Introducing Forrester’s Digital Maturity Model 4.0

Martin Gill

For the past eight years, business leaders have used Forrester's eBusiness and digital marketing assessments to mature their firms toward excellence. In 2013, we introduced a comprehensive digital maturity model that consolidated our interactive marketing and eBusiness maturity models.Two years applying the model with clients have helped hone and focus it even further. Our latest report, the Digital Maturity Model 4.0 updates our 2014 digital maturity model into a single set of scoring criteria that today's cross-functional digital leaders can use to benchmark how well they use digital to drive competitive strategy, enable superior customer experiences, and create operational agility.

What’s new?

  • Digital maturity demands cross-functional collaboration. Digitally mature firms do so much more than deliver great technology. They understand that digital execution demands the right culture, organization, technology and insights. That’s why we define digital maturity across those four key dimensions. Our assessment outlines key best practices for how firms drive a digital culture, how they organize and resource digital teams, how they invest in technology and how they steer their strategy and execution with customer-driven insight.
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How to embrace new digital business models

Martin Gill

The mass adoption of consumer broadband in the late nineties and early 2000’s helped firms like Amazon, Expedia and Intuit establish new business models and new ways of scaling to millions of customers. Selling products online and empowering customers to find the best deals on travel or financial services products changed market dynamics in a range of industries. But things aren’t slowing down. Quite the opposite, in fact.

 

Digital continues to change how your firm makes money. Perhaps not fundamentally yet for your firm, but don’t kid yourself, there are changes afoot. There’s obvious examples:

 

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Unleash Your Digital Predator

Nigel Fenwick

Your customers' digital experiences with other suppliers already shape their perceptions of value. Today, your customer assess the value of your services based in part on your ability to integrate into their digital world. The future belongs to companies able to harness digital to create new sources of customer value - these companies are destined to become digital predators, swallowing up lesser digital prey. 

As a business leader, do you get the feeling that you're no longer playing the same game that you once were? It's not you; the world has changed. The things that used to set companies apart — such as economies of scale, distribution strength, and brand — are far less potent than they used to be. Why? Because digital technology has fundamentally changed two things: the dynamics of the markets in which you operate and the speed needed to remain competitive.

The latest report in our series on digital business – Unleash Your Digital Predator – updates our thinking on digital transformation and includes analysis of data from our latest executive research study on digital, conducted in partnership with executive search firm Odgers Berndtson.

Many firms proudly point to their mobile app and proclaim "Hey, we're digital!" While they may be driving incremental revenue, all they have done is bolt another digital touchpoint onto the existing business. Digital transformation goes much further, fundamentally reshaping the way you create value for your customers and drive revenue growth. Achieving this requires that firms approach digital business from the outside in, pursuing two dimensions of digital in parallel: digital customer experience(DCX) and digital operational excellence (DOX).

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The Race To Digital Mastery Is On In 2016

Martin Gill

When it comes to digital, we are at a pivot point. Digitizing your business isn’t about technology: it’s about customer obsession - and in 2016, it will be among your ten critical business success factors helping position your firm for success in the Age of the Customer. In fact, next year will be a year of consequence: those firms that “get digital” will begin to pull ahead, and those firms that don’t will begin to look increasingly archaic, facing the risk of extinction.

The preliminary results from our recent digital business survey are telling. An increasing number of firms are reporting that they have a coherent and comprehensive digital strategy. While this is good news, these firms are still the minority. The vast majority of firms report that their approach to digital is limited at best, and non-existent at worst. But the consistently bleak picture is that most executives think the wrong people are in charge of their digital activities and few (very few) think they have the capabilities to deliver.

But there are some shining lights.

Leading firms like John Deere are pathing the path to digital mastery, demonstrating revenue and share price growth that outpaces less digitally savvy competitors. Executive committees are taking note. Innovation spend is on the rise, digital skills are in hot demand, and a new breed of digitally savvy senior leaders is finally emerging.

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2016: CIOs And CMOs Must Rally To Lead Customer-Obsessed Change Now

Cliff Condon

In the coming weeks Forrester will publish its annual set of predictions for our major roles, industries, and research themes — more than 35 in total. These predictions for 2016 will feature our calls on how firms will execute in the Age of the Customer, a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.

In 2016, the gap between customer-obsessed leaders and laggards will widen. Leaders will tackle the hard work of shifting to a customer-obsessed operating model; laggards will aimlessly push forward with flawed digital priorities and disjointed operations. It will require strong leadership to win, and we believe that in 2016 CMOs will step up to lead customer experience efforts. They face a massive challenge: Years of uncoordinated technology adoption across call centers, marketing teams, and product lines make a single view of the customer an expensive and near-impossible endeavor. As a result, in 2016 companies will be limited to fixing their customer journeys.

