ACCELERATING DIGITAL TRANSFORMATION MEREDITH WHALEN SENIOR VICE PRESIDENT, IT EXECUTIVE, INDUSTRY, SOFTWARE AND SERVICES RESEARCH

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1 ACCELERATING DIGITAL TRANSFORMATION MEREDITH WHALEN SENIOR VICE PRESIDENT, IT EXECUTIVE, INDUSTRY, SOFTWARE AND SERVICES RESEARCH IDC Visit us at IDC.com and follow us on

2 Two and a Half Years Ago We Were all Experimenting The power of crowdsourcing design Keyless entry as a loyalty program perk Robotic bartender for cruise ship wow factor IDC Visit us at IDC.com and follow us on 2

3 Today, Digital Transformation is a Priority for 82% of Organizations in Asia Pacific Source: IDC DX Leadership Sentiment Study. A/P sample n= 277, March, Q: Is Digital Transformation a priority for your organization? IDC Visit us at IDC.com and follow us on 3

4 2017: Australian Organizations Are Advancing in their DX Journey 33% 30% 28% 32% 5% 4% Digital Resister Digital Explorer Digital Player Digital Transformer Digital Disrupter Source: IDC, Australia Digital Transformation Maturity Model Benchmark, 2017; n= 100, May 2017 IDC Visit us at IDC.com and follow us on 4

5 Many Australian Organizations Are at a DX Impasse 63% 33% 30% 28% 5% 4% Digital Resister Digital Explorer Digital Player Digital Transformer Digital Disrupter Source: IDC, Australia Digital Transformation Maturity Model Benchmark, 2017; n= 100, May 2017 IDC Visit us at IDC.com and follow us on 5

6 Organizations are Being Held Back by a Series of Challenges Silos of Innovation Digital Platform Limited Expertise Digital Capabilities Outdated KPIs DX Performance Scorecard DIGITAL NATIVE ENTERPRISE Siloed DX Initiatives DX Organization Structure Tactical Plans Digital Roadmaps IDC 6

7 How Do We Accelerate Our Digital Transformation Efforts? EXECUTION SPEED COMPETITIVE ADVANTAGE IT Organizational Approach Innovation Methods Applied Technology Investments Made Enables Executional Capability Determines Time to Market Provides Unique Differentiator IDC Visit us at IDC.com and follow us on 7

8 Digital Acceleration Methods IT Organizational Approach Innovation Methods Applied Technology Investments Made Enables Executional Capability Determines Time to Market Provides Competitive Advantage IDC Visit us at IDC.com and follow us on 8

9 Digital Organization Structure The DX Special Projects Team The Office of Digital Transformation The Embedded Digital Business The Digital Business Unit DX DX DX DX DX DX DX Discovering DX Establishing DX Governance Accelerating DX Creating innovative offerings Define DX Mission Establish DX Priorities for Enterprise Implement DX Across Enterprise Create a disruptive business 22% 51% 14% 13% Source: IDC DX Leadership Sentiment Study. APJ sample n= 168, March,

10 Pushing for Consent, Not Consensus BLOOMIN BRANDS DIGITAL INNOVATION TEAM Created a multifunctional organization group called Digital Innovation Team digital product managers, digital marketing, creative content, web designers, digital analytics experts, restaurant operations Technology, Marketing and Restaurant Operations are the three stakeholders invested in making the digital unit successful. All have a voice at the inception of every idea. Donagh Herlihy EVP Digital and CIO Bloomin Brands We started to say, Let s understand which moves or decisions are safe to try. ADVICE ABOUT ORGANIZATIONAL STRUCTURE Consent over consensus. When you are dealing across multiple business functions, you can waste a lot of time seeking consensus. Collaborative humility. The leader of the digital unit has to be humble and collaborative. His great skill is his character even more than his functional knowledge 10

11 From Projects to Products IT ORG NOW CALLED CLIENT AND DIGITAL EXPERIENCE GROUP Karl Gourverneur VP and Head of Digital Innovation and Workplace Northwestern Mutual 3500 IT professionals shifted focus from IT projects and support to digital products and engineering Functional/departmental org replaced with experience value streams client, advisor, and employee. Hundreds of positions eliminated and refilled with digital skills Offshored commoditized infrastructure and development moving to managed services. SELF-AUTONOMOUS TEAMS FOCUSED ON BUSINESS OUTCOMES 20+ job descriptions down to 7 core jobs All in with Agile/Lean and DevOps Teams are assembled and reassembled by workload needs and backlogs 11

12 Digital Acceleration Methods IT Organizational Approach Innovation Methods Applied Technology Investments Made Enables Executional Capability Determines Time to Market Provides Competitive Advantage IDC Visit us at IDC.com and follow us on 12

