digital transformation a need or a necessity? how …...digital marketing, sales, customer services...
TRANSCRIPT
Michał Kreczmar Director, Digital Transformation, PwC
Digital transformation a need or a necessity? How did COVID-19 force the world to use technology?
www.pwc.com
Netherlands – Polish Chamber of Commerce 14.05.2020
WTH is Digital Transformation?
Axel Springer
74% revenues & 87% EBITDA from
digital
Walmart
3. online retailer in USA
Banks in Poland
18 mln clients online (36-51%),
6,5 mln mobile only
NY Times
4,3 mln digital subscriptions, 1/3 of
revenues
Domino’s
60% orders from digital channels
Estonia
Can’t manage only 3 administrative
things online: marriage, divorce, notary
KLM
25 mln USD additional revenues from
digitalization of customer service
Starbucks
25 mln clients paying through mobile
app
Airbus
90% energy reduction thanks to 3D
printing
Boeing
40% increased productivity, 90%
quality increase Google Glass usage
CCC
26-28% share of e-commerce
revenues at the end of 2019
Source: PwC
WTH is Digital Transformation?
Axel Springer
74% revenues & 87% EBITDA from
digital
Walmart
3. online retailer in USA
Banks in Poland
18 mln clients online (36-51%),
6,5 mln mobile only
NY Times
4,3 mln digital subscriptions, 1/3 of
revenues
Domino’s
60% orders from digital channels
Estonia
Can’t manage only 3 administrative
things online: marriage, divorce, notary
KLM
25 mln USD additional revenues from
digitalization of customer service
Starbucks
25 mln clients paying through mobile
app
Airbus
90% energy reduction thanks to 3D
printing
Boeing
40% increased productivity, 90%
quality increase Google Glass usage
CCC
26-28% share of e-commerce
revenues at the end of 2019
Using digital technologies
and data as a leverage to
improve any of company
actions
Source: PwC
What questions should we ask:
What part of business is and could be based on digital technology, data, IT?
What IT tools speed up work, reduce costs, increase profits?
If We digitally transform business how it impact our business model or revenue generation model?
What processes we can automatize, what systems computerize? Where we need people, where robots/bots are enough?
What IT tools, data use our clients/employees/partners, and we don’t? Why?
How, where, for what purpose we’re analyzing data? How we decide based on data? How broad is access to data?
Which IT/data solutions are “commoditized”? On which ones can we build competitive advantage?
How our enterprise tech stack, data flows looks like? How we protect ourselves ‒ cybercrime?
What digital solutions provide our competition? What data and analytics they use? What’s they way of working?
Are our IT, data solutions up to date (cloud, edge, IIOT, AI/ML)? How many legacy systems we have? How huge is technology debt?
What’s our way of working? How we manage project? How agile, lean, reactive we are? What’s our company culture, digital literacy level?
What’s regulations impact on our day to day bussiness?
To what extent our products/services are based on IT/data? What’s our innovation loops?
Source: PwC
When we know that we’re transforming digitally?
Digital products and
services
03Digital marketing,
sales, customer
services
02Data driven
decisions
05
Work automation &
Machine Learning/AI
06Agile ways of
working, innovations
culture
07„Omnichannel”
customer, employer,
partner experience
09„Digital, technology,
data enabled”
10Flat structure, fast
decision making
08
Revenues from
digital
01IT, data tools inside/
outside organization
04
Source: PwC
Where We should invest?
How critical are emerging technologies for your business and how confident are your in your ‘digital trust’ controls?
Source: 2019 Digital Trust Insights, PwC
81%
69%
65%
70%
62%
63%
63%
63%
67%
61%
55%
39%
33%
31%
31%
29%
28%
28%
27%
26%
25%
22%
IoT
Robotic / intelligent…
3D Printing
AI
Quantum computing
Edge computing
Augumented reality
Virtual reality
Robotics
Blokchain
DronesDigital trust controls inplace
Critical to business
Challenges in Digital Transformation (DX): interconnected vessels
Competition
TechnologyConsumers/Clients
Regulations
Customer
Experience
Customer
Insights
Customer
Journey
Organization
Structure
Strategy
Data Processes
IT
Business Model
Infrastructure
Leadership
Organization
culture
Capabilities
Vision
Role
Compliance
Ways of working
KPI
Source: PwC
Where are the best places to start?
