Capgemini Consulting - Digital Transformation

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The rise of new digital technologies is one of the most exhilarating challenges facing companies today. No sector or organization is immune from the digital phenomenon, which dictates its own pace and presence in the management agenda. The question is no longer when companies need to make digital a strategic priority – this tipping point is past – but how to embrace it and turn it to competitive advantage.

Text of Capgemini Consulting - Digital Transformation

  • 1.N 01 JULY 2011The challenges of the digital revolution LOreals choices by Marc Menesguen Transform to the Power of Digital: DigitalTransformation as a Driver of Corporate Performance by Capgemini Consulting No sectoris immune by Andrew McAfee, MIT The boom of Chinese e-commerce by Brian Xin, StarryMedia A transformed society is emerging by philosopher Bernard Stiegler

2. summaryeDitorialvisionguest writerDigital and Transformation:No sector is immune from digitalDigital as Bearer of AnotherAre they now indivisible?transformationSocietyBy Capgemini ConsultingsInterview with Andrew McAfee, By Bernard Stiegler, philosopher,Editorial Boardprincipal research scientist at the President of Ars Industrialis,page 4 Center for Digital Business, MITDirector of the Pompidou Center Sloan School of ManagementInstitute for Research and page 30 Innovation page 43strategyBeauty and digital: A magicalmatchCapgemini ConsultingsInterview with Marc Menesguen, Editorial Board:Managing Director of Strategic telesCope Pierre-Yves Cros, CEOMarketing for LOralTom Blacksell, UK Regional Head Chinese entrepreneurs take full Didier Bonnet, Global Head ofpage 6 Practices advantage of the e-commerce Patrick Ferraris, Global Leader, boomTechnology Transformation Interview with Brian Xin, founder Xavier Hochet, France Regional Head of StarryMedia, a Chinese start-upTon de Jong, Netherlands Regional Head for social marketing and digitalEric Roudil, North South EuropeClose-up researchRegional Head page 36 Michael Schulte, Germany Regional HeadTransform to the Power of Digital: Ken Toombs, USA Regional HeadDigital Transformation as a Driverof Corporate Performance Coordination Editor: Claire ThiebautBy Didier Bonnet, Global Head ofPractices, Capgemini ConsultingDesign and Production:and Patrick Ferraris, Global Leader, Les Ateliers CorporateTechnology Transformation, Keyfigures Printing:SolutioncomCapgemini Consulting page 14pages 35 and 42Cover illustration: Fernando Togni Digital transformation review n01 - 03 3. eDitorial Digital and Transformation:Are they now indivisible? By Capgemini Consultings Editorial BoardWelcome to the first issue of Capgemini Consultings Digital TransformationReview. The rise of new digital technologiesthe opportunities offered by these new tech-nologies and their related applications. Whiletransformation is not just digital, transforma-is one of the most exhilarating challenges fa-tion cannot do without digital.cing companies today. No sector or organiza-tion is immune from the digital phenomenon, Second, digital is shaping the competitivewhich dictates its own pace and presence in battleground in all sectors. The data shows athe management agenda. The question is no growing performance gap between the best di-longer when companies need to make digitalgital learners and the others. The more a sec-a strategic priority this tipping point is past tor relies on technology, the greater the gap but how to embrace it and turn it to compe- between the most effective companies and thetitive advantage. rest. And yet, the digital phenomenon doesntstop at the borders of traditional sectors. Di-Given this urgency, should we now view thegital technology allows a more targeted busi-rise of digital as the alpha and omega of trans-ness approach, more scientific decision-ma-formation strategies, the focal point for every king and a new type of customer relationship.aspect of corporate change? Our hypothesis is Companies in every business sector need tothat transformation strategy is its own master, master digital tools.but we have reached a stage where transfor-mation cannot be done in isolation from digi- We do think it is important to stress that thistal. There are two reasons for this.emphasis on a technology-driven digital re-volution in no way diminishes the importanceFirst, digital has a fundamental impact on howof human initiative and responsibility. Indeed,change takes place. Moving forward, every the truth is quite the opposite. It is more im-strategy that is devised must take account of portant than ever to acquire the right skillsDigital transformation review n01 - 04 4. eDitorialand place them strategically to support trans-Media, a Chinese start-up connecting marke-formation programs. ting and social media, offers particular insightinto the speed of change in China today.In this publication we are determined to em-brace just this sort of complexity and coun-Finally, philosopher Bernard Stiegler providester-intuition, through a viewpoint that cros- the necessary distance for understanding theses geographical boundaries and domainsocial impact of the digital revolution, whichboundaries, with contributions from faculty