Digital Transformation Fundamentals James Perdomo Socio / Director Synergy – Gartner Agent james.perdomo@gartner.com

Placeholder for text (substitute your own text; delete when not used) The world is changing. F A S T. Your CEO is trying to (at least) keep up with it…

“We are on the edge of change comparable to the rise of human life on Earth” Vernor Vinge

4th Industrial Revolution

Digitalization will make most Heritage FS Firms Irrelevant Image Source: https://commons.wikimedia.org/w/index.php?search=general+shinseki+&title=Special:Search&profile=default&fulltext=1&searchToken=e8vy9tubt7rrpikerxvs5g2fw#/media/File:Gen_Eric_Shinseki_official_portrait.jpg By 2030, 80% of heritage FS firms will go out of business, become commoditized, or exist only as zombies.

What Digital Business is (and may be more important: What is not) Placeholder for text (substitute your own text; delete when not used) What Digital Business is (and may be more important: What is not)

This is NOT Digital Business Paperless Innovative Roboadvisors Analytics and AI Cloud-first Mobile / Online It’s about new ways of creating value – these technologies are just useful building blocks FinTech IoT Blockchain By 2018, the biggest mistake CIOs will make is too much focus on technology.

Transformation — More Than Technology Impact of Technology Change x Impact of Enterprise Change 15x Cloud Omnichannel AI Business Model and Strategy Corporate Clock Speed and Governance IT’s Operating Model Incentives, Prioritization and Funding Model Compliance and Risk Management Big Data and Analytics Internet of Things Ways of Working Competencies, Culture and Mindsets Leadership and Change Management Customer Experience The Impact of Technology and Enterprise Change on the Likelihood of Success in Transformation Impact of Enterprise Change 15x

What Digital Business Really Is Things People Physical Digital “Digital business is the creation of new business designs by blurring the digital and physical worlds. Digital business involves the interaction of people, businesses and intelligent things." New business strategy New business model New operating model

Overly Simplified Narrative of Disruptive Digital Models First there was … … then … and lately Disrupted! Disrupted!

Compare Customer Models and Experiences Linear Value Chain Platform Decentralized Forbes: Why Blockchain Could Kill Uber Disrupted! https://www.forbes.com/sites/bernardmarr/2018/02/09/why-blockchain-could-kill-uber/#21d533384179 Disrupted? https://www.uber.com/newsroom/newriderapp

CEOs Intend to Change Business Models 63% Likely to make change to the business model in 2018 to 2020 Q. Is your company likely to make any change to its business model (how it creates, delivers and captures value in its markets) in the next three years (2018 to 2020)? n = 460 Q: What degree of change do you expect in each of the aspects of your business model? (response “High” in at least one area n = 290)

Digital Journey

What Is Your CEO's/Board's Digital Ambition? Transform Pursue New Business and Models Optimize Current Business The drive to digital business is usually a response to an external threat. Some organizations will immediately recognize the need to change and begin their digital journey. By contrast, others may see the opportunities, but choose to move at a slower pace. As with any journey, a digital transformation begins with the destination or end in mind. What digital business goals does the organization want to achieve? We call these goals "digital ambition." Digital ambition is a clearly identified, desired digital outcome of a digital business strategy — shaped by a digital industry vision and an enterprise's response to that vision. Digital ambition goes beyond generating interest in, and raising excitement for, digital business. It is a compass, clarifying the direction for digital business. In so doing, digital ambition impacts the organization — its people, culture, technology and competitive advantage. Digital ambition also provides a unifying vision for executives, helping them commit to, and align with, the digital transformation 1 2 3 4 Improved Productivity and Products Better Customer Experience New Product and Services New Business Models

The Digital Platform – this is the Technology Enabler for Transformation IT Systems Things Intelligence Ecosystems Customers

Digital transformation is largely a myth as institutional mindsets, processes and structures stand firm

66% 11% Leaders who are transforming. 64% of people think THEY'RE a good driver. But they think that only 29% of their friends are good drivers. 11% Are you a good driver? What about the person sitting next to you? Are they a good driver. 64% of people think THEY'RE a good driver. But they only think that 29% of their friends are good drivers. Do you think you're a good driver –of digital transformation? Most CIOs do. But in reality, only 11% really are transforming. There is a gap between desire and deliver. What these numbers tell us is that CIOs really do want to transform. But it’s really, really hard work to make it happen. You are working with business leaders that need to protect their cash cow. You are dealing with CEOs and board members that are getting ready to retire. You are trying to avoid being a bad cybersecurity headline in the newspaper tomorrow. You are dealing with new market entrants and digital giants that want to eat your lunch and pop the bag. There are not enough hours in the day to get anywhere near the bottom of your to do list. But at some point true transformation becomes like a book on the shelf. Just because I have a book about how Kristin can be a better person on my bookshelf doesn’t mean I’m going to become a better person. https://www.prnewswire.com/news-releases/new-allstate-survey-shows-americans-think-they-are- great-drivers---habits-tell-a-different-story-126563103.html Leaders who are transforming. Leaders who think they are transforming. *Source: Gartner's 2018 Digital Business Survey

Next 120 Days Share this information with your team Placeholder for text (substitute your own text; delete when not used) Next 120 Days Share this information with your team Create a Sense of Urgency Put in place a lean transformation “Execution Office” Master business model frameworks Inform and educate about Digital Transformation Help every member of your executive team develop into their own digital team role.