SPECIAL REPORT

DIGITAL TRANSFORMATION:
A CXO’S GUIDE

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

TABLE OF CONTENTS
03 Digital transformation: Retooling business for a new age
16 Five winning plays for digital transformation
20 Digital transformation: Getting beyond the hype
23 How Neiman Marcus’s top-down innovation strategy transformed
retail and increased revenue

26 Culture remains biggest barrier in APAC digital transformation

31 How retailers across the globe are undergoing digital transformation
through personalization

34 8 obstacles to overcome in your digital transformation journey

38 Digital transformation: Making it work in the real world
42 How to use digital transformation to win budget
44 Want to create digital transformation? Make a solid plan first
48 How digital is aiding Lovespace’s ambitions to transform its
self-storage

51 How Campbell Soup is betting on digital transformation, ecommerce,

science to grow sales

53 Study Group moving from manual DR to an “always-on” education

provider

56 Wendy’s cooks up digital transformation plans with kiosks, mobile

apps, customer experience lab

60 Improving productivity with smart office tech at VMware and Box

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

DIGITAL TRANSFORMATION: RETOOLING

BUSINESS FOR A NEW AGE
BY CHARLES MCLELLAN
‘Digital transformation’ is a buzzword that has been tripping off the tongues of vendors, analysts and industry
observers with increasing frequency in recent years. In a sense, digital transformation of business has been
ongoing for decades, starting with the mainframe and minicomputer and progressing through the PC/client-
server, internet/web and mobile/cloud eras. Arguably, it’s set to make the biggest impact yet in the next few
years, in the brave new world of AI-driven computing.

DEFINING DIGITAL TRANSFORMATION

But what exactly is ‘digital transformation’? Here are a few definitions and descriptions from various quarters:

“Organizations must begin to look at digital holistically and transform by applying digital thinking across every-
thing they do -- how they win, serve, and retain customers; how they operate internal processes; and how they
source business services. In short, they must become a digital business” (Forrester).

image: istock/metamorworks

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

“[Digital transformation is] the realignment of or investment in new technology, business

models, and processes to drive value for customers and employees and more effectively
compete in an ever-changing digital economy” (Altimeter).

“[Digital transformation is] the result of IT innovation that is aligned with and driven by
a well-planned business strategy, with the goal of transforming how organizations serve
customers, employees and partners; support continuous improvement in business operations;
disrupt existing businesses and markets; and invent new businesses and business models” (451
Research).

“The goal of digital transformation isn’t better social or faster analytics... it’s to remake brands
to be more adaptable, better at learning and above all, able to tie together the strands of
product, sales marketing and service that make up the customer experience” (Adobe).

A pretty broad remit, then, and one that stretches well beyond the purview of just the CIO. For example, in
many organisations digital transformation is moving inwards from the customer-facing edge, via a revamping
of the ‘customer experience’ or ‘CX’. That’s why the CMO is regularly mentioned in digital transformation
dispatches. But analysts and surveys also note that more digitally advanced organisations tend to have a holistic
strategy, driven from the top down by the CEO with buy-in from the entire C-suite.

It’s important to bear in mind what’s at stake here: a 2017 survey of over 500 C-suite executives across Europe
and the US (from ChristianSteven Software, conducted by GITNS) found that two-thirds (65%) believe that 40
percent of Fortune 500 companies will not exist in 10 years’ time. Over half (53%) of those surveyed said they
were concerned about compe-
tition from disruptive businesses,
although almost all (91%) were
hopeful about the future of
technology in their organisations.

For a pointer to business leaders’

high-level priorities in 2018/19,
we can examine Gartner’s 2018
CEO and Senior Business
Executive Survey, which
canvassed 460 CxOs.

IMAGE: GARTNER

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

“Although growth remains the CEO’s biggest priority, there was a significant fall in simple mentions of it this
year, from 58 percent in 2017 to just 40 percent in 2018. This does not mean CEOs are less focused on growth,
instead it shows that they are shifting perspective on how to obtain it,” said Mark Raskino, vice president and
Gartner Fellow in a statement:

To realise their growth ambitions, Gartner found that CEOs are looking to modify the structure of their
organisations (via new strategies, partnerships, mergers and acquisitions) and prioritise IT-related issues,
including digital transformation. According to the survey respondents, talent shortage and workforce capability
is the biggest inhibitor of digital business progress.

How established enterprises manage the introduction of new technology in the coming years will play an
important part in determining which ones survive in the face of competition from a new generation of highly
focused, agile startups -- which, of course, don’t have the requirement to maintain and upgrade legacy systems.
As Tim Yeaton, senior vice-president of Red Hat’s infrastructure business, told ZDNet’s sister site Tech
Pro Research in 2016: “In five to ten years, I think it’s about how much can be abstracted, how much can be
automated, how much can be driven through machine-to-machine and artificial intelligence, with developers
adding value to what’s come before. That’s where you’re going to see the pace accelerate.” In this new world,
the CIO will become much more of a curator and enabler of IT initiatives and developments -- a “broker of
the resources,” as Yeaton put it.

Let’s take a look at some studies on digital transformation.

WHAT THE SURVEYS SAY (2017)

A March 2016 report, Leading Digital Business Transformation, commissioned by SugarCRM and Squiz from
analyst firm Forrester, canvassed 410 senior executives from enterprises in Australia, China, France, Germany,
India, Singapore, the UK and the US. Sectors represented in the survey were financial services and insurance,
government, higher education, media and publishing and retail.

Here are the key findings from Forrester’s study.

Mature digital businesses are rare (just 11% of companies surveyed). The CEO drives the digital vision and
strategy in these organisations (41% of CEOs set the digital strategy, while 59% understand and support it).
Customer experience is the ‘North Star’ for digital transformation initiatives (the top three drivers for mature
businesses are improving customer experience, increasing the speed of innovation and improving time-to-
market). Cultural and organisational issues are key challenges even for mature firms (43% of mature digital
businesses see competing departments wanting to ‘own’ digital as the most significant barrier to effective

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

transformation). Digital is a journey that requires businesses to be agile (94% of mature businesses plan to
address the threat of digital disruption by making systems and processes more agile).

A key detail from Forrester’s report is the clear emphasis placed by mature digital businesses on analytics to
improve customer experience:

IMAGE: FORRESTER

September 2016 saw the release of Altimeter’s The 2016 State of Digital Transformation report (the analyst
firm’s second on the subject), based on a survey of 528 “qualified digital transformation strategists and
executives leading change within their companies”. Respondents came from companies in a variety of
industries -- all with more than 250 employees -- in the US, Canada, the UK, France and Germany.

Here are some of Altimeter’s key findings.

Customer experience was the top driver of digital transformation (although IT and marketing still influenced
technology investments), with 55 percent of those responsible for digital transformation citing “evolving
customer behaviors and preferences” as their primary catalyst. However, only half (54%) of survey
respondents had completely mapped out the customer journey within the last year or were in the process
of doing so. The top three digital transformation initiatives at organisations were: accelerating innovation
(81%); modernising IT infrastructure (80%); and improving operational agility (79%). Digital transformation

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

is largely led by the CMO (34%), but only 29 percent of companies had a multi-year roadmap to guide digital
transformation evolution.

As noted above, Altimeter’s survey found customer behaviour to be the main driver of digital transformation.
This was followed by the need to expand into new markets, to respond to competitive pressure and to
accommodate new regulatory and compliance standards:

IMAGE: ALTIMETER

Analyst firm 451 Research’s most recent spotlight on digital transformation on echoes the Forrester and
Altimeter studies in emphasising that this process is still in its early stages. Less than a quarter (22%) of
organizations that participated
in an April 2016 survey said they
had a well-defined formal digital
transformation strategy, while 36
percent were either considering
or planning a strategy and 29
percent had no strategy at all:

IMAGE: 451 RESEARCH

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

According to the analyst firm, the main drivers of Transformation of

digital transformation are: intelligence (generating
insight from data and moving to data-driven information usage is all
decision making); agility (essential because about two-way engagement
“digital disruption is coming to your business”); with customers over multiple
and customer-centricity (“the age of personalised
marketing is upon us, so rather than individuals communication channels,
being grouped into vague demographics, it is now and extracting insight
possible to know precisely when you are walking from the resulting data via
down the aisle of a specific supermarket, or have
entered the lobby of a specific hotel”). advanced analytics and
When it comes to the aspects of an organisation
machine learning.
that are transformed digitally, 451 Research
identifies three main areas: information usage, business processes and technology platforms.

Transformation of information usage is all about two-way engagement with customers over multiple
communication channels, and extracting insight from the resulting data via advanced analytics and machine
learning. Business process transformation requires cultural and technological shifts -- for example in the
adoption of modern collaboration tools such as Slack, or agile DevOps methods in the IT department.
Technology platform transformation, meanwhile, concerns the shift from siloed on-premise ‘systems
of record’ to flexible API- and microservices-driven ‘systems of engagement’ running in hybrid cloud
environments.

Adobe’s 2017 Digital Trends report is based on an extensive global survey of 14,163 digital marketing and
ecommerce professionals across EMEA, North American and Asia Pacific markets. Conducted in November/
December 2016, the Adobe/Ecoconsultancy study offers the following key insights.

Just over a fifth (22%) of respondents rank optimising customer experience as the single most exciting
opportunity for 2017. These respondents also look beyond mobile to focus on the IoT, augmented reality (AR)
and virtual reality (VR). However, the role of data fell down marketing’s priority list in 2017 compared to 2016
-- perhaps because these investments have already been made.

The vast majority (86%) of survey respondents agree that design-driven companies outperform other
businesses, while 82 percent believe that creativity is highly valued within their organisations and 77 percent
are investing in design to differentiate their brand. That said, 44 percent believe they lack the processes and
collaborative workflows to achieve a design advantage.

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

The survey reveals an apparent split between between companies that find it easy to build a collaborative,
customer-centric culture and those that don’t. The implication is that the former are smaller, more agile
startup-type companies while the latter are more traditional enterprises.

Personalisation, and channels that lend themselves to personalisation, are a driving force behind marketing
success, the Adobe survey finds, while marketers in APAC are more likely to prioritise engagement via mobile
apps and social media.

Looking further ahead, the most exciting prospects for digital marketers seem to be VR and AR, IoT devices
and AI/bots (particularly in Europe):

IMAGE: ADOBE

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

WHAT THE SURVEYS SAY (2018)

Report Survey statistics Key findings/themes

The Sorry State Of Digital 1,559 North American Over Half Of Firms Are Transforming -- And A Very
Transformation In 2018 and European Confused 21% Believe They’ve Finished
(Forrester) enterprise business One firm said, “It’s a war between old-school, technophobe
and technology leaders and the technology innovation that represents a
decision makers completely different way of doing business.”

“Any Job That Can Be Automated Will Disappear”

And if you don’t automate away your own jobs, a disruptor

will do it first instead, thus changing the economics of delivery.
Technology will ultimately transform every position in your
company.

In 37% Of Firms, CIOs Lead The Transformation

Sometimes a chief digital officer is the best outside thinker,

able to see what must be done. But an enlightened CIO -- a rare
breed, for sure -- has the technology awareness and the enter-
prise visibility to unify the changes you need to make.

