1 Introduction............................................................................................................................................................

2
2 Organisation and digital transformation.................................................................................................................7
3 Digital strategy – reimagining business and re-evaluating value chain.................................................................12
4 Digital strategy – reconnecting customers and rebuilding organisation...............................................................21
5 Challenges and future direction............................................................................................................................30
6 organisation strategy.............................................................................................................................................37
1 INTRODUCTION
 Digital business in a nutshell

o Create new business value by blurring the digital and physical worlds

o Integration of things, Exploitation of data

 Article: What is Digital Business?

o 3 common elements of DB

 Use existing technologies to cut costs, gather data and provide a better customer
experience. DB focuses on the competitive advantages that technology gains them.

 Embrace the concept of digital transformation and the cultural shifts that requires. The
implementation and management of digital services can necessitate organisational
restructuring, especially as new roles are created and IT is given a greater role in strategic
decisions.

 Explore new business models that put customer experience at the centre of digital strategy.

o DB vs E-business

 E-business typically leaves existing business models intact, merely using technology to gain
efficiency or eliminate redundancies.

 DB focuses more on how technology allows companies to create new value and experiences
that differentiate companies and give them a competitive advantage over their peers.

o Netflix switch from e-business to digital business

 E-business: Using technology to manage inventory system and main people DVDs, providing
convenience to customers but fairly similar to other movie rental stores.

 DB: Stream video on demand.

o Disney’s MagicBand

 Using MagicBand, visitors have an experience that moves fluidly between digital and
physical.

o Digital business is changing the way organisations use and think about technology, moving
technology from a supporting player to a leading player in innovation, revenue and market growth.

o Comments

 Today, people are spending more money online, which has shifted business emphasis to
digital sources of revenue and digital channels. The growth of the digital economy has made
people more familiar with digital economy has made people more familiar with digital
products and services, which has driven companies to seek new competitive advantages in
the digital space.
  Most digital businesses focus on creating value at new frontiers for their core businesses or
they use digital technology to drive growth, revenue and performance in ways that were
impossible with traditional models.

 Digital business use technology to create new value in business models, customer experiences and the
internal capabilities that support its core operations. The term includes both digital-only brands and
traditional players that are transforming their businesses with digital technologies.

 Different business models

o Brick and click: Nike

o Subscription: Spotify

o Online marketplace: Alibaba

o Franchise: Subway

o Asset-light/Aggregator: Airbnb

 Article: Digital Business Survey

o Key drivers to digital business initiative

 Improved employee productivity

 Enabled business resilience/agility

 Better customer experiences

o Success metrics

 Improved employee productivity through process efficiencies/automation

 Excellent customer service measured by customer satisfaction scores

 Increased profitability

 Digital business is the end goal and digital transformation is the process that companies undergo in order to
get there.

 Digital transformation

o E.g. HSBC mobile banking, SeafoodXchange

o Digital transformation is the process of rethinking one’s business model or business process in light
of the availability and affordability of digital technology. It requires coordination across the entire
organisation since it applies new technologies to fundamentally change the way business is done.
For many enterprises today, the driving motivation of digital transformation is the chance to gain
competition advantages by improving customer experience.

 Article: Chien Chi Tow and Swee Choon

o What is common?

o Why did they embark on digital transformation?

 o What path did Chien Chi Tow take to go digital? Is engaging an IT and design partner sufficient?

o How did analytics help in Swee Choon’s expansion?

 Stages of digital transformation

o Digitisation: Changing from analogue/physical to digital form

 Digitise information

 Organise information

o Digitalisation: Using digital technologies and information to transform individual institutional

operations.

 Automate processes

 Streamline processes

o Digital transformation: A series of deep and coordinated culture, workforce and technology shifts
that enable new educational and operating models and transform an institution’s operations,
strategic directions and value propositions.

 Transform institution

 Digitalisation vs Digital transformation

 What is being transformed?

o Products and Services

 Music: iTunes

 Clinic: DoctorAnywhere

o Processes

 Buying grocery online

o People

 Customers

 Interaction with the organisations

  Expectation with the organisations

 Employees

 Provide support and services

 Day to day operations

 Activity: Digital Transformation

 Requirements of a Digital Transformation

o Requirements

 Digital leadership

 People and culture

 Innovation

 Exploit digital opportunities

 Ability to unlearn > Ability to learn

 Technology

 Modern solutions, e.g. Cloud

 Infrastructure within the organisation

o Culture, not technology, is the key to digital transformation

 Impact

 Change the world radically through constant innovation

 Speed

 Move fast and iterate rather than waiting to have all the answers before acting

 Openness

 Engage broadly with diverse sources of information and insight.

 Share advice and information openly rather than keeping knowledge to oneself.

 Autonomy

 Allow people high levels of discretion to do what needs to be done rather than
relying on formally structured coordination and policies.

o Tools that can be used

 Agile methodology

 Design thinking process (Rapid prototyping)

o Ecosystem involved

 Regulators/Government
  Infrastructure

 Supporting industries

 Software giants

 Mindsets (Sweden vs Germany)

 Technologies in a Digital Transformation

o Technology needs assessment

 Gather relevant information

 Audit infrastructure, processes and systems

 Study workflow and conduct surveys and interviews

 Identify drivers for change

 Identify problems areas, e.g. new system to satisfy new legislation, streamline
processes for efficiency, meet customer needs, remain competitive.

