Post on 24-Sep-2020
#innovateUS2019
Master Your Digital TransformationEllen Carney, Principal Analyst, Forrester Research
#innovateUS2019
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Paper Native▪ Quality
▪ Safety
▪ Privacy
▪ Personal
connections
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Digital Native▪ Quickness
▪ Openness
▪ Transparency
▪ Global digital
contacts
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Your customers — and their expectations —
are changing…
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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.
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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?
© 2019 FORRESTER. REPRODUCTION PROHIB ITED.
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?
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Source: Forrester Research “Winning In The Age Of The Customer” report.
Empowered customers have given rise to a new era…
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Willingness to
experiment
Digital/physical integration
Information
savvinessDevice usage
Self-efficacy
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Digital changes consumer
expectations . . .
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. . . changes business
models…
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. . . and threatens
incumbents…
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Amazon has been stalking financial services for years
Source: Forrester Research, “Amazon Invades Banking: Here's What You Should Do” report.
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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?
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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
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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%
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The four rules of digital business.
Source: Forrester report Digital Rewrites The Rules Of Business
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Digital experience
Deliver experiences
that are easy, effective,
and emotional.
The four rules of digital business.
Source: Forrester report Digital Rewrites The Rules Of Business
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Digital operations
Reconceive products
and capabilities to
deliver better outcomes.
Digital experience
Deliver experiences
that are easy, effective,
and emotional.
The four rules of digital business.
Source: Forrester report Digital Rewrites The Rules Of Business
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Digital operations
Reconceive products
and capabilities to
deliver better outcomes.
Digital experience
Deliver experiences
that are easy, effective,
and emotional.
Digital ecosystems
Build platforms and
partnerships to
accelerate and scale.
The four rules of digital business.
Source: Forrester report Digital Rewrites The Rules Of Business
© 2019 FORRESTER. REPRODUCTION PROHIB ITED.
Digital operations
Reconceive products
and capabilities to
deliver better outcomes.
Digital experience
Deliver experiences
that are easy, effective,
and emotional.
Digital ecosystems
Build platforms and
partnerships to
accelerate and scale.
Digital innovation
Continuously improve
and break through at
the digital frontier.
The four rules of digital business.
Source: Forrester report Digital Rewrites The Rules Of Business
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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?
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Culture is a set of shared values
and beliefs that drive behavior
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“Culture is what people do
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“Culture is what people do…when
no one is looking.”
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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
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The right culture removes barriers and
enables you to digitally transform faster
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Traits of strong digital
cultures
Collaborative
Empathetic
Customer obsessed
Agile
Experimental
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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
accelerate and scale.
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.
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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?
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What barriers will stand in your way?
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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
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Common barriers: conservative culture
› How to move:
• Focus on many small
proof points.
• Nurture employee
advocates.
• Celebrate innovation.
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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
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First, build a foundation of five competencies…
Vision &
strategy
Culture
Technology
Structure
Talent
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…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.
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…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.
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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.
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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.
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(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.”
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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.”
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Thank you© 2019 FORRESTER. REPRODUCTION PROHIB ITED.
Ellen Carney
+1-617-613-6328
ecarney@forrester.com