Sales Client acquisition and loyalty Esizeme, eobuwie/CCC
Sales Lack of workforce Selfservice stores Żabka
Sales No client data and loyalty Mobile app, Rossman
Customer Service Lack of workforce AI (Max), Orange
Recruitment To much friction AI (Emplocity), PKO BP
Start where are the pain points now, or will be in a near future. Cut the friction out
Source: PwC
Where are the best places to start?
External
• Company Management
• Analytics & Reporting
• HR, HC
• Production & Assembly
• Accounting & Tax
• Work tools
• R&D
• Governance
• Maintenance & Monitoring
Internal
Marketing
Customer
service
Sales
Suppliers,
partners
Distribution & supply chain: logistics, warehousing,
fulfilment
Source: PwC
Building competitive advantage during COVID-19
Think about impact of
Touchless: payments, logistics, customer service, POS, ways of working, impact on consumer/employer experience
Tele: work, sales, services, entertainment, education, government, communication, products…
Infrastructure: cloud, supply chain, fulfilment, last mile, monitoring, failure prediction…
Automation: selfservice IT tools for employees, consumers, partners, API, workforce automation, RPA/IPA…
Data: internal, external, consumers, partners, factories, processes, flows, control, dashboards, CRM, DMP, CDP…
Source: PwC
What we can transform to and to what extent?
Structure – interdependence
Systems – procedures, IT solutions, data & analytics
Staff – workforce: people, machines, software
Skills – know-how, ways of working
Rather no:
Strategy – There is no 'Digital Strategy’ just strategy in a digital
world
Style – management
Shared values – ideas
Skills Structure
Style Systems
Superordinate
Goals(Shared Values)
Strategy
Staff
Yes we can:
Source: PwC
How to measure ambition and know our limits?
„If the product is software and thus can produce
software gross margins (75% or greater), then it
should be valued as a software company. If the
product is something else and cannot produce
software gross margins then it needs to be valued like
other similar businesses with similar margins, but
maybe at some premium to recognize the leverage
it can get through software.”
Fred Wilson
Union Square Ventures
Ben Thompson https://stratechery.com/2019/what-is-a-tech-company/
Can we be tech or just tech enabled business?
SOFTWARE Creates ekosystems
Has zero marginal cost
Improves over time
Offers infinite leverage
Enables zero transaction cost
How we can transform?
Old things New things
Old
ways • Traditional retail or offline services
• Paper document workflows
• Prepaid cards for digital products, services, virtual money sold in
traditional retail chains
• Taxes on digital services, products
New
ways
• Meetings through videoconferences
• eCommerce
• SVOD
• E-books
• E-learning
• Voice/chat bot customer service
• On-demand delivery, e-Consierge
• BOPIS, Click & collect
• E-merchanidising – AR
• Dashboards
• Paczkomaty, delivery lockers
• OTT video transmissions of concerts, sport, politics
• Online tax returns
• Electronic signature
• Online sale of virtual goods, services (clothing, accessories for
avatars in games, virtual worlds)
• Computer games
• E-sport
• Digital advertising, programmatic: MA (Marketing Automation),
DMP (Data Management Platform), DSP (Demand Side Platform)
• Interactive media
• E-Services e.g. for SaaS companies helping them build, develop,
sale, manage their products
• Apple & Google social distancing solutions for governments during
Covid-19
Source: PwC
Finally, what we can really do?
Small Huge
(scale of change)
Old
New (ways of doing things)
Wait
Copy from best
pupils
Permanent
transformation
Autodisruption
Reduce friction
Build on
advantages
Use data &
analytics
Source: PwC
Nigel Fenwick
Vice President
Forrester
Whenever representatives from a vendor claim they are experts in digital
transformation – I ask them to define digital transformation. Listening to how
a vendor describes its interpretation of this term tells me a great deal about
how well its people understand the opportunity and challenge. If it sounds
like the vendor simply relabeled its traditional IT services as digital
transformation, it probably did. While they may still be helpful in managing
your legacy technology, they are less likely to have the capabilities you need to
accelerate toward becoming an outcome-delivery business.
Thank You
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Michał KreczmarDirector, Digital Transformation, PwC
+48 883 365 [email protected]
Q & A