“Digital Maturity is a Key Performance Factor for Companies”

By November 26, 2012
Patrick Ferraris - Capgemini

Few companies have as yet embarked on a real digital transformation, but those that have are already reaping the benefits.

Interview with Patrick Ferraris, Global Leader of the Technology Transformation practice at Capgemini Consulting, on the sidelines of the Electronic Business Group (EBG) Mobile, Social & Big Data event in Paris. There he presented the findings of a study* published by Capgemini Consulting together with the MIT Sloan School of Management.

L'Atelier: It’s said that companies must embrace digital technologies if they want to remain competitive and innovative. But what has been the actual experience of those that have made the move?

Patrick Ferraris: We’ve seen that companies which succeed in moving to digital really benefit from the shift in comparison with those that haven’t done so. We’ve identified four levels of digital maturity. These are a combination of on the one hand, digital intensity – i.e. how much the company uses digital technology – and on the other, the intensity of its transformation management. Companies which are digital leaders are dubbed ‘Digirati’ in the study; these are firms which have benefitted most from their digital transformation. They’re on average 26% more profitable than their non-Digirati peers and enjoy a market value around 12% higher. Moreover, the study also indicates that all Digirati share the same digital DNA.

L'Atelier: What exactly is ‘digital DNA’? Is there a miracle recipe for creating digitally mature companies?

The study found that there was something different about the digital DNA of the Digirati companies that makes them stand out from other firms. People at the company tend to have a shared vision and there is strong involvement of the senior executives, the management and all departments in the transformation process. Another element which is common to these digital pioneers is the desire to become the benchmark in their industry. For example, Burberry, the iconic British brand, is the benchmark company in the luxury goods sector and also in terms of customer experience. For the last five years the company has been investing in its sales outlets, boosting its web presence and developing social and mobile.

Today, however neither media communications nor marketing will suffice. A company has to go beyond these efforts and thoroughly review its business model. All the Digirati we studied have tackled this challenge. These firms offer new services and target new markets using their digital technologies, but that doesn’t mean they give up their traditional business model entirely. They’ve managed to find the right balance.

L'Atelier: Which industries are leaders on the digital front?

The study found that there are three industries which lead the digital advance: High-tech (38%), Banking (35%) and Insurance (33%). Why do they outperform other sectors? Well, while every sector has a certain average level of digital maturity, the leading three have been forced to ‘go digital’ by fierce competition and a fast-changing environment, plus high customer expectations. So some industries have simply had no choice and have already taken the great leap forward into digital technology. By contrast, the manufacturing sectors have been much less affected by the digital revolution and can count only 12% Digirati. These are essentially B2B businesses, which operate at one remove from the end-customer, so their competitive environment is different and that’s mainly why they’ve been slow to shift to digital. However every industry and sector does have its examples of digitally mature companies.

*The Digital Advantage: How digital leaders outperform their peers in every industry, Capgemini Consulting and the MIT Centre for Digital Business at MIT Sloan School of Management



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