Digital Transformation.pdf

6 de Dec de 2022

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Digital Transformation.pdf

  1. Digital Transformation
  2. 2 • What is DX and why it is needed • Current Business Environment • Examples of Successful DX • Technologies for DX • Tools for DX • DX Framework (what to transform) • DX Roadmap (how to transform) • Measuring DX • Common Challenges for DX Agenda
  3. Why Digital Transformation is needed
  4. 4 Market leader in photography Invented the digital camera - 1975 $3B Income, 15K Employees - 1990 Bankruptcy in 2001
  5. 5 Case Study: Kodak What went wrong in the case of Kodak? • Did not appreciate the pace of disruption • Focused on evolution but competition on revolution • Too much invested in traditional photography • Tried to be perfect instead of being first • Did not appreciate what customers really wanted
  6. 6 Best Mobile Phone Brand in 1998 Nokia 1100 best-selling phone - 2003 $4B Profits in 1999 Sold to Microsoft in 2013
  7. 7 Case Study: Nokia What went wrong in the case of Nokia? • Did not appreciate the pace of disruption • Focused on evolution but competition on revolution • Tried to be perfect instead of being first • Did not appreciate what customers really wanted
  8. 8 Business Disruption Examples  Newspapers  the web  Phones  Apple  DVDs  Streaming  Books  Amazon  Photography  mobile phones  Retail  Online shopping  Music sales  YouTube, Spotify  Television  Netflix  Automotive industry  Tesla  Airbnb  Hospitality What do all these disruptors have in common? They are ALL digital disruptors
  9. Current Business Environment
  10. 10 Current Business Environment: Lean and Agile Practices  Optimize the whole • Make continuous improvements in a business operation • Remove ineffective practices and unprofitable products  Eliminate waste • Waste is anything that adds more cost but does not return more profit  Deliver fast value to customer  Assure quality at the source • Correct mistakes when they occur  Create knowledge
  11. 11 Current Business Environment: Social Responsibility  Customer choice criteria are not just product-focused  Serve interests other than that of shareholders • Responsibility to employees • Responsibility to consumers  Must protect the interests of the society • Comply to ethics • Comply to legislation  Do not damage the environment • Do not waste resources • Adopt eco-friendly technologies
  12. 12 Current Business Environment: Innovation  Companies that don’t produce new products and services do not look relevant.  Business differentiation • Standing out from the pack ensures the business can survive the flooding of the market.  Customers know that requesting extreme services is normal • There will always be a company which offers whatever is asked for.  Innovation should be a top priority for companies • Requires investments in time, resources, changing the ways of thinking
  13. 13 The S-Curve of Technological Innovation  Innovation has a shorter lifecycle.  The S-Curve of Technologies and Operating Models based on them.  Sooner or later, all technologies become obsolete • In the past, “sooner” was a 1-2 decades, and “later” was much longer. • Today “sooner” is 3-5 years .
  14. 14 In Summary: why DX is imperative  Customers want everything, they want it now, and they can instantly see who else has got it.  New companies appear in short spaces of time and disrupt the business area.  Employees see the progress taking place elsewhere and may feel trapped in a legacy environment.  Any type of waste raises the cost for no good reason and puts the company in a disadvantage.  Innovation is so rapid that if the company is not up-to-date, it appears outdated. “It’s not the strongest of the species that survives, nor the most intelligent; but the one most responsive to change”. Charles Darwin “Change is the law of life. And those who look only to the past or present are certain to miss the future”. John F Kennedy
  15. What is Digital Transformation
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  18. 18 Digital Transformation: DX  Many definitions exist. Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.  So:  digitize everything with a purpose,  and always ask how to improve
  19. 19 Terminology: Common Misconceptions the process of converting information from a physical format to digital one. improving processes by leveraging digital technologies and digitized data implementing a series of technological and human changes to restructure the existing business models, thereby leading to new opportunities and values for the company Example:
  20. 20 Digital Transformation Benefits Improved efficiency and productivity Improved decision making Improved customer satisfaction Increased agility and innovation Better employee engagement/culture Reduced costs and increased profits
  21. Examples of Successful Digital Transformation Projects
  22. 22 DX Example: Starbucks  Deep Brew: an AI platform that is used for continuous innovation and provide a world-class experience for coffee lovers • It can is used to find the best locations for its new restaurants. • AI tool analyzes data (e.g. population, income levels, traffic, competitors, etc.) • After analysis, the tool can create forecast revenues, profits, etc. • Also connected with the Starbucks Rewards loyalty program which provides a “radically personalized” experience • AI analyzes preferences, purchase history, ordering habits, even weather, etc. • Starbucks app or on the drive-thru menu can present customers with thoughtful, personalized choices
