executive expectations drive digital initiatives · doing “digital” is a step along the path,...

Executive expectations drive digital initiativesFT Digital Energy Summit 2019

Mark Lillie

1 8 S E P T E M B E R 2 0 1 9

2 | Copyright © 2019 Deloitte Development LLC. All rights reserved.

Response: select one

A: 0 to 10 years

B: 10 to 25 years

C: 25 + years

Question 1: How long have you been working in the energy sector?

Experience


Premise: The Paris Agreement has a long-term goal to reduce the risks and effects of climate

change. This means limiting the increase in global average temperature to 1.5°C so as to keep the

overall increase below 2°C above pre-industrial levels.


A: No, not even close

B: Getting there slowly

C: Very much on track

D: What is the Paris Agreement?

Question 2: Are we as a sector doing what we need to do to meet the Paris Agreement targets?

Climate change

Digital Leadership



A: Our heads are firmly in the sand on this one

B: Exploring

C: Becoming

D: Doing

E: Being digital

Premise: Organisations must be agile to survive and thrive in the digital era and yet traditional

processes (e.g., annual budgeting) may not align with this.

Question 3: Where is your organisation on the digital maturity curve?

Digital maturity


Behave:

• Adopt policies to allow for quick and early

“failures” and even faster learning

• Explore alternative talent models

in order to rapidly scale projects and teams

• Redefine performance management

metrics to encourage behaviour change

Operate:

• Build an adaptive governance structure

• Encourages “agile” development cycles

through business process development

• Adapt technology architecture to be

creative spaces for design, not just routine

operations

Organise:

• Companies must create teams capable of

rapid and adaptive execution

• Restructure spaces in order to facilitate

collaboration while not inhibiting work

Doing “Digital” Is A Step Along The Path, Not The Destination

Image: Deloitte Insights, Digital Innovation: Creating The Utility Of The Future, pg.13

Don’t get stuck here

Many organisations swirl in an endless

loop of “doing” digital things-an illusion

of being digital-rather than making

changes to business, operating, and

customer models.

Exploring

Leveraging traditional

technologies to

automate existing

capabilities. Dabbling

with digital. No change

to the organisation.

Doing

Leverage digital technologies

to extend capabilities, but still

largely focused around the

same business, operating and

customer models.

Becoming

Leverage digital technologies

– becoming more

synchronised and less siloed-

with more advanced changes

to current business,

operating, and customer

models.

Being

Business, operating, and

customer models are

optimised for digital and

profoundly different from

prior business, operating,

and customer models.

Digital maturity (cont’d)



A: CEO

B: CFO

C: COO

D: CMO

E: Other

Premise: For innovation initiatives to ‘stick’, technology/digital leadership must have a seat at the top

table.

Question 4: In your organisation, who does the Group CIO/CDO report to?

Leadership


Source: Deloitte US CIO program analysis.

39%

47%

47%

50%

54%

55%

32%

33%

19%

30%

11%

17%

7%

8%

25%

9%

14%

3%

12%

10%

6%

11%

9%

19%

10%

2%

4%

11%

5%

Energy & resources

Consumer & industrial products

Financial services

Life Sciences & health care

Public sector

Technology, media & telecommunications

CEO CFO COO Board Other

Note: Numbers may not add up to 100 because of rounding, Technology, media, & telecommunications n=58, Public sector n=35, Life Sciences & health care n=44,

Financial services n=81, Consumer & industrial products n=196, Energy & resources n=41.

Leadership (cont’d)

Global CIO reporting structure by industry



A: Not my company’s Board! Strongly disagree

B: Disagree

C: Agree

D: Shhhh! Strongly agree

Premise: Business strategy is now largely technology strategy. It is imperative for board members to

understand these disruptive changes.

Question 5: Boards are currently ill-equipped to guide digital strategies.

The role of the board


Strategy

Growth and innovation. Technology

capabilities (digital) to deliver

business growth.

Data and insights. Using data for

better business decisions and ability

to monetise it.

Customer experience. Enabling

better customer experience and

engagement.

Ecosystem engagement.

Leveraging ecosystems to deliver

higher business value.

Risk

Cyber risk. Clarity on risk appetite; protection and

preservation of information assets; capability to respond to

threats and incidents; and resilience.

Regulatory matters. Use of technology to stay ahead of

regulations and compliance and implications of current and

future regulations on data and information.

Industry disruption. Technologies, platforms, and strategies

disrupting existing businesses and industries.

Performance

Financial performance. Impact of

technology investments on financial

measures such as earnings per share,

profitability, margins, revenue.

Business operations. The role of

technology in transformation,

automation, and enhancement of

current business operations.

Talent. Attracting, curating, and

engaging talent from inside and

outside the organisation to deliver tech-

enabled business capabilities.

The role of the board (cont’d)The three dimensions of technology-board engagement

Source: Deloitte US CIO program.

The importance of technologies to energy –myth vs reality


Premise: According to some, Blockchain is the most important enabling technology for every sector

since the invention of the computer!