 Determine the requirements

 Align IT with business – critical, realistic and affordable

 Consider available resources

 Money, time, staff training, change management maintenance

 Review and prioritise results

o Invest more in AI and analytics

 AI

 Hyper-automation of processes

 Analytics

 Continual improvement available for digital business and company

o Higher number of digital transaction -> data (about customer and employee)
  Insights to make improvement

 Decision making support

o Digital platform -> Repository of business, data and infrastructure

components to rapidly configure digital offerings

 Measurement to support continual improvement

 Scopes in Digital Business Transformation

o Scope

 Business, organisation, enterprise

 Societal

 Employment: skillsets

 Growing population: aging society

 Environment: sustainable tech, logistic industry-emission

 Nation

 Digital economy, cross border collaborations

o Digital economy and society index (DESI)

 Human capital: digital skills of employees and citizen

 Connectivity: very high capability of network

 Integration of digital technology: usage of cloud technologies, electronic info sharing

through ERP

 Digital public services

 Summary

o Digital businesses use technology to create new value in business models, customer experiences and
the internal capabilities.

o Digital transformation is the process of reimagining business or achieving goals for a company,
society or nation through digital technologies.

o With the advancements of technologies, business, society and nation needs to evolve to remain
competitive and create opportunity.

o Adoption of digital transformation is total and not partial. It is a business evolution and culture of
company plays a big role.

o Customer and employees needs is the focus, not the technology.

2 ORGANISATION AND DIGITAL TRANSFORMATION

 Article: Digital transformation is not about technology
 o

 Approaches to digital transformation

o Bold, tightly integrated digital strategies are the most effective approach to digital transformations.

o Organisations that can leverage things like design thinking into their new offerings during the crisis
will see significant first-mover advantage.

o New partners and platforms.

o Reinvent business model at its core.

 Elements

o Products/Services

 Streaming services, Online courses

 Standard offerings vs Customisable

o People

 Transforming customer interactions

 Customers value empathy

 Need to earn customer’s trust

 Customers don’t mind a little independence

 Time is precious to customers

 Pandemic and customer

 Customer expectations have increased.

 They want simpler and faster services.

 They want to share more with each other and have a lower tolerance.

 Employer and employee

 Type of changes

o Tasks may be eliminated or merged.

o Scope will change.

o New skillset will be needed.

o New technology will be implemented.

o New process will be adopted.

o Changes to organisation structures.

o Higher order job scope with more decision making.

  Change must come from both employers and employees – the willingness of firms to
embrace technologies and employees being open to upskilling and adapting to
changes.

 Companies will have to change their business models to survive and workers whose
jobs no longer exist will have to re-skill and move to new sectors.

 Employees want 4 things post-pandemic:

o Better work-life balance

o Better flexibility for day-to-day work

o Positive implications for compensation

o Increased focus on employee well-being

o Processes

 A business process is a series of repeatable steps taken by a team or company to achieve

some sort of business goal.

 The key aspect of a business process is repeatability.

 In a digital transformation, ask:

 Do we still need this process? If so, which part of it needs to change?

 How are they changing?

 Increase in the number of channels where customers can interact with

organisations.

o Processes for each channel will be different.

o Customers’ journey, experience, expectations for each channel will be

different.

 Beyond the product, it comes with service.

 Organisations are using AI/ML to provide better services (e.g. predictions).

Understanding and using correct data is important.

 Well defined processes -> Increased efficiency -> More customers -> More revenue

o Technology

 Digital transformation is more than business improvements

o A process of rethinking one’s business model or business process considering the availability and
affordability of digital technology.

o Requires coordination across the entire organisation – people, process and technology.

o Impact on the whole organisation.

 o Key driving motivation of digital transformation is the chance to gain competitive advantage by
improving customer experience.

 Process reengineering

o Gain competitive advantage by improving customer experiences, reducing operating costs and being
efficient.

 Principles of process engineering

o Organise around outcomes, not tasks.

o Identify all the processes in an organisation and prioritise them in order of redesign urgency.

o Integrate information processing work into the real work that produces the information.

o Treat geographically dispersed resources as though they were centralised.

o Link parallel activities in the workflow instead of just integrating their results.

o Put the decision point where the work is performed and build control into the process.

o Capture information once and at the source.

 Digital transformation ecosystem

 Effect of change

o Changes does not happen only within the organisation.

o The integration and dependency of activities across organisations can be potential bottlenecks for an
organisation to successfully enhance and implement digital transformation.

 6 core capabilities among successful ecosystem players

o Advanced analytics

o Agile development and operations

o Governance that allows for a portfolio of bets

o Strong middle platform

o Entrepreneurial talent

o Partnership

 Activity: Transformations of different organisations

 Summary

o Organisations see the need for making the change. Change is the only constant. New set of
processes must be sustainable.

o Digital transformation is not just a technology implementation. It needs to be aligned to the

organisation’s business objectives. Products and services offered by the organisation, its people
(employer, employees and customers) and processes will need changes as well.

o Business process reengineering is needed to assist in this transformation.

o Either evolve on the business process (redraw) or invent something new (blank paper).

o The ecosystem has a role to play in an organisation’s digital transformation.

 o Different industry has different focus and needs but the bottom line in digital transformation
remains unchanged.

