Becoming a World Class Digital Organisation - BearingPoint

To get there. Together.
Becoming a World
Class Digital
Organisation
Six best practices
for digital transformation

Contents
Methodology 2
THE DIGITAL FUTURE IS HERE AND NOW 3
Six best practices for digital transformation 4
#1 - Develop an incremental digital journey 4
#2 - Define the rules for digital 7
#3 - Increase agility to overcome structural inertia 9
#4 - Dare to fail 12
#5 - Prioritise what you measure,
measure what you prioritise 14
#6 - Build your digital business on data insights 19
Conclusion 22
Contact details 23
1

METHODOLOGY
BearingPoint undertook a comprehensive study of World Class
Digital companies through primary interviews, market research and
a global survey covering Europe, North America and Asia Pacific.
The focus of this study was to assess and understand how these
companies organise their internal digital teams and capabilities to
enable digital transformation and delivery of digital engagement
with their customers and partners.
The 25 companies included are defined as World Class Digital
through their standing in respective industries and their exemplary
demonstration of successful innovation and engagement in the
digital world. Focus areas for digital activity range from marketing to
acquisition, from servicing to cross/up sell, and from customer
satisfaction to market influence.
Industries covered in the survey include financial services,
telecommunication, retail, software services, consumer electronics
and internet services. For the purpose of analysis, they were split
into three segments:
� Digital companies
� Financial services companies
� Other companies
Furthermore, the study distinguishes two different patterns:
� The Digital Pure Players, companies that have been
designed for digital from inception and exclusively use digital
without any physical channels
� The Digital by Evolution companies are those that have
evolved over time and have moved away from physical
channels in favour of newly developed digital ones
Finally, we would like to thank all the participants and contributors
for their valuable time and insights. We hope that these findings will
assist them as they respond to the changing digital world.
Point of view
2

THE DIGITAL FUTURE IS HERE AND NOW
Gone are the days when a standalone website was sufficient to
constitute an online business presence. Today, a fully interactive
and engaging end-to-end digital customer experience is not only the
norm, but the minimum expected from customers across all
industries.
With the emergence and establishment of key digital players,
together with changing customer behaviours exacerbated by device
mobility and perpetual connectivity, the digital landscape is rapidly
evolving. The pace of this digital change is phenomenal – and the
opportunity therein even more so.
To maintain competitiveness and ensure long term success,
businesses must ensure that their organisation is ready and capable
to meet challenges faced in the digital world, to respond to
customer needs, and where possible, define the future of digital
engagement.
Moving beyond existing studies focused on external digital customer
experiences, comprising of online functionality and “look & feel” for
customers, companies need to understand what is required
internally to enable successful delivery of digital into the
marketplace. This ranges from culture and behaviours to
organisational capabilities and structure.
This digital wave has driven fundamental changes and the journey
towards digital effectiveness is specific to each organisation.
However, World Class Digital companies can provide fundamental
lessons and key insights that should be adopted on the journey to
digital transformation.
3

SIX BEST PRACTICES FOR DIGITAL TRANSFORMATION
#1 - DEVELOP AN INCREMENTAL DIGITAL JOURNEY
� The development of an integrated global strategy reflects
a homogenous business model delivered through digital
channels
To ensure consistency with local demographics, customer
affluence and maturity and their channel preferences, Digital by
Evolution companies tend to develop a global strategy that is
highly tailored locally – 50% of the Non-Financial Services
companies and 70% of the Financial Services companies. To
guarantee the success of the implementation of the strategy,
activities executed at regional and country level are adjusted to
local specificities.
Level at which digital strategy is built
Those Digital by Evolution companies which are spun-off from
traditional brick & mortar firms, are strongly linked to their
parent companies in terms of culture, ways of working and
ethos, although they do apply separate business and digital
strategies.
Point of view
4

