A Board's Eye View of Digital in Enterprise

A PREVIEW

A BOARD’S EYE VIEW of Digital in Enterprise

Dr. Kapil Dev Singh

TM

Includes 100 GLOBAL GEMS OF DIGITAL ENTERPRISE

A BOARD’S EYE VIEW of Digital in Enterprise

A BOARD’S EYE VIEW of Digital in Enterprise

A Global

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Research Covering

330K PAGES BROWSED

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1750 GLOBAL ENTERPRISES

COUNTRIES

19

62K

DX POINTERS DECIPHERED

INDUSTRY VERTICALS

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CONTINENTS

Dr. Kapil Dev Singh CEO and Principal Research Analyst, Coeus Age www.coeusage.com, www.leaddding.com

MAN MONTHS OF FFORTS

3.8K

QUALITATIVE TEXT SLICES ANALYSED

A Board’s Eye View of Digital in Enterprise, 2019

By Coeus Age

© Copyright 2019 Coeus Age Consulting LLP, India. All rights reserved. No part of this report shall be used or reproduced in any manner whatsoever without a written permission from the author, except in the case of brief quotations embodied in critical articles and reviews.

Although the author has made every effort to ensure that the information in this report was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

The research is based upon qualitative and quantitative analysis of the construct of ‘digital in enterprise’ as contained in the annual reports of the selected large business enterprises. The research is limited by the perspectives and information as contained in these documents. But we believe, since they are published as per the regulatory requirements of different countries, the information is adequately and carefully whetted by the relevant authorities in the business enterprises. The methodology, framework and universe reference has been clearly defined in the report.

For any further clarifications, kindly get in touch with Dr. Kapil Dev Singh at kds@coeusage.com, +91 9811771187.

www.coeusage.com | www.leaddding.com

Price: 999 USD Designed by – Kaira The Creative World, New Delhi, India

06 23

INTRODUCTION

TOP 100 GLOBAL GEMS OF DIGITAL ENTERPRISE

08 27

RESEARCH PROCESS, FRAMEWORK AND INSTRUMENT

CONTENT

CASE STUDIES 10 GLOBAL GEMS OF DIGITAL ENTERPRISE

13 40 16 68

EXCUTIVE SUMMARY

ANNEXURE

A BOARD’S EYE VIEW

COEUS AGE

OF DIGITAL IN ENTERPRISE

PROFESSIONAL SERVICES

INTRODUCTION

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A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

Digital is a momentous phenomenon that is fast transforming economies and societies. It holds the power to bring tectonic shifts in the way the world operates. Distances don’t matter anymore, with geographical and societal barriers being broken like never before. Technology is more pervasive in every walk of life, and disruption is the new normal.

17 50 62

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ntries

Amidst the big shifts, business enterprises and governments across the world are struggling to cope with the phenomenal pace of change while trying to discover the new opportunities presented by these changes. Digital has entered the boardroom conversations and is being seriously considered as an integral part of the strategy. Frontrunners have already taken a lead, while many others are trying to emulate them or are yet to start their journeys. In this context, it is pertinent to gauge the conversations and activities around digital and understand how these correlate with business performance.

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Digital is so pervasive and multifaceted that its manifestations can’t be understood through traditional modes of research. ‘Digital in Enterprise’ is a complex construct that requires a multidimensional quest for a holistic understanding. All is not lost though. There exists a solution in the form of annual report, something that all listed companies are mandated to publish. A cursory look at the annual reports of some of the leading companies will make it clear that there is an increased emphasis on digital as highlighted in these reports. This emphasis can be a subject of analytical rigor to identify the underlying dimensions and determine ways to measure those. Annual report can be an apt window to look into a business enterprise’s take on digital. It’s a holistic statement that emanates from the company boards, whetted by the members in charge of determining the strategic courses of their respective businesses. In short, an annual report presents a Board’s Eye View of a business.

We therefore decided to take ‘annual report’ as the source of information for deconstructing and reconstructing ‘digital in enterprise.’ Despite the fact that narratives in annual reports are often window-dressed with a view to present a positive face to the world, trained analysts can identify, validate and join the important dots to make the real ‘digital in enterprise’ construct. We believe that there is no better way to understand the construct of ‘digital in enterprise’ than the annual report, which covers it in all its complexities and dimensionalities. In fact, there is no better way to do it at a scale that this report covers. A total of 1,750 global companies were analyzed using the approach.