IMAGE: FORRESTER

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

Report Survey statistics Key findings/themes

Real Digital: Success factors for 1,535 CxOs and An uneven digital landscape
digital transformation (Fujitsu) decision-makers at
large and mid-sized Exclusively online businesses have embraced digital trans-
companies from formation, while it’s a work in progress for more traditional
key industry sectors businesses. Business drivers behind transformation differ across
across 16 countries industry sectors. Outside of online-only companies, the finance
worldwide industry is the furthest advanced.

Outcomes of digital transformation

30% of digital transformation projects have delivered successful

outcomes in finance and retail; 25% in transportation; 21% in
manufacturing; and 14% in healthcare.

Success factors of digital transformation

Leadership, people, agility, business integration, ecosystem and

value derived from data -- a company’s ‘digital muscles’.

Attitudes to AI

68% believe that the future will involve people and AI working
collaboratively.

DATA: FUJITSU/CHART: ZDNET

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

Report Survey statistics Key findings/themes

2018 Digital Transformation Participants came 82% of organizations can’t attract and retain the quality and
Readiness Survey (DevOps.com/ from organizations quantity of software engineers they need to feed the business
Appian) of varying sizes and with innovative technology.
based around the
world. They were 72% of respondents don’t believe they’ll be able to scale their
invited to participate efforts to keep up with business demands in the coming years
via social media and More than 1 in 5 organizations say they’ve got 50 or more major
email invites sent to application development requests in their application backlog.
DevOps.com’s 93% of organizations say AI is a top area of focus for digital
qualified database transformation efforts in the next five years.
of IT professionals.
Number of 91% of organizations struggle with technical debt.
respondents: 463

DATA: APPIAN/CHART: ZDNET

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

Report Survey statistics Key findings/themes

The 2018 Digital Transformation 200 executives from Today’s customer experience is omnichannel
Report (Adobe) across the travel
industry Today’s travel brands must cope with a proliferating range of
customer interaction touch points, both offline and online.

Rising customer expectations shape digital priorities

The world-class customer experiences offered by leaders like

Amazon, Google and Airbnb are setting a high bar for customer
expectations.

Mobile is no longer a trend: it’s a requirement

Two-thirds of respondents said mobile devices now make up

20% or more of their website traffic.

Travel organisations are drowning in data

Rather than empowering many travel organizations, digital tools

and processes can often lead to decision paralysis.

Personalization must balance the digital and the human

touch

Digital personalization needs to be balanced by a decidedly

human touch -- otherwise it may fall flat.

Separating emerging trends from immediate opportunities

Tech tools like blockchain get plenty of industry attention, but

it’s opportunities like localization, chatbots and prescriptive
analytics that have the most immediate potential impact.

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

IMAGE: ADOBE

Report Survey statistics Key findings/themes

2018 Digital Transformation 128 executives in Companies are moving towards digital processes to make
Survey: Creating Products and product development, money, save money, mitigate risk, and discover new business
Services in a Digital World engineering, opportunities, within their organizational processes. With digital
(CorporateLeaders/PTC) production, corporate PLM [Product Lifecycle Management], IoT and the cloud, all
management, IT these boxes are ticked. The companies that can’t or don’t tick
and marketing, with these boxes, are now finding themselves to be digital laggards
respondents from within their industries.
Europe, North
America, the Middle
East and Asia

IMAGE: CORPORATELEADERS/PTC

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

OUTLOOK
Digital transformation is about reshaping organisations’ culture, business processes and IT operations around
new technology -- social, mobile, analytics (including AI and ML) and cloud, plus VR/AR and IoT -- in order
to better engage with their customers and streamline their internal processes.

Surveys suggest that many organisations are still in the early stages of this transformation. Some are starting
with the customer experience, while smaller, more agile companies may be finding the process easier than large
enterprises with legacy baggage. Talent shortage is proving a major barrier to digital transformation progress in
many organisations.

Data is a key raw material for the digitally transformed business, and data science will turn this raw material into
realisable value. But raw materials and value-added assets can be stolen, held to ransom or otherwise misused,
so next-generation businesses will need to guard and govern their data carefully or risk serious damage to their
brands and punitive fines under increasingly strict regulatory regimes.

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FIVE WINNING PLAYS FOR DIGITAL

TRANSFORMATION
BY ALISON DENISCO RAYOME
Most organizations are in the midst of digital transformation projects that aim to keep
the company competitive in an expanding digital market. However, the definition of a
digital project varies from company to company, said Khalid Kark, managing director of
Deloitte LLP and director of research for
The most popular Deloitte’s CIO Program.
digital measures that It might mean enabling mobile and social
companies plan to capabilities, or getting the workforce to
implement in 2017 are collaborate more, or focusing on customer
engagement and experience, or developing
moving systems to the and driving a new revenue source. So how
cloud, shifting to online can business and tech leaders choose the
digital tools, using data projects that will yield success?

analytics, and using “You have to look at your business context,

and develop an approach that would allow
social media. you to drive quick value for your business,”
said Kark. “It doesn’t matter what it is, but there needs to be an urgency around doing
it. Go after the low hanging fruit, build and establish credibility, then go for bigger, more
innovative efforts to drive change.”

Here are five digital transformation projects with high chances of success.

1. BUILD A CROSS-FUNCTIONAL DIGITAL TEAM

Digital enablement involves setting the foundation for further digital transformation, by
adding channels such as mobile, social, and cloud, said Hung LeHong, vice president and
Gartner fellow, and member of the CEO and Digital Business Leaders research group.

“It’s more of a technology preparing the ground than actual business change,”
LeHong said.

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

It seems that many organizations are preparing experience group to bring together employees across
for digital enablement: The most popular digital departments to develop new ways to reach their
measures that companies plan to implement in 2017 market, and revamped their infrastructure, apps, and
are moving systems to the cloud, shifting to online kiosks. The company also opened an innovation
digital tools, using data analytics, and using social center in San Francisco to test new technologies
media, according to a recent Tech Pro Research in a live environment to try and get ahead of the
study. consumer.

Part of this process should include building a “They learned how the physical aspects of customer
cross-functional digital team, said Gianni Giacomelli, interaction needed to change,” Solis said. “Every
chief innovation officer at Genpact, and head of aspect, web to mobile to app to cloud were all done
its Genpact Research Institute, which has studied to create a unified customer experience for a higher
digital transformation. “Your digital projects should and more advanced series of expectations.”
cross organizational fault lines—business people, IT
Research from Deloitte also found that 57% of
people, and front and back office people should be
CIOs ranked customers as the top business priority.
represented,” he said.
“My sense is that a lot of companies are gravi-
tating toward customer engagement and experience
2. IMPROVE CUSTOMER [projects], because there is a tangible benefit they can
ENGAGEMENT see,” Kark said.
Evolving customer behaviors and preferences are
the number one catalyst driving organizational digital
change, according to research from Brian Solis,
3. ENHANCE THE EMPLOYEE
principal analyst at Altimeter. EXPERIENCE
Improving employee engagement will soon follow
“Many businesses are looking to customer doing so for customers in terms of necessity, said
experience to bring about organized change,” Solis Solis.
said. “They learned customers and making decisions
differently, and are much more mobile and instant, For example, in recent research, Solis found that
so the tech they’re investing in is to serve a particular most enterprises still provide employees with
need.” desktop phones. However, most employees do not
use those phones, due to their use of smartphones
For example, Sephora went through several custom-
and other devices in their personal lives.
er-focused digital transformation projects, Solis said.
The company studied how their customers make “Employees are now at the point where if they
decisions, what technology they use and how it have a desktop phone and other old technologies
fits into their lives. It then created a new customer they have to work with, they start to view that

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

organization as being archaic, and not as a desired place to work,” Solis said.”If the customer experience is
painful or dated, the employee starts thinking about other companies.”

Some 79% of companies report that they have reduced paper use by shifting to online and digital tools, while
58% said they use online employee training tools, according to a Tech Pro Research survey. But while just 37%
said they have shifted away from traditional phone and email systems, another 33% said they plan to do so in
the next year.

4. ENABLE THE INTERNET OF THINGS

Companies should look to enable IoT elements into systems such as manufacturing, LeHong said. “It will
make your factories more productive, remove costs, increase productivity, and maybe even quality by using IoT
sensors and analytics,” LeHong said. Doing this does not change the business model, but does add business
value, he added.

One example of this is General Electric: The company integrated sensors into its aviation, transportation,
manufacturing, healthcare, and energy production businesses, and created software to analyze the resulting
data. Its software and services business made about $6 billion in revenue in 2016--a 20% increase from the
prior year.

Utilizing IoT in manufacturing can also pave the way for larger digital transformation efforts later on, LeHong
said. For example, a manufacturer may be able to use data gleaned from sensors in order to begin selling their
product as a service.

Currently, only 20% of companies said they have implemented IoT technology, according to a Tech Pro
Research survey. However, 30% of companies said they plan to do so in 2017.

5. MODERNIZE THE BUSINESS OF IT

Modernizing the business of IT is often a low hanging fruit for digital transformation projects, according to
Bill Briggs, CTO and managing director of Deloitte Consulting.

For example, AIG applied machine intelligence in its IT shop by automating its IT ticket system. Now, more
than 140,000 tickets are being resolved without the need for an employee. The company was able to redeploy
IT workers to do more impactful projects, Briggs said.

Creating a digital enterprise involves reshaping the way work gets done at the back and mid-office, that will
ultimately impact the front end. “You can prove out some of these digital technologies that will have impactful
front and back office implications in the IT shop,” Briggs said.

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

It can be difficult to prove backend ROI or a business case to get the needed funding for a project like this,
Kark said. “There is a huge amount of back end effort around legacy systems, capabilities, culture, security,
risk management, data, and emerging technologies that need to be in place for digital efforts to be constructive
and appropriate in terms of driving value,”Kark said. “If you don’t do that, the front end is only going to be
beneficial to a certain [point].”

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DIGITAL TRANSFORMATION: GETTING

BEYOND THE HYPE
BY MARK SAMUELS
Digital transformation remains a difficult concept to deliver on. The core idea is to use technology not just to
replicate an existing service in a digital form, but to transform that service into something significantly better.

While the idea might seem simple, there remain significant differences between the vision and the reality of
rethinking business processes. Here four CIOs give their best-practice tips for delivering business benefit that
sticks.

1. DIGITAL TRANSFORMATION IS MORE THAN JUST TECH

“I have a real thing about the phrase ‘digital transformation’—what is it? Did we have paper transformation?
Did we have bricks and mortar transformation, or metal transformation?” says Chris O’Brien, CIO at the Royal
Shakespeare Company (RSC).

He does, however, see the benefits of digital-led business change that can improve operations and customer
experiences.

“For me, transformation in our organisation is about key business concerns, such as how can we sell more
tickets, how can we improve audience engagement, and how we can reduce costs,” says O’Brien.

But he warns that CIOs must be careful to avoid the creation of a silo, where people label their work as digital
and then create a separate department. “You want people across your organisation, whether that’s IT, content
managers, or producers, working together,” he says.

“I feel that overuse of the word ‘digital’ can be counterproductive. Get your organisation to work together. Set
up a digital transformation team, by all means, but make sure that group has clear business goals and that it
comprises people from across the organisation.”

2. BE A LONG-TERM CHANGE AGENT, NOT A SHORT-TERM

CATALYST
Ian Cohen, CIO at Addison Lee Group, is another digital leader who is concerned that technology
professionals are spending too much time considering the semantics of change rather than delivering services.

