1. Ben Gilchriest
Digital Transformation Lead, ANZ
Capgemini Consulting
@BenGilchriest
DIGIRATI'
AND$THE'
+26%'DIGITAL'ADVANTAGE'
March,'2014'

2. In'the'past'decade'the'world'Australian'customers'and'retailers'operate'in'has'
fundamentally'changed,'we'have'entered'the'2nd'Machine'Age'
LEAPS IN
CONNECTIVITY
%$of$Australian$
households$with$
internet$
Max.$internet$
connecLon$speed$
(residenLal)$
RISE &
DIGITIZATION
RISE OF
MOBILITY
OF
INTERACTIONS
No.'of'Users'by'PlaCorm,'
2013E'2014'
%'of'Australian’s'with'a'mobile'
phone'
100$
2003'
2014'
2003'
1.46
Mps
60$
OF THE MICROMULTI-NATIONAL
Achieving'scale'without'mass'
1200$
Facebook$
80$
53%$
DAWN
1000$
40$
20$
800$
0$
%'of'Australians'transac<ng'on'
mobile'
2014'
+80%$
100
Mps
12%$
2012'
400$
37%$
2011'
TwiRer$
600$
Combining'digital'innova<ons'at'
tremendous'pace'
200$
Google+$
MySpace$
0$
2003'
2014'
Source:$Capgemini$analysis;$“Our$Digital$Future”,$Capgemini,$2013;$“The$Second$Machine$Age:$An$Industrial$
RevoluLon$Powered$by$Digital$Technologies”,$Capgemini,$2014.$
$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
2$

3. This'has'driven'a'major'shiK'in'the'expectaMons'customers'have'of'how'they'can'engage'
with'retailers'
REQUIRED$
INTERACTION$
MODEL$
CUSTOMER$
POSITION$
THE PAST
IN'THE'DARK'
InformaLon$poor.$
Limited$choice.$
Faceatoaface$the$preference.$
“TELLING”'
Mass$markeLng.$
Outbound$blast$communicaLons.$
ReacLve,$inbound$service$model.$
NOW
EMPOWERED$
Pull$content,$benchmark$on$trust,$
authenLcity$and$value.$
Constantly$changing$&$sharing.$
High$trust$in$peer$review.$
Benchmark$across$industries$&$
geographies.$
“CONVERSING”'
Embrace$social$(P2P)$&$coacreaLon.$
Onaline$and$mobile$at$the$core.$
Constantly$changing$needs.$
Source:$Capgemini$analysis.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
3$

4. With'your'customers'demanding'more'and'more'it'can'be'easy'to'just'jump'in'
MOBILE
SOCIAL
ANALYTICS
Digital'transforma<on'is
$
the$use$of$ NEW
digital$technologies$to$
enable$major'business'
EMBEDDED DEVICES
$
IMPROVEMENTS
$
$
$
ENHANCED CUSTOMER
EXPERIENCE
$
$
$
CREATING NEW BUSINESS
MODELS
STREAMLINING$
OPERATIONS$
$
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
4$

5. WHAT'is'the'
organisaMon'
doing''
(digital'
investments'&'
assets)'
DIGITAL INTENSITY
Digital'maturity'is'a'combinaMon'of'“what”'and'organisaMon'does'and'“how”'they'approach'
it'
HOW'is'the'
organisaMon'
doing'it'
(vision,'governance'
&'roadmap)''
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
5$

6. WHAT'is'the'
organisaMon'
doing''
(digital'
investments'&'
assets)'
DIGITAL INTENSITY
‘Beginners’'may'be'carrying'out'some'experiments'though'are'largely'skepMcal'of''value'of'
digital'
BEGINNERS
This is not for us!
HOW'is'the'
organisaMon'
doing'it'
(vision,'governance'
&'roadmap)''
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
6$

7. WHAT'is'the'
organisaMon'
doing''
(digital'
investments'&'
assets)'
DIGITAL INTENSITY
‘ConservaMves’'have'a'digital'vision'and'strong'governance'though'have'few'advanced'
digital'features'
BEGINNERS
CONSERVATIVES
This is not for us!
Analogue focus
HOW'is'the'
organisaMon'
doing'it'
(vision,'governance'
&'roadmap)''
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
7$