A Board’s Eye View of ‘digital in enterprise’ is a first of its kind research initiative, both in terms of breadth of coverage and depth of analysis. It is also unique as the approach has not been adopted earlier. Never before have the analysts sifted through thousands and thousands of pages (330,000 to be precise in our case) looking for the narrative around digital (and related aspects that make it) to decode the construct of ‘digital in enterprise’. In total 62,000 digital-related words were identified, and 3,771 chunks of qualitative content were analyzed.

The report presents the outcome of the rigorous research that our analysts carried out, putting in 12 man-months of efforts. It is presented in a contemporary style that helps enable better assimilation.

The report is only a modest beginning. Coeus Age plans to continue with the research over time so that a longitudinal view of ‘digital in enterprise’ could evolve and key business issues be answered using empirical evidence. We believe that the global enterprises will need these answers to adopt or modify their ‘digital in enterprise’ journeys.

I look forward to hearing from you.

Dr. Kapil Dev Singh CEO and Principal Research Analyst, Coeus Age, kds@coeusage.com, +91 9811771187 7

A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

RESEARCH PROCESS, FRAMEWORK AND INSTRUMENT

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A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

RESEARCH PROCESS The main focus of the research study was on the construct of ‘Digital in Enterprise’.

Two distinct waves of digital were covered- first wave represented

by SMAC or Social Media, Mobility, Analytics and Cloud, and second wave represented by Big Data, Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), Blockchain and other emerging technologies such as 3D Printing, Additive Manufacturing, Robotics Process Automation (RPA) etc. The traditional enterprise IT as defined by the infrastructure and applications was not the focus of the study.

SELECTING A UNIVERSE REFERENCE

LANDSCAPE MAPPING WITH RANDOM SAMPLING

We decided on the Forbes 2000 list of 2018 as the universe reference for the research. It is a publicly available list of top 2000 business enterprises of the world. The list is based upon multiple business performance measures – revenue, profit, assets and market capitalization. The list was further categorized into industry verticals, of which 19 prominent ones were selected for the study – representing 1750 enterprises.

This was the operational phase where the analysts sifted through the annual reports looking for key words, identifying and analysing relevant qualitative chunks around the key words and using that information for rating each enterprise on the scale created during the earlier phase. 19 industry verticals were identified from the Forbes list, a sample of minimum 30 companies was selected for each industry vertical (except Health and Media for whom the list contained less than 30 enterprises). Systematic random sampling method was used. The total number of sampled enterprises across the 19 industry verticals was 656. The sampled enterprises represented their respective industries. The combined statistics for all industries put together was obtained after weighing each enterprise by a factor determined by the ratio of ‘total number in the list’/’total sample taken’. E.g. 40 Auto companies were sampled out of 59 in the Forbes list. They were weighted by a factor of 1.475 (=59/40) for their rightful representation in the universe of 1750 enterprises across 19 industry verticals.

Since it was a random sampling exercise, it served the purpose of mapping the landscape, i.e. the findings could be generalized to the whole universe, at the industry, regional and the overall levels.

PHASE 1

PHASE 2

PHASE 3

PHASE 4

Forbes 2000 of 2018 as the universe reference 1750 enterprises across 19 industry verticals covered Random sample of 656 The rest 1094 enterprises boosted A coveted list of top 100 Global Gems of Digital Enterprise (GGODE)

BUILDING THE RESEARCH FRAMEWORK

LISTING THE BEST BY BOOSTING THE SAMPLE

A sample of 25 good companies’ annual reports were studied (E.g. Citibank, Unilever, Olam, and Standard Chartered Bank) . The content around digital was coded and analysed to identify the hidden dimensions and sub dimensions around which the content revolved. In total, 4 key dimensions and 10 sub dimensions were identified.

These dimensions and sub dimensions were used to create an instrument or a scale for measuring ‘digital in enterprise’ construct for an enterprise. Any enterprise can obtain a maximum score of 30 on the scale, 3 for each sub dimension.