3 DIGITAL STRATEGY – REIMAGINING BUSINESS AND RE-

EVALUATING VALUE CHAIN

 Digital strategy framework

o Digital leadership

o Reimagine your business: Scope, Business model, Platform

o Revaluate your value chain: R&D, Operations, Omnichannel

o Reconnect with your customers: Acquiring, Engaging, Measuring

o Rebuild your organisation: Transition, Organisation design, Skills

 Digital leadership

o People leading digital transformation projects need to have digital leadership.

o Skills needed:

 Transformative vision: Knowledge of market and trends, business acumen, problem solver

 Forward-looking: Clear vision, sound strategy, foresight

 Understands technology: Prior experience, digital literacy

 Change oriented: Open-minded, adaptable, innovative

 Strong leadership: Pragmatic, focused, decisive

  Other: Collaborative, team builder

 Strategy for digital transformation

o Set very clear goal

o Have visions – pivoting to high growth and high value area

o Transformation should be done across the entire business

o All about alignments – leadership, people, business, investment (Communication)

o Thoughtful and selective – make sure the technology is mature enough to deliver the benefits

 Reimagine your business

o Reflect core essence of business

 Scope

 What business are we in?

 Redefine the scope of business to stay competitive

 E.g. Amazon started as online retailer but no longer just that

 Business model

 How to create and capture value?

 E.g. Music industry: recorded music -> live performances

 Ecosystem

 Manage ecosystem of players – both partners and competitors

 E.g. Amazon invites competitors to sell products on their platforms. Shift from selling
products to creating a platform.

 Scope

o Amazon evolution

 AWS

 Cloud business: new competitors like IBM

 AWS help Amazon scale its technology growth

 Leverage and monetise its excess web capacity

 Kindle

 Hardware business

 Customer shifted from physical goods to digital goods

 Strategy for Kindle is different from Apple’s iPad (Differentiation from competitors)
  Razor and blades strategy

o Define business around customers, not products or competitors

 E.g. John Deere: selling heavy machinery to farmers and construction companies. In early
2000s, added software and sensors

o Competitive advantage doesn’t only come from low cost or product differentiation

 E.g. Amazon

 Deep knowledge of customers – mining data

 Back-end logistics – rival FedEx and UPS

 Ability to manage technology infrastructure – AWS

 Accurate estimation of demand -> quick delivery -> meet customer needs

o Complementary products and network effects provide strong competitive advantage

 E.g. Apple

 Complementary services like iTunes and FaceTime harder for customers to switch

 Network effects

 Direct (same-side): value of a product/service increases with more users/customers

o E.g. WhatsApp

 Indirect (cross-side): when a product becomes a platform that connects buyers and
sellers

o E.g. eBay

 Both complement and network effects

 Tencent’s WeChat
 o Designed as messaging application (direct network effects)

o Become leading platform (built complementary services)

o Data and customers become critical assets of a company

 E.g. Amazon leverages on Prime customers to introduce new services like grocery shopping,
entertainment etc.

 With data, Amazon can make personalised recommendations.

 Targeted advertising.

 Data to improve services

 E.g. Tesla improves its self-driving algorithms and updates software from its data

 Business model

o Razor and blades business model

 A business model where one item is sold for the purpose to make money on the other
complementary item, usually a consumable.

o New ways to capture value

 E.g. The Weather Channel

o Create value through experiences

 E.g. Eataly

 Create a place for customer to eat, shop and learn

 Concept and store design

o Restaurant and marketplace and culinary school

 Store size and location

o Locate in big cities to generate traffic

o Expect people to come from all over for good experience (not just
convenience)

 Marketing and promotions

o In-store communication, event hosting, social media

 Metrics

o Not sales or revenue per square foot store

o Selling experience

o Build an asset-light business

 E.g. Tesla
  Showroom in shopping malls

 Multimedia interactive screens to customise

 Virtual reality to test drive

 Not much hardware maintenance, software focus

 Continuous upgrade of software – good resale value

 Electric car with more than 30 years of potential usage

o Transition to Product-as-a-service (PaaS)

 E.g. Philip

 Ecosystem

o The platform revolution – connect parties

 Sellers and buyers (e.g. carousell)

 Consumers and developers (e.g. Apple’s Appstore)

 Business and freelancers (e.g. upwork)

 Digital technology enables reduction of transaction costs – finding and matching the relevant
parties becomes easier.

 The future is not about who owns the assets but who make the assets more productive.

 Advantages

 Greater access to sellers

 Better value to consumers

 Market growth – no geographical barrier

 Asset-light

 Scalability – network effects

  Challenges

 Inventory-based model

o Greater control over product quality and delivery

o Better customer experience and service

 Marketplace model (platform model)

o Offers scale and growth

o Low capital investment (asset-light)

o Limited control of ecosystems -> poor customer experience

 Hybrid

o E.g. Alibaba: Hema store (grocery), Cainiao (logistics)

o Developing a platform business

 Building critical mass

 Create supply of good products and services first

 Start with a focus (Facebook started with Harvard students)

 Build a freemium model

o Users get to use a basic product/service for free but must pay for a premium
version with additional features.

o Try before you buy

o How to convert the customer?