8. ‘Fashionistas’'have'many'advanced'digital'features'though'they’re'run'in'silos'and'there'is'
no'over]arching'vision'
FASHIONISTAS
WHAT'is'the'
organisaMon'
doing''
(digital'
investments'&'
assets)'
DIGITAL INTENSITY
Digital
Digital
Digital Digital
Digital
BEGINNERS
CONSERVATIVES
This is not for us!
Analogue focus
HOW'is'the'
organisaMon'
doing'it'
(vision,'governance'
&'roadmap)''
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
8$

9. ‘DigiraM’'have'a'strong'vision'and'clear'governance'with'many'digital'iniMaMves'generaMng'
business'value'in'measurable'ways'
FASHIONISTAS
DIGITAL INTENSITY
Digital
Digital
Digital Digital
Digital
DIGIRATI
Strong$digital$vision$
Good$governance$
Strong$digital$culture$
DIGIRATI'OUTPERFORM'
THEIR'PEERS*'
'
+9%'Revenue'
+26%'Net'Profit'
+12%'Market'Valua<on'
BEGINNERS
CONSERVATIVES
This is not for us!
Analogue focus
TRANSFORMATION MANAGEMENT INTENSITY
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$2011;$
“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$
publicaLon,$2012.$*$Average$performance$difference$for$firms$in$each$quadrant$versus$the$average$performance$of$
all$large$firms$in$the$same$industry$for$the$184$publiclyatraded$companies$in$our$sample.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
9$

10. On'average'Retail'and'CPG'sectors'are'making'good'ground'but'only'a'quarter'of'companies'
are'in'the'‘DigiraM’'quadrant'and'many'are'falling'into'transformaMon'traps'''
The'Biggest'Transforma<on'Traps'
Retail'&'CPG'Digital'Maturity'
• A$decadealong$history$with$digital$disrupLon$has$seasoned$
retailers,$producing$a$number$of$DigiraL$(26%).$
• For$CPG,$less$than$25%$are$‘DigiraL’,$with$many$other$
companies$lagging$far$behind.$
• The$most$significant$barriers$to$Digital$TransformaLon$are$desire,$
money,$and$tools.$
No'“burning'plaCorm”'/'sense'of'urgency'
FASHIONISTAS
39%$
DIGIRATI
“We'don’t'have'
<me'for'this'right'
now”'(53%)$
Not'enough'funding'
The “What”
33%$
RETAIL (global)
Limita<ons'of'IT'systems'
30%$
Roles'&'responsibili<es'not'clear'
CPG (global)
28%$
Unclear'business'case'
BEGINNERS
CONSERVATIVES
The “How”
27%$
Business'units'implemen<ng'in'silos'
24%$
“We'don’t'know'how'
to'do'that”'(52%)$
“I’ll'lose'influence'in'my'
company”'(23%)$
“It’s'not'worth'the'
risk”'(18%)$
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$
publicaLon,$2012;$“Embracing$Digital$Technology$a$a$New$Strategic$ImperaLve”,$Capgemini$–$MIT,$2013.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
10$

11. The'race'to'respond'means'that'some'fundamentals'are'at'risk'of'being'missed'
54%
INFORMATIONAL$
46%
$
44%
TRANSACTIONAL$
$
$
$
$
$
$
SOCIAL$
$
$
$
$
$
$
$
Shopping$cart,$home$
delivery,$online$
payment,$inastore$
availability$etc.$
$
Product$catalogue,$
product$search,$store$
informaLon,$store$
locaLon$etc.$
30%
RELATIONAL$
$
Related$items,$
product$
recommendaLons,$
user$history,$website$
personalizaLon$etc.$
$
$
$
$
Reviews,$raLngs,$
social$media$
integraLon$etc.$
Increasing'complexity'
Informing$customers$about$
product,$service$and$
business$offerings$
FacilitaLng$and$supporLng$
the$enLre$buying$and$
fulfillment$process$$
Building$1atoa1$
relaLonships$with$
customers,$loyalty$and$
repeat$purchases$
Engagement$with$a$wider$
customer$group$via$
integraLon$of$social$media$
plaqorms$$
Source:$“Digital$Commerce;$a$commentary$on$the$Australian$Retail$Sector”,$DT$AU$Lab,$2013.$A$Capgemini$–$
University$of$Sydney$Business$School$publicaLon.$Assessment$of$89$Australian$retailers$across$63$separate$
criteria$for$Digital$Commerce..$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
11$

