breaking through the digital deadlock · kpis siloed dx initiatives tactical roadmaps limited...

BREAKING THROUGH THE DIGITAL DEADLOCK

BILL KEYWORTH

RESEARCH VICE PRESIDENT & IT EXECUTIVE ADVISOR - IT EXECUTIVE PROGRAMS

IDC DIGITAL TRANSFORMATIONAL SUMMIT 2018 – NOVEMBER 14 – MELBOURNE AUSTRALIA

2 © IDC

The World is Becoming More Competitive: The Average Company Lifespan on the S&P 500 Index

Over the past 50 years, the average lifespan of S&P 500 companies has shrunk from around 60 years to closer to

18 years

The rate of change is accelerating dramatically

Average lifespan of a company on the S&P 500

Opportunity

“The Business” has shifted – learn

how to leverage change and turmoil

to your advantage

© IDC 3

1. AI – 20%

2. Robotics – 18%

3. Blockchain – 14%

4. Drones – 13%

5. AR/VR – 12%

Peer Adoption Rates of DX Technologies

Source: IDC LOB Sentiment Study. NA sample n= 1502, 2017 Showing % for tech currently in use, or being implemented.

New Rules

Dictating, Controlling and Timing

Technology Change is No Longer

an Option

DX Maturity

4

11%

30%

7%

32%

19%

Digital Resister Digital Explorer Digital Player Digital Transformer Digital Disruptor

What is your Enterprise's approach to Digital Transformation (DX) efforts?

Source: IDC CIO Sentiment Survey, June, 2018 – 150 IT Executives

5 © IDC

Many Orgs are Struggling with Their DX Strategy

Thriving enterprises report higher year-over-year revenue increases, higher percentage of revenue derived from digital transformation initiatives, higher percentages of Agile development, and higher percentages of employees dedicated to modernization and digital transformation.

14%

27%

10%

32%

18%

DigitalResister

DigitalExplorer

Digital Player DigitalTransformer

DigitalDisruptor

Thrivers Survivors

N = 202., Source: US-Future of Technology Procurement 2018, IDC, September, 2018

Assessment

Who are You?

…part of the 50% who are

Deadlocked …or the 50% who

aren’t?

Organizations are Facing Several Challenges

Outdated KPIs

Siloed DX Initiatives

Tactical Roadmaps

Limited Expertise

Silos of Innovation

DIGITAL NATIVE ENTERPRISE

6

49%

49%

53%

59%

34%

Melbourne Insight

Which Digital Challenge is

impeding your Digital

Transformation the most?

Source: IDC IT Executive Study on DX, March. 2018. n= 215

US 55%

US 26%

US 32%

US 15%

US 19%

Source: IDC IT Executive Study on DX, May 2018. n= 93 Australian IT Executives/Managers

7

Embed Digital in Business

New Systems

Strategic Planning

Relevant Metrics

Non-siloed IT Execution

Deadlock #1 – Siloed DX Initiatives Resolution: DX Organizational Structure

Thriver Response: Embed Digital in the Business

Outdated KPIs


Tactical Roadmaps

Limited Expertise

Silos of Innovation


49%

49%

53%

59%

34% Source: IDC IT Executive Study on DX, May 2018. n= 93 Australian IT Executives/Managers

© IDC 8

Northwestern Mutual Reorganized IT from Projects to Products

Karl Gourverneur Northwestern Mutual

VP and Head of Digital Innovation and Workplace

IT ORG NOW CALLED CLIENT AND DIGITAL EXPERIENCE GROUP 3500 IT professionals shifted focus from IT projects and support to

digital products and engineering

Functional org. replaced with “experience value streams”.

Offshored commoditized infrastructure and development.

SELF-AUTONOMOUS TEAMS FOCUSED ON BUSINESS OUTCOMES 20+ job descriptions down to 7 core jobs

Teams are assembled and reassembled by workload needs

All in with Agile/Lean and DevOps

No Governance for DX

9

Digital Organization Structure The DX

Special Projects Team

DX

Discovering DX

Define DX Mission

The Office of Digital Transformation

DX

Establishing DX Governance

Establish DX Priorities for Enterprise

DX DX DX DX

The Embedded Digital Business

Accelerating DX

Implement DX Across Enterprise

DX

The Digital Business Unit

Creating innovative offerings

Create a disruptive business

19% 11% 5% 36%

Action?

Enterprises are fighting over their

DX organizational structure…

“Market IT” around it!

28%


10

Outdated KPIs

DX Performance Scorecard


DX Organization Structure

Tactical Roadmaps

Digital Roadmaps

Limited Expertise

Digital Capabilities

Silos of Innovation

Digital Platform


49%

49%

53%

59%

34%


New Systems

Strategic Planning

Relevant Metrics



Deadlock #2 – Silos of Innovation Resolution: Digital Platform

Thriver Response: New Infrastructure Systems


© IDC 11

Islands of Innovation

3D Product Design

Fraud Monitoring

Self Healing Assets

Real Time Inventory

Mgmt.

Smart Warehouse

Track and

Trace

Data as a Service

Chat bots

VR Product Interaction

Mobile App

P2P Payment

Enterprise IT

Source: IDC, 2018

© IDC 12

By 2021, driven by LoB needs, 70% of CIOs will deliver “agile connectivity” via APIs and services that interconnect digital solutions from cloud vendors, system developers, startups, and others.

2021

2019

The New Digital Platform

EXTERNAL PROCESSES

Connected Processes

Assets

People

INTERNAL PROCESSES

INTELLIGENT CORE

Mobile

IoT

AR/VR

BOT

API

© IDC 13

Action?