A: Pffft. It’s over-hyped, a technology looking for a problem

B: Meh. It has its place for niche applications

C: Mayyyyybeeeee, it will assist key parts of the industry

D: Amen. It will fundamentally redefine the industry

Question 6: What is your view of Blockchain in the energy sector?

Blockchain


Attitudes towards Blockchain are improving

Blockchain (cont’d)

The surge in new projects

suggests a wave of

adoption is coming.

“The business value-add

of blockchain will grow to

slightly more than $176

billion by 2025, and then

it will exceed $3.1 trillion

by 2030.”

2019 Deloitte Blockchain Survey

68%

77%

74%

84%

77%

82%

83%

86%

2019 2018

Blockchain technology is broadly scalable and will eventually achieve mainstream

adoption

The executive team believes there is a compelling business case for blockchain

Our suppliers, customers, and/or competitors are discussing or working on blockchain

solutions to current challenges in the value chain that serves my organisation

We will lose a competitive advantage if we don’t adopt blockchain

technology

- Gartner



A: Inquired: a few point applications

B: Desired: increasing adoption across the enterprise

C: Acquired: extensive adoption across all businesses and the dominant infrastructure

D: Required: how did we ever live without it?!?

Premise: Cloud is a technology enabler that allows companies to transform faster and in a more

efficient manner.

Question 7: Choose the best word for how your organisation is using Cloud.

Cloud technologies


Source: Deloitte 2018 Global Outsourcing Survey. Deloitte. June 2018.

35%

38%

50%

51%

54%

56%

63%

64%

Lower cost

Improve security and resilience

Adopt on-demand self-service

Access to new technology

Rapid elasticity / scalability

Improve performance

Improve speed / time to market

Cloud as a catalyst for IT Innovation

2016-2018

saw a 3x increase in the

number of organisations

adopting cloud to drive

innovation

Cloud technologies (cont’d)

Why are organisations adopting cloud?


Premise: IoT – connected assets are vital for predictive maintenance, asset and portfolio

management, safety and capital investment.


A: Erm….Is this like an ERP package?

B: Limited: We are trialling but haven’t really committed

C: On the way: Have invested in point solutions and now scaling

D: Fully on-board: We have realised significant ROI through implementing transformative

technologies firm-wide

Question 8: What is your company’s level of investment in IoT?

Internet of things (IoT)


Internet of things (IoT) (cont’d)Industry 4.0 drives opportunities across the organisation

BUSINESS OPERATIONS (PROTECT) BUSINESS GROWTH (DISRUPT)

New Products

& Extensions

New Business

Models

Product

Development &

Processes

Grow

GrowOperate

GrowOperate

Products

Factory &

Operations

Supply Network

& Logistics

Planning &

Inventory

Operate

Operate

Operate

Supply Chain

Customer

Experience

Selling &

Marketing

Channel

Connectivity

Post-Sales

Support

Grow

Grow

GrowOperate

GrowOperate

Customers


Question 9: My organisation is investing sufficiently in cyber to stay ahead of the increasing

threats out there.

Premise: Organisations are more connected than ever before, thanks to the shift to digital channels

and increased interconnectivity. Cyber should be a boardroom issue.


A: Don’t know/Don’t care

B: Strongly disagree

C: Disagree

D: Agree

E: Strongly agree

Cyber


Of breaches are

perpetrated by

outsiders

Of breaches are by

malicious insiders

Of breaches are by

inadvertent actors

Who might attack?

99%Virus, Worms, Trojans

98% Malware

51%Denial of Service

64%Web Based Attacks

62% Phishing and Social

Engineering

45% Stolen Devices

Out of a sample of 252 companies

suffering 477 cyber attacks:

Credit card data

Health Information

Names, DOB, Passwords etc.

Bringing cyber security into perspective

40%

44.5%

15.5%

What are they after? How might they attack?

Source: IBM 2016 Cyber Security Intelligence Index



A: It has been hard to find the right skills in the current talent market

B: The workers are out there but it has been a challenge to attract them to our organisation

C: We are investing heavily in developing the workforce we currently have

D: All systems go: we are actively hiring, and retraining to ensure our workforce has the skills

needed for the digital future

E: Haven’t even begun to think about this

Question 10: Does your company have people with the right skills?

Premise: Employees of the future are going to require radically different skills than what they require

today.

The Future of Work


CULTURE

• Faster talent acquisition

• Better succession planning

• Improved health and safety

• Self-directed and dynamic learning

EXPERIENCE

• Reduced customer service costs

• Lower capital spending

• Efficiency gains

• Improved productivity

COLLABORATION

• Improved productivity

• Higher employee retention

• New products and

services

• Enhanced customer

experience

The Future Employee

Benefits

Requirements

Features

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© 2019 Deloitte LLP. All rights reserved.

Mark LilliePartner, Global Technology Strategy & Transformation Leader

DeloitteContact: [email protected]

executive expectations drive digital initiatives · doing “digital” is a step along the path,...

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