Delivering on the promise of digital

Transcript

1 Delivering on the promise of digital How traditional frms are successfully going digital

2 Introduction Uber. Facebook. Google. AirBnB. We’re Each roundtable represented a all familiar with the poster companies of 90-minute deep dive into the challenges they the digital generation – who seamlessly face and the opportunities they see, from the harness huge volumes of customer data perspective of the executives themselves. with advanced analytics, cutting-edge technologies, easy-to-use interfaces and “Companies that have embraced a relentlessly customer-centric outlook in digital transformation are 26% order to transform our expectations and more proftable than their industry seemingly reinvent the art of the possible. competitors and enjoy a 12% higher market valuation.” These frms are rightly lauded for identifying new opportunities and raising the bar across This ebook gathers the highlights, challenges every industry, not just their own. But what and learnings from those discussions: over six about those frms born before the advent hours of conversation with 20 senior executives of the digital age? For these organisations, on the impact of digital transformation. digital doesn’t always come naturally. And What does business really think? moving to a digital business mindset – one that not only embraces digital technologies and business models, but that has digital thinking Creating a digital culture and ways of working built into its very DNA – Where do you start on the transformation involves a signifcant amount of disruption. journey? And what are the main challenges? For traditional frms, going digital means Few buzzwords have received the same levels transformation. And that can sometimes of hype as digital transformation in recent years. be a painful process. The journey is often According to everyone from journalists and long and winding. False starts – and false business leaders to analysts and academics, horizons – abound. Mistakes happen. transformation is essential for frms looking to But the opportunities for those who tap into new markets, become more get it right are signifcant. customer- centric and adapt to rapidly changing business environments. According to research from MIT, companies that have embraced digital transformation But it’s not easy. Change of any kind is hard. are 26% more proftable than their So where do the main challenges lie? industry competitors and enjoy a 12% higher market valuation. Improvements For many, it’s about getting that initial in operational performance and customer buy- in for transformation. “The challenge experience can bring meaningful rewards. is that initially nobody wants to try. Everybody knows it’s a good thing to do, And being seen as a digital leader is but they’re apprehensive about putting money critical for attracting the next generation and time into it,” explains Piyush Gupta, Senior of talent to the workplace. Executive Vice President in charge of Business Learning from those who’ve already taken Transformation at India’s Reliance Industries. those frst steps is an important starting point. Which is where this ebook comes in. Oracle recently hosted a series of roundtables with senior executives from some of the world’s leading brands to ask them how they are approaching digital transformation. Oracle Delivering on the promise of digital 2

3 Indeed, whilst tools, talent and skills are Kaz Kempers, Head of IT at ABN Amro in all critical pieces of the digital puzzle, they Hong Kong, agrees. “I think as IT heads we mean nothing if you do not have the desire to all want to be innovators and we all have change in the frst place. “There’s a cultural great ideas. However, often when you try to aspect to digital that goes way beyond push an idea, it’s met with scepticism: it’s the technology,” says Neil Sholay, Head of going to cost too much or it’s too risky.” Digital at Oracle. “It’s a mindset change.” Overcoming that initial resistance is key to And while fnding that mandate is key to success, however. And that means getting the driving the internal transformation needed support of your senior team is critical. Research to make a success of digital, the catalyst from the Project Management institute for that change is universal: improving the shows that up to 43% of project failures customer experience across the board. can be linked back to insuffcient executive sponsorship – and this is particularly true in a “You need to make it seamless and easy transformation program that will likely touch for people,” insists Citi’s SVP and Head multiple (if not all) aspects of the organisation. of Digital Marketing for EMEA and APAC, Aman Chawla. “Everybody is trying to push “It absolutely has to be a top-down out new ways to get their clients to easily initiative,” argues Damion Howlett, Customer engage with them,” agrees Kempers. And for Engagement & Digital Transformation Director Italian-headquartered global banking giant at insurance giant AXA. “This is a big bet for Unicredit, customer-centricity is central the company; we’re going to invest signifcantly, to its digital transformation roadmap. and we’re not going to worry too much about whether we can see a business case because “You have to take a customer-centric approach,” it’s more about business survival. We can’t says Arnaldo Transirico, the group’s Head of just be talking about incremental revenue Business Strategy. “This means that we try or cost savings; it’s about survivability.” to understand what customers might need in the future, and we try to fnd solutions 43% of project failures can that are technology and data-driven.” be linked back to insuffcient The customer experience needs to change executive sponsorship because expectations are changing. “We need to start thinking digitally, because the ABN Amro’s Kempers holds a similar view expectations that our clientele have from us as – but feels that merely getting executive a bank are changing,” suggests Bala Nagaraj, approval is not enough. “The driver has to Digital & Technology Offcer at Commerzbank. be the board,” he says. “But you need to go “We need a change in strategic perspective further than just getting management buy- from the way we currently do things.” in. You need a management mandate. We shouldn’t be fghting for buy-in, we should be “We need to start thinking getting a mandate to change. It’s why a lot of digitally, because the expectations companies have problems embracing the digital future.” that our clientele have from us as a bank are changing.” Bala Nagaraj, Digital & Technology Offcer, Commerzbank Oracle Delivering on the promise of digital 3

