Digital Transformation at the Heart of Innovation - BNP Paribas CIB
Saturday 05 December 2015

An interview with Dr Didier Bonnet, Global Practice Leader at Capgemini Consulting and co-author of "Leading Digital: Turning Technology into Business Transformation"

Innovation and Digital are certainly two of the themes which have attracted many articles and discussions in the past months. But behind buzz-words, is digital the only path to innovation? And if so, how does it affect our organizations? Dr. Didier Bonnet, answer to our questions.
Generally speaking, what is your vision of innovation? How digital changed things? 
Before the  arrival of Digital, innovation within corporates was "organizational". It was the field of a limited dedicated number of individuals based in innovation centers. The first change brought by digital is that innovation is now more wide spread across organizations and has changed mindsets. It is now much more of a "democratized" task. Digital tools facilitate spreading of ideasand now irrigate different fields within corporations, ranging from process optimization to enhancing client relations. A second change is that digital has allowed to "open up" the number of participants. Companies do not hesitate anymore to go outside their walls in the search for new partners or link up with start-ups to add new competences to their in-house knowledge. All of this has led to a more continuous innovation process, and new forms of communication within the company and with its clients. 

From a Corporate point of view, what are the main challenges in terms of performance and competitiveness? 
The risk of this new era is to innovate just for the sake of innovation. Digital can in fact change things in all functions within a company. It is therefore key to keep a certain level of focus on innovations which effectively have an impact on the business itself. There is indeed a certain hype to creating new applications in all directions and therefore to be too thinly spread and lose focus. It is thus important to have a sort of "storyline" to follow which will keep things improving for the company. For example, focus improvements in back-offices and administration which will have a direct effect on P&L, either through cost savings or enhanced treatment capacity. "Digital Masters" companies whom we feel have really managed to integrate digital in their innovation process to its full potential (see illustration below) clearly set a vision first, understand what they want to achieve and then develop appropriate innovation schemes.

How can digital trigger management and organizational innovation?
Before the digital era and the last 5-10 years, innovation was really focused on product development and associated processes. Today the scope is much larger. In terms of organizations, we have moved from the "command and control" set-up which prevailed for the last century to a more KPI driven approach whereby companies adjust their organizations to keep agility. This translates also into more democratic and horizontal set-ups. In this context, those who are the most challenged are middle management functions as expertise gradually takes more importance than hierarchy. In terms of back-office processes as well things are changing rapidly. Companies experience "no touch" STP processes whereby client contact is reduced while maintaining strong client satisfaction when this is well executed. Hierarchy will remain within organizations but in a much more agile way as corporates move functions to operate more in a succession of project modes than Taylorian approach.

Is co-creation a key driver of tomorrow's innovation? How does digital transformation facilitate this?
Co-creation is indeed becoming an important feature, and clients now have an active role in the value chain. In fact this new approach translates the new balance of power which is leaning towards increased power of the client. Digital has been a key factor in this, through such phenomenon as client advocacy and recommendations (or unhappy comments) on social network. To a certain extent it is now customers who take an active role in marketing new products and services. Co-creation has also led to more self-enabled processes to the benefit of both clients and corporates. Think of parcel tracking through internet, e-invoicing as launched in the telecom industry or even the way we now prepare our air travel: we can buy the ticket online, book our seat and confirm our travel. The client is more active but with better user experience. The previously prevailing product design model: focus group > product > purchase has now changed to integrate incremental input from clients at all stages. Co-creation is just a step in the process. It is key that front end teams need to be trained and geared to integrate client feedback in real time, as the side effect of this new client engagement is that clients also become more demanding.

According to you what comes next after digital transformation?
Let's be clear: digital transformation is not over, far from that, and there is an enormous amount of innovation going on. This will materialize by a much shorter cycle between prototyping and effective sales of a product - the average cycle which was about 10 years has now dropped to 1,5 years. As digital transformation continues, innovation, cooperation will become a day to day mindset. Those who achieve this transformation quickly will gain certain competitive edge. At the same time it will also entail other transformations: for example at Top Management level which will require more technological awareness. But also in terms of risk management and in particular the needed attention to reputational risks. The next transformation actually emanates from digital and the data associated to it. In my view this next revolution will be that of artificial intelligence and robots.

Leading digital
Published by Harvard business review press in the fall of 2014. Leading digital makes the provocative argument that the next phase of digital technology adoption will make everything that's happened so far look like a prelude.

Based on researching over 400 global corporations, leading digital presents the dna of digital masters, those companies that have mastered digital transformation to gain strategic advantage. Where and how to invest in digital and how to lead the transformation?

Didier Bonnet
Senior Vice President and Global Practice Leader at Capgemini Consulting
Dr Didier Bonnet is a Senior Vice President and Global Practice Leader at Capgemini Consulting. He also acts as the Executive Sponsor for Capgemini?s Digital Transformation. He is co-author of the best-selling book Leading Digital: Turning Technology into Business Transformation

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