Digital Transformation. Tracey Santos

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1 Digital Transformation Tracey Santos

2 Welcome

3 Digitally aware? Alert Ready: Skynet is now active

4 Market Overview

5 Witnessing Papal history in 2017

6 Market Overview

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8 At the age of 4 years: 30 Million daily users Valuation: $1 Billion 13 employees At the age of 4 years: 100 million daily users Valuation: $4-5 billion 20 employees At the age of 7 years: 1.5 million rooms(largest lodging company on earth) 134,000 cities Valuation: $20 Billion Employees: 2,368* At the age of 4 years: 65 cities 1.5 Million drivers Valuation: $3.5 Billion Employees: 550 *Hilton has over x40 more employees

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10 Market Overview HBR studied 30,000 public firms over a 50 year span: ½ of the companies listed in the year 2000, are no longer there An estimated ⅓ of companies expected to delist over next 5 years Life expectancy for companies has fallen from 56yrs to 18yrs

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13 By % of all enterprises will have fully articulated an organization-wide digital platform strategy By 2021, enterprise apps will shift toward hyper-agile architectures, with 80% of application development on cloud platforms By 2021 organizations will spend more than 530 billion on cloud services and cloud enabling IT By % of the workforce will be digital native connected 24/7 and work the way they want to

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16 Digital Intensity What s in it for us? Fashionista Many advanced digital features (mobile, social etc) but in silos No overarching vision Underdeveloped coordination Digital culture may exist in silos Digirati Strong overarching digital vision Good governance Many digital initaitves generating business value in measurable ways Strong digital culture Beginners Management skeptical of the business value of advanced digital technologies May carry out some experimentation Immature digital culture Conservatives Overarching digital vision exists but may be underdeveloped Few advanced digital features though traditional digital capabilities may be mature Strong governance across silos Taking active steps to build digital skills and culture Aligned leadership Source: Capgemini: the digital advantage

17 Digital Intensity What s in it for us? Revenue Generation Fashionista Digirati +6% +10% Beginners Conservatives -4% -10% Source: Capgemini: the digital advantage Aligned leadership

18 Digital Intensity What s in it for us? Profitability Fashionista Digirati -11% +26% Beginners Conservatives -24% +9% Aligned leadership Source: Capgemini: the digital advantage Digital Infusions Pty Ltd 2017

19 What s in it for us? Revenue vs. Profitability Source: Capgemini: the digital advantage Digital Infusions Pty Ltd 2017

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22 Case Study: Disney

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26 Case Study: Domino s

27 Case study: Lego

28 Case study: Shopper Media Group

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34 Repositioning IT Innovation (Outcome driven) Differentiator (Function driven) Core services (Fulfillment driven) Traditional Emerging Attributes Traditional Emerging Goal Stability Agility Value Price for performance Revenue, Brand, Experience focus Approach Waterfall, High ceremony Design Thinking, Agile, Lean StartUp Governanc e Plan driven, approval based Empirical, Continuous, Process based Talent Likes certainty Good with ambiguity Culture IT centric, Removed from customer Business centric, close to customer Cycle times Months Days/weeks

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36 Innovation investments made Finance Process. Offering Delivery Business model Networking Enabling process Core process Product performance Product system Service Channel Brand Customer experience Hi Volume of innovation efforts Last 10 years Lo Source: Doblin analysis

37 Value Created Finance Process. Offering Delivery Business model Networking Enabling process Core process Product performance Product system Service Channel Brand Customer experience Hi Cumulative value creation Last 10 years Lo Source: Doblin analysis

38 Counterintuitive

39 What is Digital Transformation?

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41 Digital Transformation (DX)

42 Definition Altimer Group Digital transformation entails the realignment of, or new investment in, technology and business models to effectively engage customers at every touch point in the customer experience lifecycle.

43 VALUE Capture Arrange Deliver NEED Mode 1: Efficiency thinking Mode 2: Disruptive thinking

44 What is digital transformation? VALUE NEED

45 What is digital transformation? VALUE Capture Arrange Deliver NEED

46 What is digital transformation? VALUE Capture Arrange Deliver NEED Mode 1: Efficiency thinking

47 What is digital transformation? VALUE Capture Arrange Deliver NEED

48 What is digital transformation? VALUE Capture Arrange Deliver NEED

49 What is digital transformation? VALUE Capture Arrange Deliver NEED Mode 2: Disruptive thinking

50 What is digital transformation? VALUE Capture Arrange Deliver NEED Mode 1: Efficiency thinking Mode 2: Disruptive thinking

51 Bringing it together VALUE Capture Arrange Deliver NEED Mode 1: Efficiency thinking Mode 2: Disruptive thinking

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54 What is digital transformation? Mode 1 Mode 2

55 Mode 1: Top 5 Traps Organisations often get stuck because they: 1. Forget to start at the beginning 2. Delude themselves by doubling-down on the things that are no longer working 3. Attempt to get house 100% in order before thinking about Mode 2 4. Forget to prioritise against future state 5. Forget to retire/divest

56 Mode 2 traps! Failure to provide space from BAU: Todays work is more important than projects of ambiguous value No financials allocated Stringent requirements to complete a business case before launch Immediate KPI s & Incentive structures don t allow time for new initiatives Lots of politics required to gain sign off Wrong capability: Staff are trained to maintain lines of business not develop new ones Commercialisation is hard! Poor governance: No senior leader oversight (including board level) Run as a project within a department (usually IT), rather than approached as an all of business initiative No metrics or incentives around new revenue growth No filter mechanisms to identify a good idea Starting in the wrong place Poor market validation No clear understanding of job to be done Pain targeted is just not painful enough, or felt by enough people

57 Companies struggle to determine where to disrupt How to lead the change with other commitments Organizations are built to resist disruption Change Management not understood/taken seriously Social is not being used properly in business setting

58 Digital Transformation Maturity Model

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61 A Year from Now You Will WISH You Started Yesterday! Executive agreement Executive understands innovation (DX) Create a formal process for disruption in your organization Criticality of / methodology for Change Management Social to get your organization to acceptance faster

62 Let us show you how!

63 Questions?

64 Thank you Please fill out the survey provided