Digital Business - Accenture

Digital BusinessExternal Material

Becoming a Digital Business is not just digitized marketing or digitized

operations – it will be essential for survival

What is a Digital Business

Copyright © 2013 Accenture All rights reserved. 2

Definitions:

Digital Business: an

organization that incorporates

digital technology to create

revenue and results via

innovative strategies,

products, processes and

experiences.

Digitize: applying technology

to resources. A digitally

enabled sales force is an

example of incremental

digital improvement.

Digitalize: the process for

turning digitized resources

into new sources of revenue,

growth and operational

results that generate a

premium to your business.Internal Focus

External

Focus

Digitize Processes

Revenue

Profit Margin

Digitize

Channels

Digitize Marketing

Digitalize

Operations

Digital

Business

Digital

Transformation

The Digital Age requires a rethink about traditional strategy formulation in

discovering opportunities for our clients

Evolution of technology and business

Copyright © 2013 Accenture All rights reserved.

B T B

In the past, Business requirements

drove Technology that then

enabled the Business to advance…

B

T

Today, technology creates new

opportunities and fundamentally

changes businesses…

Opportunities Imperatives

…with the objective of digitalizing

processes and making products

available through digital channels.

…and transforms the business and

operating models of almost every

company in every industry.

3

B T= Business = Technology

Key technology trends combined with enabling technologies presents

dramatic opportunities for new players and real threats in all industries

Key trends and technologies


The possibility to virtualize and consume infrastructure, platforms and

applications as a service enables new levels of scalability, flexibility and

responsiveness.

Social media and collaboration technologies enable new ways and drive

expectations of interacting, personalization and building relationships within

and beyond the organization

Technologies such as in-memory computing and appropriate information

architectures which enable real-time decision making based on analytics

Analytical methods and access to the right data enable the generation of new

insights and decision-rich information. Big Data approaches allow to make

use of the rapidly increasing amount of data from multiple sources

Connected devices of all kinds and cheap sensors integrated nearly

everywhere constantly create large amounts of data that need to be managed

effectively. This also enables new ways of automated and personal interaction

The uninterrupted trend towards using mobile devices impacts all areas of

business and personal live by transforming how people interact, consume

information and services, collaborate, and work

Cloud

Social media/

Collaboration

Analytics/

Big Data

Data Velocity

―Connected

Everything‖

Mobile

Digital Business results in new challenges and new roles for Corporate

Leaders as well as the speed of decision making required

Changing role of Corporate Leaders (CEO, COO, CIO)


COO

CIO

› How do I use digital to align the organization for increased speed to market

and more flexibility?

› How can I deploy digital solutions to improve business process efficiency?

› Does digital change the level of vertical and horizontal integration?

› Where does IT help create new business models & opportunities?

› Does the IT organization have the capabilities to facilitate innovation and

enable the business strategy?

› Where do I need to invest in order to be ahead of the technology curve?

CEO

› What should I do about digital disruptions in my industry?

› How does digital help me grow the business, enter new markets or

strengthen the position?

› How does it threaten my value chain ecosystem of customers, suppliers,

business partners?

Examples of big disruptions

that requires actions from

Corporate Leaders:

Questions for Corporate Leaders

Competitor can reduce

their operating costs by

10 – 15% through

digitalized operations

New competitors are

emerging from

previously unrelated

industries.

The skills required by

leaders and

organizations to

compete are different

5

Changing role of Corporate Leaders (CFO, CDO, CMO)


CDO*

CMO

› Which roles and responsibilities does a CDO have in the new era?

› How does digital strategy integrates with business & IT strategies?

› How digital opportunities can be used to innovate the business model and

increase market share?

› Does our marketing strategy exploit the opportunities of new technologies to

improve our digital consumer value proposition?

› Do I have sufficient insights about how customers use digital technologies?

› How does digital facilitate customer retention?

CFO

› How can digital help me to improve financial performance?

› Where is the profitability of our products/services threaten by digital e.g. new

market entrants with much lower costs structures?

› How can I better control the business with real-time information?

Examples of big disruptions

that requires actions from

Corporate Leaders:

Questions for Corporate Leaders

Competitor can reduce

their operating costs by

10 – 15% through

digitalized operations

New competitors are

emerging from

previously unrelated

industries.