 Facilitating access and transactions

 Aggregating demand from a fragmented market

 E.g. Amazon offers warehousing and logistics to sellers

 Choosing between open and closed systems

 Open system creates a larger market (Google Andriod)

 Closed system creates a better customer experience (Apple iOS)

 Managing partners in the ecosystems

 Balance interests – Apple Pay (complementary services) so banks and merchants can
own data

 Governance

 Create rules so that players can operate within its ecosystems

 Revaluate your value chain

 o Value chain describes the full range of activities needed to create a product/service.

o Omnichannel strategy

 New entrants disrupt the existing value chain – mainly in distribution

 Synergy between online and offline channels

o Operational excellence

 Digital manufacturing, VR and AR, 3D printing to improve productivity, reduce failure rate

o Rethinking R&D and Innovation

 Open innovation – competitions

o How to transform retails

 Unique and affordable products

 Seamless online ordering and pick-up

 Speedy fulfilment

 Social media for customer engagement

 Live streaming to drive sales

 Awe-inspiring flagship stores

 Omnichannel strategy

o Unified strategy for physical (offline) and digital (online stores)

o Think of different channels as complements. Need to identify the complementary and build around
them.

 Complementarity across products

 Complementarity across customer lifestyle

o Physical and digital fusion

  Addressing customer pain points

 Finding things

o Install kiosks and allow order online

o Hointer in Seattle – scan code, enter size, robot dispatch product

 Trying things

o Online info not enough, customer needs to physically try.

o Sephora – free samples, virtual-assistant app, scan display get product

details and reviews

 Paying for things

o Amazon Go, Starbucks mobile app

 Returning things

o Normstorm Rack in New York – “Drop and Go”

o Happy returns in santa monica – opening a return bars for e-commerce

companies that do not have physical presence

o Article: Hema Fresh

o Operational excellence

 Digital technology is helping to improve productivity, reduce failure rate and create
competitive advantage.

 Industry 4.0

 Convergence of digital and physical products

 Smart factory

o Siemens has 99.99885% defect-free production

o Product control manufacturing processes with unique codes

o Software agent will monitor and ensure compliance

 Industrial internet and predictive maintenance

o GE adds sensors from jet engines to wind turbines

o Collect data on the performance

o Do predictive maintenance and reduce downtime -> increase efficiency of

equipment -> savings for clients

 Additive manufacturing (3D printing)

 Ability to produce more complex and better products

  Customisation

 On-demand production

 Reduced cost of inventory and logistics

o Amazon: mobile truck that can do on-demand printing of customer order

 Design platforms

o Competitive advantage shifts to design

 Intellectual property

 Impact on workforce

o Reduce need to store products – affect retail, transportation and

warehousing

 Digital supply chains

 Technology is transforming warehousing, inventory management, logistics and

delivery.

 Demand-driven supply chain

o Real-time information and data analytics are key to implementing demand-

driven supply chain.

 Warehousing, logistics and fulfilment

o DHL’s smarttrucks – RFID chips and route-planning software to ensure that

right products are loaded onto the right trucks.

o Walmart uses autonomous carts to retrieve goods shoppers order online.

Pick up when done shopping for fresh food.

 Rethinking R&D and Innovation

o Open innovation: leveraging the expertise and insights of both users and experts outside the
company.

o The world has moved from R&D to C&D (Connect and develop)

o Why open innovation works?

 Diverse approaches

 Better customer insight. Users innovate for themselves.

 Self-selection

 Contesters choose to work on projects they are passionate about – good match of
task and innovator.

o How to do it right?

 Defining the problem

  Break down to small questions

 Generalise to common public (not expert lingo)

 Creating a clear metric for evaluation

 Designing the challenge

 Prize money

 Length of contest

 Ownership of intellectual property

 Confidential data handling

o Limits of open innovation

 Does not work in all situations

 Not effective for broad and conceptual questions like “what is the future of banking”

 Can’t create breakthrough innovation like “how to create driverless cars”

 Need to breakdown into smaller components, e.g. how to use sensor to detect
pedestrians

 Hardware or infrastructure limitation

 The competitive advantage is on defining the problem, the question asked and not the
solution that the firm knows

 Summary

o It is about the customer, not the product or competitor obsession.

o Business needs to have clear vision with a business model that can create and capture values.

o Platform or marketplace model is about integrating partners within the ecosystems.

o Fusion of online and offline channels for better customer experience and purchase journey.

o Leverage on technology for operational excellence.

o Innovation is no long er a R&D within an organisation but important to consider and connect with
ideas outside.

4 DIGITAL STRATEGY – RECONNECTING CUSTOMERS AND

REBUILDING ORGANISATION

 Reconnect with your customers

o Customer journey
  The customer journey is the complete sum of experiences that customers go through when
interacting with your company and brand. Instead of looking at just a part of a transaction or
experience, the customer journey documents the full experience of being a customer.

