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Issue 1

1 Introduction
2 Increasing digital
Formulating a Successful Equation
maturity and
embracing new
business models
for a Digital Renaissance
Leading businesses understand the value of experience-driven data
9 Research from
Gartner: Disruptions
and Disruptors: Use
Digital Business
Lenses to Uncover
Secondary Disruptions
13 About the Author Introduction
13 About NTT DATA

In recent years, weve seen many businesses evolve


to take advantage of digital technologies and
processes to improve their customer experiences
and gain a competitive edge. Even more striking
is the emergence of companies born in the digital
age that have no technology heritage and are free
to innovate at a rapid pace. These disruptors not
only understand that the world is rapidly changing,
they also lead with experience-driven data, using
adoption and agility as their new currency.

This newsletter ties together our insights on this


Mark Fulgham
phenomenon with research from Gartner analysts President, Enterprise Application Services
David Mitchell Smith, Daryl C. Plummer and David NTT DATA, Inc.
Yockelson on the use of digital business lenses to
uncover secondary disruptions.
To learn more about NTT DATAs Digital Business
Our hope is that these ideas and research will solutions, contact us at digital@nttdata.com.
provide strong direction for how your company can
evolve its digital strategy. Importantly, we offer a Mark Fulgham
simple equation that contains a repeatable formula President, Enterprise Application Services
for digital business success that is, a valuable NTT DATA, Inc.
method for creating a digital renaissance within
your company. The equation clearly shows how
three critical factors combine to form the basis
for an agile development process that repeatedly
produces successful digital outcomes.
2

Increasing digital maturity and embracing new


business models
Four themes run through the challenges that 4. How do we move to a faster and more agile
organizations face in the digital era regardless development process based on sprints that
of industry. occur at regular and frequent intervals?

1. How do we create a more meaningful, more The high-level answer to these questions is
engaging customer experience? bridging the gap between a data-driven model
Companies must raise
in which prediction is the main currency (where
the value of IT projects 2. How do we bring our physical and logical are the potential risks?) to an experience-driven
and narrow the strategic storefronts together? model in which agility is the main currency and
value gap to the
organizations are delivering brand loyalty, identity
business by increasing 3. How do we obtain a set of analytics that helps and employee unity (fast development of good
their overall digital us (1) understand whats going on with our enough work). Figure 1 illustrates this concept.
maturity. business and (2) deliver a more engaging
customer experience thats not intrusive?

FIGURE 1 Closing the innovation-to-adoption gap

INNOVATION ADOPTION

Data Driven Experience Experience


drives data Driven
B

Prediction is the Data improves Agility is the


currency experience currency

Source: NTT DATA


3

FIGURE 2 The four stages of digital capability

44
Resourceful and
33 Generationally-
VALUE GAP
STRATEGIC

aware Innovation
Scaling the
22 Digital Enterprise
Agility is the currency
of adoption. Data
virtualization agility
Public data
11 Interactive Experiences connects:
BUSINESS VALUE

Business for Business


Data virtualization (B4B) data Microservices agility
One-off Social and connects interactive Data management agility
Internal data
experiences with:
Mobile Applications
Data binding
Introductions
Analysis
Interaction
Tracking
Intelligence
Offers

DIGITAL CAPABILITY MATURITY MODEL

Source: NTT DATA

More specifically, companies must raise the value to lower the total cost of ownership and to drive
of IT projects and narrow the strategic value gap brand loyalty. This is in wide-scale use today
to the business by increasing their overall digital with search engine marketing or marketplace
maturity. Businesses generally move along the purchasing suggestions.
continuum shown in figure 2 with the stages
defined as follows: Stage 3: Scaling the enterprise