The skills required by

leaders and

organizations to

compete are different

CDO = Chief Digital Officer 6

Digital Business results in new challenges and new roles for Corporate

Leaders as well as the speed of decision making required

7

Value tree of a digital business


Metrics Improved

Value of

Digital

Business

Growth

through

Digitalization

(Revenue levers)

Efficiency

through

Digitization

(Cost optimization)

ObjectivesValue levers Investments in new Digital Capabilities

New

customers

• Analytics-driven and dynamic customer segmentation

• Improved digital customer experiences linked to segments

• Faster time to market with targeted offerings

New &

optimized

products &

services

• Monetize information assets

• Create new digital products, services and offerings

• Rapid prototyping with customer interaction

• Integrate products and services into solutions that have digital components

• Convergence of products enabled by digital technologies

New &

optimized

channels

• Omni-channel marketing, selling and servicing provide seamless integration

across channels

• Customize digital channels to customer segments and experience to

optimize the cost-to-serve levels

New pricing

and earnings

models

• New earnings (subscription, licensing, credit, “freemium”, etc.) models

• Rapid prototyping of earnings models on sample customers

• Combine portfolio of digital and non-digital products and services with

customized earnings models and pricing

New cost

models

• Analytics-based commercialization (marketing, commissions, trade

promotions) to target investments and track returns

• Customer self service

• XaaS opportunities to digitize the technology and infrastructure assets

Supporting technologies: Analytics, Mobility, Cloud, Virtual networks, Social, Sensors

• Customer acquisition/churn

• Sales conversion

• Customer profitability

• Cross-sell and Up-sell

• Decrease time to market

• Revenue per customer

• Product development costs

• Portfolio management costs

• Cross-sell and Up-sell


• Customer satisfaction

• Customer profitability

• Cross-sell and up-sell

• Decrease % of time spent on

non-selling activities

• % handle by self service

Process

efficiency

• Digitized and automated process processes

• Improved process governance & efficiency through real time insights

Asset

utilization

• Optimized production/inventory planning based on demand forecasting

• Data-based preventive asset maintenance

• Task automation optimization through digital technology such as sensors

Agility• Utilize remote access and collaboration and mobility tools for employees

• Integration with partners in digital ecosystem to optimize service delivery

• Virtual organizations enabled by mobility and seamless cooperation

• Customer satisfaction

• Process efficiency

• Production costs

• Inventory costs

• Employee productivity

• Customer support costs

• Training costs

Challenges Digital Value Levers

• Underutilized assets (down time, demand)

• Competitors offer significantly lower price

• Exclusive IP has limited market value

• Licensing is not part of our business model

• Customers abandoning non-digital channels

• Sales and serve costs consuming margins

• Current customers are not future customers

• Customers valuing experience over product

• Today‟s data is not tomorrows insight

• What matters, when we know everything?

• Current products face limited future potential

• New product migration paths are uncertain

• Customers gaining control of our brand

• Technology performance equals brand promise

• Limited availability of business services

• Weakest link limits ability to change and scale

• Our rate of innovation falling behind the market

• Collaboration trapped between silos

• Lead times for internal mobilization increasing

• Upgrading skills without downgrading focus

Example Target KPI’s and Metrics

• Customer interest, participation,

satisfaction, retention and referrals


• Purchase frequency and size

• New product revenue contribution

• Sales & channel productivity

• Product portfolio yield

• Customer satisfaction – net promoter

• Brand awareness and reach

• License revenue growth

• Share of IP-based products

• Increasing variable to fixed expense

ratio

• Greater ROA

• Greater margin contribution from new

products and improved operations.

• Reduced time to results & profitability

• Retention of „best people‟ and skills

• Reduced restatements and

• Increase in fact based decisions

• Reduced activity cost and cycle time.

• Rising EBITA per employee

• Lower unit infrastructure and

operations costs

Leaders should recognize specific challenges which can be addressed

through digital value levers

Customers and their

experiences

Product and Service

features and functions

Sales and service

channels

Brand equity and

perception

Trading partner

relationships & alliances

Intellectual Property and

Licensing

Operational scale.