CMOs will have good partners, though. As they continue to break free of IT gravity and invest in business technology, CIOs will be at their sides. 2016 is the year that a new breed of customer-obsessed CIOs will become the norm. Fast-cycle strategy and governance will be more common throughout technology management and CIOs will push hard on departmental leaders to let go of their confined systems to make room for a simpler, unified, agile portfolio.

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The Future Of Retail Is Digital

Nigel Fenwick

Retail CIOs have always had a tough job, but digital makes it tougher. Emerging digital technologies threaten to transform retail experiences both in stores and at home. Without a good business case, CIOs at large retailers will find it hard to prepare their business to compete with small, nimble startups. My latest report highlights the potential of today's digital technologies to radically disrupt the retail industry once more. It serves as a call to CIOs to begin shaping their strategy to digitize the end-to-end customer experience and start proving the business case in time to make the investments needed.

Specialty fashion retailer Rebecca Minkoff is creating a truly differentiated in-store customer experience by combining RFID tags with new technologies like digital mirrors in the changing room connected to employee mobile devices. At the NYC Rebecca Minkoff store, customers can select products from racks or a digital fashion wall and head to the dressing room, where they meet their personal fashion consultant. Once in the dressing room, a digital mirror displays all the products and sizes the customer has in the room. The customer can easily request a new size by selecting it on the mirror. The consultant delivers the new sizes to the dressing room without the customer having to redress or wander the store half-undressed. By extending what Rebecca Minkoff has already achieved, we get a glimpse of a future in-store experience that helps each customer quickly find more products that satisfy their desires.

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What's Your Perspective On Digital Business?

Nigel Fenwick
I’d like to capture your perspectives in this year’s study on digital business.
 
Last year we started a detailed research study into digital business and published numerous reports on our findings and insights for business executives. This year we have partnered with Odgers Berndtson to help field our digital business survey to business executives. And as we did last year, we’re also extending the survey to our clients and social media followers.
 
The survey only takes 10 to 15 minutes to complete … the perfect accompaniment to a cup of coffee or tea! (OK that may be a stretch … but you can easily complete it while enjoying a cuppa.)
 
Please share the link with your social media followers (http://nigel.im/2015digibiz).
 
If you’re interested in learning more about our latest digital business analysis, check out my recent webinar Digital Predator Or Digital Prey: Which Will Your Business Be By 2020?
 
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Time To Become a Digital Unicorn

Martin Gill

I’m happy to report a major milestone.

The final chapter of the Digital Business Playbook went live today.

It’s the Tools and technology chapter, which has been an absolute beast of a research project. After all, where do you start outlining all of the tools and technologies you need to transform your business to become truly digital? To digitize your business strategy?

The short answer is you don’t.

In most of our research for the Digital Business Transformation Playbook we’ve concentrated on finding and outlining best practice examples of traditional firms that are transforming to embed digital into the heart of their business strategy. As one of our Research Directors so rightly pointed out early in this research, “horses don’t like stories about unicorns”. It’s not so helpful for us to tell you “hey, just copy Amazon” when you run a retail bank with a chain of a thousand branches around the world.

But in this instance we do need to hunt for unicorns.

Because the unicorns are nailing it.

Firms like Amazon, eBay or Spotify manage digital technology on the massive scale, yet retain a high level of innovation and agility. So what sets them and other digital masters, apart from digital dinosaurs in their relationship to technology? What can we learn from how they plan, manage and invest in technology? What we found was:

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Five Killer Competencies Your Digital Team Needs

Martin Gill

It’s no great shocker that digital skills are in short supply.

 

In our annual organizational and staffing survey of eBusiness and channel strategy professionals, we found that while eBusiness budgets have grown by more than 10%, finding the skills and capabilities to execute on a digital strategy is becoming harder and harder.

 

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The Digital Bolt-On Conundrum

Nigel Fenwick
What’s the difference between a digital bolt-on and transformative digital disruption?
 
In the two years I’ve been on the road talking with executives around the world about digital business and delivering keynotes on digital transformation, I’ve been most frequently asked about bolt-on vs. transformation; what’s the difference? 
 
A digital bolt-on is a digital project that is added to the existing business model that might improve the customer experience in a small way, but doesn’t fundamentally change how value is created for, and/or delivered to, the customer. For example, when a company updates a website and provides customers an electronic ordering platform, they are not changing the existing business model; they are simply providing an alternative channel through which the customer can buy products. The value proposition remains the same: buy and experience our product and you’ll gain value from the experience. Digital (in this case an online sales channel) has been bolted to the existing business model in much the same way a teenager bolts a spoiler onto an old car to make it "go faster".
 
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