  23. 23 DX Example: IKEA  Redefined DIY • Acquired TaskRabbit • home delivery and furniture assembly • service added valuable new data streams of customer info the company could use to develop new products and target its advertising and services more effectively to digital natives  IKEA Place • An augmented reality tool • enables you virtually "place" IKEA products in your space
  24. 24 DX Example: LEGO  LEGO was on the verge of bankruptcy in 2004. They embarked on a massive digital transformation program aimed at diversifying their revenue streams • invested in movies • invested in mobile applications and games that blended the physical and digital worlds • Example: offered a 3D design platform (Digital Designer platform) • involve LEGO Fans in the design of company's future products
  25. 25 DX Example: NIKE  Nike, felt they were starting to become sluggish and outdated. • focused on more powerful data analytics • created stronger digital marketing campaigns (story telling) • updated e-commerce strategy (direct customer sales and personalization) • implemented a number of digital technologies • Nike Fit App • scans your feet, measures their full shape, and determines perfect fit shoes • Nike+ App • feedback on their performance, expert advice from professional athletes • special pricing and promotions on Nike purchases • Nike uses customer data to provide targeted promotions and rewards
  26. 26 DX Example: Domino’s  The pizza chain evolved from near bankruptcy into one of the most advanced companies in the restaurant business • Personalization • build your own pizza – give it a name • Various ordering techniques • website, mobile, smartwatch, smart TV, SMS, Twitter etc. • Fast ordering • place an order while waiting at stoplight (20 secs) • customers can save orders they get most frequently • Real-time Tracking • helps customers know when the order will arrive
  27. Technologies for Digital Transformation
  28. 28 DX Technologies: Cloud Technologies  The distribution of on-demand computing services, such as applications, storage, and processing power, through the Internet  It is considered a key DX technology. Ιt provides: • higher flexibility and mobility • enhanced security • cost efficiency • increased scalability and agility
  29. 29 DX Technologies: Internet of Things  The interconnection via the Internet of devices embedded in everyday objects, enabling them to send and receive data • Devices acquire real-world data via sensors • Connect to the cloud to transmit data and/or receive commands • Data is stored in cloud and analyzed to create insights which are presented to user • Command the “things” to perform specific tasks based on insights  IoT is regarded as one of the most important DX technologies
  30. 30 IoT Categories  Consumer IoT products (smart)  Smart cities
  31. 31 IIoT Manufacturing Use Cases  Flexibility in Automation • Production Line Customization/Configuration • Flexible integration of new tech (e.g. 3D print)  Predictive Maintenance • Big data analytics over multiple sensor data • Automatic estimation of RUL (remaining useful life) • Maintenance at best optimal time • Reduced downtime, increased safety
  32. 32 IIoT Manufacturing Use Cases  Zero Defect Manufacturing • Data collection from production line and supply chain • Main goal: why a defect/error happened • Proactive handling of errors and defects  Supply Chain Optimization • Flexibility across the supply chain • track location, movement, ETA; monitor storage or container conditions of products/materials; locate storage product in storage, etc.
  33. 33 DX Technologies: Big Data Analytics  Big Data is a term that describes collections of data that are too large or complex to be analyzed using traditional means • Sources of data: business processes, application logs, networks, social media, sensors, mobile devices etc.  Big data analytics can process huge and diverse amounts of data to extract the right info for a particular business to help them model their strategies and take relevant/better decisions  Real World Big Data Examples • discovering consumer shopping habits • finding new customer leads • monitoring health conditions from data from wearables • predictive inventory ordering
  34. 34 DX Technologies: AI and Machine Learning  AI, the field dedicated to making machines smart.  Machine learning is a division of AI that allows systems to learn and improve from experience.  Machine Learning algorithms help the systems to identify patterns in a given data and make predictions.  Machine Learning Applications: • Image and video recognition • Sentiment Analysis • Voice Recognition • Product Recommendation – Example: NetFlix
  35. 35 DX Technologies: Robotic Process Automation  Technology that employs bots to automate business processes that are rule-based, structured and repetitive.  RPA: • reduces costs • prevents human error • takes the burden of performing mundane tasks and helps employees focus on work that demands their expertise  Examples: • Call center operations • Help desk • Onboarding employees
  36. 36 DX Technologies: Augmented Reality  AR offers virtual elements as an overlay to the real world in real time.  It provides more seamless connections between the real world, the computer world, and the human world.  Not to be confused with Virtual Reality • produces an entirely computer-generated simulation of an alternate world at any time (e.g. the Matrix)  Exciting potential in the future of gaming, marketing, e-commerce, education and many other fields
  37. 37 DX Technologies: Digital Twin  Like AR, digital twins reduce the gap between physical and digital worlds  A digital copy of a physical object or process that uses real-world data to create simulations that can predict how a product or process will perform  Benefits of a digital twin differ depending when and where it is used.  Examples: • manufacturing, energy systems, healthcare, hotels etc.