Facilities and locations

Information and

understanding

Organizational agility and

workforce engagement

Innovation and

collaboration

Reve

nu

eO

pe

rati

on

sB

ran

d, IP

an

d

Inta

ng

ible

s


Digital technologies impacts industries in different ways and presents

unique as well as shared opportunities across industries

Digital examples by industry


Industries 1. Digital Revenue

Growth

2. Cost-efficiency through

digitization

3. Digital Business

Resources • Chemical company provides

online portal for partners to

manage orders for a fee

• Energy companies apply analytical

methods to improve asset

maintenance resulting in reduced

number of unplanned downtimes

• Chemicals extend their portfolio

with solutions combining

classical products with value

adding services (e.g. BASF)

Communications,

Media and

Technology

• Telco partners with retailers

(for a fee) to push offers to

shoppers who opt-in

• Media companies digitize their

operational value chain resulting in

time improvement and reduced

costs (e.g. Warner Bros.)

• Telcos extend their business

model by integration mobile

payment solutions (e.g. African

mobile payment trend)

Financial Services • Retail banks offer additional

services like mobile payment or

advanced wealth mgmt. for

normal customers

• Retail banks optimize their process

and leverage customer self service

opportunities (e.g. BBVA artificial

intelligence supported self service)

• Crowd-funding based loan

options, allowing retail banks to

reduce their risk exposure (e.g.

kickstarter)

Products (divide

into Automotive,

Pharma, IE, Retail

& CGS)

• Office supply company sells its

products through its

ecommerce platform

• Inventory optimization due to

analytical driven demand forecast

and supplier integration in value

chain (e.g. WalMart)

• Individually customized

products instead of mass

production (e.g. cereals

customization via webportal)

Health, Life

Sciences and

Public Service

• Pharmaceutical company uses

analytics to customize products

• Public services reduces process

costs by digitization of

administration processes and

customer self service options

• Life sciences extends business

into lifestyle nutrition supplies

based on individual analytical

results

9

10

Accenture‟s Digital Business Strategy Offering addresses the issues,

decisions, actions and investments required in creating a digital

business

Digital Business Strategy Framework & Critical Questions


Vision, Opportunities and Outcomes

Digital Operations & Platforms

Digital Products,

Services and Offerings

Customer

Experiences

and

Workforce

Abilities

Digital

Ecosystem

and

Business

Process

Operating

Model

and

Future of Work

Information and Applications

• What are digital‟s disruptive opportunities,

threats and outcomes?

• How will enabling technologies and

trends support differentiation and

sustainable growth?

• What are the changes digital creates in

go-to-market and business economics?

• What combinations of strategic

information, interactions and ability drive

compelling customer experiences?

• Who has the required capabilities

internally and externally?

• What is the most effective structure to

drive creativity, collaboration and

adaptability?

• What is the most valuable information

and where will it come from?

• What are the requirements for a digital

platform delivering efficient speed and

scale?

Innovation and IP

Bu

sin

es

s M

od

el

Op

era

tin

g M

od

el

Accenture is a Digital Business partner that can set the right path and

accompany an organization in every step of the journey

Accenture‟s Value proposition


Your Digital Business Journey

Plug-in

capabilitiesSet the

direction

Yo

ur

Org

an

iza

tio

nA

cc

en

ture

You need a digital

business partner

that can set the

right strategy for

your organization,

based on an

understanding of

your industry and

the available

technologies.

A partner that you

can leverage key

capabilities from

that seamlessly

integrate into your

business to launch

your Digital

Business faster and

more effectively.

A partner that is

connected to and

can connect you

with all the different

parts of your

ecosystem.

A partner that has

the breadth of

expertise,

footprint and

people to bring

your digital

business to scale,

no matter what your

ambition.

