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Achieving digital maturity to drive growthAugust 2018

of decision makers feel they have two yearsvto make inroads on digital transformation orrisk falling behind.of executives feel confident thatSource: Progresstheir company fully understandsthe potential for digital to changevalue creation.Source: Forresterbusiness leaders agree that digital prioritiesare fully aligned within their organisation’soverall strategy.Source: Fujitsu2

ThinkdifferentlySeedifferentlyDodifferentlyThe digital era needs a new approach because themonolithic, linear approach to organisationtransformation is too slowIt is that simple but it’s not easy3

All organisations recognize that digital is a major differentiator, but there are so many different digital assessment tools out there, it’s difficult toknow which will give the best results.The first industry-standard digital maturity assessment:The DMM is a framework that enables business leaders to:Developed in collaborationwith the TM ForumRapidly assess where they are intheir transformation journeyHuawei ConsultingTata Consulting ServicesOrangeNokiaBearingPointPCCW GlobalDetecon Consulting MicrosoftChina UnicomBTChina nesiaNTT GroupEtisalat China TelecomWith key contributions from industryand subject matter expertsReviewed by a broad spectrumof global telco businessesPrioritise and focus their transformationefforts to maximise returnMake impactful transformationinvestmentsDigital capability is assessed against five dimensions to create an enterprise view of digital maturity:5 DIMENSIONS (Click for detail)CustomerStrategyTechnologyOperationsOrg. & Culture28 SUB-DIMENSIONS179 INDIVIDUAL ASSESSMENT CRITERIAToday: as-isTomorrow: to-bePrioritize: importanceCompare: benchmarkAs-is score for digitalcapability todayTo-be score aligned tothe organisation’s ambitionImportance score to identifypriority areas for focusCompares organisations totheir peers on key criteria4

One thing holding back progress towards digital transformation in the telecoms industry is the lack of a clear, industry-oriented roadmapMany other digital maturity modelsexist but with varying scopes, pointsof view, and metrics for measuringsuccess.Using the Digital Maturity Model willempower businesses through everystep of their transformationjourney.The Digital Maturity Model is:It enables business leaders to: The first industry-standarddigital maturity assessment tool The first pan-organisationdigital model, covering 5 corebusiness dimensionsAssess and measure theprogress of their transformationjourney Understand the pace of change,and prioritize objectives andareas of focus accordingly Make impactful investments intransformation projects The first to benchmark againstpeers and measure progressMORE: Define your ambitions5

OutputsApproachChallengesDifferent approaches can be adopted for using the Digital Maturity Model Bring all siloed digital initiatives under oneprogramme Drive digital as a common agenda across avery large organization Give direction on key programmes that willdeliver required digital capabilities Align on digital priorities across the business Prioritize focus and investment on dimensionsmost critical to delivering overall strategy Define a consolidated view of global digitalmaturity across Opcos to support informeddiscussion with Group and Opco executives 10 week engagement 200 surveys completed11 business unitsEngagement across 4 levels of theorganisation (VP, GM, Dir., Expert) Surveys completed individually using webbased self-assessment tool Supported by interviews, evidence data & KPIs 6 week engagement72 participants9 business divisionsEngagement across 4 levels of the organisation(VPs to Dir.) Data gathered over 37 group workshops &individual interviews 4 week engagement 5 OpCos, Enterprise, and Group businessessurveyed Surveys completed by Deloitte account teamsbased on detailed knowledge of the client Front end assessment (i.e. outside in,sentiment/social media analysis) In-flight digital initiatives assessment Weighted maturity index incl. evidence 60 digital initiatives (incl. 20 quick wins) Developed transformation roadmap Set up Digital Transformation Office DMM assessment per division and atorganisation level 4 digital initiatives / recommendationsidentified to drive digital transformation andchange Developed draft transformation roadmap DMM assessment per Opco and for Group ‘Heatmap’ of current digital maturity againstGroup and Global priorities Identified gaps against priorities and keydifferences by market 6 key recommendations to drive digitaltransformation and change6