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

“We’re still talking about what digital transformation is—why are people still wasting time arguing about
definitions?” he says.

That is something Cohen is keen to avoid in his role at Addison Lee. Appointed as group CIO last July, he now
has responsibility for all product and technology activities at the transportation company. Cohen says this focus
on products means recognising everything that his business does is directly related to creating great customer
experiences.

He says technology is simply one of the various building blocks necessary to create new and ongoing value for
the organisation. While digital leaders often focus on being the catalysts for this value creation, Cohen prefers
a different concept, where successful digital leaders are defined by their ability to deliver the benefits of digital
transformation on an ongoing basis.

“A catalyst is useful for bringing two inert substances together and creating something different. But at the end
of that process, it disappears. So, you don’t really want a career as a catalyst. It could be fun for a while, but not
over the long-term. It’s also a strategic truth that if you want to ‘be’ something, work out what that is, and then
go and ‘do’ things to get there,” he says.

Cohen says problems occur when CIOs fail to establish clear objectives. He says too many people are running
around trying to ‘do’ digital transformation, with no idea what they want to ‘be’ as a result. At Addison
Lee, Cohen’s aim is to use technology to deliver engaging services for customers—passengers, bookers, and
drivers—and he advises other CIOs to also focus on clear outcomes for their digital transformation projects.

“In my company, we are continually building and deepening our reputation as the premium ground-transport
provider. We are focused on changing ground transport into mobility-as-a-service through an obsession with
passenger service, having the best drivers, and delivering great solutions that inform, engage, and delight all
parties—that’s the purpose,” he says.

3. HAVE HONEST CONVERSATIONS WITH YOUR

CUSTOMERS
Akash Khurana, CIO and CDO at McDermott International, is leading technology-based initiatives that are
boosting organisational efficiency and effectiveness at the engineering company. Khurana is using data and
connectivity to transform how his business builds offshore and subsea facilities for oil companies around the
globe. He says several lessons around engagement emerge from this transformation journey.

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“It’s very important to understand the strategy of digital. You must think about how the technology can impact
the bottom line of the company in a positive way and improve the experiences of customers. You must get
your head around those concepts very early. And the way to do that is to get out there,” says Khurana.

“CIOs might be good at talking with internal stakeholders, but they are not used to going and talking to
customers. IT leaders can bring a lot of value to the business if they go outside and look for opportunities in
the value chain from the customers’ perspective.”

Once they’re aware of how digital can be used to help solve client challenges, Khurana says CIOs should focus
on understanding how technologies can come together and how new services will be integrated with legacy
systems. His firm, for example, is working with technology company Alfresco to deliver open and connected
systems. Khurana says digital transformation must be a continuous improvement lifecycle on behalf of
the customer.

“McDermott is positioned really well because we’re designing our own products and we’re making sure our
expertise and knowledge is transferred to our customers,” he says. “Have an honest conversation about how
tangible the benefits of digital will be.”

4. RETHINK SUCCESSFUL PROCESSES TO CREATE A

NEW FUTURE
According to Phil Armstrong, global CIO at  finance firm Great-West Lifeco, when his firm talks about using
technology as a strategic lever, it often means reinventing processes—including those that are working well and
some which are extremely profitable.

That approach sounds radical, but CIOs aiming to deliver constant digital transformation have no room to rest
on their laurels, even in areas where their business is already raking in returns, explains Armstrong. “If we do
nothing, because we believe our processes are already working well, then our perceived slowness will mean we
lose customers to agile, responsive and client-centric organisations,” he says.

“It’s not about predicting the future, it’s about reinventing the processes that we have today and which may
be working well, to work even better to match the changing expectations of our customers. It’s a lot easier to
invent the future than to try and catch up.”

Armstrong notes the potential danger from born-in-the-cloud fintech companies that are coming from
nowhere and “trying to eat our lunch”. “These small, startup companies have agility and they’re chasing scale;
we have scale and we’re chasing agility to future-proof our business,” he says.

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

HOW NEIMAN MARCUS’S TOP-DOWN

INNOVATION STRATEGY TRANSFORMED
RETAIL AND INCREASED REVENUE
BY ALISON DENISCO RAYOME
Many retailers have failed to innovate their decades-old storefronts and websites despite the threats posed
by Amazon and other digital native companies. But luxury department store line Neiman Marcus adopted a
digital-first strategy to customer service, creating an innovation lab and leveraging technologies like artificial
intelligence (AI), augmented reality (AR), and visual recognition to transform the shopping experience.

The Neiman Marcus Innovation Lab (iLab) came to life in 2012 in Dallas. Scott Emmons, founder and head of
the iLab, previously worked at Neiman Marcus as a project lead and enterprise architect, and has since spear-
headed the evaluation, design, testing, and piloting of new technologies and applications for luxury retail.

In his previous role on the enterprise architecture team, Emmons realized that the stores didn’t have the
foundation in place to support digital, “yet customers were showing up with smartphones and outgunning our
own associates’ capability to access relevant information that would help them in their shopping journey,”
he said.

The creation of the lab “allowed me, and the IT organization in general, to stop thinking about our customers
being internal Neiman Marcus associates, and start thinking about what we could do to make the shopping
experience better for the actual Neiman Marcus customer in a store or online,” Emmons said.

Neiman Marcus wanted to leverage technology to differentiate the store from competitors, as well as solve
problems for customers, Emmons said.

Notable projects from the lab include Memory Mirrors--giant video screens and cameras that allow shoppers
to see outfits in 360 degrees and compare clothing options side-by-side. These have rolled out to most of the
store’s 44 locations nationwide, Emmons said.

Following the success of the smart mirrors, the lab rolled out Memory Makeover Mirrors as well, which
allow beauty associates to record makeover sessions with customers and send the personalized tutorials home
to them. This also gives the beauty associate a full record of the customer interaction and products used,
Emmons said. The store also added AR beauty components that allow customers to try on makeup virtually
when looking in the mirrors--similar to Sephora’s Virtual Artist app feature.

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With an increased focus on online sales, the lab also launched the Snap Find Shop visual search feature in its
app, which allows customers to take a photo of a shoe, handbag, or clothing item and find a similar style in the
store’s product line using AI.

The efforts have paid off: In Q2 2018, Neiman Marcus reported total revenues of $1.48 billion--an increase of
6.2% over Q2 2017. Net earnings were $372.5 million, compared to a net loss of $117.1 million the
year before.

EMBRACING FAILURE
The concept of trying and failing at several new projects is not exactly natural in a corporate environment.
“Neiman Marcus is among the most advanced because they’ve allowed themselves to build a model for
innovation and experimentation,” said Brian Solis, a principal analyst at Altimeter. “They’ve built a culture from
that, that it’s okay to experiment and fail.”

The iLab in its current form is rare for an enterprise, Solis said. “Innovation centers often act in isolation,” he
added. “They explore innovation opportunities, partner with startups, and pilot programs, not to the greater
awareness or understanding of the organization at large. So one part of the organization becomes innovative,
but others do not benefit from that work.”

However, Neiman Marcus approached this by essentially offering “Innovation as a Service,” to help the rest of
the organization transform, Solis said. This means not just deploying new technologies in flagship stores, but
helping other teams throughout the organization learn from their work, he added.

The retailer has come a long way in terms of work and expectations since the lab started, Emmons said.
“We even began to do specific innovation programs in places other than technology--we have an innovation
team now that focuses specifically on product, for example,” he added. “I see it blossoming around the
organization.”

Other retailers need to invest in innovative experiments, or risk being left behind, Emmons said. But this
doesn’t necessarily mean create a large, expensive external organization to focus on digital.

“I think our approach has been very grassroots and built internally and cost-effectively,” Emmons said. “That’s
allowed a lot of staying power for the lab, where I’ve seen a lot of other retail innovation programs come and
go.”

Early and continuous support from the C-suite was also key, he added.

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INNOVATE, BUT DON’T FORGET THE BASICS

It’s not that the majority of retailers don’t want to innovate -- it’s that they don’t know how to, Solis said. “They
have had over a hundred years of traditional commerce that really started to unravel going back to the ‘90s, and
then only continued to branch off in new directions while they were still trying to figure out e-commerce,” he
added.

Many fall into the trap of chasing the latest hyped-up technology, said Sucharita Kodali, vice president and
principal analyst at Forrester. “These days it is AI and machine learning,” Kodali said. “But they often do miss
the boat on basics.”

Take Williams Sonoma, Kodali added: The company acquired an AR startup last year for $112 million to begin
work in that space, yet many customers still see online orders cancelled because the company doesn’t know
what it had in stock, she said.

“What is different about Amazon is that they do chase the moonshots, but they also nail the basics with laser-
sharp automation,” Kodali said. “Retailers don’t challenge their processes enough.”

Apparel retailers tend to iterate, rather than innovate, Solis said, adding features like buy online and pick up in
store. Neiman Marcus is innovating in the physical retailer experience as well, and in omnichannel experiences,
he added.

“The best companies are attaching themselves to innovation because it is a competitive advantage,” Solis said.
“Neiman Marcus has demonstrated that better than most of their competitors.”

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

CULTURE REMAINS BIGGEST BARRIER IN

APAC DIGITAL TRANSFORMATION
BY EILEEN YU
Digital transformation has become a priority “Asia-Pacific CIOs’ cultural
for most organisations in Asia-Pacific, but
businesses still are glazing over the need to
challenges are mostly about
first transform their corporate culture and business push-back to use
create new operating models. technology as an enterprise asset
The impetus for digital transformation has and the fear that agile practices
been widely accepted across all industries in
may not fit with existing ways of
the region, with few believing their business
do not need to transform. However, those that doing business.”
had begun their transformation journey years —Manjunath Bhat
before were finding their progress had stalled
after having picked the easiest, low-hanging
fruits, said Dane Anderson, Forrester’s Asia-Pacific vice president, research director, and region manager.

Customer expectations also were rising faster than organisations were able to change, causing customer
experience scores to plateau in most industries, the analyst noted.

“A primary culprit is the ‘frozen middle’ within large organisations resisting change and moving too slowly,”
Anderson said, adding that companies leading the way were starting to invest in “employee experience” as a
tool to “unfreeze the stubborn middle” in order to unlock more returns from their digital transformation.

Manjunath Bhat, Gartner’s research director, also pointed to corporate culture as a major challenge hindering
CIOs in scaling their digital efforts.

“Asia-Pacific CIOs’ cultural challenges are mostly about business push-back to use technology as an enterprise
asset and the fear that agile practices may not fit with existing ways of doing business,” Bhat said, adding that
the lack of resources and talent also are common barriers.

CIOs who were effective had taken the initiative to work with their CEOs, who must champion the company’s
transformation, and other C-suite colleagues to design and execute digital transformation roadmaps as well as
commit to change, he said.

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PROOF-OF-CONCEPTS CAN CONVINCE EMPLOYEES OF

DIGITAL TRANSFORMATION
The nature and size of an organisation’s business, though, can result in greater resistance to adoption, revealed
Genting Malaysia’s vice president of relationship marketing and social media Nicco JL Tan, whose role is
to champion the company’s digital transformation, including evaluating any strategy that involved its digital
channels.