 Aware of the product/brand

 Interact (consider, purchase, service) with the product/brand

 Loyal to the product/brand: repeat purchase, support the brand

 Reconnect

o Acquiring customers

 Digital and social marketing – new channels for acquisition

o Engaging consumers

 Not technology and data alone but unique value

o Measuring and optimising marketing spend

 Effectiveness in ads spending

 Acquiring and Engaging customers: 3 fundamental customers

o Which customers should you acquire?

 Customer lifetime value (CLV)

 80-20 rule and 200-20 rule

 20% of customers provide 80% of the revenue

 20% of customers provide almost 200% of the profit

 Implementation challenges (How to find customers to target?)

  Companies organised by products or business units

 Cost per customer tracking

 Customer segment analysis – by channels, spending habits etc.

o When are customers acquired?

 Moments of truth

 The best brands consistently win 2 moments of truth. The first moment occurs at
the store shelf, when a consumer decides whether to buy one brand or another. The
second moment occurs at home, when she uses the brand and is delighted or isn’t.

 FMOT - Purchase

 SMOT – Consume

 ZMOT (Zero moment of truth) – Search and evaluate (GOOGLE)

o How should you go about acquiring them?

 From search to purchase

 Paid media: search engine marketing, sponsored ads

 Owned media: search engine optimisation, organic search results

 Earned media: social media, reviews, online word of mouth

 Personalisation and retargeting

 Ads to customers who visited by didn’t buy

 Social media advertising and viral marketing

 Acquisition through offers: price promotion

 Freemium model for acquisition

 Digital products – almost zero production and distribution

 E.g. Adobe changed from selling packaged products to monthly subscription service
with freemium model -> acquired millions of free users
 o

o Personal touch

o Packaging, personal touch and increased sales

 E.g. Rice Krispies

 Engaging consumers

o Providing additional value

 Leverage mobile to create win-win strategies. E.g. Starbucks app.

 Tesco “Virtual store” in South Korea

 Sephora’s Virtual Artist App

 Building loyalty. E.g. Airline frequent flyer programs

o From storytelling to story making

 Making consumers an integral part of the story

 A broader message that is emotionally engaging allows for a two-way conversation

 Mastercard: an enabler of not just payments but also meaningful experiences. “Connecting
people to priceless possibilities”. Mastercard’s “priceless causes” campaign generates
donations to particular charities when consumers use their Mastercards.

o Moment-based marketing

 Era of micro-moments: messages need to arrive at the proper time, in proper context.

 No longer on consumer demographics, interests or past purchases. It is about the moment

and context.

 Classify different micro-moments into coherent groups.

 Activity: SASA
 Measuring and optimising marketing spend

o Digital advertising: new era of marketing metrics – video views, Facebook likes and click-through
rates but their link to actual sales is fuzzy.

o E.g. MarTech

o Attribution modelling

 Attribution is used to describe who gets the credit for a conversion.

 Attribution model

 The default: last click/interaction

 Simplest to implement but only one channel gets the credit

o Online-offline interaction

 Online ads influence offline sales but it is challenging to measure the value of ads.

 E.g. Google analytics, Facebook analytics

 Rebuild your organisation

o Managing digital transition (leadership)

 Strength core business and build for future

 E.g. Adobe

o Designing organisation for innovation (culture)

 Landing dock for new initiative to dock while leveraging the power of mothership

o Skills, capability and talent management (skillset)

 Train for the future

 Innovative way of hiring and managing talents. E.g. Knack uses mobile games to recruit.

 Article: 12 reasons why digital transformations fail

o Managing digital transition (leadership)

o Designing organisation for innovation (culture)

o Skills, capability and talent management (skillset)

 Managing digital transition

o Development stages of digital organisations

 

o Roadmap

 Design for digital

o Across organisation

o Practical building blocks

 Operational backbone

 Set of integrated systems, processes and data supporting company’s core

operations.

 Digital platform

 Repository of business, data and infrastructure components to rapidly configure

digital offerings.

 External developer platform

 Repository of digital components for external parties.

  Customer insights

 What customers will play and how digital technologies can deliver.

 Accountable framework

 Distribution of responsibilities for digital offerings for autonomy and alignment.

o Example: DBS

 Adobe efforts and changes

o Product development

 Used to be 18-24 months soft release

 Subscription model allows features incorporation from customer feedback and

customisation

o Distribution and sales force

 Direct selling instead of relying on retailers

o Pricing

 Charge based on usage behaviours instead of single price

o Promotion and communication

 Digital marketing tools for better targeting

o Customer management

o Online communities

 Create a platform for information sharing and connect with expert for a fee

 Perception and mindset

o Office layout – Google like?

o Structural change -> Perception change

 o Introduce office change – project focus with delivery and sprint reporting, acknowledgement and
empowerment, expert or focus group.

o Start visualisation to activate discussion and find the focus and what to work on. E.g. Pie charts/Bar
charts etc.

 Design organisation for innovation

o Create a landing dock

 Instead of creating an initiative and let it evolves, the initiative should use the infrastructure
and the engine, align with company strategies.

 Open to internal and external innovation team.

