Enterprise Digital Lab
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1. The document discusses setting up an Enterprise Digital Lab to facilitate digital transformation across various areas of impact for an enterprise like customer targeting and engagement, supply chain optimization, and operational excellence. 2. It recommends establishing digital labs in regions with rich product capabilities and talent like the Bay Area in the US and Bangalore in India to leverage local ecosystems and skills. 3. An Enterprise Digital Lab is characterized as a separate entity led by a Chief Digital Officer that works cross-functionally across business units to standardize digital initiatives, gain a clear view of goals, and rapidly disseminate best practices with its own dedicated budget and resources.
Enterprise Digital Lab
- 1. 1 Enterprise Digital Lab: Your way to Enterprise Digital Transformation!
- 2. A Digital Enterprise is one that leverages customer, contextual and enterprise data and use new-age technologies to drive exponential business impact 2 Customer Targeting & Engagement Supply Chain Optimization Workforce & Partner Enablement Digital Products & Services Risk Management Operational Excellence AREAS OF IMPACT FOR AN ENTERPRISE CRM Data Partner Data Warehouse Data Weather/ Seasonality Data Natural Resources Data Traffic Data Digital Platform Digital Business Process / Operations Loyalty Program Data Point-Of-Sale Social Media App Usage Data On-board Systems Data Process- Related Data Corporate Updates & Notifications Contextual Data Customer Data Enterprise Data Modern IT Virtualization Hybrid Cloud Sensors Mobility Enterprise Security Analytics Platform Software Defined Network
- 3. To facilitate this digital transformation, enterprises are increasingly setting up Digital Labs/Hubs in geographies with rich product capabilities, such as the Bay Area (US) and Bangalore (India) 3 US (Bay Area, NY, Seattle) Bangalore Large number of product companies, a developed and mature ecosystem, abundance of fresh as well as installed talent pool, and a widespread start-up culture has resulted in several traditional enterprises setting up their digital labs in the Bay Area Increased globalization of tech enterprises, a booming start-up landscape, proliferation of new-age technologies, availability of digital skillsets (due to the presence of product companies as well as institutes such as the IISc.) are the collective force behind centers setting up digital hubs in Bangalore 13 acquisitions 300+% CAGR in Headcount USD 80 MN Annual Investment* Launched in Feb, 2015 to create analytics- driven personalized shopping solutions and omni-channel experience Note: Estimated annual investment
- 4. In accordance with this market trend, Zinnov recommends setting up an Enterprise Digital Lab within the traditional enterprise to provide the catalysis necessary for effective digital transformation 4 Characteristics an Enterprise Digital Lab turns digital transformation initiatives into a program that can be repeated within the organization. It provides the necessary people, processes, technology and infrastructure for digital initiatives packed into a short time frame. It liaisons with different BUs and functions of the organization to understand their digital requirements and initiatives Sales & Marketing IT Enterprise Digital Lab CMO Supply Chain BU 1 CIO CDO Supply Chain Head CXO / BU Head CEO Customer Targeting & Engagement Workforce & Partner Enablement Operational Excellence Supply Chain Optimization Risk Management Digital Products & Services BU 2 CXO / BU Head Enterprise Digital Lab: Structure Why is this structure recommended? • Digital Team is cross-functional and effective in breaking siloes • Results in standardized digital initiatives across all Business Units and consistent brand messaging • More responsive to changes in market as it is a separate entity in the organization • Direct and clear view of the organization’s goals and objectives as the CDO directly reports to the CEO • Rapid dissemination of digital best practices across the organization • Separate digital budget allocated Note: Digital Horizontals such as Workforce & Partner Enablement, Operational Excellence and Risk Management have a one-to-many relation with different functions and BUs. For instance, depending on the requirement, the Risk Management division of the Enterprise Digital Lab can report to Supply Chain function or a BU. The EDL is led by the Chief Digital Officer, who directly reports to the CEO GE operates with a CDO-led structure
- 5. We have identified four key enablers critical for setting up a Digital Lab Technology 5 People Processes Ecosystem Connect C A B D • New Roles & Responsibilities • Digital Talent: Acquisition and Development • Digital Skillsets • Technical Career Path • Distributed Agile • Scaled Agile Framework • Multi Speed IT • New Age Technology and Tools • Platform Partnership • Service Provider Partnership • Start Up Connect • University Connect
- 6. Setting up an EDL might look challenging, and you might face with several questions… 6 CORPORATE BUY-IN CHANGEINFRASTRUCTURE TALENT “ The HR is not aligned to the Business “ “ HR tools and processes are not in place for Digital talent “ “ How should I get corporate buy-in ? “ “ How do I get budget allocated for digital initiatives? “ “ How do I modernize my IT and where do I begin? “ “ Should I build or buy the required tools for building an EDL? “ How do I implement Change Management ? “ How do I realign my organization in order to a smooth transition? “
- 7. …however, success stories across verticals reinforce the fact that times are changing, and it is imperative to transform rather than perish! 7 There are numerous industry examples of enterprises that have jumped at the opportunity to transform digitally, only to reap benefits • Starbucks Digital Ventures created to improve customer experience & engagement via mobile payments, web, card, loyalty, e- commerce, Wi-Fi strategy, & the Starbucks Digital Network • Nike is at the forefront of digital transformation through its digital tools for making product designs and manufacturing simpler, digital products to track workouts and share them with friends online and receive customized advice from coaches, and the Nike+ platform • Southwest Airlines has bolstered its customer experience as well as back-end operations by leveraging digital technologies such as a new suite of customer contact and workforce optimization to improve customer satisfaction using predictive analytics, social media analytics for customer targeting, and collaboration with NASA to improve airline safety using Machine Learning skills