Genting Malaysia operates casinos, resorts, and hotels offering 40,000 guest rooms. It serves 22 million visitors
a year on average and is aiming to boost this number to 30 million over the next five years.

Tan acknowledged the importance of instilling the right mindset within the organisation to truly embrace
digital transformation, but noted that this has not always been smooth-going for a company with a 52-year
history in the industry.

“We need to think about how digital affects and disrupts our day-to-day operations, and start thinking
about how we can enable ourselves to be more efficient. It’s about having a digital-first mindset, using data
and thinking mobile-first before making any business decision,” he said. “We have processes that are quite
traditional and not easy to change because it affects a lot of systems, so it’s not going to happen overnight.”

He added that transforming certain processes that involved sensitive information such as finance are more
challenging, as these had been established over time and it is tougher to convince employees carrying out these
tasks to move to a new process.

Furthermore, due to the sensitivities of operating a gaming business in Malaysia, Genting had to comply with
the country’s strict regulatory rules governing its casino operations. This meant taking extra precaution to
ensure any changes it made to existing processes would remain in compliance with local regulations.

Tan said his team was constantly running tests and trialling proof-of-concepts within a small user base to make
sure everything was in place before they were rolled out across the organisation.

More importantly, doing so would demonstrate the effectiveness of a digital transformation initiative and
convince employees to embrace a new way of doing things, he said, stressing the role of proof-of-concepts in
securing user buy-in.

Martin Mackay, CA Technologies’ Asia-Pacific Japan president and general manager, pointed to the need for
companies to develop a sense of “digital intuition”, so they would be able to make informed decisions and take
calculated risks.

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Mackay said: “This means being data-savvy, cultivating a deep understanding of where the data is coming
from, what it means, and how to use it responsibly. Those who can analyse and transform data—generated by
customers, employees, and partners—into insights and understanding of the market and new trends will be
champions in the digital economy.”

Tan, though, urged tech vendors to improve the way unstructured data is analysed so they can provide more
accurate interpretation of the information collected. He noted that several market players, for instance, are
attempting to tap native language processing to better assess online social conversations, so these can be
properly attributed to returns on investment in a marketing campaign.

Interpreting this data currently requires significant manual intervention, as such tools largely were still
inaccurate in their interpretation of the information available, he said.

He also pointed to the need for tighter integration across the different online and offline channels, so a single
unified view of the customers could be established. This currently remained highly disparate, he noted.

TRANSFORMATION REQUIRES LOOKING BEYOND THE TECH

According to Mackay, most companies in the region still look at digital transformation in terms of using
technology and software primarily to complete tasks faster and more efficiently. This, he said, is undermining
their efforts. Pointing to the vendor’s digital transformation impact and readiness study for the region, the
CA executive said the top three priorities for businesses are optimising operational efficiencies, improving
workforce collaboration, and reducing operational costs.

image: iStock/metamorworks

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This indicated that they are not investing enough time and effort on more impactful and transformative
objectives, such as creating new services, business models, and revenue streams, as well as improving customer
experience, he said.

Elaborating on what Asia-Pacific businesses are doing wrong with regards to digital transformation, Anderson
said: “Allowing inside-out mindsets and cultures to survive or changing them too slowly. Another common
mistake is obsessing over technology as a silver bullet when it is a tool that must be exploited by customer-
focused teams. Finally, too many organisations fail to understand the depth and breadth of the changes they
must make before declaring success.

“There is no way around transforming cultures and mindsets first in order to reboot company operating
models,” the Forrester analyst said. Organisations that had successfully transformed had exploited technology
as a tool to systematically understand and serve their customers as quickly as possible.

Radisson Hotel Group has mapped out a five-year business roadmap with the goal to improve its interactions
with customers. This includes significant investment in a building out a global IT platform, according to its
executive vice president and global CIO, Kevin Carl.

Noting that digital transformation is revolutionising the hospitality industry and is crucial to Radisson’s future
success, Carl said the group is focused on making its hotels and service offerings available to customers across
various digital channels. This also means digitising parts of the guest as well as operator experience that previ-
ously had been offline.

He added that part of the five-year plan includes a new unified technology platform, which encompasses all
core aspects of the hotel business including reservations, property management, point of sales, and catering.
This is scheduled for rollout in the second half of 2019.

Also in the works are a revamped online site and the introduction of mobile apps to offer customers new ways
to engage with Radisson as well as grow its customer base. In addition, to lower costs and improve speed-to-
market, the group plans to reduce its dependence on datacentres and move its delivery platform to the cloud.

Ultimately, Carl said, digital transformation is the means to an outcome, and not the destination itself. For
Radisson, this means delivering an experience that matters to its guests and that bolsters customer engagement
with its various brands.

It also means that the technology supporting this vision should not be apparent to the guest and must facilitate
the group’s physical business in “an easy, intuitive, frictionless way”.

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

Carl said: “If a guest or team member has to think hard about how to use digital, then digital won’t be relevant.
It is that simple.”

He further noted that while consumer technology is fuelling user expectation and can introduce innovative new
offerings, these might result in little business value. These conflicting returns sometimes can prove challenging
for the hotel group with regards to its digital transformation efforts, he said.

The CIO added that it also has been tough to build up capabilities that enabled the hotel to innovate quickly
and, at the time, be globally scalable and locally relevant.

According to Fujitsu’s Future Insights Global Digital Transformation Survey 2018, the finance industry is the furthest
advanced, with an estimated 90 percent of respondents in this sector already engaged in digital transformation.
In addition, 30 percent of companies in finance as well as retail already have delivered successful outcomes
from their digital transformation deployments.

The study also identified six key success factors of digital transformation initiatives: leadership, people, agility,
business integration, ecosystem, and extracting value from data.

In comparison to non-online companies, online companies demonstrated higher capability across the six areas,
said Noriaki Tanaka, Fujitsu’s manager portfolio strategy division.

In particular, the biggest gap was found to be ecosystem, as online companies placed more value on
partnerships with startups as well as organisations in other industries, government agencies, academia and
research institutions, and consortiums.

Tanaka noted: “Building partnerships with those players can be a key for non-online companies to accelerate
their digital transformation.”

Gartner’s Bhat also suggested that deep neural networks and machine learning enable organisations to not
only scale their digital business initiatives, but stronger analytics capabilities also translate to better business
decisions, which in turn yield better results.

He added that investments in data and analytics lower costs, empower companies to rethink business models,
and achieve higher operational efficiencies.

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

HOW RETAILERS ACROSS THE

GLOBE ARE UNDERGOING DIGITAL
TRANSFORMATION THROUGH
PERSONALIZATION
BY TEENA MADDOX
Retailers are using personalization technology to change
how data is collected on customers as part of an overall
“Ecommerce companies no
digital transformation strategy. longer see personalization
One personalization platform provider is London- as a nice to have, but as an
based Qubit, which has customers including essential way to engage
NET-A-PORTER, ColourPop, Ulta Beauty, Farfetch,
with their visitors.”
Vestiaire Collective, Ubisoft and L’OCCITANE en
Provence. Every week, Qubit is used to personalize —Graham Cooke
approximately $600 million in online sales.
Retailers working with Qubit can collect behavioral data from customers to use for personalization. In July,
Qubit integrated with Salesforce Commerce Cloud to automate the integration of Qubit’s data layer for
ecommerce companies. The resulting product is known as the Qubit Pro platform.

Qubit enables retailers to deploy personalization techniques that go beyond basic targeting and product
recommendations, whether they’re a first-time visitor or a long-time customer. The technology combines data
collection methods, advanced segmentation capabilities and personalization techniques.

“Ecommerce companies no longer see personalization as a nice to have, but as an essential way to engage
with their visitors,” said Graham Cooke, CEO of Qubit. “We’re working with brands that are leading the
way when it comes to creating data-driven customer experiences. The Qubit Pro platform is a valuable
stepping stone for Commerce Cloud customers wanting to integrate with a technology dedicated to powering
personalization initiatives.”

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WHY IT’S A DIGITAL TRANSFORMATION FOR RETAILERS

Using personalization has required a digital transformation for many retailers. In the not-so-distant past, online
customers had to search an entire site to find a product. Now, with personalization, products are suggested to
the customer based on a variety of data points, including their online browsing history and previous purchases.

“Ultimately this is about retailers driving more revenue and being very competitive within their sectors, and
these are already very competitive sectors, with categories like beauty an inherently competitive area,” said Leah
Anathan, chief marketing officer of Qubit.

Qubit also has Qubit Aura, an AI-powered discovery product built specifically for mobile commerce and
launched in late 2017. Overalll, Qubit customers have reported up to a 6 percent increase in revenue as a result
of personalization, Anathan said.

HOW L’OCCITANE USES PERSONALIZATION

L’OCCITANE en Provence is one of Qubit’s customers, using Qubit Pro on more than 20 domains from
Japan to Brazil, London to Australia and also with the US, according to Loanne Le Gac, e-business product
coordinator for L’OCCITANE en Provence.

“We have multiple regional teams using the platform to build personalizations that can easily be rolled out, if
successful, to other regional teams meaning we can scale very quickly. These include social proof, abandonment
recovery, geo-based personalizations and Qubit Aura, the product discovery solution for the mobile web,” Le
Gac said.

“Qubit Pro allows us to consolidate all of our worldwide personalization efforts into one platform.
Collaboration is key and aligning with the teams across the globe is essential to the success of our
personalization program. Working with Qubit, we’re able to bring the in-store experience customers have
in-person, online. It’s an incredibly exciting time to be in ecommerce,” Le Gac said.

The beauty and cosmetics retailer has been using Qubit since 2015 and has seen a 2.86 percent increase in
Revenue Per Visitor (RPV) overall, with a 3.55 percent increase in the UK and a 2.65 percent increase in the
US, Le Gac said.

“When Qubit Aura was released in late 2017, we were one of the inaugural customers on the solution as we
recognized that it was a great opportunity to offer 1:1 personalization using the latest AI technology,” she said.

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BENEFITS OF PERSONALIZATION
The biggest benefit of personalization is delivering customer experiences that resonate with visitors, she said.

“Personalization is required for any brand looking to differentiate their product offering and be able to deliver
experiences that really resonate with onsite visitors. You sometimes have seconds to engage with a visitor
online and if you’re not delivering content, offers and messaging which resonates they’ll quickly bounce,” Le
Gac said. “With personalization you can deliver context and appropriate messaging to visitors if their a first-
timer customer or if they’ve been buying from the brand for many many years. We focus on bringing together
retail, ecommerce, luxury, cosmetics and technology together into a cohesive experience for our visitors.”

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

8 OBSTACLES TO OVERCOME IN YOUR

DIGITAL TRANSFORMATION JOURNEY
BY ALISON DENISCO RAYOME
Enterprises with lofty digital transformation goals must take caution: The road
will not always be smooth, largely due to human behavior, not the new technology
itself.

“We’re at the cusp of trying to understand what digital is

as an industry,” said Khalid Kark, managing director of “The best efforts around
Deloitte LLP, and director of research for Deloitte’s CIO
Program. “We’re just starting to recognize the huge amount
digital are not individual
of impact digital will have. But we are not recognizing the siloed efforts, but are multi-
enormity of the effort required to actually drive those front functional and dimensional
end changes we want.”
efforts where there is a
Here are eight common challenges that arise during digital
team and accountability.”
transformation projects, so you can be prepared to navigate
any bumps in the road. —Khalid Kark

1. ORGANIZATIONAL CHANGE
Some 70% of change programs fail to achieve their goals, largely due to employee
resistance and lack of management support, according to McKinsey.

