News

Advanced Search

Retail Performance, Profit Improve With Digital Transformation

Nov 11, 2013 11:47 AM   By Jeff Miller
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share

RAPAPORT... Every industry faces numerous alternatives to gaining the digital advantage, according to Capgemini Consulting and MIT Digital Transformation, but there also exists ''a bewildering barrage of advice'' along with conflicting and often incorrect suggestions on how to move an organization forward in the digital age. Authors of the report, ''The Digital Advantage,''  found that a higher level of digital maturity across the enterprise resulted in significantly more profit than that earned by a less digitally astute player. The authors collected data from 400 firms,   7 percent of which were retailers, and interviewed 157 executives. Retailers were generally confident in the potential for social and mobile, as well as their digital skill set, but the authors advised retail firms to focus on cross-channel consistency and worker enablement, while building their analytics capabilities.  digital maturity

Capgemini Consulting and MIT identified common patterns that identified how organizations have grown their digital maturity since the authors' first  study, conducted  two years ago. In terms of digital transformation excellence, which authors defined  as ''digirati,'' the high-tech industry led with 38 percent of firms in that classification, followed by 35 percent of the banking world, 33 percent of the insurance industry, 31 percent of travel and hospitality, 30 percent of telecommunications and 26 percent of retailers.  By comparison, the pharmaceuticals industry only had 7 percent of firms that qualified as digirati.   (View the entire report.)

The most successful organizations were transforming and integrating the enterprise from the top down, securing employee engagement on the digital strategy and fostering cultural change. Capgemini and MIT identified top transformation management practices that enabled the most successful companies to align their digital efforts under a common vision and coordinated structure and engage the company in making that vision a reality.  Those practices were: establish a transformative vision, which frames how the company will be different in the future; create digital governance to manage effective and coordinated operating efficiency and ensure that digital efforts are moving in the right direction; minimize resistance to internal change by engaging employees, who in turn help make the vision a reality, and instill shared digital goals between IT and business executives.

Compared with the 2011 survey, the authors found that CEOs and other senior executives today were increasingly seeking answers to practical questions about what digital transformation means for their businesses. Based upon the feedback, authors stated that digital transformation strategy required taking action in four key areas, such as framing (conceptual), investing, engaging and sustaining.

CEOs need to ensure that their senior team has a common vision of how to proceed, coupled with understanding why the change is required and how the future will be better after the transformation. Executives must ensure their organizations invest in the right areas, which may require reducing funding for  unproductive areas while ramping up investment where it needs to occur. Engage employees, since a shared vision creates less resistance to change and often identifies new opportunities that were not previously envisioned, according to the authors.

Digirati sustained and differentiated themselves by excelling in a few areas such as  customer experience, social media, mobile, customer analytics, process digitization or internal collaboration, but rarely in all, the authors noted.

While moving ahead by improving the enterprise's digital maturity,  Capgemini concluded that organizations must identify where the company should excel now, based on its existing capabilities and strategic assets and as capabilities improve, they can refocus to excel in areas of weakness. Engage the organization early and often to send  an unequivocal message that change is necessary.

''Although more than half of the executives we surveyed believe their firms have the necessary digital skills, nearly all believe that they need to improve in some areas. To fill skills gaps, consider hiring some experienced executives who can make an impact quickly and coach existing employees. Redesign your training programs to develop skills your company needs, such as Intel’s 'Digital IQ' program that trains and certifies employees in social media,''  the authors advised.

Other options included partnering with vendors who are digitally mature and remaining focused on building and sustaining momentum for change. Quantifying and monitoring investments also provides the power  help to change the culture, the authors' noted.

 

Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
Tags: capgemini, investment, Jeff Miller, maturity, mit digital, retailers
Similar Articles
Similar Videos
Enterprise Solutions Help Jewelers' CRM, ERP
Jan 16, 2013
The 102nd annual Retail's Big Show, hosted by the National...
diamond viewer Diamond News Broadcast... esdnetwork ESDNetwork Optimizes Jewelry... big show sm Diamond News Broadcast...
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First
© Copyright 1978-2014 by Martin Rapaport. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are TradeMarks of Martin Rapaport.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.