EMBRACING THE POWER OF DIGITAL DIGITAL TRANSFORMATION CONSULTING

Transcription

1 EMBRACING THE POWER OF DIGITAL DIGITAL TRANSFORMATION CONSULTING

2 02 / NEW FRONTIER GROUP The Digital Opportunity The digital economy is now a reality that creates immense opportunities but also significant threats for enterprises. There are over 3 billion internet users; more than 40% of the world s population. The number of mobile connections surpasses the world s population; over 15 billion devices are connected through the internet of things (IOT). The near future will bring driverless cars, internet through your contact lenses, sensors in your clothes, computer screens that fold like handkerchiefs as well as desktop fabrication through 3D printers. The shift to digital will disrupt all industries and apply across all geographies. Industries like banking, insurance, telecommunications, transportation, retail and energy as well as the public sector are digitizing rapidly and relentlessly. The B2B industries are quick to follow. Digital leaders constantly seek to understand how digital transforms their business and how they can embrace the opportunities it brings. Digital leaders constantly question and rethink their business model and value chain building on the power of networks and information.

3 DIGITAL TRANSFORMATION CONSULTING / 03 The digital economy is a new reality. It disrupts all industries across all geographies. Industries like banking, insurance, telecommunications, transportation, retail and energy as well as the public sector are digitizing rapidly and relentlessly. The B2B industries are quickly following. There are two main digital transformation paths: evolving within the existing business model as well as a revolutionary approach rethinking your business model. Enterprises should seek to become the node in their network ecosystem of collaborating customers, creative service partners and numerous data sources, seamlessly bridging the world of atoms and bits. Digital leaders seek to understand how digital transforms their business: constantly questioning and rethinking their business model and value chain. This is a significant challenge for enterprises, leaving behind the traditional within organization model and moving to an outside-in platform model. A successful digital transformation requires a holistic approach with broad high-level management sponsorship and strong project leadership. A digital transformation journey needs to lead rapidly and efficiently from strategy to initiatives detailing to prototyping to implementation. New Frontier Group is a leader in the area of digital transformation with over 150 digital experts working with our clients throughout their digital transformation journey. Our support is end-to-end. From digital strategy definition to designing, prototyping and going to market with digital solutions and business models.

4 04 / NEW FRONTIER GROUP Average operating cost reduction of 10-20% REVENUE GROWTH Development of new revenue sources Improved customer acquisition and market share growth Higher revenues per customer / higher customer utilization of products Increased customer cross-selling between products and to new products COST REDUCTION More efficient sales and distribution channels More efficient and collaborative customer care and servicing More effective innovation and development Increased automation of operational processes Improved supplier management Improved customer loyalty and retention Average revenue upside of 5-15% Potential bottom-line improvement of more than 30% The digital economy promises significant financial upsides for enterprises. Digital leaders can expect to grow revenues, reduce costs and realize potential bottomline improvements of over 30%. On the other hand, digital laggards are highly threatened as their more agile established competitors move ahead, new cross-industry players enter their industries and new digital start-ups overturn established industry models.

5 DIGITAL TRANSFORMATION CONSULTING / 05 Digital Transformation New Frontier Group has researched digital transformation across multiple industries. We have identified two main paths of digital transformation: an evolutionary path and a revolutionary path. The evolutionary approach utilizes digital opportunities to evolve within the existing business model and value chain to better engage at the customer interface, to provide offers and content relevant and tailored to the customer, to digitize processes and operations, to extend the business ecosystem network as well as to realize better employee engagement. A revolutionary approach implies a much more fundamental shift of the underlying business model and breaks up the established value chain. Typically this creates a multi-sided business platform with a radically extended number of partners in your business ecosystem. An enterprise that is a digital leader becomes a network node in an ecosystem through which and with whom many service partners create and sell services and products, in which customers form communities and collaborate with each other and the enterprise jointly driving innovation, in which all parties build on information from numerous internal and external data sources, that seamlessly bridges and integrates the physical world of atoms with the virtual world of bits. Such a digital transformation must build on the power of networks and information. Digital leaders like Amazon, Google and Facebook all follow this model. This is still a very difficult shift for many enterprises today, leaving behind the traditional insular within organization model to an open and interactive outside-in platform model. However, for those aspiring to be digital leaders such a transformation is required to stay ahead and embrace the opportunities of digital. EVOLUTIONARY REVOLUTIONARY Use digital opportunities to evolve within existing business model and value chain Enhance customer touchpoints and interactions Position content and offers relevant and tailored to the customer Digitize business processes and operations Extend business network ecosystem Drive forward employee engagement and collaboration Rethink and revolutionize your business model and value chain on the basis of digital Create a multi-sided business platform within a radically extended business ecosystem building on the power of networks and information Become the node in your ecosystem network of collaborating customers, creative service partners, numerous data sources, seamlessly bridging the world of atoms and bits Leave behind an within organization model to an outside-in platform model

