Digirati and the +26%; KeyNote for the Retail Leaders Forum, 2014

Ben Gilchriest Digital Transformation Lead, ANZ Capgemini Consulting

@BenGilchriest

DIGIRATI'AND$THE'

+26%'DIGITAL'ADVANTAGE'

March,'2014'

LEAPS IN CONNECTIVITY

In'the'past'decade'the'world'Australian'customers'and'retailers'operate'in'has'fundamentally'changed,'we'have'entered'the'2nd'Machine'Age'

2$

Copyright$©$2014$Capgemini.$All$rights$reserved.$

RISE & RISE OF MOBILITY

DIGITIZATION OF INTERACTIONS

DAWN OF THE MICRO-MULTI-NATIONAL

0$

20$

40$

60$

80$

100$ 2003' 2014'

%'of'Australian’s'with'a'mobile'phone'

%'of'Australians'transac<ng'on'mobile'

2011' 2012'

12%$37%$

53%$

+80%$

2003'

2014'

%$of$Australian$households$with$

internet$

Max.$internet$connecLon$speed$

(residenLal)$

1.46 Mps

100 Mps

0$

200$

400$

600$

800$

1000$

1200$

Facebook$

TwiRer$

MySpace$

Google+$

No.'of'Users'by'PlaCorm,'2013E'2014'

2003' 2014'

Achieving'scale'without'mass'

Combining'digital'innova<ons'at'tremendous'pace'

Source:$Capgemini$analysis;$“Our$Digital$Future”,$Capgemini,$2013;$“The$Second$Machine$Age:$An$Industrial$RevoluLon$Powered$by$Digital$Technologies”,$Capgemini,$2014.$$

THE PAST NOW

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This'has'driven'a'major'shiK'in'the'expectaMons'customers'have'of'how'they'can'engage'with'retailers'

CUSTOMER$

POSITION$

REQUIRED$

INTERA

CTION$

MODEL$

IN'THE'DARK'InformaLon$poor.$Limited$choice.$

Faceatoaface$the$preference.$

“TELLING”'Mass$markeLng.$

Outbound$blast$communicaLons.$ReacLve,$inbound$service$model.$

EMPOWERED$Pull$content,$benchmark$on$trust,$

authenLcity$and$value.$Constantly$changing$&$sharing.$

High$trust$in$peer$review.$Benchmark$across$industries$&$

geographies.$

“CONVERSING”'Embrace$social$(P2P)$&$coacreaLon.$Onaline$and$mobile$at$the$core.$Constantly$changing$needs.$

Source:$Capgemini$analysis.$

4$

Copyright$©$2014$Capgemini.$All$rights$reserved.$Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$2011.$

With'your'customers'demanding'more'and'more'it'can'be'easy'to'just'jump'in'

the$use$of$digital$technologies$to$enable$major'business'

SOCIAL MOBILE

ANALYTICS EMBEDDED$DEVICES$

NEW

ENHANCED$CUSTOMER$EXPERIENCE$

IMPROVEMENTS

STREAMLINING$OPERATIONS$

CREATING$NEW$BUSINESS$MODELS$

Digital'transforma<on'is

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Digital'maturity'is'a'combinaMon'of'“what”'and'organisaMon'does'and'“how”'they'approach'it'

DIG

ITA

L IN

TEN

SITY

WHAT'is'the'organisaMon'

doing''(digital'

investments'&'assets)'

TRANSFORMATION MANAGEMENT INTENSITY

HOW'is'the'organisaMon'

doing'it'(vision,'governance'

&'roadmap)''

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‘Beginners’'may'be'carrying'out'some'experiments'though'are'largely'skepMcal'of''value'of'digital'

DIG

ITA

L IN

TEN

SITY


doing''(digital'





&'roadmap)''

BEGINNERS

This is not for us!

7$


‘ConservaMves’'have'a'digital'vision'and'strong'governance'though'have'few'advanced'digital'features'

DIG

ITA

L IN

TEN

SITY


doing''(digital'





&'roadmap)''

BEGINNERS

This is not for us!