4 And in this regard, the Holy Grail for Harnessing digital tools most frms is when digital becomes Once you have that mandate for digital second nature rather than an initiative in change in place, what tools, technologies its own right. When people stop talking and ways of working can help you in terms of digital transformation and on your transformation journey? instead start talking about business outcomes, that’s when you know Legacy is an issue for all but the shiniest of you’re making real progress. start-ups – and for most large organisations with signifcant legacy environments, “A lot of what started as digital transformation transitioning to digital is easier said than from a program perspective is now absorbed done. Many see those existing systems into the organisation as business- as-usual,” and architectures, some of which are explains AXA’s Howlett. “We’ve stopped talking now decades-old, as incompatible with about transformation, and it’s now just how we the more open, agile, fexible ways of incorporate digital as part of those everyday working required by the digital age. business processes: customer engagement, product development, etc. It’s evidence of Nevertheless, overcoming these progress, but there’s still a long way to go.” challenges is key to unlocking the potential of digital – as Zurich’s Head of IT Some are taking it a stage further. Transformation, Daniel Teague, explains. “We’re largely dropping the word ‘digital’ in Oracle now,” says Oracle’s “We have systems that have been around Neil Sholay. “But not because it’s not for 25-30 years, supporting policies that were important. We’re not using it because sold that long ago. Bringing those systems it’s starting to become integral to everything up-to-date so that they are digital-capable is a we do. The concept of digital as a separate massive challenge for us,” he says. “You see thing has become a bit – dare I say it – passé.” that in the types of products that we are able to sell: they’re shaped by the But regardless of the different approaches administrative systems they sit upon.” being taken, the appetite for change amongst both senior executives and organisations in It’s a common complaint and, in response, general is clearly there. “We’re going digital. many frms are moving to new, cloud-based We know that digital disruption is here. architectures that offer greater scalability and It’s happening. There’s no choice about that. So fexibility. Others are embracing APIs and micro- we’re changing our model,” asserts Reliance services in an effort to open up their internal Industries’ Gupta. “It’s a new way of thinking business applications and stimulate innovation. for us.” “The reason we’re talking about APIs, “It’s evidence of progress, but microservices, clouds, analytics, etc. there’s still a long way to go.” is because those are the technologies, Damion Howlett, Customer Engagement the lightweight architectures, that support & Digital Transformation Director, AXA becoming built for change,” says Oracle’s Neil Sholay. “How do you build a business that embraces change and plans for it rather than avoids it? It’s not about technology. It’s about having a culture that is very fast, very agile, and built for change.” Oracle Delivering on the promise of digital 4