The landscape mapping helped us get the representative breakup in terms of low, medium and high digital score enterprises. In order to further build the list of high digital score enterprises, we explored all those 1094 enterprises that were not shortlisted during the earlier phase of random sampling (1750 – 656 = 1094). A quick glance through each one of them helped us identify those with the potential of a high digital score. These companies were further analysed in depth to arrive at their true digital scores.

The combined list of high digital score enterprises, from both from the random sample (656) and the boosted sample (1094) helped us get a holistic list of the best digital enterprises across the world. A coveted list of top 100 was created, aptly called as the 100 Global Gems of Digital Enterprise (GGODE). The list is a first of its kind as seen from the digital lens.

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A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

DIGITAL ENTERPRISE FRAMEWORK AND INSTRUMENT 4 DIMENSIONS

10 SUB – DIMENSIONS

SCALE**

Density of Key Words - measured as percentage of pages that contain at least one of the key words*

3

Value Chain Spread - measured as number of activities being covered as part of narrative around digital

3

Tech Spread – measured as number of emerging technologies being covered as part of narrative around digital

3

DIGITAL ENTERPRISE

Spread of Digital in the Narrative

Strategic Appreciation of Digital

Concrete Adoption of Digital

Supportive Environment

Connect with Strategic Focus or Imperatives - measured as the digital’s connect with the core strategy of the enterprise

3

Chairman/ CEO/ MD’s Emphasis on Digital - measured as the clarity of digital narrative in the top management’s message

3

Quantum of Digital Initiatives on the Ground - A sense of the range of concrete digital initiatives Maturity or Depth of Digital Initiatives on the Ground - measured as the variation in depth or maturity of concrete digital initiatives

10

A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

9

6

3 6 3

Metric/ KPIs– measured as the degree to which metrics or KPIs with respect to digital are developed and practiced

3

Leadership/ Culture/ Structures – measured as degree to which leadership, culture, skills and structures are developed for digital

Ecosystem Development – measured as degree to which ecosystem partners like start-ups, R&D labs, universities are identified & nurtured

3

*Key Words: Cluster 1: Digital, IT, Analytics, Big Data, IoT, AI, ML, Blockchain, Social, Media, Cloud, Mobility

Cluster 2: Intelligent, Smart, Transformation, Innovation, Platform, Portal, eCommerce

MAX SCORE

MAXIMUM ENTERPRISE DIGITAL SCORE 30

1 CONSTRUCT

9

3

**Each sub dimension was measured on a scale of 0 to 3, where 0= almost none, 1= low, 2= moderate and 3= high

2

3

Quantitatively derived from the number of domains of the value chain covered in the narrative around digital Products/ Service, Customers/ Marketing, Core Operations, Suppliers, Distributors and HR

Quantitatively derived from the number of emerging technologies covered in the narrative around digital Social Media/ Mobility/ Cloud, Big Data/ Analytics, Artificial Intelligence, Machine Learning, Blockchain, Internet of Things, Others (3 D Printing, eCommerce etc.)

Value Chain Spread

2

Tech Spread

Chairman/ CEO/ MD’s Emphasis on Digital “We are also particularly well placed, I believe, to capture the opportunities of the digital revolution - and the unprecedented explosion in data – which

1

are transforming our markets and our ways of operating.

Again, we started early. Our digital marketing capabilities, for example, have frequently been recognized as among the best in the industry and the online sales of our brands increased by a further 80% last year, making it a €1.7 billion business for us.”

-Chairman’s Message, a Large consumer products company

Density of Key Words Quantitatively derived from the count of key words, divided by number of pages. E.g. if number of words is 200 and pages is 150, the density will be 200/150*100%= 133%. Key Words – Cluster 1 - Digital, IT, Analytics, Big Data, IoT, AI, ML, Blockchain, ML, Social, Media, Cloud, Mobility Cluster 2 - Intelligent, Smart, Transformation, Innovation, Platform, eCommerce, Portal Multiple variations were used e.g. innovate, innovation, innovative. Cluster 1 and cluster 2 were given 100% and 50% weights respectively. So each word in cluster 1 was counted as 1, whereas it was counted as 0.5 in cluster 2

01

02

Spread of Digital in the Narrative

Strategic Appreciation of Digital

1

Connect with Strategic Focus or Imperatives “The objectives to be achieved through digital transformation are Improvement in operational efficiency, development of new business models and adaptation of the Group’s human capital so it can be effective working in a digital company.