Integrated strategies
Separate strategies
Level of integration of digital strategy
In contrast, 100% of Digital Pure Players deploy global,
integrated strategies: digital
strategy and business strategy
are one and the same. There is
no separation between the two
types of strategy; digital is
intrinsic to these companies.
Consequently, key strategic
objectives are defined at a global
level and then deployed by each
country for their local market.
Any local variations remain
closely aligned to the global
strategy and approach.
We do not refer to
“digital”, neither do we
have separate “digital”
training, or separation of
digital and business
strategies; it is a
fundamental part of who
we are and part of
everything we do
� Focus and emphasis on consistent customer experience
over specific digital channel ownership
Today, companies are adopting a more customer centric
approach. Regardless of where digital ownership lies within or
across the organisation, delivering a consistent brand and
customer experience to the customer prevails. It has become a
true differentiator for companies.
In the Digital by Evolution model, digital ownership is often split
between different teams. Examples of this are digital
5

and non-digital channel teams, or Marketing and Ecommerce/Digital
solutions teams.
However, despite this split digital expertise is often organised in
a centre of excellence (CoE). The objective is then to have a
dedicated digital team within the CoE; they provide digital
support and guidance to all product teams and functions within
the organisation, and ensure a higher level of consistency in
terms of experience and message across all channels and
customer interactions.
When it comes to Digital Pure Players, providing a consistent
customer experience is ensured globally through management
of standards and guidelines, as well as being reinforced through
the brand (both internally and externally). Digital is then either
owned by a single person or by “all employees”, as they are all
responsible for digital within their specific functions and areas.
Best practice 1
Business and digital strategies need only be combined and
integrated once intrinsic digital maturity and capability has
been achieved. A global digital vision should be deployed
with local execution.
Point of view
6

#2 - DEFINE THE RULES FOR DIGITAL
� Effective delivery of digital capability is closely correlated
with clear definition of digital principles and
organisational ownership
Analysing the level of organisational digital dissemination
indicates how far a company is in its digital transformation. This
evolution occurs predominantly in the Digital by Evolution
model. These companies must ensure that digital rules,
guidelines and principles are first defined, then disseminated
and truly embedded in all teams.
For companies with emerging digital maturity, organisational
set-up is usually in mixed teams, ranging from centralised and
decentralised, to region specific, as well as digital teams at
specific group/function level. This model is mainly in place in
Financial Services companies.
Organisational digital dissemination path
Organisations then move away from pockets of mixed
ownership, ensuring smooth transition through the
implementation of a digital centre of excellence. The aim is to
promote a consistent and standardised digital knowledge base.
This type of organisation creates a more effective use of
resources by pulling information from all required areas whilst
developing them appropriately. Interactions and collaboration
7

etween key groups are then developed. This approach
encourages new methods and technologies that creates a
favourable environment for product and process diversification,
as well as innovation.
The ultimate organisational model to enhance digital adoption is
to have digital embedded throughout, as seen in the Digital
Pure players. There is no need to set up a centralised digital
organisation as all teams are digital by definition. Digital culture
is naturally widespread within the organisation.
Best practice 2
How teams are organised
Establish a digital centre of excellence to create and enforce
guidelines and principles as part of your digital transition
until digital is embedded and fundamental throughout your
organisation
Point of view
8

#3 - INCREASE AGILITY TO OVERCOME STRUCTURAL INERTIA
� Responsive and agile digital delivery is enabled through
physical and collaborative integration between teams
Agility is imperative for organisations: they need to build and
maintain a strong culture to develop its identity, but, at the
same time, they have to remain responsive to dynamic
environments and seize the opportunity to initiate or to react to
environmental change. Agility is thus a mix of stability and
reorganisation whist coping with internal coherence.
Encouraging cohesion, organisational commitment, and
desirable work behaviours among members is therefore
fundamental to creating the baseline of the organisation.
Path to create true integrated collaboration
In Financial Services, IT and business teams are often physically
separated: for more than 60% of respondents, teams are
located separately within offices, between offices, and often
geographies. The mode of working between them is that of
customer and supplier; primarily through IT responding to
business requests. Collaboration is low and people rarely
request help from others, fearing that it is perceived as an
admission of incomprehension or lack of knowledge.
9