he compares in the scale of human history toexperts, practitioners, start-up pioneers and the invention of writing.philosophers:Marc Menesguen, Managing Director of Stra-We hope you enjoy the thoughts and strongtegic Marketing for LOral, explains how the convictions of all our authors.digital revolution has impacted the organiza-tion and strategy of this global beauty pro-ducts leader.Prof. Andrew McAfee of MIT paints a pictureof how these digital technologies are disrup-ting work processes and corporate strategy.Along the way he describes profound changesin American consumer habits and their im-pact on traditional marketing approaches.The article by Brian Xin, founder of Starry-Digital transformation review n01 - 05 5. strategyBeauty and digital: A magical matchan impact on how our consu-Marc Menesguen, Managing Director ofmers relate to information andStrategic Marketing for LOral, explains advertising, and thus to ourbrands. According to a study byhow the digital revolution has impacted the Forrester group, 7% of salesaround the world today takethe organization and strategy of theplace online, and almost 40%global beauty products leader.of off-line sales are influencedby internet research. So almosthalf of purchases in the worldare already somehow digitally H as the rise of the digital phenomenon changed your customers habits?influenced.This trend in any given countrydepends on its digital maturity. Digital transformation is oneIn the United States, where the of the major drivers of change phenomenon first developed, in todays world. I believe we the internet plays a very signi- are witnessing the start of a true ficant role today in purchasing revolution, given how the majordecisions and in how we sup- players are powering forward port our consumers. This is a Google, Apple, Microsoft, Face-little less the case in Europe, book... and the speed at which although things are advancing digital tools are proliferating. more quickly. And in the newer There are expected to be 20markets digital technology has billion connected devices (tele- a considerable impact. In China, phones, tablets, game consoles,internet penetration is already etc.) by 2015. almost 30%. These changes areof fundamental importance to This revolution naturally hasLOral.Digital transformation review n01 - 06 6. strategyHow does the company viewyou see emerging with digitalThe final opportunity involvesthis revolution? transformation?innovation. Research & Innova-tion is at the heart of the LOralDigitaltransformationre- First of all, digital transforma-model, and digital transforma-presents anextraordinary tion is a chance to strengthen tion helps our researchers work.opportunity to strengthen ourour brands images by impro- For example, in the United Sta-current business model and be- ving the efficiency of our com-tes we have a social networkcome even better at being themunication and advertising.of 250 women who test ourworlds number-one beauty cosmetic or facial care products,group. In fact, beauty and di-and give their feedback online.gital are something of a magi- The digital worldWe examine their reactionscal match, because beauty is an and take them into account multiplies the waysemotion and the digital world when designing new products. our brands can createmultiplies the ways our brandsWe have truly reached the stagecan create an emotional-filled an emotional-filledof co-innovation!relationship with their custo- relationship withmers.their customers. How is LOral reactingto take advantage of theseAlso, using our products isntopportunities?always self-evident, and digi- Second, the internet is an ama-tal tools allow us to help our zing tool for supporting custo-Our Chairman and CEO, Jean-consumers understand and use mers throughout a products cy-Paul Agon, named 2010 thethem better, and to offer them cle of use, and for strengtheningDigital Year for LOral. Suc-personalized, one-to-one ser-brand loyalty. The third advan-ceeding in the digital revolutionvice so we can increase thetage is one of sales. The inter- is a major strategic challengequality and perceived value of net makes it possible for brands for the company at the globalusing our products.to project themselves right into level, along with winning one peoples homes, and generate billion new consumers over theCould you tell us more spe-purchases and repeat purchases coming decade. The year 2010cifically what opportunities through online sales.was therefore one of intenseDigital transformation review n01 - 07 7. strategyBeauty and digital: A magical matcheffort, particularly for a crisisexit phase, with strategic po-licies impacting our 23 brandsand all our countries.This mobilization was expressedin a number of ways. First, wemade sure we had the necessaryexpertise in-house. We formed ateam of 300 people specializedin digital technologies, withthe goal of providing digitalexpertise at every strategic pointin the company, and we havea global digital manager to pilotthis cross-functional networkwho reports to me directly.I would point out here thatdigital transformation doesntonly concern marketing; rather,we have digital managers inMarc Menesguen Managing Directorresearch, manufacturing, com-of Strategic Marketingmunication and in the sa