 E.g. Mastercard

 Mastercard Labs

o Standalone on budget but must use base infrastructure

 Tapping into external ecosystem

o Incubators and accelerators around the world

o Invest in start-ups

 Joint ventures

o Most innovations don’t succeed, worth to try and see technology of future
and inspire the employees

 Building pipeline for acquisition

o Find local talent and innovation for better integration

 Internal competitions and hackathon

o Encourage and fund employees to develop innovative ideas related to its

payment, data or services business

o Build a new company from within

 Build new business focus and slowly morph the company into the vision.

 E.g. IBM from a hardware to services company (Cloud, Analytics and AI, Business continuity,
Intelligent workflow)

 E.g. Goldman Sachs – regulation and Fintech challenges

 Create technology platform to centralise core components – remove duplication and

breaking silos

 Open the platform to clients to access the platform and tools – co-build the product

 Build new businesses – position itself for the future

o SIMON – platform for structure notes (competitors are invited)

 o Marcus – online consumer-lending unit

 Skills, capability and talent management

o Skills in demand

 Cloud computing

 Artificial intelligence

 Sales leadership

 Analysis

 Translation

 Movie application development

 People management

 Video production

 Audio production

 UX design

o Talent management in digital age

 Recruiting

 Knack used mobile games with combinations of machine learning and 35 human
model behavioural attributes

 Algorithms first screen candidates and then face-to-face interviews

 Training and development

 CEO of Coke in China created a teen advisory board to get insights on media
consumption and buying behaviour

 Performance evaluation

 GE implemented real-time feedback from peers, subordinates and bosses

 Data analytics on succession planning and career coaching

 Talent retention

 GE predicted employee churn 6 months in advance and designed appropriate

interventions

 Summary

o Customer journey provides avenue to connect, acquire and engage customers.

o Digital technology enables new channels to acquire customers but no perfect metrics for the whole
journey (online and offline).

o Attribution model is used to measure conversion.

 o Unique value needs to be created and story telling is no long sufficient.

o Organisation needs to be rebuilt to manage the digital transition and instil innovation culture.

o Employees’ skills need to be retained and upgraded.

5 CHALLENGES AND FUTURE DIRECTION

 Challenges in digital transformation

o Scalability

o Community (inclusivity)

o Technology

o Organisations, government, society

o Environment (climate change)

o Sustainability

 Target customers and the requirements

o Are the digital solutions targeted at selected customer segments?

o Are there any pre-requisites before one can make use of these digital solutions?

 Digital know-how

 Availability and access to digital devices and equipment

 Availability and access to means of electronic payments

 Cost incurred to make use of these services

 Customer segregation

o Demographic

o Geographic

o Psychographics: lifestyle, interests, opinions

o Behavioural: loyalty, purchasing power, user status (first time buyer etc.), buyer readiness

o Special needs: abilities of an individual

 Social inclusion

o Process of improving the terms on which individuals and groups take part in society – improving the
ability, opportunity and dignity of those disadvantaged on the basis on their identity.

 Financial inclusion

o Individuals and businesses to have access to useful and affordable financial products and services
that meet their needs – transactions, payments, savings etc.
 o First step is to have access to a transaction account.

o E.g. EcoCash in Zimbabawe

 Economic inclusion

o Everyone, regardless of citizenship, has the right to work and governments are obliged to take
processive measures to safeguard this right.

o Non-citizens who are lawfully present in a state are entitled to treatment equal to that enjoyed by
citizens in the realm of employment and work.

o Challenges

 Unemployment, low educational level, unrecognised qualifications, low-paid and insecure

work and lack of access to financial services. With regards to gaining access to capital,
migrants may find it difficult to locate and receive financial services. Racial, religious and
gender discrimination may limit the employment opportunities for some migrants.

 Disabilities are excluded.

 Activity: Why IT matters – The digital divide

 Digital divide

o Refers to the gap between demographics and regions that have access to modern information and
communications technology and those that do not or have restricted access. This technology can
include the telephone, television, personal computers and the Internet.

o Cities vs rural, educated vs uneducated, socioeconomic (education, income, occupation) group,

industrially developed nations, low performance of computers, speed, connection.

 Activity: Digital divide in Singapore

o Regard digital access as a public utility

 Moving towards a digital economy

o Infrastructure

 Internet connectivity must be universal and affordable.

 Accessibility of devices.

o Education

 Providing new skills that are required in the digital age.

 Availability if training programs and courses.

o Government ecosystem

 The business climate must encourage competition, which spurs innovation.

 Availability of safety nets to protect those displaced by automation.

  Financial inclusion through technology and adapt their regulatory frameworks to manage
the risks.

 The digital transformation is affecting every aspects of our lives. It is redefining social and economic
interactions. It is raising concerns about jobs, skills, privacy and security. And it is testing our policy
frameworks as we try to balance innovations that can greatly improve people’s well-being with many other
concerns involving privacy, security, competition or equality etc. We have a responsibility to get the digital
transformation right so it empowers and improves everybody’s lives.