6 06 / NEW FRONTIER GROUP A digital transformation is a major undertaking for an enterprise demanding significant change from all functions across the entire organization, potentially even overturning established business models and value chains. A digital transformation requires a holistic strategic approach. It has to be innovative and disruptive and to transform the experience and value proposition offered to an enterprise s ecosystem. Typical focus areas of digital transformation across industries include: EVOLUTIONARY WITHIN EXISTING BUSINESS MODEL REVOLUTIONARY APPLYING BUSINESS MODEL TRANSFORMATION CUSTOMER ENGAGEMENT Migrating to direct digital channels. Providing a seamless online and offline channel experience. Using physical shops and devices to provide a hybrid digital and physical customer experience. Developing deeper customer understanding from multiple internal and external data sources. Using customer analytics for next-best offer proposition and enhanced customer profitability management. Creating multiple mechanisms for instantaneous collaboration and exchange with and between customers. ECOSYSTEM NETWORK ENGAGEMENT Extending the network of business partners. Developing new digital affiliate partnerships. Creating cross-industry customer data sources often through loyalty schemes. Positioning thirdparty offers and services in extension to own services. EMPLOYEE ENGAGEMENT Providing new digital mechanisms for employee collaboration. Creating new tools for innovation and learning. Implementing new intelligent communications platforms, developing a continuous innovation capability. Introducing new mobile solutions for field workforce, providing remote working solutions. AUTOMATION AND EFFICIENCY Automating and simplifying front-end and back-end processes, extending customer self-servicing, automating customer servicing and order management. Introducing remote monitoring and tracking solutions. Creating cross-operational smart data platforms and dashboards. Implementing automated maintenance and repair solutions. Intelligent management of supply and demand shifts. CUSTOMER COMMUNITIES Identifying and empowering customer communities around common interests and needs. Leveraging crowd intelligence and power by enabling customers to communicate with each other and the enterprise. Trusting and utilizing crowd wisdom to drive forward product and services development and innovation. CREATIVE SERVICE PARTNERS Developing a platform approach (often open source) enabling service partners to develop and sell services and products. Extending the enterprises products and service portfolio through service partners creating a broader customer experience and tie-in. Seeking, incubating, growing or acquiring selected service partners around enterprise priorities. INFORMATION NETWORKS Developing information networks based on internal and external data and content sources (including connected devices/iot). Motivating customers to share information and intelligence creating win-win propositions. Sharing data and content with ecosystem network. BRIDGING ATOMS AND BITS Creating a seamless experience and offer between the physical and the digital world. Integrating hardware and software offerings to drive customer choice and purchase. Merging digital and physical into a hybrid experience. CONTENT Creating personalized interfaces, providing real-time and instantaneous interaction, providing configuration and collaboration functionalities. Providing smart offers and products, positioning only personally-tailored and relevant content and offers, combining internal and external content and offers.

