WORLDF①RUMCOMMITTED TOIMPROVING THE STATEOF THE WORLDInsight ReportThe Digital EnterpriseMoving from experimentationto transformationIn collaboration with Bain CompanySeptember 2018World Economic Forum91-93 route de la CapiteCH-1223 Cobgny/GenevaTel.:+410228691212Fax:+41(0227862744Email:contact@weforum.orgwww.weforum.org2018 World Economic Forum.All rightsreserved.No part of this publication may bereproduced or transmitted in any fomm or by anyContentsIntroduction5Digital strategy7Today forward/future backDigital departure:1,000 points of digital light8Industry direction:"Autonomous and electric"-what's yours?9Company vision:Your role in a digital future9Case study:Equinox and Peloton10Waves and stepping stones:Traditional plans start too late and are too static11Case study:Kaiser Permanente11Case study:Vehicle manufacturer12Business model13Redisoovering the raw customer need unconstrained by the current model13Case study:Netflix14Case study:Walmart14Customer and channel engagement:Digital technology makes excellence viral but mediocrityshort-lived16Products and services:The raw customer need is permanent;a company's products are temporaryresponses16Economic model:Don't layer a new economic model on top of a legacy business17Operations:Synchronize operations and the front end to achieve the vision for the business18Enablers20The engine of a transformationCase study:Facebook22Data and analytics:Start with value,not data23Case study:Airbnb24Systems and technology:Technology questions are now questions for CEOs25Case study:Electronic Arts26Talent and culture:With digital technologies,they matter more than ever27Case study:Equinor28Operating model and partnerships:Traditional models are inhibitors29Case study:Equinor (No.2)30Case study:Nokia32Orchestration33Experimentation is easy;transformation is hard33Scaling:Win,scale,amplify34Governance,metrics and risk management:Set priorities and guardrails to govern grass-rootsinnovation35Case study:Kaiser Permanente36Leadership and engagement:Harness the power of communities through digital and physicalchannels36Case study:Shell39Funding and investor management:Make the case for funding and investing in digitaltransformation39Case study:Munich Re40Case study:Domino's Pizza41Regulatory and community engagement:Take a proactive and positive approach42Conclusion43Acknowledgements4434IntroductionDo not be fooled by the term "digital transformation".Theproduct,and to write paragraphs of detailed reviews,hasdata-driven changes businesses are undergoing certainlymoved e-commerce beyond being a digital version of thebegin with digital technology,but just as important as theUS retailer Sears'catalogue to replacing the trusted shoptechnology itself are the surprising ways people react toowner.and interact with it.That combination has made digitaltechnology so disruptive.These are consumer businesses,but companies sellingto other businesses are seeing important shifts as well,Digital technology made it possible for mobilesometimes influenced by experiences in the consumertransportation platforms Uber and Didi Chuxing torealm.At a recent Word Economic Forum workshop,anefficiently match riders with drivers,inexpensively andexecutive noted that he can order a $1 million piece ofon a massive scale.Equally critical were customers'equipment with months of lead time,yet have almost noembrace of the service and their willingness to jump intovisibility as to its location in the manufacturing processthe cars of total strangers.Hospitality platform Airbnbat any given moment.If he'd order a $10 pizza fromwould not be worth $31 billion if customers had notDomino's online,however,he'd know almost to thequickly become comfortable with the idea of sleepingmoment when the anchovies are added.Such digitallyin a stranger's bed.The willingness of consumers toenabled experiences have created a new normal for allask 1,000 online strangers if they should buy a certainindustries.5