Location of business and IT
For 60% of Digital Pure Players,
agility is provided through physical
and cultural integration of IT and
business teams. This enables a true
collaboration to build upon and
support each other’s ideas and
pledge resources. IT and business
teams partner collaboratively
throughout the lifecycle, from
concept and feasibility assessment,
through to development, delivery
and improvement.
We provide breathing
space to develop and
work on new ideas,
everyone is encouraged
to innovate. We actively
support this by giving
everyone 20% of their
time to work on pet
projects
� Digital innovation is the responsibility of everyone, not
just discrete teams
Growth depends on innovation, and innovation depends on an
open flow of ideas. So organisations have to harness and
develop strategies to encourage creativity.
For Digital by Evolution companies, structure for innovation
varies. Siloed teams within organisations still exist where
innovation is seen as being under the ownership of business
Point of view
10

teams that deliver to market. While such teams are used to
work in isolation in the past, the trend is for the development of
Businesses are
reorganising around
people. Technology
enabled collaboration
with external stakeholders
helps organisations gain
market share from
competition
that continuously develops creative
teams to run and sustain the end to end
process. All employees are innovative
and are encouraged to take part in the
innovation process. When an idea is
developed an ad-hoc, dedicated
innovation team is set up with all
interested contributors. All members of
the team bring their own expertise. This
team is not isolated, it partners with the
business to deliver new products and
digital innovation to be
increasingly in collaboration with
the business. In the integrated
model, the team is responsible for
incubating ideas, and working
with the business to develop them
further to bring to fruition.
The most advanced model is in
Digital Pure Players companies.
They have established a structure
Previously, some
innovations took so
long to incubate
and develop, that
by the time they
reached the market
they were no long
innovative nor
relevant!
services, sharing working ideas. A key factor in this digital
segment is that innovation is not exclusively owned by the
innovation teams that exist; but rather, all staff are asked to
own, innovate and build on ideas.
Creativity also depends on how managers encourage and exploit
diversity in the organisation. Managers allow and encourage
employees to take up to 20% in some organisations of their
working time to develop ideas, as well as own and drive them
forward.
11

Best practice 3
Integrate delivery and business teams throughout the
innovation and development process, ensuring true
collaboration and promoting innovation ownership
Point of view
12

#4 - DARE TO FAIL
� World class digital culture liberates passion and talent by
accepting risk as a part of the iterative route to success
No one likes to fail: we have been conditioned to think that
failing is unacceptable. However it is through repeated failures
and learning more from the failure that the greatest innovations
have been created. Culturally, for at least one of the Digital
Pure Players, unless a new recruit can demonstrate that they
have taken a risk, failed and learnt from that failure, they will
not be hired.
In conservative companies such as
Financial services with a culture of
hierarchy and command and control,
innovation is a complex dilemma and
not an easy one to solve. Financial
Services firms operate under an
increasingly strict regulatory regime,
and even if people are willing to
innovate, there are reservations
concerning the activity; whilst
innovation is encouraged in principle,
We dare to fail – not
shambolic public
multi-million dollar
failures – but we
accept that not
everything works first
time, and our people
know this
it is restrained by the desire to avoid risk and the fear of the
consequences of failure. This culture is as fundamental to
ensure quality and accountability, but hinders rapid
development and delivery into new areas.
Innovation therefore, encompasses the process of examining
things that potentially could work and then either rejecting
them or evolving them into something that really does work. It
is especially true when you start to explore, to experiment and
to create something new. Most successful companies embrace
failure, making deliberate efforts to create a culture where
people can feel comfortable about failing.
13

