Master Your Digital Transformation · Source: Forrester's Global Business Technographics Services Survey 2017 Base: 2,809 Services Decision-makers % Agreeing/ Strongly Agreeing Our

#innovateUS2019

Master Your Digital TransformationEllen Carney, Principal Analyst, Forrester Research

#innovateUS2019

© 2019 FORRESTER. REPRODUCTION PROHIB ITED.


Paper Native▪ Quality

▪ Safety

▪ Privacy

▪ Personal

connections


Digital Native▪ Quickness

▪ Openness

▪ Transparency

▪ Global digital

contacts


Your customers — and their expectations —

are changing…


What you’ll take away from our session today

› Understand how customer experience is shaping digital businesses

and transformation strategies.

› Gain perspective on the state of digital transformation and the four

rules of digital business.

› Appreciate the role of culture in advancing—or impeding—digital

business transformation.

› Identify the barriers you’ll encounter and how to best sequence the

way to clear them.

› Answers to your questions.


Our agenda for today

› Why is now the time to extend your existing capabilities through digital?

› How do you identify the opportunities to unlock new value with digital?

› What are the digital cultural requirements needed for success?

› What are the best practices for overcoming the biggest barriers to digital transformation?








Source: Forrester Research “Winning In The Age Of The Customer” report.

Empowered customers have given rise to a new era…

http://www.forrester.com/go?docid=119546


Willingness to

experiment

Digital/physical integration

Information

savvinessDevice usage

Self-efficacy


Digital changes consumer

expectations . . .


. . . changes business

models…


. . . and threatens

incumbents…


Amazon has been stalking financial services for years

Source: Forrester Research, “Amazon Invades Banking: Here's What You Should Do” report.

https://www.forrester.com/report/Amazon+Invades+Banking+Heres+What+You+Should+Do/-/E-RES143116








Few companies have started true Digital Business Transformation programs

Source: Forrester Research.

Objective Short term cost savings Cost savings, functional agility Business growth, sustainable, long-term

competitive advantage

Scope Team Department End-to-End

Ownership Digital teams Head of digital; CMO; CIO CEO

Investment Minimal (several $100k) A few $ millions Significant (up to several $ billions)

Drivers PR, CFO pressure CFO, head of LoB pressure Burning platform, disruptive forces

Operating levers Single, usually technology Technology, processes, skills Culture, structure, metrics, processes,

technology, skills

Tactical Functional End-to-end

Number

of firms

2016 2018


How much do you agree with the following statements about your organization's digital efforts?

Source: Forrester's Global Business Technographics Services Survey 2017

Base: 2,809 Services Decision-makers

% Agreeing/

Strongly Agreeing

Our senior leaders invest in new & emerging technologies to contribute to our digital growth 72%

Our senior leaders believe we cannot best serve value to our customers without a digital experience 68%

Our senior leaders invest in targeted digital education and training for all employees 68%

Digital technology enhancements are the driving force behind our business strategy 66%

We have embedded digital capabilities comprehensively across our organization 65%

We rely on services partners to improve digital operational excellence 65%

We hire employees that contribute to digital business, regardless of what department they work in 65%

We have a documented, formal digital transformation strategy in place 64%

We cannot reach and serve our customers without great digital experiences 64%

We rely on services partners to create a digital customer experience 64%

We measure our digital growth with formal metrics across the organization 64%


The four rules of digital business.

Source: Forrester report Digital Rewrites The Rules Of Business

https://www.forrester.com/report/Digital+Rewrites+The+Rules+Of+Business/-/E-RES137784


Digital experience

Deliver experiences

that are easy, effective,

and emotional.





Digital operations

Reconceive products

and capabilities to

deliver better outcomes.

Digital experience

Deliver experiences


and emotional.





Digital operations

Reconceive products

and capabilities to


Digital experience

Deliver experiences


and emotional.

Digital ecosystems

Build platforms and

partnerships to

accelerate and scale.





Digital operations

Reconceive products

and capabilities to


Digital experience

Deliver experiences


and emotional.

Digital ecosystems

Build platforms and

partnerships to


Digital innovation

Continuously improve

and break through at

the digital frontier.











Culture is a set of shared values

and beliefs that drive behavior


“Culture is what people do


“Culture is what people do…when

no one is looking.”


Poor culture can stop transformation in its tracks

Base: 2,809 US services decision makers who are involved in their company’s digital transformation; Source: Forrester Analytics Global Business Technographics®

Business and Technology Services Survey, 2017

“Which of the following areas could be/are/were the greatest challenges within your

organization for executing its most recent digital transformation?” (top 10 responses only)

18%

19%

20%

20%

20%

21%

22%

23%

26%

31%

Managing communications

Business process redesign

Lack of employee time dedicated to transformation

Lack of technology skills or knowledge

Customer experience design

Company culture

Implementation of new processes and capabilities

Data issues

Technology strategy

Security


The right culture removes barriers and

enables you to digitally transform faster


Traits of strong digital

cultures

Collaborative

Empathetic

Customer obsessed

Agile

Experimental


The right culture is critical for transformation success

Source: Forrester Research

Digital experiences

Deliver easy, effective, emotional

customer experiences.

