Operating Model In A Digital World - Capgemini

Operating Model in a Digital World the way we do itOperating Model in a Digital WorldAn introduction to Digital Operating Model

Operating Model in a Digital WorldOperating Models have defined the waythat we work and operate for centuries.A good set of architectural blueprintsare essential to successfully build a newoffice. The same is true if you want tobuild a successful business; you need agood set of blueprints on which to lay thefoundations and undertake the detaileddesign and implementation. In otherwords you need an Operating Model.Like modern office designs, businessesare responding to digital stimuli and thechanging needs of their customers.Digital is taking the world by storm,transforming everything in its path. Thosewho transform reap the benefits; thosethat don’t get left behind. So, just as theblueprints for offices have changed in thedigital age, the blueprints for businesses– their Operating Models – also need toevolve.Digital Operating ModelWhat we mean by Digital OperatingModel (DOM) is operating model for adigital world, and it replaces Capgemini’sprevious operating model methodology.The DOM methodology represents anevolution of our existing practice. It hasbeen built upon Capgemini’s globalexpertise in understanding how digital isaffecting the outcomes we are deliveringto clients and how to deliver theseoutcomes. It is these outcomes and aniterative delivery approach that will allowour clients to be competitive in a rapidlychanging, digital business context.The world our clients operate in ischanging fast. The current pace andbreadth of change now requires some ofour clients to exist in a constant state ofevolution, rather than relying on one offchanges every few years.2The DOM builds on Capgemini’s welldeveloped Operating Model capabilityby putting the customer at the centre ofbusiness change. The DOM approachtethers the traditional approach to fourmain digital themes:1. Customer Centric2. Data Driven3. Pace, Integration and Agility4. Business and Technical AlignmentBy focussing on these themes, DOMdelivers outcomes that enable clientsto respond flexibly in markets wheretechnology can change things bothquickly and profoundly.The implementation of the DOM retainsthe idea of flexibility with an iterativeapproach to delivery that runs designwork in parallel with piloted deployment.The result is a robust DOM that evolvesbased on real world testing and data. Italso leads to a tightly aligned OperatingModel with a high level of stakeholderbuy in, but which remains flexible enoughto change over time.Operating Model atthe Heart of DigitalTransformationThe digital economy is entering a new agethat presents unprecedented challengesfor all CEOs. Digital tools are invadingthe business environment, provokingsignificant changes in the way that wework, communicate, and sell. This hasgiven rise to new opportunities andchallenges, and has triggered the DigitalTransformation of enterprises.The digital journey is about treadinguncharted and unfamiliar territory. It isriddled with questions and challenges.CEOs increasingly want to understandwhat their organisation will look like atthe start of their Digital Transformationjourney. We have therefore positionedDOM as part of our Phase 1 offering,providing the link between Digital Strategyand Customer Experience.Digital Operating ModelDimensionsCapgemini’s Operating Model methodologyis centred around nine dimensions. Thereare six digital architectural componentsand three integrating mechanisms. Theintegrating mechanisms provide the glue,ensuring that the architectural componentswork together and deliver the requiredbusiness outcomes.To make digital part of thelifeblood of the organizationnot only requires strong visionand investment, it also requiresaccelerated deployment acrossthe business- Digital Transformation ReviewNo 4 – Accelerating DigitalTransformation