“Digital transformation involves a significant change, and usually changes to

people’s jobs, compensation, bosses, and the type of work they do,” said Marc
Cecere, vice president and principal analyst on Forrester’s CIO role team. “Making
that kind of change is difficult, and is something where there is not a lot of
science. Make sure you have someone on board who knows how people’s minds
are changed, and how to adapt to new business models.”

Organizational siloes are one of the biggest impediments to digital transformation

efforts, in terms of understanding the customer journey, said Gianni Giacomelli,
chief innovation officer at Genpact, and head of its Genpact Research Institute.

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Often either the IT group or the business lines areas like data or changing business processes, you
try to solve it, and do not work together deeply, may have some problems, but it’s not the worst
Giacomelli said. thing. But the feeling is if you mess up on security,
the consequences are more dire.”
Digital requires multi-functional collaboration,
Kark said. “The best efforts around digital are not
individual siloed efforts, but are multi-functional 3. LEGACY SYSTEMS
and dimensional efforts where there is a team and Legacy systems remain a large challenge for most
accountability,” he added. enterprises, said Brian Solis, principal analyst
at Altimeter. “Almost every aspect of how a
“More often than not, the company does business today is built on the
premise of how businesses worked in the last
existing IT landscape doesn’t
hundred years,” Solis said. “Any time innovation
have enough to support has forced businesses to make changes, they’ve
these new models like smart invested in new tech as a means to adapt to that
tech, but based on yesterday’s premises.”
cities, digital healthcare, and
the industrial internet,” Research firm Gartner recommends enterprises
build a digital platform—a blueprint for what IT
—Hung LeHong needs to build to support digital transformation.
This includes legacy systems, as well as new
2. SECURITY building blocks to support digital initiatives such
More than half (55%) of companies said that as the Internet of Things (IoT). “More often than
security was the No. 1 challenge they face when not, the existing IT landscape doesn’t have enough
implementing digital enablement technologies, to support these new models like smart cities,
according to a recent report from SoftServe. digital healthcare, and the industrial internet,” said
Security nearly always tops the list of digital trans- Hung LeHong, vice president and Gartner fellow,
formation obstacles in Forrester research as well, and member of the CEO and Digital Business
according to Cecere. Leaders research group. “It does require additional
building blocks.”
Cybersecurity is complex, dynamic, and
fast-changing, Cecere said. Security issues are Most businesses will not completely get rid of
also highly visible to boards of directors and the their legacy systems, but will modernize them,
public. “It makes it rougher because you have to LeHong said. They might do this with APIs
get it right,” Cecere said. “If you mess up on other or service-based options, he added. “It’s about

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renovating the core, as opposed to getting rid of the “Executives don’t often live the
core, and it sets the foundation to build out a digital
platform,” LeHong said. company the way employees
and customers do, so their
4. LACK OF CLARITY understanding of tech is done
The danger of the term “digital transformation”
is that it can potentially encompass a huge number from an arm’s length.”
of initiatives, said Bill Briggs, CTO and managing —Brian Solis
director of Deloitte Consulting.

“Being able to define it in a statement that has a meaningful and measureable outcome might seem
trite, but it’s amazing how many projects don’t have that clarity,” Briggs said. “The challenge becomes
taking that and winding it into some actionable, digestible initiatives.”

5. THE “DIGITAL ICEBERG”

When considering digital transformation, each member of the C-suite is focused on some aspect of
the “digital iceberg,” Kark said. For example, the CMO might be focused on customer engagement,
the COO on the supply chain, the CFO on analytics, and so on. However, these issues only reach the
iceberg’s tip, when in reality, a lot of systems will need to be adjusted on both the back and front ends
to succeed digitally, Kark said.

The CIO is often the best positioned to address the entire digital iceberg, as they can take a more
holistic view of IT and other systems, Kark added.

6. LACK OF DIGITAL LITERACY

A lack of C-suite understanding of the importance of making digital shifts can undermine many
efforts, Solis said.

“Executives don’t often live the company the way employees and customers do, so their under-
standing of tech is done from an arm’s length,” Solis said. “They tend to see mobile and all of these
new technologies much in the same way they saw the web when it first came along, asking ‘Is this
going to be a thing? Let’s limit our investment.’ It places them in dangerous territory.”

7. UNDERSTANDING CONSUMER DEMAND

When considering digital projects, enterprises need to understand what customers want, and when
they’re going to want it, LeHong said.

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“Getting the timing right is complicated,” LeHong said. “If you create a connected dishwasher, customers
might want it today, but probably will want it more in the future, when the connected home is more popular.”

8. PARTICIPATION WITH DIGITAL GIANTS

Companies on the business to consumer side need to determine if their products and services will integrate
with the likes of Apple, Amazon, and Google, LeHong said. For example, in the connected cars space, Ford
recently announced that it would bring Amazon Alexa to new vehicles.

“The concept of working with digital giants creates holy wars at the executive level,” LeHong said. “You can
imagine some executives thinking ‘There’s no way we’re going to work with them, they are our competitors.’
But some people won’t buy a car if it doesn’t have Apple CarPlay.”

This also applies to almost any digitized product, LeHong said. For example, people may want a dishwasher
that can interface with Alexa. “The incumbents in every industry are having to join forces with some of these
big platforms, or make the choice to fight against them,” LeHong said.

Image: Wayne cunningham/Cnet roadshow

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 DIGITAL TRANSFORMATION: A CXO’S GUIDE

DIGITAL TRANSFORMATION: MAKING IT

WORK IN THE REAL WORLD
BY MARK SAMUELS
Digital transformation is the process through which companies can take a
new look at their existing processes and remake them with the help of new
technologies and new ways of thinking.

The aim might be to cut costs, understand customers better, or create new revenue
streams. It’s a relatively simple concept but hard to put into practice; here we look
at some of the issues involved in such a project.

MARKETING: HOW TO CREATE A DIGITAL-

FIRST ATTITUDE
Customer experience—CX—is the big priority for marketing professionals
through 2017, says Jim Clark, research director at Econsultancy. He draws on
evidence from the research firm’s recently released Digital Trends 2017 report,
which surveyed 14,000 marketing professionals globally. Almost a quarter (22
percent) of marketeers say CX is their key concern this year.

Clark, however, issues a word of warning and suggests great experiences are by
no means a given: executives must focus on techniques that help their business
exploit data in an integrated manner. “CX is in itself important, but marketing
professionals must think now about how they implement experience as a strategy,”
said Clark, speaking at Adobe’s recent Digital Trends Forum in London.

The good news is that almost half (46 percent) of firms believe that digital now
permeates their marketing efforts. Clark says easy access to the cloud and software-
as-a-service is helping marketeers to harness digital technology quickly in their
attempts to change business processes and customer experiences for the better.

There is interest in technology to spread insights, too. Almost half (49 percent)
of marketing professionals intend to increase their investment in analytics this
year. However, the research suggests that digital transformation is a far from

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straightforward process. Just 14 percent of to fully understand the key trends to engage with
marketing chiefs described their business as a customers personally. As new technologies like VR
digital-first organisation in 2015; today, that figure roll out, that focus on personalisation becomes
is even lower at 11 percent. even more critical.”

“The reality of the situation is that implementing All firms, he says, must look to continually surprise
digital transformation is tough,” says Clark. “Some and delight their customers. “It can be difficult to
boards might not be as fully behind change as engender digital-led change, particularly in a sector
others. Having the right skills in place is key to like finance,” says Clark. “One way is to start small
engendering full cultural change, both in terms on key projects, and to hope these examples pick
of understanding the customer and linking those up traction and that the benefits permeate across
trends back to the business.” the rest of the organisation.”

Clarke points to best practice examples in strategy.

He says smart companies are findings ways to BUILDING A DIGITAL
converge sales and marketing teams, ensuring FOUNDATION IN
customer data is pooled across the business, rather FINANCIAL SERVICES
than being held in isolated and unconnected stove Chris Worle, digital strategy director at Hargreaves
pipes. Lansdown, is one executive driving transformation
Leadership matters, too. More than three quarters in a finance firm. Worle manages digital-led change
(77 per cent) of blue-chip firms now have a chief at the FTSE 100 business, which manages £70
customer officer or equivalent, billion of assets on behalf of its 876,000 clients.
according to analyst Gartner.
These c-suite executives are
focused on building and
pushing the focus on customer
experience across the business’
various operational activities.

“Data-driven marketing
technology is now a lot more
accessible but there needs
to be an awareness in terms
of engaging audiences,” says
Clark. “Your business needs Image: ZDNet

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Worle and his team run a website that receives more than
100 million visits a year.
“Your business will be
judged against the digital
“We’re seeing huge growth in mobile, both in terms of the
use of our apps and direct visits to the website,” he says. experiences that people
“The number of trades via mobile is up 200 percent year get everywhere else, be
on year. This has consequences in terms of the experiences
that from technology
we provide, because we pride ourselves on a high quality of
service.” companies like Google or
Worle recognises the number of channels to market has
via online retailers.”
grown rapidly since the firm started its transformation —Chris Worle
journey in 2008, as has the number of products offered
to clients. The digital team started sifting through huge volumes of data to keep a
tight grip on customer experiences, but found itself swamped with information.

“We took a breath and decided to start small instead,” he says, looking back
on the digital change process. “We then took a strategic approach to testing
and optimisation. Rather than focusing on the entire website, we focused on
quick wins connected to high-volume web pages. We used that insight to drive
improvements.”

Worle and his team honed website content and launched the firm’s first app in
2011. Yet transformation in the mobile age remains a work in progress. “We find
ourselves today in a constant cycle of measure, understand and improve,” he says.

The modern digital challenges facing Hargreaves can be summed up by three key
terms, says Worle: complexity, speed, and expectations. “There’s a requirement
to create a consistent experience across multiple channels and that’s incredibly
difficult,” he says, referring to the issue of complexity. “We’re actively working on
cracking that approach.”

When it comes to speed, Worle says his organisation feels the pressure to innovate
and deliver solutions increasingly quickly. “Technology is moving faster than ever
before,” he says. “People will drop off, and you will lose their business, if they have
to wait even just a few seconds for a web page to load.”

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The final challenge is around expectations and the ever-demanding nature of modern customers. “Your
business will be judged against the digital experiences that people get everywhere else, be that from technology
companies like Google or via online retailers,” says Worle. “Customers don’t care that you’re a regulated finance
firm—they just expect the same high quality of service, regardless of sector.”

The good news is Worle continues to deliver great customer experiences. The key lesson for other CXOs is to
recognise the importance of mobility. “Most of our clients use mobile as their main communication channel of
choice,” he says. “The business needs to focus on the fact that mobile is more than just another channel—and
that’s a constant battle.”

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HOW TO USE DIGITAL

TRANSFORMATION TO WIN BUDGET
BY PATRICK GRAY

Added to a growing list of executive concerns, one of the more recent and interesting questions is “Could
we be ‘Uber-ed?’” referring to the ride sharing company that has forever changed the taxicab and broader
transportation industry. Technology has long had the ability to drastically change industries and business
models, but now technology is combining with innovation, business strategy, and unprecedented speed
to create what’s been termed digital transformation. While this change isn’t exactly new to IT leaders, the
breathtaking speed with which industry upsets are occurring has drawn attention to the opportunities and
threats that digital presents to incumbent businesses.