Faster revenue growthReduced cost of operationIncreased customer satisfactionMore engaged employees6 big trends that digital exploitsThe digital opportunity is present across the whole enterpriseDIGITAL DISRUPTIONDIGITAL EXPERIENCEReimagine business1. ConnectivityDIGITAL AT THE COREEngage consumers andcustomers in new waysMoving from a linear operator-to-Enable intelligent sensingoperations4. ExperienceDeploying digital channels andhousehold relationship, digital unlocksfunctionality across product, marketing,the ability to create user-to-device-to-sales and care to improve the customerservice-to-lifestage relationships,unlocking new value2. InnovationCollaboration and crowdsourcing(underpinned by flexible platforms)enable you to rapidly develop, test andlaunch new products and services todeliver more impact to your customers,and create differentiation in your marketexperience, enable self-service and joinNewOperatingModels &CultureNetworkEcosystemsNew ValuePropositionsNext Personalised,ProgrammaticMessagingNew RevenueModelsFlexible mersiveSocial /Always OnDigitalContentNew nDigital ngLocalNuancedCustomerExperiencesCustomerLoyalty &ReferralSchemes3. AutomationApplying automation(e.g. roboticprocess automation, chatbots) tomanual tasks enabling faster, moreaccurate processing, or more efficientinteractions, freeing up humans to focuson emotional customer engagementDigitalEngagementPlatformsDigital ShopFront / Digitalin RetailSeamlessCommerceIntegratedPhysical,Digital GoTo-MarketPropositionDigitallyEnabled Sales& CarePersonalisedBundleBuilder /DynamicPricing &DiscountsWeb Chat &AsynchronousMessagingIntelligent IVRChatbots lyEnhanced R&DDigital SupplyNetworksOpenInnovation tfolioDynamicControl ce &Back OfficeRobotics s to CoreProcesses /MobileVisualisationsDriver-BasedForecasting &PredictiveAnalyticsDigitalPerformance& HRManagementAgileWorkforcePlanningFlexibleCareer PathsCascadingGoals, KPIs& Incentivesup fragmented customer journeys5. Risk managementBetter control of data assets, andmanagement of operational riskthrough the application of cyber,analytical and data toolingPerformanceGamification &InterventionProcessProductivityAnalytics nment toDigital OpModelAdopting a digital philosophy allows you to achieve success quickly and iteratively6. Data IntelligenceCollecting and employing data to gainbetter insight into the customer,creating enhanced and personalisedexperiences, and predicting the nextbest action measured against a rangeof dynamic criteria7

The potential benefits of an enterprise-wide digital transformation are significant – below are some benefits we have seen in other Telcos1Marketing & SalesCareFinanceProviding customers with a seamless and personalisedexperience across all digital channels will encourage theirmigration from physical stores, telesales and direct sales,towards a primarily digital experienceCall volumes can be reduced by 30-40% through implementation of selfservice capabilities and AI-enabled interactions (e.g. chatbots)Use of RPA in Finance can drive 30% cost reductionthrough automating manual finance processes (e.g.tax, billing and treasury)Potential to eliminate 60-80% of physical sales channelcosts and enhance customer experience ( 25%improvement in NPS scores)Opportunity to reduce total Care costs by 10%-30%RPA deployments in front and back office Care can deliver cost savings of30%-60% in the impacted process areasSales tooling can drive c.30% improvement in salesproductivity in the remaining physical channels. Inaddition, potential exists to increase ARPU by 1-2% byoffering personalised bundles, pricing and discountsProduct simplificationHRSimplification of products (retirement of legacy tariffs orbundles) and supporting platforms is the foundation forsuccessful automation and digitisation (you don’t want tosimply digitise your ‘mess’)Digital HR can revolutionise the entire employeeexperienceOrganisations with engaged workers have employeeswho are 57% more effective³ and 87% less likely toleave⁴ than organisations with low engagementProduct portfolio and platform rationalisation programmestypically deliver 5-20% Opex savings² (relative to in-scopecosts), and streamlined operational platforms and crossfunctional processes as enablers for growth and agility.Simplification is also a critical enabler for cross-borderstandardisation.1 2 Benefits sourced from implementations at North American and European cable, telco or mobile operatorsOther downstream cost savings may be lower if run a product portfolio and platform rationalisation programme3 ADP 4 Staff in Schaufenbuel, K. (2013). Powering your bottom line through employee engagement. UNC Kenan-Flagler Business SchoolEngage for Success (2012), The Evidence8

