2013 03-05 competitive advantage of digital transformation

Transform to the power of digital
COMPETITIVE
ADVANTAGE OF
DIGITAL
TRANSFORMATION
&
SOCIAL CRM
Martin Hack
Head of Salesforce.com at Capgemini Consulting D/A/CH
Hannover, 5th March 2013

2
Social Business and Digital Transformation – the mega trends are undoubted
CustomerExperience
Digital Shopper Relevancy
Social Insights
SocialBusiness
All Channel Experience
Realtime Personalisation
Copyright © 2013 Capgemini Consulting. All rights reserved.
“…develop a new business, which is not only selling
skis, but also selling services and dreams”
Rossignol (Ski Equipment)
“We’re creating a world, where the car becomes
a friend to its owner”
Toyota
“You have to be totally connected with
anyone who touches your brand”
Burberry
We’re going to change the way
banking happens”
Commonwealth Bank “Become more social, both in terms of
how we communicate internally and how
we communicate with our customers”
O2
“Linear interaction […] is not longer valid”
Virgin America
“The social enterprise will be the differentiator
on how we interact with our customers, our
employees and our partners”
Hewlett-Packard
“We need to interact with customers the
ways that work best for them
Activision” (Video Games)
“You need a view on all the touch points
to understand the customer” GE
GlobalCollaboration
Machine2Machine communication

3
...but: is there a measurable impact on revenue, profit or shareholder value?

CapgeminiConsultingand BostonMIThave teamed up to analyse why
some companies successfully embrace Digital Transformation while others fail
4
„Digital Transformation: A roadmap for Billion-Dollar Organisations“ is ranked among the
top five best publications in the last 10 years.¹
ONE COOPERATION WITH
…OVER 450 INTERVIEWS WITH IT AND BUSINESS
EXECUTIVES
…OF MORE THAN 390 COMPANIES
…MANY OF THEM BILLION-DOLLAR ENTERPRISES
…THREE RESEARCH PHASES OVER MULTIPLE YEARS
Source: White Space – a leading institute for market research in the consulting sector, 2012

We assess the DigitalMaturityof organizations as a combination of two separate
but related dimensions: Digital Intensity and Transformation Management Intensity
5
Digital Intensity:
investment in technology-enabled initiatives to
change the way a company operates ‒ customer
engagements, internal operations, business models.
Transformation Management Intensity:
creating the leadership capabilities necessary to
drive digital transformation in the organization.
Location-based marketing
Digital Design
Connected Products
Mobile sales
Customer Service in Social Media
…
Digital Vision
Cross-silos coordination
New skills
Cultural change
…

The twodimensionsspell out four different types of digital maturity defining the
alchemy of success in Digital Transformation: Style and substance
6
Transformation Management Intensity
DigitalIntensity
BEGINNERS
Beginners…
…carry out some experiments,
immature digital vision and culture
FASHIONISTAS
Fashionistas …
… have advanced digital features in silos
but no overarching vision and coordination
CONSERVATIVES Conservatives…
… have few advanced digital projects,
coordinated but underdeveloped vision
DIGIRATI
Digirati…
...have strong vision and governance.
Digital initiatives generating measurable benefits.

We quantifiedthe digital maturity of 391companies and analyzed their financial
performance
7
* Of the 391 companies in our sample, 184 were publicly traded
We analyzed financial data &
interviewed top- executives
from all the publicly-traded
companies in our sample*
** Industry adjusted FY2011 financial performance for 184 publicly traded firms, controlling for geography
Transformation Management Intensity
DigitalIntensity
Digitally-mature companies
are achieving statistically
significantly better financial
performance**

Companies that are mature on the digital intensity dimension are
better at driving revenue through their existing assets
Digital Intensity and RevenueGeneration
8
Basket of indicators:
 Revenue / Employee
 Fixed Assets Turnover
(Revenues / Property, Plant &
Equipment)
+6% +9%
-4% -10%

Companies that are mature in the transformation management intensity
are more profitable
Transformation Management Intensity and Profitability
9
 EBIT Margin
 Net Profit Margin
-11% +26%
-24% +9%

Companies that are mature in the transformation management intensity
achieve higher market valuations
Transformation Management Intensity and MarketValuation
10
 Tobin’s Q Ratio
 Price / book ratio
-12% +12%
-7% +7%

The digital transformation performance varies across industries– but in all
industries there are outperformers and followers
11
Banking
Consumer
Packaged Goods
Insurance
Manufacturing
Pharmaceuticals
Retail
High
Technology
Telecoms
Travel and
hospitality
Utilities
Average industry
maturity:
Telcos
 Fast to launch digital initiatives
 Need to integrate and align initiatives
across silos
Retailers
 Strong in social and mobile
 Need to focus on cross-channel
consistency, worker
enablement and analytics
Manufacturers
 See less opportunity / threat in digital
transformation
 Need a transformative digital vision and
the leadership drive to develop impetus
Insurers
 Strong digital governance
capabilities, but
 Regulatory worries and a risk-
averse culture

12
…so simple? Still our benchmarks and studies show:
There is a gap between perceived need for action and reality

Social CRM – Hype or competitive advantage?
Example from our annual CRM Barometer:
though digital and social CRM has high potential it is not fully leveraged up to now
13
2/3 of the companies aim at creating a
uniform customer experience,
both online and offline…
... of which 55 % find it challenging to
harmonise the customer contact points
through all the channels
… of the companies see highest potential in
social CRM for winning additional customer
information…
... However 7 out of 10 companies
evaluate their present capabilities to be
insufficient for social media data analysis
For 8 out of 10 companies, the high
relevance of digital media and social media
leads to a relaunch of their CRM strategy…
… only 13 % of all the companies have
already integrated their social media
activities in their CRM strategy
…of the companies predict a further
increase in the relevance of social media…
... Only 8 % of the companies have
established practical business processes
for tapping the full potential of social CRM