Digital operations

Focus operations on things customers

value.

Digital ecosystems

Build platforms and partnerships to


Digital innovation

Innovate at the intersection of

experiences and operations.

• Foster customer empathy.

• Value a deep understanding of customers’ needs and ecosystems.

• Recognize and reward digital experimentation and collaboration.

• Embed customer metrics into the scorecard of every employee.

• Foster customer empathy and customer-led decision making.

• Promote internal and external collaboration.

Cultural attributes neededFour rules of digital business

• Encourage speed instead of perfection.

• Have some tolerance for risk.

• Be willing to fail fast and learn from failures.

• Promote collaboration with customers and partners.








What barriers will stand in your way?


Common barriers:

C-Suite out-of-touch (unrealistic expectations or lack urgency)

How to move:

Exec workshops

Digital safaris

JV pilots

Innovation hub in HQ

Paper Natives

Different Business Paradigms

Digital Natives


Common barriers: conservative culture

› How to move:

• Focus on many small

proof points.

• Nurture employee

advocates.

• Celebrate innovation.


Common barriers: unable to prove ROI

› How to move:

• Benchmark old versus new.

• A/B test

• Use outcome metrics.

• Reset expectations.

› Common causes:

• Value equation is out of balance.

• Bad metrics

• No prior benchmarks

• Lack of outcome focus in product

• Insufficient scale

Experience

Expectation

Perceived

value


First, build a foundation of five competencies…

Vision &

strategy

Culture

Technology

Structure

Talent


…then, accelerate your digital thinking…

Digital training

• Employee skills

• Digital awareness

• Design thinking

Codesign and codevelop with customers.

• Feedback loops

• MVP research

Embed security into digital touchpoints.

Organize P&L around customers versus products.

Culture of innovation

• Hackathons

• Innovation challenges

• Align metrics to customer outcomes.

Build a digital ecosystem.

• Use APIs to open connections.

• Source complementary capabilities.


…finally, disrupt your sacred cows

New capabilities

• Data science as core capability

• Partnerships (VCs and universities)

• Design thinking for strategy

Empower employees.

• Ecosystem collaboration platform

• New employee experiences + AI

• Open innovation platforms

Digital products, not projects

• Continuous funding

• Optimize using BI and AI.

• Incubate emerging tech.


Your focus will shift as maturity increases

Extend Transform Disrupt

Strategic focus Extend value of existing

products

Create new revenue models Seek disruptive business

models

Customer value Improved CX Improved outcomes New paths to outcome

Impact on operations Incremental efficiency Operational overhaul for

agility

New operational models,

often competing with legacy

P&L Extend existing Restructure around

customer outcomes

New P&L competes with

legacy

Human capital New skills around CX New skills around data, AI New skills around platform

development, ecosystems

Technology Technology as CX

improvement and cost

reduction

Technology as an enabler of

business growth

Technology as a revenue

model

Business capabilities Incremental change to

existing

Demands new capabilities Reposition core capabilities

as ecosystem components

Source: Forrester Research. “Digitize Your Business Strategy” report.

http://www.forrester.com/go?docid=139591


Summary

1. Empowered customers have given rise to a new era – the Age of

the Customer.

2. Few firms have truly transformed digitally; four rules of digital

business can get customers on the way.

3. Addressing organizational culture and change management is

essential, but won’t be easy.

4. Your strategy will evolve as you mature, but begin by building four

competencies, then evolve your digital thinking; and finally, break

with norms and conventions.



(Former) Head Of Digital Strategy For A US Regional P&C Carrier

“The mother ship is designed to see what’s foreign

and then kill it.”


Head Of Digital CX For A European P&C Insurer

“The cultural shift that we are trying to make come

true is the idea that we need to really start working

as the new organization; otherwise, we’ll end up

like Blockbuster.”

© 2017 Forrester Research, Inc. Reproduction Prohibited

Source: McKinsey Quarterly “Why digital strategies fail” January 2018

“Incumbents moving boldly

command a 20 percent share, on

average, of digitizing markets.

That compares with only 5 percent

for digital natives on the prowl.”


FORRESTER.COM

Thank you© 2019 FORRESTER. REPRODUCTION PROHIB ITED.

Ellen Carney

+1-617-613-6328

[email protected]

Documents

Master Your Digital Transformation · Source: Forrester's Global Business Technographics Services Survey 2017 Base: 2,809 Services Decision-makers % Agreeing/ Strongly Agreeing Our