Existing infrastructure platforms don’t

accommodate scale.

Are you moving towards new

industry-oriented, data-driven

platforms?

14

Outdated KPIs




Tactical Roadmaps

Digital Roadmaps

Limited Expertise


Silos of Innovation

Digital Platform


49%

49%

53%

59%

34%


New Systems

Strategic Planning

Relevant Metrics



Deadlock #3 – Tactical Roadmaps Resolution: Digital Roadmaps

Thriver Response: Strategic Planning - Use Cases


15

Digital Roadmaps Are Not Singular

31%

46% 20%

2%

None Loosely

Connected

Loosely connected but independent project

roadmaps across individual business units

Coordinated roadmaps led by individual business

units A single digital roadmap for the enterprise,

centrally led with a clear mission and formal

accountability

Coordinated Single

No Digital Roadmap


16

Base Roadmaps on Industry Scenarios


1/3 of organizations undergoing

DX have NOT held a visioning session to re-imagine their

industry

FINANCIAL SERVICES

© IDC 17

Map Use Cases to Customer Journey

47% Recreate the customer's experience of interacting with your organization. Identify current and future states. Consider what might be missing or what might need to change.

Action?

Can you position your

technology solutions with

industry use cases

in play within your enterprise?

18

Outdated KPIs




Tactical Roadmaps

Digital Roadmaps

Limited Expertise


Silos of Innovation

Digital Platform


49%

49%

53%

59%

34%


New Systems

Strategic Planning

Relevant Metrics



Deadlock #4 – Outdated KPIs Resolution: DX Performance Scorecard

Thriver Response: Relevant Metrics that Matter


19

Digital KPIs Peers are Using

54% 37% 37% 37%

Increase in return on DX-oriented investment (ROI) within applicable market

segments

Data capitalization - Measures that show an

organization's return on data-related investments,

including new revenue

Growth of competitive market share in industries targeted by DX initiatives

Metrics to track customer loyalty and advocacy (e.g.

net promoter score or NPS)

DX ROI

38%

Competition in set number of digital marketplaces.

Participate in

Digital Markets Market Share

Growth

Customer Advocacy Metrics

Data Capitalization


Creating New Digital KPIs

© IDC 20

Financial KPI

Business KPI

Operational KPI

40% of company capital budget allocated for DX initiatives by 2020

80% of DX Innovation Initiatives approved for implementation by 2020

Companies spend 10% less per year on DX failures over 3 years

20% more profitable customers each year for 3 years

Improve customer NPS score to positive 50/100 by 2019

Increased customer interactions for 50% of non-profitable products within 1 year

Platform strategies drive data-related IT investments to exceed 25% of total IT by 2020

Platform-related revenue accounts for 10% increase in total revenue each year over 5 years.

APIs reduce data acquisition and sharing costs by 50% over 3 years

Achieve 50% market share for target DX product or service by 2020

Introduce 1 new DX product or service each year for the next 3 years

Delivery of each competitive DX product meets 80% expectations for sales, customers, and scalability each year.

50% of executive compensation tied to digital MBOs

Percentage of on-demand, knowledge worker labor hour increases by 10%/year over 3 years.

10% of repetitive enterprise interactions are augmented by AI each year for 3 years.

Innovation Rate Customer Advocacy

Data Capitalization Business

Operations Workforce

Success Metrics

Action?

Do your metrics embrace,

empower and alter IT behaviors

through new Digital KPIs?

…or are you stuck with

traditional metrics focused on

efficiency of IT availability?

21

Outdated KPIs




Tactical Roadmaps

Digital Roadmaps

Limited Expertise


Silos of Innovation

Digital Platform


49%

49%

53%

59%

34%


New Systems

Strategic Planning

Relevant Metrics



Deadlock #5 – Limited Expertise Resolution: Digital Capabilities

Thriver Response: Non-siloed Execution


© IDC

Digital Capabilities Need to be Developed

Technology Process

People

Source: IDC, 2018

Data

Governance

Action?

Do your IT policies &

solutions enable the new

digital capabilities of

governance and data?

23

The Capabilities Required to Run a Digital Business


Data Monetization

62%

Sensing & Learning

52%

Experiential Engagement

35%

Operating Model Transformation

28%

Take data and turn it in to insight, automation

and/or a revenue stream for the organization.

Apply continuous sensing and

collective learning to improve experience,

efficiency and effectiveness.

Create an immersive CX so the customer

has an easy, frictionless, and

pleasing experience with the organization.

Deliver hyper-personalized digital

services at scale through autonomic

processes.

Assessment?

This is what enterprises

are building for Digital:

Is your IT organization a

part of it?

Organizations are Facing Several Challenges

Outdated KPIs


Tactical Roadmaps

Limited Expertise

Silos of Innovation


24

35%

11%

8%

17%

4%

Melbourne Insight

Which Digital Challenge is

impeding your Digital

Transformation the most?


Australia – Single Greatest Threat:

May 2018

BREAKING THROUGH THE DIGITAL DEADLOCK

BILL KEYWORTH

VICE PRESIDENT RESEARCH & IT EXECUTIVE ADVISOR - IT EXECUTIVE PROGRAMS

[email protected]

IDC DIGITAL TRANSFORMATIONAL SUMMIT 2018 – NOVEMBER 14 – MELBOURNE AUSTRALIA

breaking through the digital deadlock · kpis siloed dx initiatives tactical roadmaps limited...

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