The Digital Maturity Model is just one component of a complex transformation journey that requires the right partner supportCONCEIVEDELIVERTHINKING DIFFERENTLYDOING DIFFERENTLYEnablers: ConnectivityDMM Leading-edge innovation Automation Experience innovation Cyber Security Data intelligenceRUNScale, OperateIMAGINESense, Frame, DecideLenses: Branding & values Experiences & engagement Ambitions & aspirations Ecosystems Platforms & data Enterprise operationsDELIVERValidate, Refine Organisation & talentSEEING DIFFERENTLY9

Unlike our competitors, we are a one-stop shop, able to provide true end-to-end capabilities for our clientsIMAGINEADVERTISING AGENCIESDELIVERRUN. . .T H E F U T U R EGLOBAL SYSTEMS INTEGRATORSDELOITTESTRATEGY HOUSESMANAGEMENT CONSULTANCIESMARKETING SERVICE PROVIDERSDIGITAL AGENCIESPLATFORM PROVIDERS10

ImagineAt Deloitte we understand thatdigital transformation involves Assess current state digitalcapabilities.The Digital Maturity Model isDMMa complex ecosystem ofof focus, and establish whereto start.It will inform and support youthroughout your digitaltransformation, and will allowus to determine how we canbest support you. Validate capabilities to enhance Measure the value and impact ofbased on business objectivesinitiatives to digital maturity Refine ideas and set a plan for Evaluate process improvementfuture operating modelDMMDELOITTE SUPPORTgaps, helps prioritize key areas Quickly identify opportunities Frame the future visionan effective accelerator thatrapidly identifies capabilitymaturityRunDeliverand effectivenessDMM Explore new opportunities toshape the future Define the capabilities neededto win (people, process,technology) Redesign how you organize todeliver the strategy Implement Operating model Develop long term changeand talent strategy to delivermanagement and talent plans to helpthe visionorganisations proactively adapt Consolidate data to supportthe new digital environment Roadmap the deployment of Deploy effective analytics to monitorimpact and inform future offerings Embed a culture of disruptionnew and existing assets11

KEY DELOITE ASSETS/ PROPOSITIONSDELOITTECAPABILITIESDMMDIMENSIONSUsing the Digital Maturity Model dimensions as a guiding framework, we have a broad set of digital capabilities to support your digitaltransformation programme and help you meet your nisation &Culture Digital Marketing &Insight Next Gen Sales & Service Design Advisory Market Gravity proposition design Acne - creative agencyservices Digital Strategy Design Advisory Market Gravity –proposition design Acne - creative agencyservices Doblin – innovation Digital Platforms &Engineering Technology Strategy &Architecture Technology Delivery Digital Analytics Cyber Risk Advisory EnterpriseTransformation Digital Supply Networks Finance Operations Demand Analytics Digital Organisation Digital Workforce People & Workforce Analytics Digital Presence DigitalMix (multi-solutiondigital ecosystem) ‘Connected Store’ Lab Growth Labs Digital DisruptionIndex Venture Path Ecosystems & Alliances Disruptive M&A Enterprise Value Map Quadplay CapabilityFramework Ecosystems & Alliances DigitalMix (multi-solutiondigital ecosystem) EnterpriseNext (Apple) Workplace (Facebook) McLaren AppliedTechnologies solutions Digital BSS TransformationFramework (Open API) Agile Transformation Robotics & ProcessAutomation Future Works Digital Finance Lab ‘Connected SupplyChain’ Lab ‘Insight DrivenOrganisation’ Lab Agile TransformationDigital DNADeloitte PixelEmployee Value IndexNext Gen Digital Leadersprogramme Future of Work Lab ‘Connected Employee’ Lab Deloitte Capability Tool12

Alicia Hatch namedto Adweek’s Top 15Tech-Savvy CMOs#2 DigitalAgencyWorldwideGlobal DigitalMarketing Partnerof the YearPartner inExcellence Awardfor Cloud ServicesAdweek, 2017AdvertisingAge, 2015Adobe, 2015SAP, 2015Andy Main named toAdweek’s Top 100Power ListAndy Main namedConsulting Magazine’sTop 25 ConsultantsBronze Generation:Global–LeadAdweek, 2017Consulting Magazine, 2016Deloitte named aworldwide leader inDigital StrategyConsulting ServicesMMA Smarties, 2016IDC MarketScape, 2016Cannes LionBronze in CreativeEffectivenessGold: Internet Commercialand Online/InteractiveCampaign for EA SportsCannes, 2016Addy Awards, 2016Innovation Awardfor PlatformSalesforce, 2015Silver: Video Comedyfor “The Stages ofBusiness Disruption”Telly Awards, 201613