There are patterns regarding areas of improvement that are typically targeted
14
Digital Transformation offers a huge variety of potentials
for top-line growth and operational excellence
 Customer analytics and insights
 Service adoption and information
 Crowd sourcing of ideas
 Innovation management platforms for
employees and partners
 Collaboration platforms
(internal/partners)
 E- and mobile learning/training
 Marketing, sales and service automation
 Additional revenues through digital
channels and ad-hoc services
 Customer and brand engagement
 Customer service in social media
 Extended / smart products
and services
 Retention management through
predictive / Next best action
EXAMPLE

The Customer Experience Transformation approach of Capgemini Consulting presents a
structured and pragmatic way to create a strong Customer Experience
15
Customer Experience
Strategy
Customer Journeys
Customer Experience
Transformation
Customer
Measurement
2
3
4
5
CustomerExperienceTransformation
Customer Insight1
Establish your desired perception
Analyze a sequential set of
customer activities
Redesign processes & improve the
experience
Optimize the Customer Experience
Get to know your customers
 Marketing, sales and service automation
DEEP
DIVE
 Additional revenues through digital
channels and ad-hoc services

Customer journeys allow organizations to view themselves from
the customer’s point of view. They identify:
 All touch points & steps that a customer takes
 The current offer of the company at each of these steps
Customer journeys represent the end-to-end activities that are needed to satisfy customer
needs and resolve questions, all seen through the eyes of the consumer
16
Which interaction points are considered as
most crucial by customers?
This is where companies should impress their
customers
Customer journeys put companies in a customer-centric frame of mind
Moments of truth
I want to know
which product
suits my needs
best
I know which
product to buy
I want to be
inspired with
product images
I want to
compare the
products and
see reviews
I need to
choose what is
important for
me
I want to speak
an advisor
Be inspired by
the website
with product
info
Check reviews,
comparisons ,
wikipedia &
youtube
Choose my
essential
requirements
Receive advice
to help me
with my choice
J1: Product Discovery
! !
Moment of truth
Awareness Discover Purchase Receive Use Get help
Cancel /
Renew
Customer Journeys3
Example

Customers expect the same experience across the different channels, so companies need
to consider all of their channels when designing customer journeys
17
Awareness Discover Purchase Receive Use Get help
Cancel /
Renew
Touch point
x
EXAMPLE: Cross-channel customer journey
x
x
x
x
x
x x
x
x
Wow moment Channel switch
J1 Product Discovery J3 Seamless UpdateJ2 Service Excellence
Illustrative only
Web-Site
Social
Networks
Webshop/
Retail
At home
Customer
Service
Align and synchronize all channels & install “wow-moments”
Customer Journeys3

18
As leader for digital transformation we work on extraction of the DNA of
successful digital transformations – and how this can apply to you
Customer Experience Operational Processes Business Model

Step 1: Assess where you are with our DigitalMaturityAssessment
based on industry benchmarks
19
1) DMA = Digital Maturity Assessment
 Structured questionnaire to assess
the company’s
‒ Transformation Management
Intensity
‒ Digital Intensity
 Contains benchmarks of leading
global corporations
DMA1 Tool
www.capgemini-consulting.com/dma
Are you
behind?
Customer
understanding
Customer
experience
Process
automationDecision making
HR processes
Top performers of the industry based on MIT-CC surveyYour positioning based on CC maturity model
Are you
aligned
on priorities?
Vision
Engagement
GovernanceSkills
Ways of
working

Step 2: Design the your transformationpathdepending based on
your specific context (various examples deliver orientation)
20
Source: Capgemini Consulting – Digital Services Strategy – Technology Transformation (c) 2011
+6% +9%
-4% -10%
-11% +26%
-24% +9%
-12% +12%
-7% +7%
Start building a strong
vision on digital:
 how to leverage digital
on our core assets?
 For which objectives?
 At what pace?
 Which investment?
 What are the key
impacts ?
Then, start implementing
new digital initiatives
In most cases, it will be
necessary to
 rationalize the firms’
digital landscape,
 to build the right
organization and
governance towards
digital,
before restart developing
digital services.
 Digital conservatives
companies have already
build strong vision focus
on business areas and
some digital services.
 It will be possible to
build on these solid
roots to increase
leverage of digital
advantage at global
scale
RevenueProfitabilityValue

DIGITAL MATURITY MATTERS
IT MATTERS IN EVERY INDUSTRY
AND THE APPROACHES THAT DIGITALLY
MATURE COMPANIES USE CAN BE
ADOPTED BY ANY COMPANY THAT HAS
THE LEADERSHIP DRIVE TO DO SO
THE FUTURE IS ARRIVING QUICKLY.
TAKE ACTION NOW TO CREATE YOUR
OWN DIGITAL ADVANTAGE
Copyright © 2012 MIT CDB and Capgemini Consulting

For details on our Thought Leadership, please visit:
www.capgemini-consulting.com/think
For details on our Digital Maturity Assessment, please visit:
www.capgemini-consulting.com/dma
Martin Hack
Head of Salesforce.com – D/A/CH
Capgemini Consulting
Karlstrasse 12, D-80333 Munich
Phone: +49 151 4025 1418
E-Mail: martin.hack@capgemini.com

2013 03-05 competitive advantage of digital transformation

2013 03-05 competitive advantage of digital transformation

More Related Content

What's hot (20)

Viewers also liked (20)

Similar to 2013 03-05 competitive advantage of digital transformation (20)

Recently uploaded (20)

2013 03-05 competitive advantage of digital transformation