Stage 1: Creating one-off social and mobile In stage 3, the enterprise moves into a mode of
applications scaling the model across all applications and data
sources. In this stage, data is abstracted through
The first stage of the digital capability maturity data virtualization so that all forms and sources
model represents those enterprises that have of data (public, business for business (B4B) and
developed one-off mobile applications or internal) can be joined logically. Systems of record
those who reach their audiences with popular are integrated with systems of engagement,
social platforms. In this stage, the enterprise is advancing toward data standardization and overall
focusing on the three Is: (1) introductions to the business/IT alignment in the enterprise. This
companys digital experience, (2) interactions approach is a stark contrast to the existing bulk
with the brand and what it stands for and (3) the or batch data integration processes (e.g., Extract-
collection of data and some simple intelligence in Transform-Load or ETL) that are common today.
a stand-alone application.
Stage 4: True innovation that is resourceful
Stage 2: Creating interactive and immersive and generationally aware
experiences
Here, organizations create transformative
Stage 2 represents interactive closed-loop business models that are scalable, adaptable and
experiences where data is loaded and binded personalized to consumer needs and hedge against
into the system and analytical processing is disruptive digital forces. A cultural transformation
performed along with tracking to enable non- takes place at the enterprise level, driving the
intrusive suggestions or offers throughout the enterprise to re-imagine its customer experiences
immersive experience. The key step in stage 2 is and to adopt new business models, technologies
to break down data silos. The enterprise designs and processes. At stage 4, the enterprise has
emotionally-engaging experiences that are built on complete access to all data sources from emerging
a foundation of understanding user needs and their data lakes and heritage data management systems
context. Experiences are delivered consistently throughout the company and/or its subsidiaries.
across channels to create sustained engagement, These interconnected data sources provide
4

new levels of agility, enabling organizations to The flaw with the pyramid shape is that it narrows
enhance both employee and customer experiences as you move upwards from the back office to
with personalized brand interactions based on the front office, reaching a point at the height of
device, location, preferences and other collected the customer interaction in the front office that
data. A stage-4 enterprise fully understands the significantly limits the ability to create a truly rich
psychology of the generations (Baby Boomers, Gen and profound customer experience.
X, Gen Y, Millennials, etc.) and thereby what is
important to each of its customers. Microservices NTT DATA recommends inverting the pyramid to
are widely used in stage-4 organizations as they adopt a funnel approach in delivering personalized
develop and deploy continuous improvements customer experiences. In this model, the front
to their digital business applications. The agility office widens to allow organizations to actively
introduced by microservices becomes the currency demonstrate originality for generationally-aware
of adoption. experiences. Enterprises invest in building up the
front office with co-innovation provided by its IT
Flipping the pyramid services partner(s) to achieve the highest levels of
Today, most organizations structure their customer customer personalization. The mid-office becomes
Dynamic systems are the place where abstraction and automation
experiences in a pyramid shape with the top of
the sum of three factors: are key enablers of the organic and inorganic
the pyramid representing the front office. The front
understanding friction, partnerships that scale out from, or within, the
office is the point of interaction and differentiation.
understanding that your company. And, the back-office continues to be
The middle section of the pyramid is the mid-
brand is the center of a optimized to deliver peak operational performance.
office, which coordinates the internal and
customers experience
external workings of the company including data
and knowing how to A formula for success
synchronization. And the functions at the bottom
deliver in a world of
of the pyramid, known as the back-office, drive NTT DATA believes the equation below describes a
many clouds, multiplied
all aspects of the digital nervous system through repeatable formula for digital business success.
by an investment profile.
business processes and the IT management
dedicated to running the business.

FIGURE 3 A successful formula for a digital renaissance

Data-driven becomes
experience-driven
= ( Identify
pain points
+
Emphasize a
brand-centered
experience
+
Delivered through
(
a world of many clouds
and applications
Align on the
investment

Source: NTT DATA


5

Your Customers Are Experiencing


Friction Now What?

Being able to indentify and mitigate high-friction


areas in your business model is the first step
in creating a superior experience and creating
customer loyalty.