Pure Digital Players not only accept but expect risk and failure
as part of the innovation process. Beta versions are deployed to
users for early feedback and to influence the final version.
Leadership commits to and supports ideas, and accepts that
taking risks is part of the iterative route to success.
� World class digital organisation have an inherent digital
culture, embed knowledge, reward innovation and recruit
digital expertise
Organisational culture is key for successful business as it
assembles a set of shared beliefs, norms, and values.
Organisational culture is formed over years of interaction
between the participants in the company. Developing a digital
culture can, therefore, present a challenge.
For Digital by Evolution businesses, changing existing culture is
far more difficult than for organisation built from scratch in the
digital space. Established norms create a vastly different culture
in comparison to Digital Pure Players companies.
In Digital by Evolution businesses, digital is treated as a
standalone entity and is used as a bolt-on to general training or
through induction of employees when required for specific roles.
Digital knowledge is deemed to be role specific, and not spread
throughout the whole organisation.
How staff are trained and educated around digital
Point of view
14

However, Financial Services organisations do develop refresher
courses for encouraging digital thinking and raising awareness.
For Digital Pure Players, digital is core to the culture. It is
fundamental and required at recruitment. Deep technical skills,
true passion for the internet, and a hunger for innovation is
Hire the best people,
and expect the best
from our people
essential. As digital is a fundamental
part of the business, there is no need
to incentivise digital adoption
specifically. All training is digital and is
mostly provided as part of the
induction process.
Regular sessions on product innovation, industry trends and
insights are used to encourage broadening and deepening of
knowledge and expertise, along with role specific training.
Digital know-how is seen as inherent and is included in all
training.
Innovation is favoured, rewarded and encouraged through using
a broad range of methods encompassing monetary and nonmonetary
incentives.
Best practice 4
Drive cultural change through demonstrated commitment
from leadership, and recruitment of digital expertise
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#5 - PRIORITISE WHAT YOU MEASURE, MEASURE WHAT
YOU PRIORITISE
� Define, implement and monitor consistent KPIs to ensure
business and customer relevance and competitiveness
Key Performance Indicators (KPIs) are used to ensure that
projects are clearly aligned and contribute to the strategic goals
of the organisation.
KPI used to determine the success of the digital strategy
Digital by Evolution companies focus on internal measures;
Financial Services organisations more so on financials and costs.
Achieving financial objectives, maximising market share, and
reducing costs are the main criteria for assessing business
cases. Thus projects are mainly prioritised on financial criteria
as well as increasing their competitiveness in the market.
Non-Financial Services
organisations focus on
financials and optimisation.
As these companies are
managed mainly taking an
inside out view (company
first) vs outside in
(customer first), project
We have clear objectives
and metrics about what we
want to achieve prior to
entering the channel, as
opposed to saying ‘we want
to use Twitter’
Point of view
16

prioritisation is based on optimising their value chain. Key
criteria for business cases are financial, such as increasing
revenues and profitability, as well as competitiveness.
Top 3 Project prioritisation elements
As for Digital Pure Players
companies, the customer and
innovation are the main focus.
Capturing the customer view, in
terms of what they desire, and/or
whether they will adopt and
recommend, is key in project
prioritisation. The strategy is to
drive higher revenue by attracting
the most customers.
Competitiveness driven through
innovation is also a high priority;
being first to enter a new market,
shaping trends, timeliness and
relevance.
We plan and prioritise
our work based on
what is relevant to
our customer now – if
a project is not
important or relevant
enough to be green lit
the first time round,
digital moves so fast
it is unlikely be
relevant when we
next go through the
cycle
17