The structure of the digital transformation strategy includes three interrelated axes, divided, in turn, into ten programmes - Cultural Change, Efficiency and New Business, Data Tech and Governance.”

- A large utilities company

DIMENSIONS AND SUB DIMENSIONS

1

2

– AN ILLUSTRATION Metrics/ KPIs INNOVATION LABORATORIES AROUND DIGITAL “We have set a key performance indicator for the laboratories: at least 70% of their innovations must be applied research performed at the request of the business units. At the same time, at least 15% of the pool of business cases with technological pilot projects have already entered industrial use. “ – A large bank

04

03

Supportive Environment

Concrete Adoption of Digital

Leadership/ Culture/ Structures “Furthermore, a skills-development plan was developed that includes training for all members of the Organization; for example, the Airplane Game (where concepts of the Agile method are practiced) and analytics training, which seeks to develop knowledge along the Data-based Decisions pillar. Meanwhile, for those teams directly involved in the squads, the training sessions include behaviour aspects in order to implant this new culture, and technical aspects about the new work methods, with a focus on training professionals to carry out those new actions in their daily tasks” – A large business to business company

1 Quantum of Digital Initiatives on the Ground “During 2017, more than 100 digital transformation initiatives have been identified which are currently underway in the Group, with some being noteworthy for their contribution to the objectives of the digital transformation strategy.”

- A large utilities company

3 Ecosystem Development “One such initiative was investment in a new telematics car insurance services company in the United States. This company is developing insurance services in which driverspecific data on distance driven and other driving patterns is collected and analysed to calculate insurance rates.“ – A large Auto company

2

Maturity or Depth of Digital Initiatives on the Ground “Upon years of a digitalized reform characterized by “One XYZ, One System, One Standard”, we have successfully materialized operations driven by software and data through its value chain, connecting end to end and covering R&D, PO, scheduling, flexible manufacturing, procurement, follow-up of product quality, logistics, installation & post-sale services, etc. The Group’s cloud platform has made come true C2M flexible manufacturing, platform-based, modularized and digitalized production techniques, logistics simulation, intelligent logistics, digital marketing, digital customer service, etc. In addition to applying these cloud platform solutions to its manufacturing bases across the world and tens of thousands of its products.”

- A large consumer products company

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A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

1

Automobile (Auto)

Population

Sample

59

40

12

C O V E R A G E

31 13

97

34

Aluminium

Electronics

Iron & Steel 15 16

Internet & Catalog Retail 425

51

Retail (RTL)

Major Banks

Computer & Electronics Retail

Regional Banks

Department Stores

Thrifts & Mortgage Finance

Discount Stores 60

37

Food Retail

Pharmaceuticals

Home Improvement Retail

Construction and Real Estate (CRE)

64

32 18

161

40

Telecommunications (TEL)

19

Transport (TPT)

47

Total Coverage Others (OTH)

35

A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

43

31

1750

656

250

Not Covered

Aerospace & Defence Air Courier

Food Processing

Airline 20

19

Casinos & Gaming Computer Services/ Software & Programming

Healthcare Services

Containers & Packaging

Managed Health Care 140

33

Environmental & Waste

Communications Equipment

Forest Products

Computer Hardware

Furniture & Fixtures

Computer Storage Devices

Hotels & Motels

Electrical Equipment

Paper & Paper Products

Heavy Equipment

Printing & Publishing

Medical Equipment & Supplies

Recreational Products

Oil Services & Equipment

Rental & Leasing

Other Industrial Equipment

Security Systems

Precision Healthcare Equipment

Tobacco

Semiconductors

Trading Companies Total Universe

12

34

Advertising 69

Beverages

Heavy Engineering/ Engineering (HE)

54

Other Transportation 20

Natural Gas Utilities

11

34

Railroads 100

Electric Utilities

Health (HLT)

113

Trucking

Diversified Utilities

10

37

Telecommunications services

Real Estate

Food and Beverages (F&B)

