Highly DigitalDigital Transformation

Jason Fuller

November 20th, 2012

22

Something happenedat Defrag• What is Defrag?

– Defrag is the first conference focused solely on the internet-based tools that transform loads of information into layers of knowledge and accelerate the “aha” moment

• Defrag 2012 was held November 14th – November 15th in Broomfield, Colorado

• The event’s audience was made up of innovators, entrepreneurs, and investors.

November 2012

33

Sponsors were front and center.

November 2012

44

Many have only worked with two…

November 2012

55

Enterprise companies spoke as well.

• Defrag is not an enterprise show – it is for innovators.

• Showed me that the enterprise now realizes that these innovators matter.

November 2012

66

Those companies are not like these companies

November 2012

77

One company was relevant to everyone

November 2012

88

How do we enable our customers today?

November 2012

99

It will take more then just the cloud.Despite hundreds of billions wasted on failed research and development projects, most market influencers would agree that enterprise software vendors have produced a dearth of innovation over the past decade. Vendors often cite UI re-skins, major functionality additions, integration of acquisitions, technology re-platforms, and weak attempts at faking cloud computing as innovations. In fact, let’s call it what it is. Only a handful of enterprise software vendors have truly innovated. Many enterprise software vendors are fast followers. Most are innovation laggards living off fat maintenance revenue streams. Ask any product strategist where they gain their inspiration and they will all cite advancements in consumer technology; and not peer enterprise competitors.

Wow…http://blog.softwareinsider.org/2010/10/04/mondays-musings-how-the-five-consumer-tech-macro-pillars-influence-enterprise-software-innovation/

November 2012

1010

It will take more investment in what are considered complementing technologies today.

• Ray Wang (CEO of Constellation Research) believes that this is the key to consumer tech success over the next 10 years

• We need to help the enterprise to become “highly digital”http://blog.softwareinsider.org/2010/10/04/mondays-musings-how-the-five-consumer-tech-macro-pillars-influence-enterprise-software-innovation/

November 2012

1111

Most enterprise software companies believe their solution is “highly digital”. It's not enough.• Yes, an enterprise software company creates solutions to optimize

the customer experience and automate operations

• Some argue that they are not creating highly digital value for enterprise customers according to this measure – – From the Harvard Business Review:

“Only nine companies — less than two percent of the Fortune 500 — are what we would call ‘highly digital.’ To be highly digital, by Russell Reynolds’ definition a company must pass four tests: it generates a high percentage of revenues digitally; its leadership (both the CEO and the Board) has deep digital experience; it does business significantly enabled by digital channels; and it's recognized as transformational in its industry.”

“Given the increasing influence, even dominance, of social and mobile technologies, we expect to see a similar evolution take place in more ‘unlikely’ sectors: health care, industrial goods, natural resources.”*http://www.russellreynolds.com/content/do-you-have-digital-leaders-you-need

November 2012

1212

Ok...confused – why isn't enterprise software already creating a “highly digital” experience?

Digital Business Game Plan – identifying new value and growth opportunities

Systems

Connecting products and services to create

new value

Disruption

Creating a new value chain

Design

Human-centered business solutions

Addition

Making legacy business more

valuable

Transformational Value

Incremental Value

Market Focus User Focushttp://anaandjelic.typepad.com/i_love_marketing/2012/11/digital-business-gameplan.html

TODAY

November 2012

1313

Affecting the value chain of enterprise is key to creating a “highly digital” experience.

Digital Business Game Plan – identifying new value and growth opportunities

Systems

Connecting products and services to create

new value

Disruption

Creating a new value chain

Design

Human-centered business solutions

Addition

Making legacy business more

valuable

Transformational Value

Incremental Value

Market Focus User Focushttp://anaandjelic.typepad.com/i_love_marketing/2012/11/digital-business-gameplan.html

The Future

November 2012

1414

Let's explore why the Enterprise is only playing in the Addition Quadrant.• Enterprise benefit on the Cloud primarily because of time to

market delivery of the applications:– They can now handle the global problem easier– They can now offer distributed vendor channel with 24x7 support– They can now handle digital distribution at the edge

None of these are creating new value chains, they fix old problems.

• The Enterprise may not be ready to move from Addition Quadrant to the Disruption Quadrant– The largest Enterprises are ready to be social, cloud, mobile, but

they are still fixing old problems with software today– The customer voice still isn't loud enough...

November 2012

1515

The numbers on Social in the Fortune 500.

• These represent the largest presence in the F500

Corporations by Industry That have a corporate Blog

That have a corporate Twitter account

That have a corporate Facebook page

Aerospace and Defense 7% (1/14) 86% (12/14) 71% (10/14)Chemicals 18% (3/17) 76% (13/17) 53% (9/17)Commercial Banks 30% (3/20) 75% (15/20) 70% (14/20)Food Consumer Products 21% (3/14) 93% (13/14) 86% (12/14)Insurance: Property and Casualty (Stock) 19% (3/16) 81% (13/16) 69% (11/16)

Motor Vehicles and Parts 19% (3/16) 44% (7/16) 44% (7/16)Specialty Retailers 25% (7/28) 86% (24/28) 89% (25/28)Telecommunications 40% (6/15) 80% (12/15) 80% (12/15)Utilities: Gas and Electric 27% (6/22) 73% (16/22) 50% (11/22)

Social Media Surge by the 2012 Fortune 500: Increase Use of Blogs, Facebook, Twitter and More

http://www.umassd.edu/cmr/socialmedia/2012fortune500/

November 2012

1616

The numbers don't always tell the truth

• Many of the CIO's that are most social are not in the top Enterprise companies today

• The "top social CIO's" according to Vala Afshar (CMO and Chief Customer Officer, Enterasys Networks):

Oliver Bussmann -- SAP, @sapcio

Jason Smylie -- Capriotti's Sandwich Shop, @capriottisjasonJonathan Reichental -- City of Palo Alto, CA, @ReichentalPeter Yared -- CBS Interactive, @peteryaredMike Kail -- Netflix, @mdkailBrenda Cooper -- City of Kirkland, WA, @brendacooperBen Grey -- Oak Lawn-Hometown District 123, IL, @bengreyJohn Halamka -- Beth Isreal Deaconess, @jhalamkaSusan Bearden -- Holy Trinity Episcopal Academy, @s_beardenKelly Walsh -- College of Westchester, @EmergingEdTech

November 2012

1717

What are the right first steps to developing a Digital Strategy?• Digital Director or Chief Digital Officer (CIO converted)

– Presents strategic direction, responsible for the budget, and is accountable for the growth in these areas – mobile, social, cloud, analytics, user content.

• The development or purchase of better operational delivery and customer relations applications– Transformational change is culture, but incrementally there

are technology investments that need to be made– Leading to new value chains for the customer's customer,

be disruptive to the consumer

November 2012

1818

What are the right first steps to developing a Digital Strategy?• Get uncomfortable

– No need to leave the old business metrics behind, but you do need to be comfortable with losing some control of the data

– Big data requires that you have service / API driven analytics included in your strategy to engage the freely available customer information out there today

• Broad Data - not just Big Data– Knowing what is on the edge of your customer and product is important -

understand who is a brand promoter and who is not– Decrease the Noise to Signal ratio so you can ensure good data

• Look to pass outside of the box, don't stop at today's boundaries that are holding back the brand– Find the complementary path through better broad dataNovember 2012

1919

Become Highly Digital…

THANK YOU!

Jason Fullervizify.com/jason-fuller

linkedin.com/in/jasonbfuller

November 2012