� Measure project success based upon key prioritisation
criteria
Defining KPIs creates impartiality in project selection by giving a
rationale behind selecting projects, putting them on hold or
even cancelling them.
For Digital by Evolution companies, customer sentiment KPIs
are often used to assess digital customer satisfaction and
loyalty. However these KPIs are not reflected in the key decision
criteria for Financial Services project prioritisation. Therein lays
a true dissonance between how projects are prioritised - on
financial KPIs - and how project results are measured. It might
end by launching projects with financial opportunities that are
not aligned with customer expectations.
Conversely, Digital Pure Players measure project success based
on key prioritisation criteria. Customer
sentiment KPIs are used most frequently as
their business model is to develop products
in line with customer requirements and
adoption. Project prioritisation criteria are
aligned with these KPIs as these companies
adopt a customer focus and centricity approach. While
important, financials are not the deciding factor in prioritisation
but rather customer demand and innovation relevance/
timeliness. However, financial KPIs are also key for these
companies given that digital is their primary (and often only)
channel for business.
� Regular planning and prioritisation enables incorporation
of latest trends and customer feedback, ensuring
timeliness and relevance of delivery
Demand volatility is exacerbated by shifts in customer
behaviour, consumer awareness, individual preferences and
distribution patterns. New challenges emerge for organisations:
they need flexibility and agility to align with customer
expectations. However, ensuring timeliness, relevance and
Point of view
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delivery responsiveness provides a great opportunity for growth
for those who can anticipate and capture customers during
these shifts.
Commodity based businesses – Digital by Evolution companies
– have to manage their supply chain to deliver products and
services. Demand management is often complex with
distribution and planning processes fragmented. Organisation
flexibility becomes low and as a result it becomes more
challenging to deliver the right product at the right location at
the right time.
Quarterly
Biannually
Monthly
Annually
Frequency of digital plan refreshment
An integrated and responsive supply chain is key to becoming
competitive as is adopting a more consumer-centric approach.
Organisations can then provide a more accurate and consistent
offering to increasingly savvy customers who expect their
demands to be met in whichever location and through
whichever channel their prefer.
Digital Pure Players have established short, monthly digital
project plan cycles and help focus effort and enable effective
responses to what customers want the most.
Lessons can be learnt faster and iterations produced quicker -
beta products can be improved and completed. Shorter planning
cycles will also ensure customer and market timeliness and
relevance.
19

� The voice of the customer is key for product and
experience improvement, with feedback utilised in a
framework of listen, learn, and act
The voice of the customer is key in relation to the continuous
improvement of customer experience. Organisations should
derive a roadmap from customer feedback in order to identify
items to address and realise even greater commercial success in
the future. The focus should be to optimise the relationship
between the organisation and the customer, ensuring efficiency,
longevity and to make customers feel that they are empowered
and are in the heart of the development / improvement process.
Collecting customer feedback
Financial Services organisations prefer an inside-out approach,
pushing products and services to customers, with the goal of
increasing financial return. Shareholder value is often prioritised
over immediate customer needs, except for where regulation
dictates.
Digital Pure Players have embedded a culture of testing, where
they allow customer to make decisions that will ultimately lead
to an increase in conversion rate. To ensure the most accurate
response to customer preferences, tests occur almost
continuously. Digital channels are predominantly used to collect
feedback, although physical channels are also utilised.
Point of view
20

Web monitoring is the most used method amongst all Digital
Pure Players. Less automated methods are also deployed such
as social media monitoring and email surveys. Both positive and
negative feedback is collected and used to optimise the
customer experience: negative feedback builds authenticity and
creates trust in the brand, (what is
When companies stay
close to their
customers, powerful
real time insights feed
into future planning
and product
development. When
our customers speak
we listen
Best practice 5
bad for one might not be for
others), and ignoring negative
feedback will not make it go away.
Outside-in focus is chosen, taking
into consideration what customers
need and want, and working to
exceed expectations. Capturing
multi-channel customer feedback
for continuous service and product
improvement is essential.
Customer experience should become a key criterion for
project prioritisation, facilitated by continual review of digital
plans and priorities to enable effective response to market
and customer needs
21

