Develop Vision & Align Around It

Sustain the Transformation

INCENTIVES : 68% of digital masters tie

incentives to digital transformation against

39% for beginners

• Ongoing iteration and

re-assessment of Capabilities

• Realize benefit

Engage the Organisation

SHARED VISION – only 36% of senior

executives have shared a digital vision

PACE – 33% of employees think

the pace of digital transformation

is right against 54% for CEOs• Manage Organization and

Partner eco-system

• Drive cultural shift & evolve work practices

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A simpler view of the same model

Sustain Frame

FocusEngage

Why

WhatHow

Last

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A simpler view of the same model

Sustain Frame

FocusEngage

Why

WhatHow

Last

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Translating the why into what: Business & IT capabilities

Compelling Case for Change

Customer

Management

Content

Management

Commerce

Management

Fulfillment

Management

Finance &

Performance

Management

Business Proposition

Development

Innovation, Vision

and Roadmap

Business Case

Development

Single View

of Data

Integration &

Orchestration

Cross Channel

Service Management

Integrated Marketing &

Campaign Management

Web Content

Management

Digital Asset

Management

e/s/m commerce

Merchandising

Management

Pricing & Promotion

Management

Order Orchestration

Transport and Delivery

management

Payment / Fraud / FX

Management

Finance – Allocation

and KPI’s

Social Media

Engagement

Warehouse Mgt / 3rd

Party Mgt / DSV Mgt

Insight & Analytics Big Data and Warehouse

Standards based IntegrationBusiness Process

Orchestration

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And mapping it to Technology vendors: an example with Oracle

Compelling Case for Change

Customer

Management

Content

Management

Commerce

Management

Fulfillment

Management

Finance &

Performance

Management

Cross Channel

Service Management

Integrated Marketing &

Campaign Management

Web Content

Management

Digital Asset

Management

Business Proposition

Development

Innovation, Vision

and Roadmap

Business Case

Development

e/s/m commerce

Merchandising

Management

Pricing & Promotion

Management

Order Orchestration

Transport and Delivery

management

Payment / Fraud / FX

Management

Finance – Allocation

and KPI’s

Social Media

Engagement

Warehouse Mgt / 3rd

Party Mgt / DSV Mgt

Single View

of Data

Integration &

Orchestration

Insight & AnalyticsMaster data

Big Data and Warehouse

Standards based IntegrationBusiness Process

Orchestration

Technology trends - SMAC

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Do you know what is SMAC?

SMAC

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Social Mobile

Cloud

Analytics

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SMACT

Now, where did I leave my keys…?!?!

iBeacon: yes you found me!

Do you Like this jacket?

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But HOW do you survive all these technologies?

Sustain Frame

FocusEngage

Why

WhatHow

Last

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Integration & Orchestration

Security

Data governance

Service control

Performance

By applying an architecture framework that supports you.

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Integration, Orchestration &

Data governance

Se

cu

rity

Pe

rform

an

ce

S

erv

ice C

ontro

l

Operational

Business

Services

Common

Data

Services

Personalisation & Interaction

Customer Management

Business

Support

Services

The Capgemini Immediate H-Model

Some live examples

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Being on top without paying Google…

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Do you know how you get recommendations?

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Using Social feedback for Faceted searching

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Getting all the information you need, and more…

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Digital Transformation - You haven’t seen anything yet…D

igita

l C

apa

bili

ty

Leadership Capability

Digital Masters

Sustain Frame

FocusEngage

Why

Wha

t

Ho

w

Last

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Arjan

Kramer

Digital Solution Architect | Global OCommerce Solution lead

arjan.kramer@capgemini.com

@arjankramer

www.linkedin.com/in/arjankramer

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About Capgemini

With more than 140,000 people in over 40 countries, Capgemini

is one of the world's foremost providers of consulting,

technology and outsourcing services. The Group reported 2013

global revenues of EUR 10.1 billion. Together with its clients,

Capgemini creates and delivers business and technology

solutions that fit their needs and drive the results they want. A

deeply multicultural organization, Capgemini has developed its

own way of working, the Collaborative Business ExperienceTM,

and draws on Rightshore®, its worldwide delivery model.

Learn more about us at www.capgemini.com.

Rightshore® is a trademark belonging to Capgemini