  38. 38 DX Technologies: the top Cloud Technology IoT Augmented Reality Big Data AI and Machine Learning Robotic Process Automation Digital Twin Mobile Social Media
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  40. Tools for Digital Transformation
  41. 41 DX Tools: Cloud Storage • Cloud storage solutions are crucial for companies looking for superior information management. • Advantages of cloud storage: • cost efficiency • increased scalability • increased accessibility • enhanced security • Examples: • MS OneDrive, Google Drive, Dropbox
  42. 42 DX Tools: Collaboration Tools • Work has become more agile and more collaborative. • A digital workplace is required to unite content, people and applications on a single platform. • It’s impossible to ignore cloud solutions as the right answer. • Examples: • Microsoft Office 365 (Word, Excel, Teams, Outlook, OneDrive etc.) • Google Workspace (Gmail, Docs, Drive, Calendar etc.)
  43. 43 DX Tools: Communication Tools • Good communication is a prerequisite for the success of any company as it impacts productivity. • Old solutions (email) don’t cut it any longer. • Communication platforms centralize all important information and provide a single source of truth. • Examples: • Instant messaging: MS Teams, Slack • Enterprise social networks: Yammer, Jostle
  44. 44 DX Tools: Project Management Tools • Successful project management means greater efficiency. • Important to have the right digital project management tool and ensure the tool is widely adopted. • It will lead to more productive employees, successful projects and happy customers. • Examples of well-known project management solutions: • Jira, Trello, Asana, Monday
  45. 45 DX Tools: Content Management Tools • Most companies use a solution in the form of a Content Management System (CMS). • Examples: WordPress, Drupal, Joomla, Prestashop • A regular CMS offers a way to: • 1) store data, 2) interface for CRUD, 3) display data • The problem: content can be distributed to multiple channels (omni-channel) and a seamless customer experience is needed • Channels: website, mobile, smart watch, smart TV, VR glasses, airport huge screen, car screen etc. • Solution: Headless CMS. It offers: • 1) store data, 2) interface for CRUD • Examples: Contentful, Strapi, Contentstack
  46. 46 DX Tools: SCM, CRM, ERP Tools SCM CRM ERP Main focus: supply chain management customer relationships complete business solution Benefits • improved visibility of the product lifecycle • forecasting and trending • process automation • seamless deliveries/ returns • increase sales • improves customer satisfaction • prioritizes customers • manages loyalty programs • customer support • gain business insights, planning, forecasting • streamline processes • enhances productivity • improves collaboration • reduces human error Who uses it Anyone in the SC Front-end (sales, marketing) Back-end (accounting, HR) Who is it for Manufacturers, retailers Practically every business, no matter size or scope Practically every business, no matter size or scope Software: Does not cover other areas Does not cover other areas Scalable and customizable Example SAP SCM, Oracle CSM SalesForce, Zoho, Apptivo Oracle Netsuite SAP BusinessOne
  47. 47 DX Tools: Business Intelligence Tools • Data-driven decision making is increasingly becoming the norm in modern enterprises. • Business Intelligence (BI) is an umbrella term that refers to processes, methods and SW used to collect, store and analyze data from business operations and activities. • Big Data Tools: • Store large amounts of unstructured data and process them to create insights • Examples: Hadoop, Spark, Hive, Presto, Cassandra • Business Intelligence Tools: • Enables businesses to collate, analyze and visualize data • Examples: Microsoft Power BI, Tableau, Qlik
  48. 48 DX Tools: Digital Adoption Platforms • Complex and unfamiliar software can cause negative effects, such as user burnout, dissatisfaction, and poor performance. • A relatively new software segment that helps employees learn any application while they do their job. DAPs promote digital adoption. • Benefits: • Reduced onboarding time • Reduced burden on IT support • Deeper insight into what works, what doesn’t, and why • Lowered user resistance to new software technology • Increased user satisfaction and higher morale • Examples: Pendo, WalkMe, Whatfix, Appcues
  49. 49
  50. What to Transform
  51. 51 What to Transform: Business Processes  A business process is a structured set of activities that produce a result. • Manufacturing: order processing, production line, quality assurance, maintenance • Finance & Accounting: invoicing, billing, payroll, budgeting, expense management • Human resources: hiring and onboarding, performance management, L&D  Processes should be carefully designed and continually optimized to be effective and efficient.  Process transformations address a specific area of the business or have a specific objective. • e.g. improve customer experience, reduce cost, increase quality etc.