 Activity: Other challenges

Technology

 Cyber security

o Cyber breaches lead to a loss of trust throughout all sectors of society.

o Aim: Cyber-resilient – taking measures to prevent and protect against the criminal or unauthorised
use of electronic data.

o Data security: Confidentiality, Integrity, Availability

o In a world where everything is connected, cybersecurity must be comprehensive, adaptive and

collaborative.

o 3 states of data: at rest, in transit, in use

 Data privacy

o E.g. Grab

o Data privacy rests on a definition called personally identified information (pii). E.g. NRIC, Credit card.

o Special categories such as genetic code, biometric data, sexual orientation, health records

o Authentication vs Authorisation
 o EU framework GDPR (global data protection regulations)

 Privacy as human right

 Citizens’ data rights – access, rectification, erasure, restriction, portability, objection,

notification and automated decision-making

o PDPA in Singapore

 Organisations: Cyber resilience

o Primary source of vulnerability: Human error

 Train employees on digital habits

 Use internal data classification – secret, confidential, public etc. to increase awareness.

o Central inventory of all networked devices and applications to monitor devices.

o Incident response team and procedures

o Third-party risk – vendors need minimum cybersecurity standards.

o Not having cyber-resilience can lead to loss of competitive information and a reputational hit from a
breach and/or a significant operational shutdown.

o E.g. OCBC Bank SMS scans

 Data governance

o Managing data as business assets

o Compliant with regulation with procedures, such as regular audits

o Maintain correct permissions and metadata to data

o Set clear procedure on how data can be used

o Define owner of various data:

 Who is responsible for data accuracy?

 Who can access the data?

 Who maintain the access control?

 Who is responsible to update the data?

o To own or not to own?

 If your key business process depends on some data, important to own the data and not
depends on third-party.

 Implication if third party ups their price, serious disruption to business.

 Data minimisation as good practice

 Big data is in so keep every piece of data

  May land you in legal trouble. GDPR “adequate, relevant and limited to minimum
necessary for the purposes for which the data are processed”

 Walmart: only previous 4 weeks of data

 Storing data just in case is dangerous

 Challenge

 What data to collect

 Level of access controls

 Government

o Cyber resilience

 Government has to develop national cybersecurity strategies and transnational treaties.

 Ensure public databases and infrastructure have necessary safeguards

 Law enforcement needs to be standardised and deterrents to cybercrime shared between

nations.

 Education curriculum on best online practices and managing personal data.

 Individuals can be more aggressive in reporting phishing attacks.

 Challenge

 To implement the systems and processes to have cyber resilience in place.

o Responsibilities/Regulations

 The inability of regulatory frameworks to cope with the rate of change.

 Risk of digital transformation -> digital fraud within banking institutions, cyber terrorists that
paralyse public institutions

 Regulation protects economy threats and public

 Napster: first major P2P sharing platform for music that violated the copyrights of artists ->
lawsuit -> shutdown in 2001.

 Challenge

 Organisations need to keep up to date with the changing regulations: PDPA, HIPAA,
PCI etc.

 IoT threats

o Connected devices – more possible attack points

o Leverage on network vulnerabilities to get to PCs or phones that hold sensitive and valuable info

o Attack can be prompts to download patches – malware to access other devices or ransomware –
locking user out of the device unless a ransom is paid.
 o IoT cyber security guide for enterprises

 Challenges: properly collect and protect data

 Environment

o Green economy

 Green finance

 Issues with climate change is a major concern, leading to an increase in the number
of investments in these areas.

 Green supply chain

 Integration of supply chain with the environment. This includes product design,
material sourcing and selection, the manufacturing process, delivery of the final
products to consumers, and end-to-life product management.

 E.g. Amazon using frozen water bottle instead of gel packs.

 Design of products and packaging that are environmentally sustainable.

 Plan for sustainable outcome

o Reduce obsolete inventory

o Reduce carbon footprints with effective procurement, production and

transportation plans.

o Minimise waste.

o Operate with equipment in a energy-efficient manner.

o Partners play a key role in sustainability initiatives.

o Climate change

 Technology

 AI

o Help to make a wide range of industrial processes more energy efficient

 o Training a single AI algorithm system can use nearly 5 times the emissions
produced by a car over its lifetime

 Apps and search engine

o Eco-conscious apps to help reduce carbon footprints

 Remote work

o Reduced in number of commuters

 Cloud computing

o Consumes only about 1% of world’s electricity.

 Smart cities

o Cities account for 70% of greenhouse gas.

o Making use of technology to assist in decision making and communication.

o Sustainability

 Digital transformation will create a more sustainable world.

 Challenges in digital transformation

 Article: Leveraging digital technology for social inclusion

 Summary

o Digital transformation has created a divide which we will want to narrow and not widen. Everyone
should be included in this transformation and not being left out.

o Other challenges

 Technology – data security, privacy

 Organisations, government, society – cyber resilience, data governance, regulatory &

responsibilities

 Environment – green finance, green supply chain, climate change

  Sustainability

o Various goals for the future directions but the key is building an inclusive, trustworthy and
sustainable digital society.

o The use of technology should help in the building of an organisation or nation that includes
everyone, not segregating or eliminating them.

6 ORGANISATION STRATEGY

 Michael Porter’s Five Forces

o A situational analysis method: understanding existing internal/external environment

o Analyse “5 forces” that determine competitive intensity.