CONSERVATIVES

Analogue focus

8$


‘Fashionistas’'have'many'advanced'digital'features'though'they’re'run'in'silos'and'there'is'no'over]arching'vision'

DIG

ITA

L IN

TEN

SITY


doing''(digital'





&'roadmap)''

BEGINNERS

This is not for us!

CONSERVATIVES

Analogue focus

FASHIONISTAS

Digital Digital

Digital

Digital Digital

9$


Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$publicaLon,$2012.$*$Average$performance$difference$for$firms$in$each$quadrant$versus$the$average$performance$of$all$large$firms$in$the$same$industry$for$the$184$publiclyatraded$companies$in$our$sample.$

‘DigiraM’'have'a'strong'vision'and'clear'governance'with'many'digital'iniMaMves'generaMng'business'value'in'measurable'ways'

DIG

ITA

L IN

TEN

SITY


BEGINNERS

This is not for us!

CONSERVATIVES

Analogue focus

FASHIONISTAS

Digital Digital

Digital

Digital Digital

DIGIRATI

Strong$digital$vision$Good$governance$

Strong$digital$culture$

DIGIRATI'OUTPERFORM'THEIR'PEERS*'

'+9%'Revenue'

+26%'Net'Profit'+12%'Market'Valua<on'

10$


Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$publicaLon,$2012;$“Embracing$Digital$Technology$a$a$New$Strategic$ImperaLve”,$Capgemini$–$MIT,$2013.$

On'average'Retail'and'CPG'sectors'are'making'good'ground'but'only'a'quarter'of'companies'are'in'the'‘DigiraM’'quadrant'and'many'are'falling'into'transformaMon'traps'''

The

“Wha

t”

The “How”

BEGINNERS CONSERVATIVES

FASHIONISTAS DIGIRATI

RETAIL (global)

CPG (global)

Retail'&'CPG'Digital'Maturity' The'Biggest'Transforma<on'Traps'

•  The$most$significant$barriers$to$Digital$TransformaLon$are$desire,$money,$and$tools.$

•  A$decadealong$history$with$digital$disrupLon$has$seasoned$retailers,$producing$a$number$of$DigiraL$(26%).$

•  For$CPG,$less$than$25%$are$‘DigiraL’,$with$many$other$companies$lagging$far$behind.$

“We'don’t'have'<me'for'this'right'

now”'(53%)$

“I’ll'lose'influence'in'my'company”'(23%)$

“It’s'not'worth'the'risk”'(18%)$

39%$

No'“burning'plaCorm”'/'sense'of'urgency'

“We'don’t'know'how'to'do'that”'(52%)$

33%$

Not'enough'funding'

30%$

Limita<ons'of'IT'systems'

28%$

Roles'&'responsibili<es'not'clear'

24%$

Business'units'implemen<ng'in'silos'27%$

Unclear'business'case'

11$


Source:$“Digital$Commerce;$a$commentary$on$the$Australian$Retail$Sector”,$DT$AU$Lab,$2013.$A$Capgemini$–$University$of$Sydney$Business$School$publicaLon.$Assessment$of$89$Australian$retailers$across$63$separate$criteria$for$Digital$Commerce..$

The'race'to'respond'means'that'some'fundamentals'are'at'risk'of'being'missed'

INFORMATIONAL$$

$

$

$

$

$

$

$

Product$catalogue,$product$search,$store$informaLon,$store$

locaLon$etc.$

TRANSACTIONAL$$

$

$

$

$

$

Shopping$cart,$home$delivery,$online$payment,$inastore$availability$etc.$

Informing$customers$about$product,$service$and$business$offerings$

RELATIONAL$$

Related$items,$product$

recommendaLons,$user$history,$website$personalizaLon$etc.$

SOCIAL$$$

$

$

$

Reviews,$raLngs,$social$media$

integraLon$etc.$

FacilitaLng$and$supporLng$the$enLre$buying$and$fulfillment$process$$

Building$1atoa1$relaLonships$with$

customers,$loyalty$and$repeat$purchases$

Engagement$with$a$wider$customer$group$via$

integraLon$of$social$media$plaqorms$$

54%

46%

30%

44%

Increasing'complexity'