12. DigiraM'have'a'common'Digital'DNA,'they'invest'100%'in'the'“how”'
VISION'
Digital$Units$
Investment$CommiRees$
Chief$Digital$Officers$
GOVERNANCE'
TransformaLve$Vision$
Shared$Vision$
IT'/'BUSINESS'
CAPABILITY'
Shared$understanding$between$
IT$and$business$execuLves$on$
the$role$of$IT.$
PromoLng$change,$invesLng$in$
skills,$employee$parLcipaLon.$
Source:$“Digital$TransformaLon;$a$roadmap$for$billion$dollar$organizaLons”,$a$Capgemini$a$MIT$publicaLon,$
2011;$“The$Digital$Advantage;$how$digital$leaders$outperform$their$peers$in$every$industry”,$Capgemini$–$MIT$
publicaLon,$2012.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
12$

13. In'addiMon,'they'make'strategic'decisions'on'where'to'dominate'in'digital'
Domains'of'Excellence'(&'most'common'linkages)'
CUSTOMERaFACING$
PROCESSES$
‘Digira<’'make'strategic'decisions'on'where'to'excel'
OPERATIONALa$
FACING$PROCESSES$
Social$Media$
Customer$
Experience$
Mobile$
Channel$
AnalyLcs$
Process$
DigiLzaLon$
Internal$
CollaboraLon$
Data$IntegraLon$
Sources:$Capgemini$ConsulLngaMIT$Analysis$–$Digital$TransformaLon:$A$roadmap$for$billionadollar$organizaLons$©$
Capgemini,$2012;$Capgemini$ConsulLng$–$MIT,$“The$Digital$Advantage:$How$digital$leaders$outperform$their$peers$
in$every$industry”$©$Capgemini,$2012.$*$a$charts$represent$percentage$of$companies$that$exhibit$Excellence$in$one$
or$more$of$the$six$digital$intensity$domains.$We$define$excellence$as$an$average$score$>$6$(on$a$1a7$scale)$on$all$
quesLons$of$a$given$domain,$ater$dropping$the$quesLon$with$the$lowest$score.$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
13$

14. And'they'apply'pragmaMc'approaches'that'balance'customer]driven'design'with'
investments'that'may'have'unclear'ROIs'
OUTSIDE-IN THINKING
INSIDE-OUT DESIGN
Business'
TradeOffs
OUTSIDE-IN DESIGN
Customer'
Customer'
Customer'
Business'
Technology'
Technology'
TradeOffs
Define$customer$needs$&$
design$endatoaend$
experience$
THINK LIKE A START-UP
Business'
Technology'
Define$business$value$and$
Design$/$adjust$/$
where$tradeaoffs$need$to$ implement$technology$to$
be$made$
support$customer$
TECHNOLOGY AS INFRASTRUCTURE
Technology as infrastructure
Technology as a tool
*!
!
value
Path 2; start-up
thinking approach
*!
*!
*!
*!
Path 1; traditional
approach
!
!
•
!
•
time
•
Design technology for a highly
specific purpose.
For example, capture
timesheets.
Opportunity for innovation is
limited as technology has a
highly specified purpose.
•
•
•
Design technology to enable
multiple uses.
Open architecture that can be
adapted by end users.
For example, installing smart
sensor grids, or building
community platforms.
Source:$“Our$Digital$Future”,$Capgemini$Australia,$2013;$Assoc.$Professor$Kai$Riemer,$University$of$Sydney$Business$School.$$
Copyright$©$2014$Capgemini.$All$rights$reserved.$
14$

15. In'summary,'
WE ARE IN THE 2 MACHINE AGE
ND
DIGITAL MATURITY MATTERS; +26%
ANY COMPANY CAN BUILD A DIGITAL DNA
TAKE ACTION NOW TO CREATE YOUR DIGITAL ADVANTAGE

16. Ben Gilchriest
Digital Transformation Lead, ANZ
Capgemini Consulting
@BenGilchriest
THIS'PRESENTATION'&'THE'MAIN'STUDIES'
REFERENCED'ARE'AVAILABLE'ON'SLIDESHARE'
'
SLIDESHARE.NET/BENGILCHRIEST'
March,'2014'

17. Copyright$©$2014$Capgemini.$All$rights$reserved.$
17$