Ecosystem

Scale

12

Accenture‟s assets and experiences supports every part of the journey

and accelerates delivery while reducing risk


• Accenture provides actionable

recommendations

• Accenture is a trusted partner with senior

leadership from strategy design to detailed

execution- transformation

Set the directionGrounded in expertise across

40+ industries,

163,000 industry SME’s

across 54 countries

• Dedicated practices that provide

comprehensive offerings

• History of successful partnerships in the

marketplace with clients

Plug-in

capabilitiesIn Cloud, Analytics, Big Data,

Mobility, Social and Interactive

Marketing

• Global presence in nearly all industries and

markets to meet the region-specific strategy

and operating requirements of 4,000+ clients

• As one of the largest system integrators and

technology consulting firms globally,

Accenture has relationships across almost

every industry‟s ecosystem that can be

leveraged for optimized strategy, execution

and ongoing operations

Ecosystem Relationships across almost every

industry’s ecosystem

270,000 consultants located

across 200+ cities

Scale

Accenture’s capabilitiesHow Accenture can help

13

Accenture is unique in covering the business & technology components of a

integrated digital strategy from strategy to execution, incorporating agility in

simulations, prototyping and delivery of business outcomes

How Accenture‟ approach is different


Business

Model

Technology

Model

Operating

Model

PrototypeOutcome

Vision

Capability

Direction

Opportunity

Simulation

Proof of

Concept

Pilot

Solution

Minimum

Viable

Solution

14

Proctor & Gamble uses real-time decision-making to drive business

success supported by real time analytics

Case Study: P&G – Real Time


What P&G Did

• Identified 88 business process covering $79bn of the

company‟s operations

• Realized that a time gap between information origination

and application to business decision hinders decision

making

• Applied analytical models to compress the time needed

for decision making

• Scaled analytical decision making by giving over 50,000

employees access to their customized “Decision

Cockpit”

• Focused on how to best apply and visualize information

instead of discussion if the information is true

Outcome

Reduction of $900m in cost over 8 years

15

BASF grew a traditional business through digital value-adding solutions

Case Study: BASF – Growth by digitalization


What BASF did

• Identified the need of customers to better

understand the application options of agro

chemicals

• Developed an mobile online tool which was

enabled the digital disease identification of

plants in the field

• A direct connection between the most applicable

BASF products and the disease is then

established to treat the affected plants

Outcome

Increased sales and market share in South

America

Thought Leadership (1/2)

Thought Leadership

Topic: Cloud computing

Where the Cloud Meets Reality: Scaling

to Succeed in New Business Models

16

Topic: Multichannel marketing

Seamless Multichannel

Retailing—Customize. Connect.

Converge. Collaborate

Topic: New role of CMOs

From Marketing

Communications to Experience

Engineering: The New Role for

CMOs in the Digital Era

Topic: Social Networks

Influence at Scale: How Companies Can

Harness the Power of Social Networks

Topic: Digital Consumer

Winning and Retaining the Digital

Consumer


http://www.accenture.com/us-en/Pages/insight-cloud-meets-reality-scaling-succeed-new-business-models.aspx




http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Seamless-Retail-Overview-Brochure.pdf

http://www.accenture.com/us-en/Pages/insight-seamless-multichannel-retailing.aspx







http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Marketing-Communications-Experience-Engineering.pdf


http://www.accenture.com/us-en/Pages/insight-marketing-engineering-new-role-cmos-digital-era-summary.aspx




http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Influence-at-Scale.pdf


http://www.accenture.com/us-en/Pages/insight-influence-at-scale-social-networks.aspx

http://www.accenture.com/us-en/Pages/insight-influence-at-scale-social-networks.aspx

http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Winning-and-Retaining-the-Digital-Consumer.pdf


http://www.accenture.com/us-en/Pages/insight-winning-digital-consumer.aspx

http://www.accenture.com/us-en/Pages/insight-winning-digital-consumer.aspx

Thought Leadership (2/2)

Thought Leadership

17

Topic: Mobility

The New Age of Mobility

Topic: From Analog to Digital

How to transform the business model

Topic: Analytics, Marketing

A new path to growth: How to

stay a step ahead of changing

consumer behavior

Topic: Mobility, workforce

Embracing the consumer IT revolution

– at work

Topic: Ecosystem strategy

Cross-industry ecosystem:

growth outside the box


http://www.accenture.com/SiteCollectionDocuments/PDF/New_Age_of_Mobility.pdf


http://www.accenture.com/us-en/Pages/insight-the-new-age-of-mobility-summary.aspx

http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2012-from-analog-to-digital-how-to-transform-business-model.aspx


http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2013-new-path-to-growth-stay-ahead-of-changing-consumer-behavior-marketing.aspx




http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2012-embracing-consumer-information-technology-revolution-at-work.aspx





http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2013-cross-industry-ecosystems-growth-outside-the-box.aspx




The time for companies to become Digital Businesses is now - what is

your strategy?

Digital Business Strategy

18

Digitalize Processes

Digitize

Channels

Digital

Transformation

The industry disruptions are happening.

New growth opportunities are available.

Your competitors are adapting.

What is your Digital Business strategy?
