The document discusses the key ingredients for a successful digital transformation based on thyssenkrupp's experience. It identifies five main ingredients: 1) building awareness of digitalization within the organization, 2) engaging employees to generate ideas for digital initiatives, 3) focusing efforts by defining clear digital strategy and priorities, 4) committing resources and establishing governance, and 5) ensuring agility to rapidly test and scale initiatives. While digitalization is a top priority for many companies, the document notes that only a small percentage of transformations fully achieve their intended benefits due to a lack of one or more of these critical ingredients.

1. Crafting a Winning Digital Strategy
World Forum Disrupt
Abhinav Singhal
22 November 2018, Singapore

2. 2 2
We are a diversified industrial group with
presence in 79 countries
~ €41.5 billion sales, 159,000 employees &

3. 3
Gartner 2018 CEO and Senior Business Executive Survey comprises of 460 business leaders in organizations with more than $50 million in annual revenue qualified and surveyed; EY Center for Board Matters supports boards and committee members in their
oversight roles; PwC’s 18th Global Annual CEO Survey interviewed 1,322 CEOs in 77 countries
CXOs have digitalization as top priority Opportunity to create significant value from digital initiatives
% improvement
Profit margin
24
15
2017
1.6x
2020
25
16
20202017
1.5x
Customer loyalty/retention
The impact from digital transformations to contribute >1 trillion USD by 2021
2018 CEO and Senior Business Executive Survey:
62% of CEOs have a management initiative or transformation
program to make their business more digital
EY Center for Board Matters:
Top priority for 2018 is understanding technology’s impact on
strategy, business models and cybersecurity
18th Global Annual CEO Survey:
86% of CEOs think it’s important that they champion the use
of digital technologies themselves
We all agree digitalization is important…

4. 4
Only 5%
of digital transformations are fully successful
Only ~30%
investments deliver expected returns
Achieved or
exceeded
expectations
Failed to
deliver,
producing less
than 50% of
the expected
results
Settled for
dilution of
value and
mediocre
performance
Total Investment
in digital
transformations in
2018
1,300
USD billion
Returns in
line with
expectations
400
USD billion
Returns not
as expected
900
USD billion
Source: Bain risk history survey, Forbes
…however, only very few companies realize expected benefits

5. 5
So, what is the recipe
for a successful digital transformation?

6. 6
We underwent a major digital transformation

7. 7
Sources: MIT Technology Review, TIME Magazine, Harvard Business Review
Smartest
Companies
50 Best
Innovations
25
Most
successful
transformations10
MIT Technology Review TIME Magazine Harvard Business Review
And we have been widely recognized for our efforts
thyssenkrupp is the only industrial company in these rankings

8. 8
1. Awareness
2. Engagement
3. Focus
4. Commitment
5. Agility
Building a common under-
standing of digitalization within
the organization
Mobilizing the organization and
generating ideas for potential
use cases
Defining clear vision and
priorities for the digitalization
effort
Re-aligning priorities based on
customer feedback and market
developments
Scaling up pilots and defining the
operating model, resources and
governance for execution
In our experience, there are five ingredients for a successful digital transformation

9. 9
WHY IS IT CRITICAL? WHAT’S SUCCESS?
• Different level of awareness and beliefs
on digitalization potential
• Hundreds of jargons and frameworks
available
• Lack of common understanding within
organization
• Common language for understanding
digitalization
• Events/forums/resources focused on
building capability
• Digitalization a ‘top leadership team’
priority
“Lacking a clear definition, companies struggle to connect digital strategy with day to day business”
Awareness1

10. 10
Awareness1

11. 11
WHY IS IT CRITICAL? WHAT’S SUCCESS?
• Need to change mindsets and build
commitment
• Frontline critical source of idea
generation and use case identification
• Identify and reach out to next gen talent
within the organization
• Secure organization commitment to
digitalization
• Build a strong pipeline of ideas/initiatives
• Tap into both internal and external talent
available
“Changing mindsets is the single biggest obstacle for digital transformation”
Engagement2

12. 12
Engagement2

13. 13
WHY IS IT CRITICAL? WHAT’S SUCCESS?
• Significant investments required with low
short term pay-offs
• Limited resources and management
bandwidth available
• Need alignment across different
stakeholders
• Critical to generate ‘success stories’ to
maintain momentum
• Digital strategy integrated with overall
corporate strategy
• Ambitious targets with clear articulation
of ‘where to play’, ‘how to play’ and
‘how to win’
• Decision on In-house vs Out-source
“Strategy is all about defining what NOT to do”
Focus3

14. 14
Focus3
CUSTOMER
VALUE ADD

15. 15
Augmented Reality Industrial IIoTIndustry 4.0
What we offer
Quality metals & plastics dispatched same day.
Internet Business
Industry 4.0Digital TWIN Virtual Reality Autonomous Driving
Predictive Analytics Predictive Analytics Human-robot collaboration Predictive Analytics
Mechatronic systems Mechatronic systems Agile Industrial Data Space
Focus3

16. 16
WHY IS IT CRITICAL? WHAT’S SUCCESS?
• Design choices on operating model
(embedded vs stand alone)
• Sequencing of initiatives and resource
commitment
• Need to leaner governance and review
mechanisms
• Digitalization part of Board agenda
• Well-defined operating model with
resources and budget in place
• Clear accountability with KPIs and
decision gates exist
• Successful pilot to commercialization
“Its not about one single idea, but solving 1000 small problems together”
Commitment4

17. 17
ENABLING IT INFRASTRUCTURE
Commitment4

18. 18
WHY IS IT CRITICAL? WHAT’S SUCCESS?
• Rapidly changing technology landscape
• Need faster time to market
• Incorporate customer and market
feedback
• Regular review of digitalization priorities
and focus initiatives
• MVP, design thinking or similar process
in place to accelerate time to market
• Feedback mechanism in place to truly
evaluate success
“In the new world, its no more about big fish eating small fish – but the fast fish eating the slow fish”
Agility5

19. 19
Lessons LearntSCRUM workshops Minimum Viable Product
Agility5

20. 20
1. Awareness
2. Engagement
3. Focus
4. Commitment
5. Agility
Is there a common
understanding of digitalization
within the organization?
Are the employees committed
and actively contribute to the
digitalization initiatives?
Is there a clear understanding
of why and how will the
organization create value from
digitalization efforts?
Are digitalization priorities
regularly re-aligned in line with
customer and market needs?
Are the required resources,
governance mechanisms and
operating model in place?
Recap: Five ingredients for a successful digital transformation

21. “The only wrong move when it comes to Digital
Transformation is not to make any move at all”
Didier Bonnet, SVP, Capegemini

22. THANK
YOU