83

Restaurants

Construction Services

9

35

Specialty Stores

Construction Materials

Energy and Utilities (E&U)

41

Drug Retail

Biotechs

Specialized Chemicals

8

Oil and Gas (O&G)

Apparel/Footwear Retail

Diversified Chemicals 7

Mining (MIN)

Investment Services

Chemicals (Chem)

36

Oil and Gas Operations 17

Consumer Financial Services

Bio and Pharma (B&P)

45

Diversified Metals & Mining

Household/Personal Care

6

Metals (MET)

Consumer Electronics

Banking and Financial Services (BFS)

17

Diversified Media 14

Household Appliances

5

Media (MED) Broadcasting & Cable

Apparel/Accessories

4

18

Property & Casualty Insurance

Business & Personal Services Business to Consumers Marketing (B2C)

33

Life & Health Insurance 48

Business Products & Supplies 3

Sample

110

Insurance Brokers

Auto & Truck Parts Business to Business Marketing (B2B)

Population Diversified Insurance

Auto & Truck Manufacturers 2

Insurance (INS)

2000

A random sample of 656 was covered for the landscape mapping.

All those not covered in the sample were further explored for identifying the high digital score enterprises.

By taking the high digital score companies from both the sample exercise and the non sample exercise, the coveted list of 100 Gems of Digital Enterprise World (GoDEW) was obtained.

01

DIGITAL SCORE BENCHMARKING Competitive Mapping Specific to Your Market or Industry

02 PROFESSIONAL SERVICES

03 04

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A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

ANALYST KEYNOTE Sharing of Research Insights to a Group within Your Organization or Extended Organization

GLOBAL MARKET SCAN Discovering Niche Digital Players to Strengthen the Digital Platform

OD FOR DIGITAL Organizational Development – ‘As Is’ Situation Study to Embark upon a Transformative Journey

Coeus (Koios) was the Greek Titan of intelligence, the axis around which the heavens revolved. In the current age, enterprise intelligence is the axis around which organizing takes place, a true source of strategic advantage and success.

Coeus Age Consulting is a new age research and consulting organization working towards a mission of enabling the contemporary business, government and technology leaders build value amid digital disruption

LEADDDING is a Coeus Age initiative to start a meaningful conversation around Digital and its relevance to business strategy and growth. The conversation shall not be just about technology but also about leadership, strategy and business performance.

Gems of Digital™ is an innovative initiative by Coeus Age Consulting to discover, document and felicitate the innovative use of digital by the governments and business enterprises across the world. Global Gems of Digital™ Enterprise uses the spirit and know how of the Gems of Digital™.

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A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

RESEARCH TEAM Dr. Kapil Dev Singh is the Founder & CEO, Coeus Age. He has over two decades of rich experience, and has headed IDC in India for close to eight years as the Country Manager. He has been tracking the ICT industry for 23 years now.

Dr. Singh is currently spearheading path breaking research on digital enterprise and new technologies. He is passionate about driving a new discourse among the contemporary business leaders on managing business in the digital age. He is also advising them on the change with respect to vision, strategy, structure and culture toward embracing the paradigm of digital.

Dr. Singh is an engineer, and an MBA. He is also a doctorate from Management Development Institute, Gurgaon, India. He regularly writes blogs and articles, which are read by business leaders across the globe.

Kapil Dev Singh,

CEO and Principal Research Analyst, Coeus Age

70

Dr. Singh has authored several books, notable of which are - Looking Inward, CIO Leading Change, The Platform Edge, LEADDDING, Thriving in a Data Economy and 51 Gems of Digital India.

A BOARD’S EYE VIEW OF DIGITAL IN ENTERPRISE

Darshika Jhunjhunwala Research Analyst, Coeus Age

Fahad Haque Research Analyst, Coeus Age

Ankit Kumar Research Analyst, Coeus Age

Sandeep Kumar Research Analyst, Coeus Age

A BOARD’S EYE VIEW of Digital in Enterprise

www.coeusage.com | www.leaddding.com 5F, Ocus Technopolis Building, Golf Course Road, Sector – 54, Gurgaon- 122002 | +91 9811771187 Copyright @ Coeus Age, 2019