7 DIGITAL TRANSFORMATION CONSULTING / 07 BANKS like Royal Bank of Scotland see the majority of banking transactions migrating to online, tablet and mobile channels. New digital-focused players like mbank in Poland and MetroBank in the United Kingdom are gaining marketshare with superior online and mobile banking services and are introducing hybrid physical/digital branch models. Fidor Bank in Germany is experimenting with banking based on social communities with customers advising each other. Crowd lending platforms like Auxmoney in Germany and Pret d Union in France are shaking up credit mechanisms while crowd-funding players like Kickstarter enable the funding of projects, ventures and businesses by many. INSURERS like esurance and Progressive in the United States are accelerating the quotation processes delivering insurance quotes in under 15 seconds. Insurances like Insure-the-box in the United Kingdom are offering usage-based auto insurance utilizing telematics to track driver behavior. Axa offers its mobile Axa Drive application to monitor driving style and enter safe driving contests. Friendsurance in Germany and Inspeer in France are introducing crowd-insurance mutualizing insurance risk among groups of insurers. Furthermore, insurance companies are increasingly launching start-up incubators such as Allianz Accelarator or Axa Seed Factory to drive digital innovation within their business. The MOBILE PAYMENT space is being fought over by online heavyweights like Google and Apple, telecoms players like Telefonica / O2, Vodafone and Deutsche Telekom as well as banks themselves. TELECOMMUNICATIONS players like Telefonica, Vodafone, Deutsche Telekom and MTS are moving beyond pure communications into cloud services and security services, M2M solutions and are looking to monetize their user data in their quest to offer more than just communications pipe services. Meanwhile, Telstra in Australia is transforming its customer service by providing its online crowdsupport platform where customers can help and advise each other. RETAILERS like John Lewis are looking to use big data analytics to improve customer understanding and offer mobile applications to inform and enhance the customer in-physical shop experience. Physical retailers are looking to create hybrid physical/digital experiences in their stores to compete against pure digital players. Target in the United States famously predicted a teenagers pregnancy based on her consumption patterns before her parents knew. TRANSPORTATION providers like KLM have largely digitized the booking and check-in processes. Now KLM Dutch Airlines is looking to socialize the in-flight experience enabling passengers linked on social networks to find each other and book joint seating. French railways SNCF are looking to create their own application store with own and third party applications around its core rail transport offering and are initiating an incubator to invest in promising start-ups. Transportation companies have a huge opportunity around digitally leveraging the on-board customer captiveness. UTILITIES like Enel, EDF and E.ON are undergoing major transformations with the roll-out of smart grids and smart metering. Governments and regulators globally are demanding rapid progress to meet energy efficiency and savings targets. With the coming of home buildinggenerated renewable energy, customers will look to trade electricity with and between each other, selling surplus energy generated back into a bidirectional grid. Meanwhile, Powershop in New Zealand is raising customer interactions and intimacy to unprecedented heights by allowing customers to buy electricity in small installments on a pay as you go basis through their mobile phone app featuring an Amazon-like one stop buy function. OIL AND GAS companies like ExxonMobil, Shell and Gazprom are digitizing their upstream and downstream operations from the digital oilfield to digitally-monitored pipelines, transportation and refineries. SMART CITIES of the future will not only offer online self-service applications but build digital service and data platforms to enable their citizens and businesses. App based taxi service Uber provides data on trips pick-up, drop-off and duration to the City of Boston to inform the city s traffic planning. CROSS-INDUSTRY BORDERS are being blurred as telecommunications players like Telenor in Serbia go into banking, retailers like Tesco in the United Kingdom start offering insurance services and telecommunication operators like Vodafone s Mpesa service substitute banking and payment services.

8 08 / NEW FRONTIER GROUP Players looking to be digital leaders drive digital transformation forward from the C-level across the entire organization and all functions. In our experience and work with leading companies and entities across multiple sectors, we have identified some key success factors for a digital transformation: Broad high-level management sponsorship and alignment (encompassing all functions e.g. CEO, COO, CMO, CFO, CIO, ) Strong project leadership with corresponding program management office Clear action plan detailing digital initiatives to be pursued Clear understanding of objectives and KPIs to be reached Organizational alignment and coordination across all functions Sufficient functional talent to drive digital initiatives forward Clear technology strategy and migration plan By the same token, it is imperative that enterprises understand that a digital transformation is not just an IT project and that social, mobile, analytics and cloud technologies (often referred to as SMAC) can be important tools for a digital transformation, but do not suffice for a successful digital transformation! New Frontier Group sees four key steps that describe the digital transformation journey that enterprises need to undertake: ASSESSMENT AND STRATEGY DETAILING AND PROGRAM MANAGEMENT ORGANIZATIONAL EXECUTION SOLUTIONS DESIGN AND TECHNOLOGY STRATEGY PROTOTYPING IMPLEMENTATION AND GO-TO-MARKET Define your digital vision and strategy Is your business strategy digitally proofed? Customer engagement? Ecosystem network engagement? Employee engagement? Detail your digital initiatives and design digital solutions Business case? KPI? How do you track? Organizational design and execution? Modify processes? Culture change? Technology strategy? Test digital solutions and business models through prototype cycles How are they received? Learnings and improvement opportunities? Fine-tuning? Go-to-market with innovative digital solutions and business models How to market and position? How to sell and service? Automation and efficiency? Content? Business model innovation?

9 DIGITAL TRANSFORMATION CONSULTING / 09 New Frontier Group Digital Transformation Consulting New Frontier Group is a leader in the area of digital transformation, focusing on helping customers to migrate to the digital economy. More than 150 digital experts are working at New Frontier Group with our clients on the digital transformation of their businesses. Our Digital Transformation Consulting unit works with our clients throughout their digital transformation journey. Our support is endto-end from strategy definition to designing, prototyping, implementing and going to market with new digital solutions and business models. We see our role as accelerating our clients ability to successfully realize their digital transformation.