  52. 52 What to Transform: Business Processes  Well-managed processes convert revenue into profit.  Rethinking of ways things are done.  Questions to address: • What are the core processes that we perform in our company? • Which ones can be automated? How can they be automated? • How are/can the processes be interconnected? • How can we use collected data help improve these processes? • How can we manage across ‘silos’? Core Process Automation Connected Operations Data-driven Decisions
  53. 53 What to Transform: Business Processes Problems with silos  Jargon to indicate ‘how a group works’ • a group is said to be ‘working in a silo’ when its members find themselves working in a disconnected manner from other groups  Problems with silos • bottlenecks • slow handoffs • miscommunication • tooling mismatches • delivery errors • excess rework • conflict (usually the finger-pointing type)
  54. 54 What to Transform: Employee Experience  Employee experience is the overall emotional encounter of the employee through every aspect of their journey in a company.  The main drivers for employee experience include: • Having access to the right tools and tech to fulfill their jobs • Being given the opportunities for career development and training • Getting involved in corporate social responsibility initiatives • Having a fair degree of flexibility in their work and a customized workspace
  55. 55 What to Transform: Employee Experience  Employees can be either the greatest inhibitors or the greatest enablers of transformation success.  Companies have begun to focus on the employee experience as intently as they do on the customer experience • employees learning additional skills to be better equipped to do their job • required as digitalization adds further business ability in existing domains • employees learning a new set of skills in order to perform a different job • will be required as automation and digitalization takes over repetitive tasks • how digital technologies can augment employee productivity and performance • enabling people to work faster, smarter, and more safely Up-Skilling Re-Skilling Augmentation
  56. 56 What to Transform: Domain  New technologies are redefining products/services providing opportunities to unlock whole new businesses beyond currently served markets.  Examples: • Amazon (online retailer): • added its own streaming platform (Amazon Prime) • added Amazon Web Services (AWS), now world’s largest cloud infrastructure • Microsoft did the same
  57. 57 What to Transform: Business Model • Some companies are pursuing digital technologies to transform traditional business models. • Business model transformations are aimed at the fundamental building blocks of how value is delivered in the industry. • Examples: • Netflix' reinvention of video distribution • Apple's reinvention of music delivery (I-Tunes)
  58. 58 What to Transform: Customer Experience  Customer experience (CX): customers’ holistic perception of their experience with your business or brand • the result of every interaction a customer has with your business • everything you do impacts customers’ perception  CX is the ultimate battleground for many companies. CX is actually the key to success. Customer Network Model Mass-Market Model Awareness Consideration Preference Action Loyalty Advocacy
  59. 59 What to Transform: Customer Experience  The focus on customers has not radically changed but the elements needed to create compelling experiences have changed.  Compelling experiences are easy to recognize but they are quite hard to design/deliver.  Creating compelling experiences requires: • equal measures of empathic creativity and technological prowess • customer intelligence: integrating customer data across silos and understanding customer behavior • creating emotional connections (engagement) with the customers
  60. 60 What to Transform: Digital Platform  The foundation for DX is a well-structured digital platform • In other words, the technology transformation Core Platform A strong foundation for operational and transactional systems that power a company’s key processes. Externally Facing Platform Data Platform Performing intense analytics and building/testing algorithms, without disrupting the company’s operational systems. Powers the websites, apps, and other processes that connect to customers and ecosystem partners. DIGITAL PLATFORM
  61. 61 What to Transform: Digital Platform Issues to consider  Making use of a new technology is a very complex process: • need to understand how a technology can be used to contribute to a transformational opportunity • need to adapt that technology to the specific needs of the business • need to integrate it with existing systems  In addition, company’s data may not up to basic standards. • data quality attributes: • accuracy, completeness, consistency, reliability, up-to-date etc. • poor quality data can lead to transaction processing problems, operational chaos, inaccurate analytics, etc. • a company needs to determine their data quality levels
  62. 62 Summary Customer Experience Employee Experience Digital Platform Business Processes Business Model Domain What to Transform
  63. How to Transform
  64. 64 Digital Transformation: Different Companies, Different Needs  DX begins with the current state • the current state is substantially different for every company • each company has different customers, partners, and employees • each company has different maturity level with digital technologies  DX means different things to different companies • main idea: increasingly apply technology across the company to improve operational success
  65. 65 Level of Digital Maturity: Different for each company
  66. 66 Digital Transformation: Key starting point  A company: • should NOT ask “what is digital transformation?” • but “what does Digital Transformation mean to us?”