ASSESS THE LANDSCAPE The challenge of IT

Your admonitions about technology-driven change may
have fallen on deaf ears in the past, but there are now
budgeting, especially for
myriad examples of disruption based on digital. Indeed, large-scale initiatives, has
industries that once seemed impenetrable to outside always been connecting
competition, due to high costs of entry or asset-heavy
operating models, are some of the most easily disrupted
the spend to the results.
through new technology. The Ubers of the world made With digital, however, this
the extensive physical assets and geographic footprint exercise becomes more
of the taxi industry an albatross around the neck rather
than a barrier to entry, and similar disruptions are
compelling.
occurring in industries from shipping to entertainment.

While one only has to look around the competitive landscape to see examples of digital disruption, spend some
time with your team or trusted advisors to determine how digital could disrupt your business—and how you
could disrupt the status quo, or even an adjacent or unrelated industry where the unique capabilities of your
company, plus some digital mojo, could change the game.

The challenge of IT budgeting, especially for large-scale initiatives, has always been connecting the spend to the
results. With digital, however, this exercise becomes more compelling. Rather than painful machinations about
TCO or ROI, a new platform might allow you to deliver a game-changing new service. Or investing in internal
innovation could leverage your existing data and processes to outmaneuver a threatening startup.

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Seek input and buy-in from your peers once your budget for the capability of “location-based
you have your initial digital “story” developed, offers” versus a line for beacon technology.
as this will ultimately be the foundation of These gaps are the areas where additional spend is
your digital transformation budget. Time required, and as each directly relates to a needed
invested in circulating and refining this story capability that is linked to a digital transformation
will pay dividends later, as each element of your initiative, it will ultimately link to the business
transformation budget will link back to enabling disruption it is meant to mitigate or create. Instead
your digital story. of financial gymnastics, your transformation
budget is two degrees away from the strategic
BUDGET FOR impact it is meant to create. Now, your budgetary
CAPABILITIES, NOT debates center on which transformational
SYSTEMS objective to pursue. If your peers hesitate to fund
a key capability, it should be abundantly clear
When you have a view of the landscape and the
which transformational objectives become more
opportunities and threats presented by digital,
difficult or impossible to achieve.
narrow the focus to a collection of initiatives that
your company can embark on in order to thrive While IT budgeting is often marketed by painful
in the changing market. Avoid confining your debates about whether a theoretical “productivity
thinking to what you can do with the current benefit” will result in 2% or 2.25% savings, digital
systems and organizational constraints during the transformation presents a unique opportunity to
initial phases of this exercise. link digital capabilities directly to transformational
Once you have drafted an initial portfolio of initiatives. This ultimately elevates the budgetary
digital transformation initiatives, assess what process to discussions about which strategies
capabilities you’ll need against what you have your business wants to pursue, versus debates
and identify the gaps. This should be familiar about how you’ve calculated TCO and estimated
to anyone who’s done a classic “fit/gap” various efficiencies. With proper preparation and
analysis; however, the focus is squarely on digital a compelling, shared vision of the future, you
capabilities versus technology and systems. For may find your budgetary discussions become
example, if one of your transformational efforts more about how quickly you can execute given
requires communicating with customers at any significant resources, as opposed to where you can
time, on any device, you might put an item in squeeze more blood from a stone.

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WANT TO CREATE DIGITAL

TRANSFORMATION? MAKE A SOLID
PLAN FIRST
BY MARY SHACKLETT
The advantage of working in IT is that you are usually well ahead of digital and
computing technology information and adoption curves. The downside of this is
that you often understand the value propositions of a new technology before your
colleagues do. The quandary for the CIO, then, is how to get buy-on from the CEO
and other key stakeholders in the organization for technologies that you regard as
essential to the business.

To consider this question at closer range, let’s look at digital transformation.

TechRepublic recently conducted a poll of CIOs, and more than half said their
company doesn’t have a formal digital transformation strategy. “Our business
supports constantly varying needs from a shifting pool of clients,” said poll
respondent David Wilson, director of IT services at VectorCSP. “We embrace
opportunities for digital transformation when they present themselves, but would
not have a clear path for such a formal plan overall.”

Does initial buy-in require a formal plan?

Such a fragmented approach to digital transformation seems like a recipe for disaster,
but is it?

With digital transformation, it just might be possible that the usual steps that CIOs
take, like recommending solutions and approaches for technology introduction
and adoption, constructing a rolling three year plan for implementation in specific
business areas, calculating estimated ROI (return on investment), budgeting for all of
this, and then selling it to the CEO and others, isn’t needed—at least not right away.

Here is what leads me to say this.

In a recent Tech Pro Research survey on digital transformation, 28% of respondents

said that IT was the driver of this initiative; 26% said it was the CEO, CMO, CFO or

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another non-IT, C-level executive; 22% said that a VP, a business leader, or an IT
director was leading the digital transformation; and another 24% of respondents
said that it was someone else.

This suggests that corporate adoption of digital technologies, unlike the adoption
of many other previous technologies, is a distributed and democratic process in
companies that no one person seems to own when it is first introduced to the
organization.

For CIOs, who usually have to do the heavy lifting At the end of the day, end
when it comes to selling and funding new technology,
this is welcome news because it gets digital trans-
users (and management, too)
formation in the door, and with many different end recognize that IT has be part of
user areas doing the selling and the adoption, the the mix—if for no other reason
likelihood of finding an appropriate business case
that can pay back on the technology investment also
than to consolidate all of these
theoretically increases. independent efforts.
But stop right there--because initial buy-in does not
necessarily translate into continuous buy-in and support, especially if projects
don’t go as planned and value isn’t delivered as expected.

WORKING IN A DECENTRALIZED
TECHNOLOGY ADOPTION ENVIRONMENT
WITHOUT A PLAN
The dangers of independent digital transformation adoption efforts by end users
is that 1) end users usually don’t know the IT that will be needed to integrate their
system into the other company systems; 2) users might inadvertently negotiate a
contract with a vendor the locks them into a solution that doesn’t work well in the
long run; and 3) users might think the payoff from their digital effort is bigger
than it really is.
Industry research backs this up.

In 2015, Forrester Consulting reported from its survey work that over 60% of
digital experience projects were failing. The top three reasons for failure were: 1)
CMOs believing `that existing legacy technology in their companies could power

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the digital technologies they wanted to introduce; information into a compiling budgetary proposal
2) lack of a full understanding of how end for the CEO or the CFO.
customers of the technology would use it; and 3)
lack of technological (specifically digital) maturity. MAKING THE MOVE INTO A
Also that year, Genpact, a business processing
FORMAL PLAN
and IT services company, published a survey
Since it seems that many organizations have
of managers working at 100 large global enter-
taken an early approach into digital transfor-
prises, with managers reporting that only 30% of
mation by pursuing it piecemeal, with a majority
their digital projects were delivering a return on
of CIOs saying that they lack a formal plan,
investment that met business expectations.
the key going forward may well be developing a
At the end of the day, end users (and management, vision and a formal plan for company-wide digital
too) recognize that IT has be part of the mix--if transformation.
for no other reason than to consolidate all of these
This overall plan should first and foremost
independent efforts.
address the value that the business expects to
In the same Tech Pro Research survey gain from digitalization—whether it is eliminating
where respondents reported that their digital paper, improving access and expediting business
transformation efforts were highly distributed and processes; using GPS and satellite imagery
decentralized, 42% of respondents came back to and combining this with contextual data so a
say that they believed that ultimately, IT would be construction company can obtain a more complete
the owner of all of these digital transformation view of a building site; cracking genomic codes
initiatives. Additionally, nearly two-thirds of to provide answers in cancer research; or better
respondents in the TechRepublic survey said that understanding the buying habits of customers.
they received enthusiastic support from their
Next, a digital transformation plan should address
senior management for digital transformation
operational and system cross-functionality
initiatives, but over half said it was difficult to
throughout the enterprise—because to get the
secure budget dollars for projects.
most out of digitalization, you have to know how
Selling the budget is also where CIOs add value. to use it fully. If sales wants data on customer
They are experienced in analyzing the inherent satisfaction, it would be advantageous for
value of a new technology, the cost of not only customer service reports to be in their system
implementing it but integrating it with existing so they can understand their clients’ pain points
systems and business operations, what the payoffs with their products before they call them with a
are likely to be--and then packaging all of this new pitch. And if customer service wants to be

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more proactive, it would help if it had visibility of all of the RMA (return material authorization) documents in
manufacturing—and which products were most often being returned and reworked.

These issues of business value estimation, selling the budget (and the CEO/CFO), and understanding the
requirements of the systems and operations implementation and integration efforts are all squarely in IT’s (and
the CIO’s) wheelhouse.

To this end, a digital transformation plan for the entire organization should be developed, ideally by IT. The
plan should illustrate how digital systems can (or will be) linked together, what the levels of initial investment
(and returns on investment) are likely to be and when they will occur, what the order of system integration
will be, and what changes in business processes and IT infrastructure are necessary to support digital
transformation.

This plan should be the final product of continuous IT engagement with other key managers throughout the
company before the plan is shared in budgetary meetings or presented to the CEO and the C-level for buy-in
and signoff.

Does this assure that your digital transformation plan will get the buy-in?

“Behavior precedes belief—that is, most people must engage in a behavior before they accept that it is
beneficial; then they see the results, and then they believe that it is the right thing to do... implementation
precedes buy-in; it does not follow it.” said Douglas B. Reeves, founder of Creative Leadership Solutions.

He’s right—and many companies with their distributed digital transformation projects have been doing exactly
this.

But what Reeves doesn’t mention is that buy-in must also be sustainable for a company-wide technology
strategy to work.

Sustainability depends on a continuous chain of project successes, and those successes depend on effective
technology investments, integration and delivery of business value.

These are the final payoffs.

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HOW DIGITAL IS AIDING LOVESPACE’S

AMBITIONS TO TRANSFORM ITS
SELF-STORAGE
BY DANNY PALMER
Businesses have more opportunities
than ever to use digital technology to
re-imagine their operations: everything
from the cloud to mobile apps, and
even the likes of wearable devices and
the Internet of Things (IoT), can drive
productivity and efficiency improvements.

Companies of all sizes around the globe

have exploited cloud storage, for example,
easily boosting or reducing capacity as
required.
image: lovespace
This model has proved very successful for
virtual items, but Lovespace, a UK firm
that describes itself as “the UK’s first storage-
by-the-box company”, offers customers the same model for physical items.

Founded in 2011, Lovespace allows customers to store individual items at a warehouse for as long as they wish,
and then have them returned within a day of request.

“The idea is, if you think about how cloud storage has enabled the ability to store just a photo online a lot
easier; we’re doing the same thing with physical items. So rather than buying a whole unit and only using a
fraction of it—essentially paying for fresh air—you just pay for the boxes you store,” explains Dave Walker,
CTO at Lovespace.

However, despite an operation designed to provide customers with cloud-like storage facilities for physical
items, the company started life with surprisingly little in the means of digital technology infrastructure.

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FROM SPREADSHEETS TO MOBILE APPS

“The actual mechanics of delivering the service to the customer were very
manually intensive,” says Walker. “At the very beginning, the method of managing
customers was Excel spreadsheets and Post-It notes on walls”.

