Digital Strategy Framework 101

Cracking the Code: A Framework for Digital Strategy

How Large Enterprises Can Successfully ‘Digitize’

SILICON VALLEY, CAJULY 2014 www.elevarco.com

Elevar – All Rights Reserved www.elevarco.com 2

About Elevar

Digital Strategy Point of View

Table of Contents

Elevar – All Rights Reserved www.elevarco.com

Today, 3 out of 4 enterprises claim to have a digital vision, but their executivesstruggle to define and execute a clear digital strategy

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Only 17-21% of CEOs in large organizationshave a clear digital strategy vision

Yes No Maybe

Just 15% of corporate executives believethey can deliver a digital strategy

Yes No

17-21% 15%

Although 74% of corporate executives claim to have a digital strategy in their organizations…

Sources: David Sealey, Digital Consultant; Forrester – The State of Digital 2014


A digital strategy is about leveraging technology to achieve two goals: breakingdown siloes internally, and connecting with individual stakeholders externally

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FrontOffice

MiddleOffice

BackOffice

ExecutiveOffice

SharedServices

FrontOffice

BackOffice

MiddleOffice

SharedServices

ExecutiveOffice

Internal Capabilities External Capabilities

Siloed Digital Capabilities Unified Digital Capabilities Digital Delivery Tools Stakeholders

Digital Strategy: A Uniform Definition

Supplier / Partner

Customer

A unified, cross-functional approach leveraging internal and external digital assets to enhance customer andbusiness benefits

Connect departments and improve their relationships with newtechnology

Improve communication and data transfer across lines of business

Enhance user experience to drive new internal revenue streamsand cost savings

InternalDigital

Strategy

Offer more service tools to engage all typesof users (i.e., suppliers, customers, etc.)

Utilize analytics to increase personalization

Stay ahead of the curve on emerginginnovation trends (i.e., mobile, social media)

ExternalDigital

Strategy

A B

Data Exchange

Siloed Digital Capabilities


A digital strategy is distinct from other enterprise strategies – it’s about connectinginternal and external digital capabilities to drive individualized experiences

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ITStrategy

DigitalStrategy

Internal technology capabilities Some cross-functionality, but mostly focused

on discrete internal business units Greater focus on internal operations Less focus on engaging users

OnlineStrategy

ITStrategy

DigitalStrategy

BusinessStrategy

OnlineStrategy

• Transcends the borders and barriers amongdepartments to unify business, IT and onlinestrategies into a set of digital initiatives

• Focuses on the use of technology to accomplish andimprove upon user (external) and business (internal)objectives

The Role ofDigital

Strategy

Where does a digital strategy fit in? How does a digital strategy compare?

BusinessStrategy

Limited to deployment of online assets Discrete function with minimum cross-

functionality Heavy focus on user engagement

Internal and external business capabilities Some cross-functionality, but generally

focused on individual departments Generally divided from IT, online, and digital

strategies

Internal and external digital capabilities Holistic approach to unify siloed

technological initiatives in the enterprise Collect and analyze user information to drive

individualized experiences for stakeholders


There are three phases across the digital strategy continuum – to date,different industries have evolved to different phases of maturity

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Digital Strategy EvolutionAugment Breakthrough Disrupt

Leve

l

Health Insurance

TechnologyFirms

A unified digital strategy vision is nearlynon-existent, but there are some unique

digital capability offerings

There is a unified digital strategy, centeredaround a single platform with compelling

digital asset offerings

New and emergingplatforms drive the

business model

Banks

HealthInsurance Emerging mobile apps, with

some simplistic functionality Redesigned web interface Basic tracking of customer

interactions

Inte

rnal

Exte

rnal

Exam

ple

Indu

strie

s

Awareness of need for BigData analytics

Some staff aligned topredictive analytics, butminimal formalizeddepartments Banks &

Airlines Investment in “internetof things” – i.e., kiosks

“All-in-one” mobile app Investments in

innovation labs andstartups

Use of internal Big Data,business intelligenceand advanced analyticslines of business

TechFirms

A

B

Inte

rnal

Exte

rnal

A

B Identifying use cases for

innovative newplatforms (i.e., GoogleGlass, iWatch)

World-class useranalytics

Data driven culturesupported by innovativeIT technologiesIn

tern

alEx

tern

al

A

B


Case study: Banks and airlines have developed ‘all-in-one’ mobile apps as part oftheir digital strategy, achieving ‘breakthrough’ maturity – and bottom line results

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Reduced customer service utilization

• 43% of customers said they make fewer phone callsto their bank’s call center due to mobile banking1

Reduced issue resolution

• 35% said they visited branches less often than theydid before adopting mobile banking1

Increased customer loyalty

• 30% of U.S. mobile banking users say mobile bankinghas made them more likely to stay with the bankfrom which they receive the service1

Reduced customer service costs

• 80% reduction in per-check-in cost compared totraditional counter check-in due to mobile check-in2

Enhanced consumerization

• 50% reduction in time required to launch newservices or channels to individual consumers3

Industry-wide impact

• 97% of the world’s carriers are investing in newways that passengers can use their smart phones to“mobilize the entire journey”3

Banks Airlines

Industry Adoption of An ‘All-In-One’ Mobile App – A ‘Breakthrough’ Capability

1) Forrester Research - http://www.forrester.com/The+ROI+Of+Mobile+Banking/fulltext/-/E-RES585042) The IBM Software story for the Travel and Transportation industry http://www.ibm.com/smarterplanet/us/en/leadership/aircanada/assets/pdf/AirCanada_Paper.pdf3) Microsoft in Aviation http://az370354.vo.msecnd.net/whitepapers/SingaporeAirshow_Infographic.pdf


Our research has shown that large enterprises without a clear digital strategy facefive pain points, common across different organizations and industries

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Overarching Pain Points Sample Client Quotes Summary of Overarching Pain Points

Website user interface and experience are subpar, creatingcomplaints

Stakeholders cannot find the features they want

No data captured on existing or potential customers

There is no way of telling what these individuals require and howto better engage them

Employees cannot access data pertinent to them

Lack of confidence that data is accurate and current

Siloed units restrict a culture of data sharing

Departments are unable to access relevant data

Internal process automation is lacking and could be improved inorder to enhance the overall customer experience

Organizations often lack the ability to utilize existing technologyto improve the customer experience

Friction points withcustomers and users

Deep siloes acrossinternal departments

Data that’s wrong anddifficult to access

Labor intensive manualprocesses

“For any given project, 30%of the team’s time is spentjust finding the data.”