5 Enrico Conte, Head of Digital Transformation One way to introduce speed to your digital at BNP Paribas, is taking things a step further. transformation journey is by introducing For him, agile extends far beyond the scope of agile development methodologies. An the IT teams: it’s an organisational imperative. increasing number of frms are using agile “We are using agile methodologies – not just processes to improve the speed at which IT for developing software, but in a wider sense,” projects are rolled out – and the executives he explains. “We are changing buildings, we spoke with were no exception. we are completely changing the workplace. It is much different to the ways we have “About 98 percent of our developments are worked before, more fexible. Everything agile,” says Kaz Kempers from ABN Amro. is changing. Going digital is not just about “About a year-and-a-half ago we decided that having cool mobile apps or faster IT. That’s a everything new should be developed using necessity, but it’s not the whole picture.” agile.” Alejandra Leon Moreno, Director of Digital Architectures at healthcare giant Philips, Indeed, for Conte and others, digital is more tells a similar story. “Agile is pretty much about being smarter about your decision- our only framework for development; we making and the way you operate as a don’t use waterfall anymore,” she says. business. And for that, data becomes key. “Data is an existential threat,” says Teague. 30% to 50% of applications “Those companies that manage to harness are typically built using agile the data that’s out there – not in their own methodologies, according books of business, because actually a lot of to Oracle research that can be old and not very useful, but the wider sphere of social data and other data And whilst not everyone is at the same levels sources – I think that’s the real opportunity.” of maturity when it comes to agile – most frms are taking a more hybrid approach, with “Data is an existential threat.” an average of between 30-50% of applications Daniel Teague, Head Of It Transformation, Zurich currently being built using agile methodologies – it is a critical piece of moving towards a According to Sholay, how you leverage data faster, more digitally-savvy organisation. to develop information-based business models, products and experiences will Nevertheless, there are challenges with defne success in the digital age. “I think applying agile thinking. “I think one of the we need to start looking at going beyond biggest things is training stakeholders to work just how we manage information to how in an agile way,” says Kempers. “It requires we apply it,” he says. “When I come across a shift in mindset – and that goes for senior organisations and boards who are obsessive management too – otherwise you end up with about data and information, they don’t just the same problems you have in normal waterfall manage it and store it. They actually assign developments: scope creep, deadlines not an economic value to their information.” being met, budget over-runs, things like that.” The best frms, he says, go beyond the technology and use data to create entirely new information- based business models and services. And for most organisations, that’s an entirely new way of looking at things. As Citi’s Aman Chawla puts it: “Data is pretty much what differentiates you as a company that’s more predictive as opposed to reactive.” Oracle Delivering on the promise of digital 5

6 “If you want to play to win in this space, then Implementing digital change you’ve got to be very clear with the way you You’ve got the buy-in, you know the want to use information to create more real- tools you want to use. But successfully time, personalised and enriching experiences executing on your digital plan requires for the customer,” agrees Citi’s Chawla. a number of additional steps... Anthony Cabrera from Emery Oleochemicals is even more direct: “The purpose of the Blockbuster. Kodak. Blackberry. Borders. business is to innovate more in the products The past is littered with well-intentioned that we bring to market,” he asserts. frms that failed to react quick enough to the digital revolution – and more importantly, the And key to that is harnessing both people overwhelming need for change. Avoiding and technology to deliver that all-important a similar fate is the number one strategic element: momentum. A recent report by priority for every organisation. So what Deloitte suggests that those born between are the best frms doing well in order to 1980 and 1999 – in other words, the frst capitalise on the digital opportunity? digitally native generation – will make up 75% of the global workforce by 2025. “For me there are some traits that I Tapping into the right expertise, regardless see consistently in digital leaders, of age, will be key to digital success. regardless of the industry, regardless of geography,” says Sholay. “They are very good 75% of the global workforce in at designing experiences, business models, 2025 will be made up of people processes, identities and services. They use information as a strategic weapon, value it as born between 1980 and 1999 an asset and they use it to drive the experience, to create new business models and even “If you really want to be a digital company to sometimes take out their competitors. then you have to attract the right talent,” says And they tend to be very platform- centric. Alejandra Leon Moreno from Philips. “When They don’t think in terms of products, you don’t have the right skillset, it’s really they build a platform and an ecosystem hard to do that type of transformation.” and they go to market from there.” Hesham Rashed, Head of IT Operations at Not only that, the companies that succeed Orange Egypt, takes a similar view. “Having also tend to push the boundaries a lot more. the right skills and the right people to manage digital transformation – having the internal “The frms I’m spending most of my time with capability to work on big data and artifcial aren’t necessarily start-ups,” continues Sholay. intelligence – is key. But this skill is very “It’s not the cool kids. It’s HSBC. It’s Unilever. rare,” he says. What’s more, the challenge It’s governments. Just look at what the Digital of developing those skills in-house is often India initiative is doing right now, it’s really proving a signifcant hurdle to moving forward pushing the nation towards digital. with a true digital mindset. “If you have The British government too, and the Dutch to get a fresh graduate with special skills government. These weren’t the organisations and teach them, grow them from scratch, that were meant to be poster children it really is proving a showstopper for the for digital. But they are the ones that are transformation process in our region.” leading the pack at the moment, precisely because they are trying new things.” Oracle Delivering on the promise of digital 6