But as the company has grown, it has increasingly turned to technology in order
to improve processes and ultimately customer service, much of which comes in
the form of face-to-face interactions between delivery and collection drivers and
customers.

One of the ways Lovespace has driven innovation through digital transformation
is by taking advantage of the smartphone that every driver has in their pocket.

Previously, the operation revolved around Excel sheets for drivers and warehouse
staff, with drivers entering the postcodes of delivery addresses into a sat-nav,
before crossing the customer off the list following a successful visit. However, this
created difficulties if a customer wasn’t in or the visit couldn’t be made.

“It was very, very manual. It worked, but there wasn’t any real-time feedback, so it
wasn’t until they got back in the evenings that you’d know there was a change to
anything,” says Walker.

In order to improve efficiency, Lovespace developed a mobile application with

accompanying scanning technology to streamline the entire operation.

“We went from a website with a poor mobile focus to a mobile app which allowed
them to directly see what items they need to pick up and from where. From there,
all they really need is a laser barcode scanner, so they scan the barcodes and get the
customer to sign at the door,” explains Walker.

The app also allows drivers to directly contact customers at the push of a button,
should they need to in the event of someone not being in. The roll-out of the
mobile app has ultimately helped Lovespace provide a better service.

“It’s massively improved the customer service, because we can now say the driver
is on drop number four of seven, you’re the next job and we’re 20 minutes away.
We can give the customer more information and help improve the service,” says
Walker.

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MORE DATA, MORE While Lovespace develops much of its customer-

BUSINESS INTELLIGENCE facing tools internally, cloud hosting provider
Deploying new technology on the front line has Cogeco Peer 1 provides the firm with much of its
also led to a digital transformation behind the server infrastructure, enabling it to meet higher
scenes, particularly when it comes to harnessing demands for service during peak periods. Walker
business intelligence. credits this outsourcing as something that enables
Lovespace to focus on its core objectives.
“As we’ve moved to more digital mechanisms
to work with, obviously we now have all of this “I’m a strong believer in a business focusing on
data we can interrogate,” Walker explains. “So its core competencies well; our core competencies
we’ve been working hard on providing a new aren’t keeping servers running and having
platform and we now have a much more accurate backups—it’s not where we can operate, and
measurement.” putting resources into that doesn’t make sense at
all,” he says.
“Now everyone understands if we change
something, what it’ll mean for the business. So it “It’s much better to put resources that would
allows us to make much better business decisions have been those things into improving our own
at that level.” offerings”.

Professor David Lamb from the University of New England at the Kirby Smart Farm (Image: NBNCo)

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HOW CAMPBELL SOUP IS BETTING

ON DIGITAL TRANSFORMATION,
ECOMMERCE, SCIENCE TO GROW
SALES
BY LARRY DIGNAN
Campbell Soup Co., has a bevy of challenges ahead, but it’s looking to spur growth with a healthy dose of
ecommerce, science-backed nutrition, and new food production models.

Consider Campbell Soup’s move another data point in the ongoing digital transformation chronicles. Every
company and industry is being forced into digital transformation and Campbell’s CEO Denise Morrison
outlined a “future of real food through strategic foresight.”

Morrison outlined four growth platforms, which are likely to take a long time to play out. Here’s a look:

Ecommerce: Morrison said ecommerce will revamp the food industry and give companies like Campbell
Soup a more direct relationship with consumers. Campbell Soup is planning meal-kits, buy now functions,
integration with recipe sites, and dash buttons. The company will also invest in ecommerce platforms and omni
channel experiences. What remains to be seen is how these platforms will integrate with retailers and grocers.

Customized snacks with a purpose: The company is investing in the science needed to alter so-called
mindless munching and focus on food for outcomes such as mood and energy management.

Personalized diets via a Campbell funded startup called Habit: It is being tested out in the San
Francisco, Calif., area. The startup aims to personalize nutrition and blend technology, food and analytics.
Here’s a screen of Habit’s testing process to personalize food and tailor it to you:

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Local food production: Campbell Soup is outlook was weaker than expected. And the
planning small-batch production and more local company is looking to save $450 million by
variations of food. This move is likely to require the end of fiscal 2020. Savings will come from
supply chain and manufacturing tweaks. optimizing the supply chain, becoming more
efficient and integrating acquisitions. Some
Like most digital transformation efforts at well
of those savings will be used to fund growth
established companies, Campbell Soup faces a
initiatives.
bunch of challenges. For instance, the company’s

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STUDY GROUP MOVING FROM MANUAL

DR TO AN “ALWAYS-ON” EDUCATION
PROVIDER
BY ASHA BARBASCHOW
Education provider Study Group first opened its doors to students back in
the 1980s, focusing originally on language studies in the UK before expanding
internationally in the mid-1990s after a spate of acquisitions.

Fast forward to 2017 and Study Group now comprises several brands and partner-
ships underneath its banner, each providing education services such as higher
education, vocational language education and online services, ranging from high
school to life-long learning programs.

Currently, Study Group employs approximately 4,500 staff in 120-odd sites around
the world. In 2015 alone, the organisation took in over 73,000 students from 145
countries, studying at around 80 campuses globally.

With the internet allowing people to study in multiple areas and locations, and at
times that they wouldn’t normally, Study Group became aware very early on how
important it was to be digital—and how far and fast its footprint was growing as
a result.

OLD-SCHOOL DISASTER RECOVERY

Despite acknowledging the digital age and shifting many of its services online early
in the game, Study Group managed its disaster recovery manually.

The company was reliant on the intimate knowledge of individual members of

the IT team to recall where individual backups were located, and the backup
and recovery process relied heavily on large-scale tape drives, which often led to
labour-intensive operations with high maintenance costs.

According to Andrew Christensen, senior systems engineer at Study Group, the

decision to virtualise its backend was important to give the business flexibility in
how it would deal with the shifting demand in student enrolments across the globe.

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“It was difficult. We had a toolset that was “Now that we do have this
disconnected from one to the other,” Christensen told
ZDNet. “We used ad hoc jobs to backup and maintain concept of always-on and
data—depending on the system that we were using. We an appreciation of what that
used data-moving functions to get data from one place involves, it allows for it to be a
to another quite frequently, often replicating in certain
circumstances.” lot more accessible so people
Essentially, a lot of user intervention was required to
can take courses when and
maintain datasets across the organisation when it really wherever they like.”
shouldn’t have been done that way. —Andrew Christensen
Study Group then went to the market to find a
solution that met the requirement of maintaining an ‘always on’ global organisation.

“We have a lot of infrastructure and we have a good structure as a whole, but we weren’t really giving it the
benefit of maintaining availability, so finding a solution to help us do that was a priority,” Christensen said.

“When we started looking around, we realised that the solution we needed was based on a hybrid cloud model
that we’ve seen come into fashion recently.”

Enter Veeam.

CLOUD-BASED DR TO THE RESCUE

“We’re an education provider; students come to us, pay for an education course or a service, and we need
to deliver that,” Christensen said. “Any interruption to that is a reflection on our service, which in turn is a
reflection on what we can charge for our service.”

“Maintaining always-on, maintaining reliability, and the reputation that comes along with those things—it’s a
big deal.”

As Study Group houses a figurative truck load of user data, from course-related student credentials through to
personally identifiable information, including payment terms—as Christensen called it, “All sorts of personal
data that you don’t want people to get their hands on”—privacy and security is of the highest importance.

With Veeam in place, Christensen said that protecting the data of its users has become far less intimidating, as
the organisation has now experienced the reliability of ‘always on’ and the security that comes with it.

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Since rolling out the solution, the business has seen a 60 percent reduction in the cost of data retention and
storage. Application development costs have been reduced by an estimated 15 percent and spending on
hardware has reduced by 10 percent.

Study Group has also experienced a 100 percent increase in disaster recovery capability and 60 percent cost
savings.

“Now that we do have this concept of always-on and an appreciation of what that involves, it allows for it to
be a lot more accessible so people can take courses when and wherever they like,” Christensen said.

REFOCUSING IT TEAMS
Study Group’s IT teams now have the opportunity to work on development rather than system upkeep, with
Christensen noting that the projects the teams are taking on are becoming bigger and more complex as a result.

“Our approach towards how we do things has changed slightly, having the reliability and the security that
comes with it,” he explained.

“It’s shifted our focus a little bit away from data protection specifically around application development. If we
can divert resource away from data protection under the development scope and make that an infrastructure
issue as opposed to a development issue, it means we can put a lot more time into quality applications.”

Christensen explained that some of the projects Study Group is now taking on now are a lot more ambitious,
noting that the ability to take on big data projects and those that combine all of the organisation’s resources
would not have been attempted previously without having a clear-cut methodology for backup and protection.

“The solutions we’re working with aren’t anything too special; we’re just leveraging them the right way and
really embracing them to get the most out of it—there’s nothing too groundbreaking here,” Christensen
concluded.

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WENDY’S COOKS UP DIGITAL

TRANSFORMATION PLANS WITH KIOSKS,
MOBILE APPS, CUSTOMER EXPERIENCE
LAB
BY LARRY DIGNAN
Wendy’s, best known for its square
burgers, is aiming to put digital
technologies at the core of its customer
experience and ultimately redefine the
brand.

The fast-food chain, which delivered

2016 revenue of $1.43 billion with net
income of $129.6 million, highlights
how every company is becoming a
digital one. Whether it’s a company like
Wendy’s digital transformation plan revolves around integrating
Campbell Soup or General Electric, mobile, kiosks, and back-end technology in a lab to enhance the
digital transformation is everywhere. customer experience.

At the center of Wendy’s digital efforts

are self-service kiosks. Wendy’s was among
the first to use kiosks as a way to control labor costs, and the restaurant chain garnered a decent amount of
attention. Why? Wendy’s was seen as a good example of what happens when the minimum wage rate is raised.
Sure, labor costs are one reason for the digital transformation effort for Wendy’s, but if you zoom out you see a
much broader plan.

“Technology can play a great role in creating a better customer experience, unlocking productivity, driving
throughput and ultimately saving some labor to help us to continue to have a strong economic model,” said
Todd Penegor, CEO of Wendy’s.

On February 16, Wendy’s held its investor day and outlined its 2020 goals, which are aiming for global
restaurant sales of about $12 billion. To hit that revenue target in 2020, Wendy’s executives said they have

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mapped and prioritized

markets globally and
identified a more than
50 percent growth
opportunity in the top
20 markets. Wendy’s also
looks to complement local
partnerships with franchisees.

So what’s the plan? David

Trimm, chief information
officer at Wendy’s, outlined
how the company will
become digital. Trimm said
Wendy’s has to be a digital brand to stay relevant. “Everybody, whether you are a millennial or not, is now
expecting to interact with brands via digital channels,” Trimm said. “And they are also expecting a response to
that at digital speed. So we are absolutely going to be judged on the basis of our digital experience in terms of
our brand’s relevance; if you don’t have it you are not going to be relevant.”

Meanwhile, to be relevant Wendy’s has to cultivate a loyal base of customers. If digital transformation is done
right, it “can create real stickiness for the customer experience,” Trimm said. Toss in the efficiencies and cost
savings that information technology can bring and Trimm and Bob Wright, operating chief at Wendy’s, believe
they can change the financial profile of the company.