#6 - BUILD YOUR DIGITAL BUSINESS ON DATA INSIGHTS
� Effective data analytics is the engine to drive targeted
marketing and customer personalisation
Amassing data across disparate channels has been facilitated for
companies as a result of the massive amount of available data
inside and outside the enterprise. This includes everything to do
with customer sentiment and opinion, customer-to-customer
communications through blogs, Twitter and social media sites.
In most organisations, customer information is distributed and
duplicated across various applications; there is no unique view
of the information. Effective customer management requires
accurate, integrated and up-to-date
customer information.
The challenge is how all of this
information is connected and how
well the data is utilised to make the
right decisions.
Only half of Financial Services
respondents have an integrated
customer database. Investing in this
area and in analytics would result in a more intelligent use of
customer data and increased ability to target consumers with
the right product at the right time. Although a huge amount of
data is captured and stored by Financial Services respondents,
it is not always leveraged or used effectively.
In other Digital by Evolution companies, investments are being
made in data and analytics as these companies increasingly
recognise the value of having a more integrated view of their
customers.
Point of view
22

Yes
No
Yes No
Integrated databases
Superior analytical capabilities distinguish some of the top
companies. As best in class, all Digital Pure Player respondent
companies have an integrated database for all customer
interactions (including cross channel) and capture real time
customer data. This data is accessible by all service agents for
interactions with customers. In addition, data analytics drives
and shapes personalised and targeted marketing.
� Product design evolves by combining digital data insights
with real time feedback through a continuous customer
dialogue
Intelligence and knowledge from data and analytics is used to,
understand, target and engage customers.
Digital data insights consist of collecting, analysing, and
distilling data from a wide variety of sources. Digital data
analytics provides statistical insights and real-time suggestions
for optimal decision-making and real-time mining to coordinate
Yes
No
23

more agile responses. Additionally, they enable understanding
customer behaviours, creating simulations based on the
ecosystem. This scenario analysis explores the effect of
variables in production/delivery and its impacts on customer
behaviours, and by extension on business. Contingency plans
are then developed to mitigate the most likely disruptive
events.
Two-way dialogues between companies and their customers can
maximise customer relationships. Customer dialogue provides a
platform for users to interact with one another in a structured
way. Communities enable collaboration between employees,
customers, suppliers, third parties, commerce platforms and
content platforms. Requirements and prioritises are thus easily
set up and product development is more relevant and aligned
with customer expectation
Best practice 6
Build a holistic data management approach to capture,
analyse, and leverage customer data across all touchpoints
to tailor communication, marketing offers and service
propositions
Point of view
24

CONCLUSION
Different types of organisations in different industries have diverse
approaches and perceptions around realising a digitally enabled
business and culture. As levels of digital maturity, capability,
appetite and opportunity inevitably vary, “a one size fits all
approach” to digital transformation does not truly exist.
However, through this study of World Class Digital companies, 6
best practices for digital transformation have been established as
the common thread underpinning their respective digital successes.
The world class trends and principles identified here need to be key
considerations as part of any digital journey, taking into account
positioning within each best practice, and levels of maturity within
them.
Applying each best practice in turn and as a whole for your
organisation will help shape and define your journey and road map
to achieve world class digital transformation, thus enabling an
organisation to become a truly competitive and pioneering in the
digital world.
Digital is the future – and tomorrow is already here.
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how to get there…
To get there. Together.
CONTACT DETAILS
Sarah-Jayne Williams
Phone: +44 (0) 7968 796915
Email: sarah-jayne.williams@bearingpoint.com
Andreas Rindler
Phone: +44 (0) 79175 53262
Email: andreas.rindler@bearingpoint.com
Chi Wai Tong
Phone: +44 (0) 7881 556038
Email: chiwai.tong@bearingpoint.com
Charlotte de Gastines
Phone: +44 (0) 7776 245124
Email: charlotte.degastines@bearingpoint.com
If you are interested in finding out more about the research and
insights presented here, or if you would just like a chat on leading
industry practices, or simply have some tough problems you would
like another perspective on, please get in touch.
Point of view
26
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