 Higher intensity -> Less attractive

 Pure competition -> Most unattractive

o Qualitatively evaluate a firm’s strategic position

o

o Bargaining power of buyers

 Extent to which customers can pressure organisation

 Price sensitivity; ability to find substitutes

 Access to info, switching costs

o Bargaining power of suppliers

 Extent to which organisation’s suppliers have control over quality/price of product/services

 Number/size of suppliers

 Availability of substitutes

 Uniqueness/quality of suppliers

o Threat of substitutes

 Serve the same need

o Rivalries and threat of new entrants

 Rivalries: brand loyalty, switching costs, size/power

 New entrants: easy for new players to enter

o Competitive forces for a digital business

 

o Criticisms

 Some assumptions may not be sound

 Buyers/suppliers/competitors may collude

 What to do if you have a high force threat

 Analysis may not be effective for non-profits

 Blue ocean strategy: pursuit of value innovation

o Blue ocean – set of methods for untapped markets

o Emphasises the concept of value innovation

 Simultaneous pursuit of low costs and product differentiation

o Blur boundaries of existing industries

o Buyer utility map

 Tool to assess whether potential customers find adequate utility in a proposed product.
 

o Criticisms

 Ideas may be more descriptive than prescriptive

 Only a few success stories

 Our iceberg is melting

o Change

 Mindset

 Traditions

 Belief

 Identify obstacles

 Looking out for solution

 Getting people to help in critical situations

 Convince others

 Assuring support and help made available

o Questions

 Why is there a need for change?

 What are the changes?

 Are there any obstacles?

 What are the obstacles?

 How do people behave?

 How do the use of technology help?

  What is the role of the leadership team?

 How can decisions be made?

 What Is the urgency of the matter?

o Steps

 Set the stage

 Create a sense of urgency

 Pull together the guiding team

 Decide what to do

 Develop the change vision and strategy

 Make it happen

 Communications for understanding and buy in

 Empower others to act

 Produce short-term wins

 Don’t let up

 Make it stick

 Create a new culture and continue with it

 Business process reengineering

o Organise around outcomes, not tasks.

o Have those who use the output of the process perform the process.

o Subsume information-processing work into the real work that produces the information.

o Treat geographically dispersed resources as though they were centralised.

o Link parallel activities instead of integrating their results.

o Put the decision point where the work is performed and build control into the process.

o Capture information once and at the source.

o There are many approaches that can be taken by the organisations to achieve BPR. The priorities of
every organisation will be different.

o Their target audience are different and thus processes has to be designed to meet the needs of the
customers.

o Each organisation has different business goals, business models, business processes and target
audiences.

 Business model canvas

o Management tool to quickly define and communicate a business idea or concept.

o Clear visual representations.

o Connecting external and internal factors to meet the business needs.

o Making connections between the ideas to make it into a business.

o To help companies think beyond product centric.

 Key partners

 Key activities

 Key resources

 Value propositions

 Customer relationships

 Channels

 Customer segments

 Cost structure

 Revenue streams

o
o

o Limitations

 Does not take into consideration external competitions, market situations etc.

 No clear linkage to the organisation’s mission and vision.

 Value capture is based on revenue – cost. Is this too simplistic? Will it work for non-profit
organisations or government agencies?

 May not be suitable for dynamic markets, with dynamic changes.

 There is no clear linkages between each of the components. How does the change in one
affect the other?

 Does not clearly define the role of the organisation in the ecosystem.

 Does not take into consideration the social values/norms/societal needs.

 Additional tools will be required for each of the components.

 Does not indicate the steps to achieve the goals.

 o

 Activity: Hawkers United

o Key factors that are pushing Singapore hawkers to digitalise their business

 Significant fall in demand

 The need to adapt for survival

 Government incentives

o Players in the ecosystem that helped the hawkers in their drive towards digitalisation

 Government

 Customers

 Delivery platforms

 Telecommunication partners

 Software developers

 Logistics partners

o What are the hawkers’ perceived value of what technology can bring to their business and how
urgent?

o The 8 step process of successful change

 

o Process reengineering

 Taxonomy of digital business strategy development

 o

 Summary

o Understand the current situation of the organisation.

o Understand the needs of a selected target customers for which this transformation will bring
benefits to.

 5 Forces

o Is there a push factor for the change?

 Our Iceberg is melting

o The change may require changes to the organisation’s business process which they can take the
chance to streamline and eliminate unnecessary steps to gain competitive advantage.

 Business process reengineering

7 TECHNOLOGY ENABLERS – CLOUD

 Cloud is the key enabler (enabler of enablers).

 Cloud computing is transformative.

o Immense increase in productivity.

o Companies can move quickly and scale as needed.

 Cloud providers

o Amazon AWS
 o Microsoft Azure

o Google Cloud

 Type of service model and key differences

 Case: Understand global customer demand

 o A cloud computing system designed to aggregate global customer demand can only generate useful
analytics when stores in different countries all collect the same type of data regularly.

o This requires ironing out differences in existing organisational processes across different regions. If
the details of how a new technology will be used are chiefly developed by employees from one
country, they might not be aware of the potential incompatibilities.

o New proposals were vetted by employees from different country offices and different functions,
these teams were able to foresee problems with implementation and were able to address them
before the entire organisation fully adopted the new technologies.

 Type of cloud deployment models