Here’s a look at how Wendy’s is approaching its digital transformation.

Bring multiple disciplines together. Wendy’s has created a lab, called 90 Degree Labs. The lab has been
around for a bit more than 18 months and is outside of Ohio State University. Trimm noted:

“It is staffed with engineers and experience—customer experience, user experience experts as well. And it
produces three products for us. And those are our website Wendys.com. It is apps for popular platforms, the
Apple iOS and Google’s Android. And it is also those customer self order kiosks. We believe that bringing
together the expertise that we have there, the built environment, and the processes that we have is creating a
technological source of competitive advantage for us.”

The ultimate goal is to build the Wendy’s of the future.

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Use an agile development process. Wendy’s has adopted agile to rapidly

prototype processes and approaches. The general idea is to iterate on technologies
and launch new versions of the front-end software that will improve the
experience.

Be customer-centric. At 90 Degree Labs, problem solving has to be at the

forefront. “We spend a lot of time talking with customers about what it is that
they need, what problems they are trying to solve, and then attempting to meet
those needs through the things that we are doing as part of our agile process,” said
Trimm, who noted that Wendy’s brings in customers regularly. Wendy’s will go out
in the field to randomly have customers try out new ideas.

Remember the food. Technology can also be an enabler in the kitchen via
automation and processes that can make food more fresh and made-to-order.
Via mobile ordering and kiosks, Trimm said customers can get customized food
at the right place and time. “We were always going to make that sandwich fresh
for you, including any customizations that you might have ordered. We weren’t
going to ever make a standard built sandwich and leave it on the side hoping that
a customer was going to come along and order just that thing. So, customization is
absolutely built into our operations process.”

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Don’t forget the foundation. Wendy’s has spent a gateway drug to more mobile ordering. Trimm
the last year investing in one point-of-sale system elaborated:
across its network to bolster efficiency. That “I think eventually everything will be mobile, right.
standardization, which can be tricky when working I think everybody sees that as being written in
with franchisees, allowed Wendy’s to develop once the future. However, kiosks do give us a stepping
and iterate. In addition, process, product changes, stone to that. Because I don’t need to persuade
technology, and the operating model all have to anybody to download anything to be able to
align. If the foundation isn’t in place it’s difficult to use a kiosk; they can just go in and use it. Gets
deliver a consistent experience across all physical customers use to self ordering, gets them used to
and digital channels. Wendy’s also consolidated navigating our menus, and so on. So we think that
apps for easier management. The trick for Wendy’s is a really important—a really important direction.
is to roll out that foundation across its network. Kiosks first leading to mobile certainly over time.”

For instance, kiosks will be rolled out aggressively Physically having the kiosks does give us a
in 2017. And there’s a good reason for that rollout: tremendous opportunity to innovate on the
A trio of kiosks will run a franchise $15,000 and software. We can keep deploying new versions of
deliver a payback within two years. the software as we come up with new ideas and
you will see some of that certainly over the next
Collect data. With kiosks, apps, and its point- few months as we start to bring some of those
of-sale systems Wendy’s can manage lines, plan things into the market.
kitchen capacity, and use front-end analytics to By using data, Wendy’s can continually tweak the
improve the experience. One insight: Kiosks are experience.

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IMPROVING PRODUCTIVITY WITH SMART

OFFICE TECH AT VMWARE AND BOX
BY TEENA MADDOX

image: box

The introduction of smart office tech, such as beacons and mobile apps, has improved productivity at VMware
and Box, which both did major installations last year.

Last fall, VMware completed a project that resulted the addition of 2,000 beacons and several new apps
available through its VMware Workspace ONE catalog, the company’s enterprise platform that delivers and
manages any app on any device. There’s a ‘v’ in front of most of the apps, such as vNavigator and vApprove.

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Through the apps, employees can do everything from approving documents to

finding electric vehicle charging spaces and empty conference rooms, and even
get help navigating across the 105-acre VMware campus in Palo Alto, CA. The
17-building campus has approximately 2,300 employees, so it can be particularly
difficult for new employees to find a meeting room or desk, said Bask Iyer, CIO of
VMware and Dell.
There’s also a feature in the works that will show which
“People use it and love it.
meeting rooms are available, and if someone is regularly
booking a larger room than they need, it will ask them to They come to us and give
book something smaller, rather than wasting a 10-person us feedback. They’re not
room on a two-person meeting.
used to IT giving them
They’re also experimenting with facial recognition. VMware
things like this.”
has a cafe set up where employees can grab a cappuccino
while they get assistance from the help desk—similar to the —Bask Iyer
Genius Bar at Apple retail stores. VMware is beta-testing
facial recognition so that employees don’t have to put their name on a list when
they arrive. Instead, it’s automatically added and someone recognizes them and
greets them by name. The next step, after moving beyond the help desk, will be to
add that to the visitor lobby, Iyer said.
But it’s not just the improved productivity that matters. It also makes VMware
more appealing to current and prospective employees.
“People use it and love it. They come to us and give us feedback. They’re not used
to IT giving them things like this. They’re used to IT not taking a risk, working
heavy-duty on the back office. This makes us cool. It makes us very relevant
and certain things like this make you come across like an innovative company
that thinks about employee productivity and not just saving costs. It changes
perception when you do things like this. It’s one of those surprises that they didn’t
expect, because they didn’t ask for it,” Iyer said.

The pilot for the app began in the second quarter of 2016 and the company
staggered the rollout through the third quarter. The mobile app provides
step-by-step navigation to conference rooms or helps find a colleague at their
desk. VMware began the project by using the existing wi-fi structure, but added
additional wi-fi access points.

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The fast navigation is helpful for employees not spending much money on this. I didn’t give
visiting from other locations, or for anyone in a them a budget. Google says that 20 percent of the
hurry who’s not quite sure where something is time their employees work on innovation products.
located on the vast VMware campus. It also allows It was like that. This was set up in hackathons—
a meeting room to be released if no-one shows the people time was nothing. We didn’t hire
up for a scheduled meeting. With approximately contractors. We wrote the software and bought
2,000 employees, this has proven to be useful. “It’s beacons. I think we spent peanuts. I didn’t see
a huge benefit to productivity, particularly for new it as an approval on my app, so it was under my
employees and contractors, and people who are [financial] threshold,” Iyer said.
ADD like me. It’s heavily used,” Iyer said.
TURN-BY-TURN
One of Iyer’s favorite things to do is get instant
metrics on usage from the apps. “There are 745
NAVIGATION AT BOX’S
users on vNavigator as of now. We’ve had 11 HEADQUARTERS
users today, 90 users this month. vApprove has In Redwood City, CA, there’s smart tech in place
gotten about 318 users this month,” he said, as he at Box’s 334,212-square-foot headquarters, which
reviewed the real-time usage of VMware’s mobile opened last year. The 730 employees can use a
apps. mobile app, combined with beacons and access
points, to navigate through the office space that
There’s also an app for electric vehicle charging fills seven floors.
spots. It shows when a parking spot is open, or
The building includes proximity center location
if they’re all full, when one will become available.
awareness beacons from Aruba Networks, a
“There are 10 users today and a total of 50 users
Hewlett Packard Enterprise company. The
this month on the [electric vehicle] app. An
wayfinding app includes turn-by-turn blue dot
average is about 20 users a day,” he said.
navigation to help employees get from one place
‘We don’t make a big deal about publicizing the to the next. It’s particularly convenient for visitors
apps. You have to go to the catalog. It’s very or out-of-town employees, said Paul Chapman,
similar to consumer [apps]. Maybe we should have CIO for Box. The project is similar to the one at
an internal magazine with mobile apps. We need to VMware, because Chapman was on the team that
figure out a better way internally to catalog,” Iyer helped design that build, before he joined Box in
said. July 2015.

And the best part is, it hasn’t cost much for “We really are replacing the touch interface with
VMware to create and use these features. “We’re a dialogue interface. We’re not necessarily doing

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anything we can’t do through a touch interface, but we’re being far more productive and efficient through a
dialogue interface,” Chapman said.

The headquarters was designed from the ground up, which made it easier to plan out the new smart technology
aspects and make it dense with Aruba’s wireless access points to support a wi-fi-first facility. Because there were
so many access points, fewer beacons were needed, Chapman said.

“One of the things we felt was important when we built out our new headquarters was that we had the most
up-to-date technology capabilities when it came to how people move around an open social collaborative
workspace like Box, where you don’t have single offices, where you have a lot of breakout spaces. and the
availability to book and get to meetings was really important for us. We wanted to create as much of a digital
experience and speed to the next meeting. A lot of time is lost between meetings and looking for rooms,
scheduling rooms and expending meetings and things like that,” Chapman said.

When someone needs a meeting room, the app shows which space is available on each floor, and rooms that
are being unused 10 minutes after the scheduled start time are made available and reclaimed. “We have a
reclaim rate of 17 percent, where effectively rooms that would have been empty but booked are actually being
freed up and reclaimed. That’s a significant productivity gain,” Chapman said.

“Where we’re headed is not only with the ability to navigate direct and check you in, we’re now looking to do
that through voice interaction as well. I can interact to the same application and say, ‘find me a room for four
people and give me directions to that room and check me into that room.’ That is the next phase of where
we’re going with that,” he said.

Box uses Amazon Echo devices with Alexa voice control for employees checking into conference rooms, and
they’re working with Utah-based Teem (formerly EventBoard) for a conference room application that runs
iPads and iPhones and partners with Amazon on Alexa team skills. Google is used for employee calendars, as
well as Google Hangouts, since meetings and conference rooms are coordinated by calendars, Chapman said.

Printers have location awareness so that documents do not begin printing until the user is at the printer. That
protects sensitive documents from unnecessary exposure. Location awareness is also being used as a credential
for entering the building. Anyone can carry someone’s badge, but if your device needs to be authenticated
through a PIN on a particular device, then it’s more secure than swiping a badge, Chapman said.

Recognizing the importance of productivity was a crucial element. “We wanted to make sure that as we moved
forward as an organization, we didn’t lose sight of how valuable it was to invest in employee productivity. I find

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that a lot of organizations over time are trading off internal productivity investment with other areas. I know
when we’re dealing with budgetary constraints it’s about trade-offs, but it’s easy to convince yourself to live
another day with internal productivity pain rather than invest somewhere else,” Chapman said.

To limit costs, Box partnered with Aruba to be a showcase use case for how beacons could work in the office.
“We didn’t allocate money for this, and find a partner to make this happen. Effectively the only money we spent
on this originally was time. If we extrapolated it out, it’s somewhere in the range of about $60,000 to $100,000
worth of software and devices [if Box had paid for it]. However, we do pay the ongoing software subscription
costs and they’re relatively small,” Chapman said.

“The workplace productivity space is an area that is often traded off over other investments. That’s a fair
approach in a number of cases, but I think over time it become a habit. It’s easy to trade off internal versus
something that might be external facing. Over time that becomes a significant impact on productivity and
efficiency and, in turn, morale, and can become a source of attrition and lower productivity. So in today’s
environment where you have a strong contingent of your workforce a millennial workforce that has grown up
in the digital world, you have a different style of worker and a new style of workplace that requires a new style
of IT,” Chapman said.

“It used to be consumer technology was behind enterprise technology, and now consumer technology is
leading the enterprise,” he added.

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