10 10 / NEW FRONTIER GROUP DIGITAL STRATEGY AND ASSESSMENT (DIGITAL STRATEGY WORKSHOP) DIGITAL INITIATIVES DETAILING DIGITAL TRANSFORMATION PROGRAM MANAGEMENT DIGITAL ANALYTICS ORGANIZATION AND PROCESS DESIGN CHANGE MANAGEMENT DIGITAL SOLUTIONS AND BUSINESS MODELS PROTOTYPING DIGITAL SOLUTIONS DESIGN AND TECHNOLOGY STRATEGY DIGITAL SOLUTION AND BUSINESS MODELS GO-TO- MARKET STRATEGY DIGITAL ASSESSMENT AND STRATEGY (DIGITAL STRATEGY WORKSHOP) Analysis of your current strategy and activities in the context of digital. Evaluation of the opportunities and challenges the digital economy presents. Defining a digital vision going forward and developing digital initiatives to be pursued. Execution of a two to three-day management workshop to define and align on digital vision across the executive management team. DIGITAL INITIATIVES DETAILING Detailing of digital initiatives to be pursued. Development of a digital transformation action plan including timelines, milestones and responsibilities. Development of business cases and KPIs to be reached with digital initiatives. DIGITAL TRANSFORMATION PROGRAM MANAGEMENT Program office management of the digital transformation across the organization. Monitoring and coordination of all digital transformation initiatives. Timely and regular progress reporting to executive levels and escalation and resolution of critical issues and delays. DIGITAL ANALYTICS Development of customer-centric intelligence and understanding for next personalized best offer development and customer profitability management. Integration of multiple internal and external customer data sources. Continuous tracking and monitoring of customer value and profitability. ORGANIZATION AND PROCESS DESIGN Defining organizational and process requirements for digital readiness. Development and evaluation of organizational options for digital transformation. Detailing of future front-end and back-end organization and processes. CHANGE MANAGEMENT Detailing of change management requirements to migrate to new digital-proof organization and culture. Development and execution of communications plans. Execution of change management workshops as well as coaching measures. DIGITAL SOLUTIONS DESIGN AND TECHNOLOGY STRATEGY Design of digital solutions and business models including technology options to realize digital solutions and business models. Definition of required technology capabilities to realize digital transformation. Development of technology strategy and migration plans. DIGITAL SOLUTIONS AND BUSINESS MODELS PROTOTYPING Rapid prototyping of digital solutions and business models. Tracking and evaluation of digital prototypes. DIGITAL SOLUTIONS AND BUSINESS MODELS GO-TO- MARKET STRATEGY Detailing of go-to-market strategy for new digital solutions and business models. Identification of customer segments to be targeted. Development of communications and positioning plans. Detailing of pricing, selling and servicing mechanisms.

11 DIGITAL TRANSFORMATION CONSULTING / 11 Why New Frontier Group New Frontier Group has broad experience in working with various companies on their digital transformation. We provide end-to-end support for our clients and bring together strategic expertise with prototyping and implementation experience. We do not leave you with presentations only but ensure that digital solutions and business models are implemented. We believe in realizing business-relevant upsides for our clients, in line with our guiding motto Shaping future, delivering results. Our key strengths to support you: PASSIONATE ABOUT DIGITAL TRANSFORMATION Experience in and history of working with our clients on realizing the digital transformations of their business. Deep knowledse base on digital strategies and best practices. HOLISTIC VIEW Understanding digital transformation beyond pure SMAC technology but as the execution of an adjusted and extended business strategy to embrace the opportunities of the digital economy. Identifying opportunities both in evolving within existing business model and realizing new business models based on digital. We have industry-specific viewpoints on digital transformation in your industry. Please visit our website or get in touch at dtconsulting@newfrontier.eu. We look forward to discussing your digital transformation and the opportunities it holds for you! END-TO-END CAPABILITY INCLUDING PROTOTYPING Results-driven from digital strategy development to organizational execution and prototyping to the implementation of digital solutions and businass models. Ability to provide rapid prototyping. STRONG TRACK RECORD OF GOING TO MARKET WITH DIGITAL SOLUTIONS AND BUSINESS MODELS Successful and profitable implementation of innovative portal, cloud, collaboration, marketplace and gaming solutions and business models with our clients. ADDRESSING TYPICAL FAILURE POINTS Understand and anticipate typical failure points such as lack of a holistic digital vision and failure to ensure organizational, process and technology alignment.

12 New Frontier Solutions GmbH Pottendorferstr /4/3/ Vienna, Austria