7 “The ability to launch something very quickly And with the best will in the world, is a common thing I’ve seen amongst frms developing those internal capabilities is that are being successful in their digital tough. “People want to learn new things. transformation journeys,” suggests Sholay. People want to change. But they have to “Speed is the new essence of business know what they need to learn, how they delivery. Organisations that are able to can change,” suggests Moreno. “I feel move quickly – and that could mean building companies waste so much time in that a product and getting it to market, or just regard; in not providing enough direction.” completely turning their business model around – are the ones that are really pulling away.” But there is hope – not least in terms of the role technology can play in simplifying, rather Reliance Industries’ Gupta takes a similar than adding to, the growing complexity frms stance. “I don’t think there’s a choice. If face. “My advice is this,” offers Sholay. “Don’t you don’t do it fast enough, somebody chase those few data scientists and pay a else will – and then they’re going to take premium. Seek out ways to abstract and the business and the money,” he says. simplify the data, using technology, so that your “You’ve got to decide quickly what you regular staff can use it better. There’ll be maybe want to do. It’s not just about keeping pace: 20 percent of use cases where you need the you’ve got to get ahead and stay ahead.” rocket scientists but drive the rest to where you can simplify and abstract, because it’s The world has never moved so fast – and it will going to be an expensive business otherwise.” never be this slow again. Transforming your business to take advantage of emerging tools, Without doubt, technology – in the form talent and new ways of working is critical to of new platforms, new tools, new ways your success – both today and in the future. of capitalising on the vast swathes of data being generated at every frm – is helping organisations make sense “You’ve got to decide quickly of the digital revolution. But only insofar what you want to do. It’s as it is enabling them to react faster not just about keeping pace: you’ve to changing trends and demands. got to get ahead and stay ahead.” Piyush Gupta, Svp Business “Seek out ways to abstract Transformation, Reliance Industries and simplify the data, using technology, so that your regular staff can use it better.” Alejandra Leon Moreno, Director & Lead Digital Architect, Philips Oracle Delivering on the promise of digital 7

8 What have we learned? Push The Boundaries Oracle’s Neil Sholay offers his top tips for digital success. Changing the organisational mindset is one of the most critical steps. “Those businesses that Take A Design-Centric Approach are highly motivated to change and experiment are the ones that see the greatest success. Are creative-types fnally getting the recognition You change the culture by experimentation. they deserve? “I’m seeing the ability to You learn by doing as opposed to fearing.” design things becoming a core discipline in successful brands. The organisations that are Be Built For Change really good at designing things, experiences, products or business models, those are the When disruption hits, are you ready for it or are ones I think that are going to pull away.” you running around like a headless chicken? If you’re built for change, you can embrace Use Data As A Strategic Weapon the disruption. “That’s why things like digital APIs are incredibly important, because they Data is power, say the experts – but only give you that ability to respond very quickly.” if you understand that asset, place a value on it, and are able to monetise it. “It’s no longer enough just to put it into a data lake; you’ve got to start attaching some www.oracle.com/ideasexecuted kind of economic value to your data.” Focus On Platforms, Not Products Old economy thinking says the more products you build, the more you can sell, the more money you can make. With customers savvier than ever, that has to change. “Don’t think in terms of products; think in terms of platforms and ecosystems. It’s about bringing together users and providers to create a value exchange.”

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