New Research from Capgemini Consulting and MIT

Global study shows need for C-level leadership

Paris, October 8, 2013

Capgemini Consulting, the global strategy and transformation consulting arm of the Capgemini Group, in partnership with MIT Sloan Management Review, today announced the findings of a new global research survey into Digital Transformation – the opportunity for radical business change offered by the convergence of new digital technologies such as social media, mobile, analytics, and embedded devices. The study, "Embracing Digital Technology: A New Strategic Imperative," reveals that while the potential opportunity of Digital Transformation is absolutely clear, the journey to get there is not.

The study – involving over 1,500 executives in 106 countries –shows that the opportunity offered by new digital technologies is clear. 78% of respondents feel that Digital Transformation will be critical to their organization within the next two years. Where Digital Transformation is a permanent fixture on the executive agenda, 81% of people believe it will give their company a competitive advantage. However, business leaders are struggling to translate this opportunity into a vision for change or a roadmap for execution. 63% of people said the pace of technology change in their organizations is too slow.

Engaging the organization. Competing priorities and lack of digital skills were the top two challenges in execution
Getting leadership aligned and committed to Digital Transformation. Lack of urgency or no "burning platform" was the number one most cited organizational barrier. In addition, only 36% of leaders have shared a vision for Digital Transformation with their employees (but within the third that have shared a vision, 93% of employees are behind it).
Making the case for Digital Transformation. Only about half of organizations create business cases for digital investments.
Putting the right governance structures in place. 40% said they had no formal governance practices around Digital Transformation and only 26% are using KPIs to track progress.

Didier Bonnet, Senior Vice-President and head of global practices for Capgemini Consulting, said: "There is a clear call to action here for business leaders. The C-suite plays a critical role in making Digital Transformation happen as only it is in a position to overcome some of the major hurdles, such as developing and communicating a vision, and governing the change across functional silos. The opportunities to improve company performance through Digital Transformation are clear, the execution is difficult. But, the only wrong move when it comes to Digital Transformation is not to make any move at all."

The report highlights Starbucks as a company that has made a strong move. It created a vice president of digital ventures role, hiring Adam Brotman to fill it. His first move was to offer free Wi-Fi in Starbucks shops, along with a digital landing page with a variety of digital media choices, including free content from publications like the Economist. Brotman is now chief digital officer at Starbucks, where he and Curt Garner, Starbucks’ chief information officer, have formed a close working relationship, and have restructured their teams so that they collaborate from the very start of projects. Last year, they cut 10 seconds from every card or mobile phone transaction, reducing customers’ time-in-line by 900,000 hours. Starbucks is adding mobile payment processing to its stores, and is processing 3 million mobile payments a week. Soon customers will order directly from their mobile phone. Starbucks has shown how digital can transform the customer experience.

“Digital transformation needs to come from the top,” said David Kiron, executive editor of MIT Sloan Management Review‘s Big Ideas initiatives. "Companies should designate a specific executive or executive committee to spearhead efforts and can take small steps, via pilot projects, so they can invest in the ones that work to advance their transformation goals.”

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