The document discusses how digital transformation is impacting corporate performance. It describes how the digital revolution is being driven by increased information availability, social connectivity, true mobility, and the merging of digital and physical worlds. This is transforming products/services, customer needs, competition, and business models. Companies can improve top-line and bottom-line performance by leveraging opportunities like business innovation, expansion, enrichment, process automation, flexibility, and control. Developing a digital agenda is important to successfully transform and improve corporate performance over time.
4. “In 2005, Blockbuster was the
biggest US video rental store. While
in 2010 Blockbuster went bankrupt,
Netflix passed the 20 million subscriber mark with its on-demand
online rental.”
Digitalization enables firms to
improve process efficiency, become
more competitive and reduce market
entry barriers in most industries.
For example, a wide range of pure
online retailer such as Amazon,
Zalando1 or Mymuesli2 revolutionized traditional retail business models
and found a wide market acceptance.
These pure online retailers have high
cost advantage compared to traditional retailers, since they can save on
personal, facility and administrative
costs. The rise of pure online
offerings also represents a threat for
traditional banks. Bank of Scotland,
a purely online based bank has a
very slight administrative structure
with less staff, physical assets or
related expenditures. Through its
cost efficiency, Bank of Scotland can
provide attractive interest rate to its
clients which surpass traditional
banking rates.
Digitalization increases the importance
of service differentiation and cost
efficiency, raising the necessity for
supplier integration. Since customers
increasingly require full services on
one hand at their fingertips, competitors increasingly become cooperators
and conjointly participate to value
creation. For example, Amazon US
now integrated Facebook Connect in
its recommendation engine to
improve its recommendation results
based on social media information.
Fressnapf3 and Mars integrated their
sales data to optimize demand forecasts and reduce inventory costs.
Also, considering potential workforce
as knowledge supplier, digitalization
transformed recruiting processes,
with Enterprise 2.0. For example,
New organization models
Zalando is a German online retailer selling shoes
Mymuesli is a mass customization website enabling customers to create their breakfast by choosing own ingredients
3
Fressnapf is a German franchise selling pet food
1
2
4
social media is highly vital for talent
identification and brand reputation.
Digitalization also increases the
necessity of a digital organization
which can deliver digital capabilities
to the firm. The digital organization
delivers digital technologies with
expertise to the firm and supports
the transformation process. To transform to the full power of digital,
L´Oréal formed a team of 300 power
users with the goal of providing
digital expertise at strategic points
of the firm. Nissan and Deutsche
Bank extended their IT organization
with a social media sub-unit which
delivers social media opportunities
such as marketing or customers
support to the enterprise.
Thus, digitalization requires new
integrated processes and delivery
models.
9. The impact of DIGITAL TRANSFORMATION on corporate performance
9
10. References
Acision Analysis: “Mobile Advertising 2020 Vision”, 2009
AllFacebook.com: “Facebook and
Amazon Join Forces For Social
Shopping”, http://www.allfacebook.
com/facebook-amazonrecommendations-2010-07,
07/27/2010
Booz&Co Analysis: “The Rise of
Mobile Application Stores: Gateways
to the World of Apps”, 2010
Capgemini Analysis: “Mobile Payments:
Are you Ready for the Early Majority?”
Telecom & Media Insights, 2008
Capgemini Analysis: “Mastering Social
Media: The 21st Century challenge
of consumer information”, Business
Information Management, 2011
Capgemini, The Royal Bank of Scotland,
European Financial Management&
MarketingAssociation: “World
Payments Report 2010”, 2010
eWeek.com: “Smartphone Shipments
to Hit 850 Million Units by 2015:
In-Stat”, http://www.eweek.com/c/a/
Mobile-and-Wireless/SmartphoneShipments-to-Hit-850-Million-Unitsby-2015-InStat-422416/, 01/25/2011
Forrester Research: “European Mobile
Media Forecast, 2008 to 2013:
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New and Challenging Ecosystem”,
2008
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2010: Enterprise Mobility Accelerates
Again”, 2009
Forrester Research: “Welcome To the
Empowered Era”, 2010
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Future in the Empowered Era”, 2011
Forrester Research: “The M2M
Market Is A Blossoming Opportunity”,
2010
Gianvito Lanzolla & Jamie Anderson:
“Digital Transformation”, Business
Strategy Review, Vol. 19 (2), 2008
KPMG Analysis: “The Digital Bubble:
balancing Operational Challenges
with Growth”, Information,
Communications & Entertainment,
2007
Michael E. Porter: “Strategy and
Internet”, Harvard Business Review,
Vol. 79 (3), 2001
Michel Krauch: “Noch kaum Realität:
Wann Unternehmen fit fürs digitale
Zeitalter sind“, http://www.cio.de /
strategien/analysen/2268577/,
03/23/2011
Portio Research: “Worldwide Mobile
Market Growth 2000-2020: Analysis
of the past, present and future
growth of the worldwide mobile
industry”, 2009
Renub Research: “Worldwide Tablet
PC Present and Future Market Scope
(2010 – 2015) and its Impact on
Various Sectors”, 2011
11. About Capgemini Consulting
Capgemini Consulting is the Global Strategy and Transformation Consulting brand of
the Capgemini Group, specializing in advising and supporting organizations in transforming
their business, from the development of innovative strategy through to execution, with
a consistent focus on sustainable results. Capgemini Consulting proposes to leading companies and governments a fresh approach which uses innovative methods, technology and
the talents of over 3,600 consultants world-wide. For more information:
www.de.capgemini-consulting.com
About Capgemini
With more than 115,000 people in 40 countries, Capgemini is one of the world‘s foremost
providers of consulting, technology and outsourcing services. The Group reported 2010 global
revenues of EUR 8.7 billion. Together with its clients, Capgemini creates and delivers business
and technology solutions that fit their needs and drive the results they want. A deeply
multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.
Learn more about us at www.de.capgemini.com
Rightshore® is a trademark belonging to Capgemini.
Contact
Dr. Guido Kamann
Vice President
Phone: +49 151 4025-2115
E-Mail: guido.kamann@capgemini.com
Serdal Sivri
Consultant
Phone: +49 151 4025-0688
E-Mail: serdal.sivri@capgemini.com
12. Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group
DE 1110-17-0078
Capgemini Deutschland GmbH
Karolinen Karree
Karlstraße 12
D-80333 Munich
Tel. : +49 89 9400-0 – Fax: +49 89 9400-1111
www.de.capgemini-consulting.com