Christine AndersonDavid GreenManaging DirectorContact: [email protected]: [email protected] RobertsWilliam EllerbyDirectorContact: [email protected]: [email protected] publication contains general information only, and none of the memberfirms of Deloitte Touche Tohmatsu Limited, its member firms, or their relatedentities (collective, the “Deloitte Network”) is, by means of this publication,rendering professional advice or services. Before making any decision or takingany action that may affect your business, you should consult a qualifiedprofessional adviser. No entity in the Deloitte Network shall be responsible forany loss whatsoever sustained by any person who relies on this publication.As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiaryof Deloitte LLP. Please see www.deloitte.com/us/about for a detailed descriptionof the legal structure of Deloitte USA LLP, Deloitte LLP and their respectivesubsidiaries. Certain services may not be available to attest clients underthe rules and regulations of public accounting.Copyright 2017 Deloitte Development LLC.All rights reserved. Member of Deloitte Touche Tohmatsu Limited

DMMsub-dimensionsThere are 28 sub-dimensions that sit beneaththe 5 core DMM dimensions

The 5 core dimensions are divided into 28 sub-dimensions and 179 individual criteria on which digital maturity is assessed28 Organisation onsAgile ManagementConnectedThingsAutomated ResourceManagementLeadership &GovernanceCustomer Insights &BehaviourFinance &InvestmentData &AnalyticsIntegrated ServiceManagementOrganisational Design& Talent ManagementCustomer Trust &PerceptionMarket &CustomerDeliveryGovernanceReal-time Insights &AnalyticsWorkforceEnablementPortfolio, Ideation &InnovationNetworkSmart and AdaptiveProcess ManagementStakeholderManagementSecurityStandards & rchitecture179 digital criteriaBACK: Return to where you were17

Define yourambitionsConsider your ultimate objectives before youset out

What is my overall focus for thebusiness?The level to which your organisationHow will I configure the business toneeds to be digitally mature isenable to overall business strategy?dependent on your own businessstrategy, business model, and operatingmodel.What are the capabilities we need toexecute against our business strategyand business model?Any organisation needs to start byconsidering these broad theme in a topdown approach, while also keeping inmind the desired outcomes ofimplementing change.Based on strategy, business model, and operating model What are the target maturity levels and priorities across the dimensions?What are the broader business changes that need to be considered inplanning digital transformation?19

Use your overarching digital ambitions and the Digital Maturity Model to prioritize focus areas across all capabilitiesTarget digital capabilitiesand maturity levels dependon the value created andthe results that areimportant to you.Your business prioritiescan be used in parallel withthe Digital Maturity Modelsurvey results to driveaction and initiate digitaltransformation in yourorganisation.For example: If you’re your business Then it will be more important to focus on having amodel is highly dependent onmature platform-based infrastructure to facilitate anpartners to deliver open ecosystem with go-to-market partnersBACK: Return to where you were20

This publication contains general information only, and none of the memberfirms of Deloitte Touche Tohmatsu Limited, its member firms, or their relatedentities (collective, the “Deloitte Network”) is, by means of this publication,rendering professional advice or services. Before making any decision or takingany action that may affect your business, you should consult a qualifiedprofessional adviser. No entity in the Deloitte Network shall be responsible forany loss whatsoever sustained by any person who relies on this publication.As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiaryof Deloitte LLP. Please see www.deloitte.com/us/about for a detailed descriptionof the legal structure of Deloitte USA LLP, Deloitte LLP and their respectivesubsidiaries. Certain services may not be available to attest clients underthe rules and regulations of public accounting.Copyright 2017 Deloitte Development LLC.All rights reserved. Member of Deloitte Touche Tohmatsu Limited

Many other digital maturity models exist but with varying scopes, points of view, and metrics for measuring success. The Digital Maturity Model is: The first industry-standard digital maturity assessment tool The first pan-organisation digital model, covering