Download the perspective

On the left, we see that dynamic systems are the sum Requiring the customer to resupply information
of three factors: understanding friction (pain points), they have previously provided
understanding that your brand is the center of a Technology is a
customers experience and knowing how to deliver in Excessive customer-driven steps and decision powerful enabler, but
a world of many clouds. points (entering information multiple times in a to create immersive
single transaction) experiences and truly
On the right, we see that each success factor must become digital, you
align to a variety of investment profiles (a force Obscure references, multiple acronyms or requiring must re-align your
multiplier, if you will). Multiplying the sum of the detailed knowledge of your companys policies or company around your
success factors with the force multiplier results in the procedures core values.
total business outcome.
Technical challenges with client-facing
Critical success factor 1: Reexamine friction applications (broken links, frozen interfaces, etc.)
The changing business landscape means that
Obviously, the less friction that customers
customer service representatives, claims adjusters and
encounter, the more likely they are to be satisfied
loan officers (among others) are no longer the primary
with a product or service and continue to do
users of your companys business and technology
business with your company (unlike our scenario).
solutions. In a customer-centric business model,
The more friction customers encounter, the more
success lies with understanding and addressing the
likely they are to disconnect from the company
challenges faced by the external customer first and
anything from hanging up the phone or clicking
foremost.
away from the website to choosing never to do
Customer friction represents any interaction that has business with you again.
a negative impact on the customers experience.
We all have our favorite companies. These
Examples of actions that can increase customer
businesses do more than offer the products or
friction include:
services we want they amaze us by making it
Requiring the customer to switch communication easy to conduct business with them. Most have
channels to accomplish a transaction (moving gotten to where they are today through months
from phone to email to fax) or years of trial and error, combined with a little
customer feedback and a lot of luck. Companies
Alerting the customer after a problem has occurred can shorten that cycle by objectively quantifying
without offering a solution (your credit card has customer friction to pinpoint challenges and
expired and your payment is now late) proactively drive improvements tailored to those
challenges.
Inconsistency across the experience (different
user interface design or varying processes across Critical success factor 2: Reimagine experiences
channels for the same transaction) Today, we expect connected systems that work in
concert to create an ecosystem of engagement. We
Not applying knowledge of customer history and want to interact when, how and where we choose.
preferences (leveraging details from Already, immersive, omnichannel experiences
past interactions) involving web, mobile, integrated voice response (IVR),
6

Read our blog posts to learn more about creating


immersive experiences for
your customers.
Why Your Company Must Create Immersive Experiences
3 Steps to Creating an Immersive Experience

customer care, email and chat are the new normal. For Critical success factor 3: Reengineer
companies with the means to create these immersive frameworks
experiences, the opportunities are enormous: Interconnected, purpose-built platforms work
in concert to deliver the customer experience.
Engage. Trans-media storytelling delivers your What businesses need now and moving forward
message to the right audience, via the right is a pervasive platform, meaning one that is
channel, at the right time. simply there in simple terms. Older IT platforms
and models do not meet this definition. Cloud-
Connect. Unified social, mobile and web based platforms do, but they must become even
content create a comprehensive brand more ubiquitous, underpinning every aspect of
experience that enables a digital field force. IT, from business execution to business insight,
applications and, of course, infrastructure.
Captivate. Compelling, personalized design
Its also important to realize that as you build
creates deep brand connections. Gamified
these capabilities, you must consider not only how
content engages and motivates consumers.
people interact with people, but also how people
Technology is a powerful enabler, but to create interact with machines and how machines interact
immersive experiences and truly become digital, with machines. Essentially, your digital business
you must re-align your company around your core must function consistently across all three of these
values. Uber used existing technology (text, GPS interaction personas.
and social sharing) to address all of the pain points
in a travel experience. Will I be able to get a taxi? Force multiplier: Aligning on the investment
Will it be clean? How long will it take to arrive? In every IT estate, there are various investment
How much will it cost? Uber mapped the customer profiles that must be put in place some
journey, identified those pain points and developed offensive, others defensive.
a service that hinges on a great experience.
The force multiplier (see figure 4) illustrates the
A brand-centered, omnichannel experience
way companies can ensure that reengineered
removes friction and is generationally aware.
It starts with creating a design strategy and platforms, reimagined experiences and reexamined
developing the user experience and the visual friction are in complete alignment.
design in order to build a lean user-experience
framework. Wireframes are used to quickly iterate As enterprises move from the bottom half of
possible solutions, a responsive web design the quadrant to the top half, spending will shift
reference architecture is created and operational from defensive IT investments (spend-to-save
reliability and support are built in. conversations) to offensive IT investments (invest-
to-grow conversations).
7

FIGURE 4 The force multiplier redefines success by creating alignment on investment priorities

