The Future Of Business Is Digital

The Future Of Business Is Digital Martin Gill, VP & Principal Analyst

May 12th, 2015

Consumers & Small Business Customers are

fundamentally digital

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Empowered customers have given rise to a new era

Age of manufacturing

Mass manufacturing

makes industrial

powerhouses

successful

• Ford

• Boeing

• GE

• RCA

Age of distribution

Global connections

and transportation

systems make

distribution key

• Wal-Mart

• Toyota

• P&G

• UPS

Age of information

Connected PCs and

supply chains mean

those that control

information flow

dominate

• Amazon

• Google

• Comcast

• Capital One

Age of the customer

Empowered buyers

demand a new level of

customer obsession

• Macy’s

• Salesforce.com

• USAA

• Amazon

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Web use is mainstream

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Source: January 29, 2014 “Introducing The Global Retail Segmentation”, Forrester report

Forrester’s retail segmentation

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Source: April 2014, “European Retail Segmentation: Emerging Patterns Of Multitouchpoint Shopping” Forrester report

Europeans Embrace Multiple Touchpoints To Shop

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Source: May 19, 2014, “The State Of Consumers And Technology: Benchmark 2013, Europe” Forrester report

Device use is ubiquitous

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Interested in connected technology grows

We face a wave of innovation.

Complexity is the new reality.

Digital competitors thrive.

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Digital competitors thrive

No industry is immune

Some brands are born digital.

Some achieve digital mastery.

While others have had digital

thrust upon them.

You must become a digital

business.

73%

34%

16%

Digital businesses continuously exploit

digital technologies to both create new

sources of value for customers and

increase operational agility in service of

customers.

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Source: April 16, 2014 “Understand The Digital Business Landscape” Forrester report

Master both sides of digital

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Dig

ita

l C

us

tom

er

Ex

pe

rie

nc

e (

DC

X)

Digital Operational Excellence

(DOX)

Source: September 10, 2014 “ Brief: Take The Digital Business Readiness Assessment”, Forrester report

Digital mastery eludes most firms

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Dig

ita

l C

us

tom

er

Ex

pe

rie

nc

e (

DC

X)

Digital Operational Excellence

(DOX)

Source: September 10, 2014 “ Brief: Take The Digital Business Readiness Assessment”, Forrester report

Don’t succumb to digital extinction

Digital Dinosaur

Don’t burry your head in the sand.

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Dig

ita

l C

us

tom

er

Ex

pe

rie

nc

e (

DC

X)

Digital Operational Excellence

(DOX)

Source: September 10, 2014 “ Brief: Take The Digital Business Readiness Assessment”, Forrester report

Drive digital efficiency and agility

Digital Dinosaur

Digital Connector

KLM focuses on making digital connections.

Vail resorts gameifies customer experience

with it’s EpicMix app.

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Dig

ita

l C

us

tom

er

Ex

pe

rie

nc

e (

DC

X)

Digital Operational Excellence

(DOX)

Source: September 10, 2014 “ Brief: Take The Digital Business Readiness Assessment”, Forrester report

Re-position yourself in the ecosystem

Digital Dinosaur

Digital Connector

Digital Operator

Rolls Royce leases “propulsion hours” to

airlines.

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Digital Dinosaur

Digital Connector

Digital Operator

Digital Master D

igit

al C

us

tom

er

Ex

pe

rie

nc

e (

DC

X)

Digital Operational Excellence

(DOX)

Source: September 10, 2014 “ Brief: Take The Digital Business Readiness Assessment”, Forrester report

Iterate and innovate to maintain mastery

John Deere’s FarmSight technology

digitizes farming.

Digital businesses are networked.

Expedia has generate over $2bn in revenue

from affiliate APIs.

Walgreens extends its digital customer

experience.

PG&E create an innovation ecosystem.

That apps like Leafully can plug into.

So what do you do?

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There are three paths to Digital Mastery

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Burberry’s iterates towards digital mastery

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Busin

ess s

tra

teg

y

Dig

ital str

ate

gy

Strategy

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Busin

ess s

tra

teg

y

Dig

ital str

ate

gy

Strategy Execution

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Busin

ess s

tra

teg

y

Dig

ital str

ate

gy

Culture

Organization

Technology

Metrics

Strategy Execution

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Culture Foster a culture of digital innovation

Volvo champions open innovation.

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Culture

Organization

Foster a culture of digital innovation

Organize to deliver digitally enhanced

experiences

Digital centres of excellence accelerate

change.

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Culture

Organization

Technology

Foster a culture of digital innovation

Organize to deliver digitally enhanced

experiences

Enable with technology

Design thinking in action at

eBay Inc.

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Culture

Organization

Technology

Metrics

Foster a culture of digital innovation

Organize to deliver digitally enhanced

experiences

Enable with technology

Underpin decisions with customer-centric

metrics

Virgin Media rewards employees based on

NPS scores.

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The Digital Maturity Model

Repair Elevate Optimize Differentiate

Culture

Organization

Technology

Measurement

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Source: Digital Maturity Survey 2013

Digital masters are hard to find

0% 20% 40% 60% 80% 100% 120%

Automotive

Consumer products

Financial services

Health

Technology

Media and communications

Retail and wholesale

Telecommunications

Travel

Other

Repair

Elevate

Optimize

Differentiate

Repair Elevate Optimize Differentiate

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Source: Digital Maturity Survey 2013

Digital Maturity delivers results

0% 10% 20% 30% 40% 50% 60% 70%

No impact

We have not implemented a multi-touchpoint digital strategy

Increased operating costs

Increased employee morale

Increased offline sales

Increased call center volume

Decreased operating costs

Satisfaction or similar metrics

Increased profitability

Increased online sales

What impact has the implementation of a multi-touchpoint digital strategy had on your company?

Differentiate

Repair

Digital business transformation is a

journey, not a destination.

Thank you

forrester.com

Martin Gill

+44 (0)20.7323.7734

mgill@forrester.com

@martinjohngill