SAN FRANCISCO -- Strong leadership and governance, and a tight fusion of IT and business processes, are essential to "digital transformation," said Capgemini consultant Didier Bonnet in this video interview from the Oracle OpenWorld 2014 conference.
Bonnet is senior vice president and global practice leader at Capgemini Consulting, which provides digital transformation advice and research. A keynote speaker at the conference, Bonnet discussed highlights of the newly released book, Leading Digital: Turning Technology into Business Transformation, which he co-wrote with MIT researchers Andrew McAfee and George Westerman.
"There was a lot of talk about digital transformation, but very little research. So we decided to partner with the MIT Center for Digital Business and really start a program of research," Bonnet said.
The authors looked outside the technology sector to see how well large companies in older industries such as manufacturing and finance took advantage of digital technology. They identified common characteristics of "digital masters:" companies that made the most use of technology to transform themselves for better productivity, profit and performance.
"We coined the term digital masters, for lack of a better word, to describe that these guys were really great at integrating the various digital technologies -- mobile, social, analytics -- inside the corporation for business benefits," Bonnet said. "They were more focused on the business."
Digital masters also make smart investments in channels, customer experience and operations, and drive their transformation with strong leadership, he said. They also emphasize employee engagement and detailed programs of governance.
And while the people in IT departments are often criticized as poor communicators who are slow to deliver -- to the point that many business managers try to work around them -- digital masters take a different approach. "What we found was [that] it was absolutely not the case that anyone, of all the digital masters, did the transformation without IT," Bonnet said. "What they did do is really fuse IT and the business."
Mere alignment -- another well-worn buzzword -- is not enough. "You really need to have fusion of execution: cross-functional teams working on real business problems, like the launch of a perfume on Facebook, in the case of [apparel retailer] Burberry. This notion of spec'ing and then passing the baton on to the other side is really disappearing."
Bonnet concludes by listing the main challenges companies face on their way to becoming digital masters and the potential benefits to companies and the economy.