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DigiraM'have'a'common'Digital'DNA,'they'invest'100%'in'the'“how”'

VISION'

CAPABILITY'

GOVERNANCE' IT'/'BUSINESS'

Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$publicaLon,$2012.$

Digital$Units$Investment$CommiRees$

Chief$Digital$Officers$

TransformaLve$Vision$Shared$Vision$

Shared$understanding$between$IT$and$business$execuLves$on$the$role$of$IT.$

PromoLng$change,$invesLng$in$skills,$employee$parLcipaLon.$

In'addiMon,'they'make'strategic'decisions'on'where'to'dominate'in'digital'

Sources:$Capgemini$ConsulLngaMIT$Analysis$–$Digital$TransformaLon:$A$roadmap$for$billionadollar$organizaLons$©$Capgemini,$2012;$Capgemini$ConsulLng$–$MIT,$“The$Digital$Advantage:$How$digital$leaders$outperform$their$peers$in$every$industry”$©$Capgemini,$2012.$*$a$charts$represent$percentage$of$companies$that$exhibit$Excellence$in$one$or$more$of$the$six$digital$intensity$domains.$We$define$excellence$as$an$average$score$>$6$(on$a$1a7$scale)$on$all$quesLons$of$a$given$domain,$ater$dropping$the$quesLon$with$the$lowest$score.$

Social$Media$

Customer$Experience$

Mobile$Channel$

CUSTOMERaFACING$PROCESSES$

OPERATIONALa$FACING$PROCESSES$

AnalyLcs$

Data$IntegraLon$

Process$DigiLzaLon$

Internal$CollaboraLon$

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Domains'of'Excellence'(&'most'common'linkages)' ‘Digira<’'make'strategic'decisions'on'where'to'excel'

And'they'apply'pragmaMc'approaches'that'balance'customer]driven'design'with'investments'that'may'have'unclear'ROIs'

Source:$“Our$Digital$Future”,$Capgemini$Australia,$2013;$Assoc.$Professor$Kai$Riemer,$University$of$Sydney$Business$School.$$

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THINK LIKE A START-UP TECHNOLOGY AS INFRASTRUCTURE

OUTSIDE-IN THINKING

•  Design technology for a highly specific purpose.

•  For example, capture timesheets.

•  Opportunity for innovation is limited as technology has a highly specified purpose.

Technology as a tool Technology as infrastructure

*!

valu

e!

time!*! *!

*! *! Path 1; traditional approach!Path 2; start-up thinking approach!

•  Design technology to enable multiple uses.

•  Open architecture that can be adapted by end users.

•  For example, installing smart sensor grids, or building community platforms.

Business' Technology' Customer'Trade-Offs

Customer' Business' Technology'Trade-Offs

INSIDE-OUT DESIGN OUTSIDE-IN DESIGN

Technology' Business' Customer'Define$customer$needs$&$

design$endatoaend$experience$

Define$business$value$and$where$tradeaoffs$need$to$

be$made$

Design$/$adjust$/$implement$technology$to$

support$customer$

WE ARE IN THE 2ND MACHINE AGE

DIGITAL MATURITY MATTERS; +26%

ANY COMPANY CAN BUILD A DIGITAL DNA

TAKE ACTION NOW TO CREATE YOUR DIGITAL ADVANTAGE

In'summary,'

Ben Gilchriest Digital Transformation Lead, ANZ Capgemini Consulting

@BenGilchriest

THIS'PRESENTATION'&'THE'MAIN'STUDIES'REFERENCED'ARE'AVAILABLE'ON'SLIDESHARE'

'

SLIDESHARE.NET/BENGILCHRIEST'

March,'2014'

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Date post:	09-May-2015
Category:	Business
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