  67. 67 Digital Transformation: A journey, not a destination  DX is an ongoing process – a journey • change is the only constant ! • DX is a never-ending process  “How long will the Digital Transformation take?” is a valid question for certain stakeholders. • depends on the company and scope of the transformation • surely DX doesn’t happen quickly • surely it is a must to create a timeline, plan, measure, review etc. • surely DX is performed incrementally
  68. 68 Roadmap for Digital Transformation  Guides/roadmaps with 3 steps, 5 steps, 9 steps, 3.141529 steps  Strategic Steps for Digital Transformation: Vision. Align on the ‘why’: Prepare for culture change: Go ‘digital’ gradually: Map out the ‘tech’: Measure DX progress: What do you want to become? Identify the business needs/goals and built DX strategy based on them. Company long term strategy is important. Maybe the most important step. If there is no culture change, there can never be a digital transformation. Start small but strategic. DX will not happen overnight. Furthermore, it is a journey, not a destination. Map out the technology implementation. Replace existing infrastructure with new technologies. Continuously measure the progress and success of DX efforts and refine accordingly.
  69. 69 Digital Transformation: Changing Culture or…
  70. 70 Digital Transformation: Change of Culture  Change in: organizational capability, structure, way of thinking • leadership (that’s where DX starts), hierarchy, team organization, teamwork, ways of working, customer relationship etc. • Without attention to such critical cultural requirements: • “new technology” + “old operations” = “expensive old operations” “The thing that’s transforming is not the technology. It’s the technology that is transforming you.”
  71. 71 Digital Transformation: Change of Culture  Develop digital DNA • empowering people to work in new ways • get rid of the ‘old way of doing things’ – introduce agility • always remember that the gravitation towards technology contrasts the human side of change.  Roles/responsibilities will be expected to change • build capabilities for the workforce of the future  Implementation of ‘change management methods’ is required
  72. 72 Effective Change/Transformation M. Lippitt (1987), “The Managing Complex Change Model”
  73. Measuring the Success of Digital Transformation
  74. 74 Digital Transformation: Measuring Success  The necessity of DX is becoming clearer all the time.  For a company’s DX efforts to be deemed successful, there is the need to assess several key performance indicators.  An effective DX is NOT a box companies can check. • It’s an ongoing process that requires constant evaluation & adjustment.  How can a company measure success of DX efforts? • Each company will have its own way of measuring success.
  75. 75 Digital Transformation: Measuring Success  How to measure the success/progress of DX? • Set the goals: What do you want to achieve? What are the objectives? • Choose a variety of metrics that align with each of the goals. • Anticipate unintended impacts (change always has a learning curve)
  76. 76 DX: Goals – Metrics Example
  77. Common Challenges and Key Issues in Digital Transformation
  78. 78 Digital Transformation: Common Challenges  Employee pushback – resistance to change • it is hard to change the corporate culture (ways of working) and to inspire employees to embrace change  No clear strategy/vision and lack of leadership  Limited access to required technical expertise  Organizational structure gets in the way (large companies)  Lack of initiative (small companies)  Limited budget (mostly for smaller companies)
  79. 79 Digital Transformation: Some Key Issues  Technology changes fast, organizations change slow (Martec’s law) • People matter more than ever: excite them, enable them, listen to them  The most common mistake is that companies focus on the technology component of a digital transformation framework. • DX is less of a digital problem than a transformation problem. • It is less of a technology problem, than a leadership problem.
  80. Why did you attend DX today?
  81. 81 DX: What it means for you at this point  You will definitely be part of DX at some point. Hopefully you have a: • clearer picture of what it entails • understand the many advantages that DX offers to you as professionals  Realize that: • change is the only constant • lifelong learning skills are vital • No matter your profession/field, you will have to either upskill or reskill
  82. 82 My 1st wish to you: I hope you learn to … Realize there is no box DON’T think-out-of-the-box
  83. Thank you for your attention Questions? Thoughts? Ideas?