“For any given project, 30%of the team’s time is spentjust finding the data.”

“It’s too difficult to findanything on our website…”“It’s too difficult to findanything on our website…”

“Many related projects arerunning concurrently, butthere is no systematic wayto share knowledge.”

“Many related projects arerunning concurrently, butthere is no systematic wayto share knowledge.”

Limited ability tounderstand the

individual customer

“We can’t captureinformation on potentialcustomers who engage us.”

“We can’t captureinformation on potentialcustomers who engage us.”

“Many customer serviceproblem call-ins could besolved with a very simpleapp.”

“Many customer serviceproblem call-ins could besolved with a very simpleapp.”

External Focus Internal FocusWithin enterprise:


The good news is enterprises don’t need to be perfect – an effective digital strategycan be implemented by focusing on pain points most relevant to company needs

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External Focus Internal Focus

Mobile app gives user/customerthe opportunity to self-correctdata in real time

Basic website Mobile app consists of

website pulls

Software and/or socialmedia tools to enhanceinformation exchange

Significant investment inautomation tools acrossdepartments

Data is available,but is oftenoutdated and wrong

Limited infosharing acrossdepartments

Most internal processesare manual

Friction points withcustomers and users

Deep siloes acrossinternal

departments

Data that’s wrongand difficult to

access

Labor intensivemanual processes


individual customer

Case Study – A Regional Health Insurance Client

Post-Digital Strategy TargetPre-Digital Strategy

Inability to trackcustomerinteractions

Predictive data synchronizes in realtime, supported by a dedicatedpredictive analytics team

Elegant redesigned website Dedicated mobile app with core

features

Augment Breakthrough Disrupt

This organization hasfocused their digitalstrategy primarily ondeveloping a betterunderstanding of theircustomers

This organization hasfocused their digitalstrategy primarily ondeveloping a betterunderstanding of theircustomers


Industry Pain Point Digital Health Company Description

An end-to-end digital health company developingsolutions to improve an individual's health

Addresses health payers’ need to engagecustomers beyond when they are sick

Acts as a health and wellness tool for customers

Develops a web application that providesindividual consumers with clarity around theirhealthcare costs, usage, coverage, and choices

Helps employers gain control over healthcarespending

Allows self-insured employers to optimizehealthcare investments and achieve the highestquality outcomes for their workforce

Developing an app for Google Glass that will allowmedical doctors to instantly access patientinformation

Reclaims hours that doctors spend on paperworkin order to dedicate that time to patientinteractions

Case study: Healthcare enterprises have begun to partner with and acquireemerging digital health companies to address long-standing industry pain points

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Friction pointswith customers

and users


individualcustomer

Optum, part ofUnitedHealth Group,

acquires majority interestin Audax Health in 2014$56M in funding, with

24 year old CEO

Data that’s wrongand difficult to

access Silicon Valley darlingfounded in 2008 with

$177M in funding

Castlight empowersemployees of CVS

Caremark, a pharmacyand drugstore company,

with healthcare pricetransparency solutions

External Focus Internal Focus

Early-stage startupfounded in 2012 with

$7.3M in funding

Dignity Health, a largehospital system, partners

with Augmedix to pilotGoogle Glass devices in

clinical settings

Within enterprise:

Forward Looking Enterprise


Stakeholder Behavior Emerging Technologies

1. Demand for Individualization

4. Digital Asset Adoption

2. Mobile App Proliferation

3. Industry Adoption of New Technologies

Convergence of Stakeholder Behaviors and Emerging Technology

• Loyalty is correlated with individualizedattention, service quality and costconsiderations

• Market surge in digital asset adoption, creatinghigher expectations for features and services

• Mobile and digital assets havebecome a fundamental part ofdaily life

• Multiple industries have been rapidly adopting newdigital assets to engage with their customers

The Need For ADigital Strategy

Rapid changes in behaviors, and an influx of emerging technologies signal that largeenterprises should prioritize their digital strategy or face long-term obsoleteness


About Elevar

Digital Strategy Point of View

Table of Contents


Elevar is a unique innovation management company – we operate digitalinnovation labs for large enterprises

We are innovation advisors

Elevar helps large organizationsinnovate by partnering with highpotential startups

We align enterprise problems withstartup solutions to drive low-risk,high-impact innovation

We represent the interests of bothenterprises and startups – ensuringmutual benefit and a spirit of long-termpartnership for both sides

We operate digital innovation labs thatconnect enterprises with startups

First, we work closely with largeorganizations to uncover their mostcritical pain points

Next, we align high potential startupsto innovate customizable, scalablesolutions for enterprise

Once the most promising solutions areselected by enterprise, we work hand-in-hand to create transformativepartnerships between the parties

Who we are: How we operate:

For general inquiries, please contact Chris Edell: [email protected].

For intellectual capital inquiries, please contact Alek Bituin: [email protected].

www.elevarco.com

Digital Strategy Framework 101

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