13 Innovate through Acquisition BMW i Ventures has invested in 16 carrelated start ups in the past several years. Now, we aim to become the leading tech company and innovation driver in the field of mobility. CEO, Harald Krueger IDC Visit us at IDC.com and follow us on 13

14 Innovating From Within TOP STEPS TO DRIVE INNOVATION IN AUSTRALIA Innovation Centers Internal Kickstarters Ideation Retreats 48% 40% 40% Source: IDC DX Leadership Sentiment Study. Australia sample n= 25, March, Q: Please indicate which of the following actions you are using to drive innovation at your organization IDC Visit us at IDC.com and follow us on 14

15 Creating Innovation Centers that Deliver Bloomin Brands Aligned with Needs of Customers and Business Their customers want a more social experience Not ready for Prime Time Evolve concept to messaging platform IDC Visit us at IDC.com and follow us on 15

16 Understand How Technology is Already Being Used Life Activities RESTING TRAVEL LEISURE ENTERTAINMENT WORKING AND STUDYING SOCIAL AND FAMILY DINING AND SHOPPING HEALTH AND SPORTS 43% of health and fitness band users track sleep at night 43% of consumers use intelligent assistants for navigation 12% of consumers primarily get their TV programming through paid online video streaming services 26% of consumers time spent on their own personal PC is for work related activities 17 Hours a week. The average amount of time consumers spend in social and messaging sessions. 34% of consumers willing to share more personal information to get discounts 70% of health and fitness bands consumers use them daily We are really focused on how we can integrate our offerings smoothly and seamlessly into the digital life of our customers. Thom Brenner, BMW Group Vice President of Digital Life Source: IDC ConsumerScape 360 Survey. Document # US , n= 42,328 worldwide consumers. Document #US , n=1122 US consumers Source: 2016 Consumer Internet of Things Survey, March 2016, N=889 16

17 Techniques Employed By IT Organizations to Meet the Needs of Customers DESIGN THINKING VALUE STREAM MAPPING LEAN STARTUP PRACTICES CUSTOMER JOUNREY MAPS 62% 54% 47% 43% Source: IDC CIO Sentiment Survey, June, IT Executives How do you ensure that IT digital transformation work meets business and customer needs? 17

18 Uncovering Moments of Truth HOW VANGUARD S IT ORGANIZATION LEARNS ITS CUSTOMERS NEEDS Adopted design thinking principles John Marcante CIO, Managing Director Vanguard Dispatched developers to learn directly from customer about what they want and need Evolved from client-focused systems design practices (usability testing) to uncovering moments of truth situations where stepping up the client experience would make a significant positive impact and could represent a defining moment in the client s relationship with Vanguard 18

19 Digital Acceleration Methods IT Organizational Approach Innovation Methods Applied Technology Investments Made Enables Executional Capability Determines Time to Market Provides Competitive Advantage IDC Visit us at IDC.com and follow us on 19

20 Dubai is Betting on Transformational Technologies Reinvent the City Embracing technology innovation Making Dubai the most efficient, seamless, safe and impactful experience for residents and visitors. IDC Visit us at IDC.com and follow us on 20

21 Technologies A/P Digital Leaders See as Transformational IoT 61% Robotics 40% Blockchain 35% 3D Print AI 17% 32% Taking the Lead Source: IDC DX Leadership Sentiment Study. APJ sample n= 168, March, Q: From a business impact perspective, select whether each technology is transformational, incremental, opportunistic, or not applicable in enabling your organization's Digital Transformation? IDC Visit us at IDC.com and follow us on 21

22 How IDC Sees Technology Transforming Industry 15% 40% 50% 40% 20% 25% 2019 Usage Based Insurance (UBI) will account for at least 15% of the global vehicle insurance market % of ecommerce is enabled by cognitive personal shoppers and social networks % of large retailers use robots in customer facing roles such as store greeters, or assistants more than 40% of US field service calls in manufacturing are managed by virtual service technicians Blockchain/ distributed ledger technology will be adopted by 20% of trade finance worldwide % of paramedics and emergency rooms use fieldready 3D printers to deliver real-time wound care. IDC Visit us at IDC.com and follow us on 22

23 Once Through the Challenges, You are Cleared to Digitally Transform The Digital Impasse Getting Digital Done Innovation Realization Full Digital Transformation 63% of Australian organizations are still in stage 2 or 3 50% of total technology spending will be data related investments 80% of revenue growth will depend on digital offerings and operations 75% of organizations will have digitally transformed IDC 23

24 Accelerating Your Digital Transformation Execution Speed Advantage IDC Visit us at IDC.com and follow us on 24

25 For More Information Meredith Whalen Twitter LinkedIn IDC 2 5