Operating Model in a Digital Worldgy and BusinesStratesMitalodegiDlaretipng Modtal OelDigiBusiness processes definevalue-adding activities toward endcustomer value and enable continuousimprovementEnterprise performancemanagement leverages data andinformation to direct and monitorbusinessGovernance provides clarity andsimplicity, allowing for considered butquick decision making, authorisation andkey approvalsThe impact of digital technologiesis now felt not only in the ITdepartment, but across the entireorganization, creating a hugedemand for digital skills- The Digital Talent Gap DevelopingSkills for Today’s DigitalOrganizationsCD& Info atarmationCultureLeaders &hipIT tureciteceanEnterprisMan e Perfoageme rmntCulture and leadership includes acollective mindset alongside clearlymodelled target behavioursGovernanceIntegrating mechanisms:OrganiStruct sationureDigital IT architecture efficientlycoordinates applications andinfrastructure (e.g. web spaces, cloudstorage) to support business processoutcomessssine sBu cesseProCustomerPhysical infrastructure providesproperty, facilities, equipment and valueadding assets to enable businessData and information are the rawmaterials for analysis and insight that cangive a business a competitive advantageer ExperienctomuseOrganisation structure directscapability and resource to processactivities through accountability andinteractionChannelsArchChannels facilitate engagement withcustomers and development of thecustomer experienceOrganisations may choose to undertake a transformation of their entire OperatingModel, or focus on one or more of the dimensions.PhysicaInfrastructureDigital architecture components:Digital ThemesCapgemini’s global experts have identifiedfour key themes that fundamentallyimpact the way organisations operate inthe digital world.1. Customer Centric: What is happening: Digital technologiesprovide customers with a wealth ofeasily accessible information, enablingthem to make smarter, more informedchoices. Crowd sourcing and a vastset of data available to them meanthat customers expect a higher level ofservice. How this has impacted OperatingModel: The implication is that wemust place the customer at the heartof Operating Model design work.We must focus on customer needs,clearly define customer interactionchannels, and break down silos withinorganisations to enable a single view ofthe customer.2. Data Driven: What is happening: 90% of readilyavailable data has been created inthe last 2 years and there is greatpressure to make use of it. Our MITresearch found that businesseswho were able to take full advantageof Big Data have improved theirperformance by 26%, is predictedto grow to 41% by 2016. How this has impacted OperatingModel: The data gathering, analysisand management process, alongwith data protection, must be acentral consideration during thedesign phase. We also need toensure that decisions surroundingthe Operating Model utilise analyticaltools, for instance using volumetricmodelling to review and quantify theimpact on FTE requirements andcosts.3. Pace, Iteration, and Agility: What is happening: In an agewhere disruptive technology iscontinually coming to the market,an organisation needs to be able toreact rapidly and with agility to keeppace with the competition. Agiletechniques allow an organisation toget something in place quickly, andimprove on it incrementally. Google,3

Operating Model in a Digital WorldFacebook, and Apple are classicexamples of these techniques. How this has impacted OperatingModel: Firstly, the ownership fordigital needs to be established.Some organisations have introducedDigital Service Units (e.g. Nestle),whilst others have created the roleof the Chief Digital Officer (e.g.HMRC). Secondly, everyone in theorganisation needs to be moredigitally aware. With these twochanges in place everyone cantake responsibility for ensuring thatthe business and IT understandeach other’s requirements and worktogether. Similarly when designingOperating Models we need tocombine Capgemini’s methodologyand experience with our knowledgeof leading technical solutions. How this has impacted OperatingModel: Just as agile organisationsfocus on the rapid delivery ofcomponents and then refinementover time, we need to take a similarapproach when designing anOperating Model. This means: 1)Rapid delivery of a high-level model;2) Iterative design, which tests andsocialises the model; 3) Collaboration,with operational stakeholders at thecentre of the detailed design andreview.4. Business and TechnologyAlignment What is happening: In the past,differences in objectives, culture,and incentives have led to unalignedIT and business functions. Thisrift generally results in expensiveIT systems providing inadequatereturn on investment. Digital hasbrought technology to the heartof organisations, blurring the linesbetween the IT and businessfunctions. Technology can no longerbe considered a distinct part ofthe business. Technology must beembedded across the organisationto deliver customer led opportunities.DOM MethodologyWhilst the traditional Operating Modelmethods and deliverables still form thebedrock of our DOM approach, themethodology has evolved to address thefour Digital Themes and meet the needsof our clients.The traditional, long, design-buildimplement approach no longer worksfor our clients. To do this risks spendingsubstantial time and effort buildingsomething which is not fit for purpose,or finding that there is already a bettermodel available by the time that thedesign is completed. Instead we need torapidly create a high-level model, whichis adaptable to change and sets theinitial direction for implementation (andbenefits realisation). Detailed design andimplementation phases then run in parallelto encourage an iterative approach andreduce risk.One of the most important differencesbetween DOM and previous OMmethodologies is that its approachis non-linear. DOM takes an iterativeapproach that enables client needs todefine the order of work and allows eachof the “Requirements and Priorities” and“Ambition and Solution” stages to berevisited a number of times throughoutthe process.When considering the steps below, theaforementioned Digital Themes should beconsidered and brought in at each stage.The last ten years were prettyrough. The next ten years willbe even more disruptive- Digital Transformation ReviewNo5. Gearing up for DigitalOperationsThe four stages of the DOM MethodologyQuickly identifying andprioritising requirements inorder to fulfil customer needsand deliver the businessstrategyIdentifying dimensions fordetailed design based on agilemethodology; transitioningquickly into targeted design,change readiness andimplementation planning4Requirements& PrioritiesDetailed DesignSpecificationsAmbition& SolutionsIntegratedTarget ModelExploring the art of the possible anddefining specific solution optionsTo meet customer needs and thebusinesses strategyEstablishing a coherent,high-level design based onpreferred solution options,which integrates solutions anddescribes their operationalimplications