Low to High Need for new Investment


Turnaround Strategic
Mode Mode

Support Factory
Mode Mode

Low to High Need for reliability

Understanding how the force multiplier changes

Defensive Moves Offensive Moves


Source: NTT DATA

For each project, define: There are many business and technical benefits
of a microservices architecture, especially when it
1. Goals. Is this a transformational undertaking or comes to digital projects:
are we looking to standardize and streamline?
1. The constant change in todays business
2. The current digital ecosystem. Define environment and frequent updates to
interactions, redundancies, metrics and technology versions and platforms requires
experiences. a high level of agility when developing and
architecting systems. The microservices
3. The gaps and opportunities relative to the architecture enables companies to scale
goals. Are business leaders driving investments? efficiently with little system overhead and
relatively few lines of code.
4. Prioritization of those opportunities based on
strategic value vs. difficulty of implementation. 2. The always-on/on-demand nature of digital
Are they near-term, mid-term or long-term technologies and solutions means that an
opportunities? architecture must handle system failures
and downtime effectively. Given that each
Benefits of a microservices architecture in microservice is an independent component, you
digital projects1 wont impact the whole application if a failure
Part of a successful co-development approach is occurs. The failure impacts only the individual
the use of microservices to organize applications microservice, and chances are good that the
around the way customers want to engage. application as a whole will run smoothly.

1
Siddiqi, Shamlan, Benefits of a Microservices Architecture in Digital Projects, NTT DATA, October 12, 2016.
8

3. Development teams can more quickly take Conclusion


advantage of new technology releases of mobile,
social or other applications for each independent Happy customers and frictionless experiences
component in the application. This allows for are the cornerstones of todays successful digital
quicker adoption, testing and validation of new businesses. Achieving these goals is not simple,
technologies and versions of technologies. especially for enterprises competing with rivals
born in the digital age with cloud-native and
Provided that a microservices approach is mobile applications.
used within a framework that incorporates an
understanding of and alignment with business But companies that successfully execute on this
requirements and goals, companies can expect to equation will experience a digital renaissance that
see a big impact on the bottom line, including: puts them squarely where they want to be: creating
better business outcomes by building customer-
Shorter time to market for solutions centric systems, seemingly without effort.

Better, more accessible systems on demand Watch Mark Fulghams presentation, Formulating
a Successful Equation for a Digital Renaissance, as
Ability to quickly access real-time, presented at Gartner Symposium/ITxpo in
integrated information October 2016.

Very little downtime and lower total cost of To learn more about NTT DATAs Digital Business
ownership of complex solutions solutions, contact us at digital@nttdata.com.

Source: NTT Data


9

Research from Gartner

Disruptions and Disruptors: Use Digital Business Lenses


to Uncover Secondary Disruptions
Using the right tools can enable business disrupted existing markets and wreaked havoc
unit leaders in end-user organizations to take on established businesses. Digital business is a
advantage of opportunities in disruption. Gartners common component of many of these disruptions.
digital business lenses can be used beyond digital Digital business itself can be the disruption. Within
business to understand the disruptions themselves, these disruptive scenarios, many opportunities
as well as second-order disruptions and priority exist. Some of these are direct consequences of
areas. disruption, while many others are second-order
effects and are harder to identify. These secondary
Key Findings disruptions lead to vectors of disruption a path
Disruption is a phenomenon that organizations through the disruptions.
must identify and analyze before uncovering
opportunities. Business unit leaders in end-user organizations will
face unprecedented challenges and opportunities
Opportunities resulting from disruption are in assisting their organizations to navigate
often difficult to see due to the amount of noise disruption. Finding the right opportunities requires
and hype around the topic. skills, tools and looking through the right lenses.
Our research agenda focusing on digital disruptions
Secondary disruptions provide opportunities to and disruptors provides some of these, including
organizations that anticipate them. digital business lenses.

Recommendations Gartner introduced digital business lenses in Use


Digital Business Lenses to Focus on Opportunities
Business unit leaders in end-user organizations should:
as a tool to enable organizations to focus on
Use digital business lenses beyond digital the nonobvious opportunities that are available
business to evoke questions to analyze a in the transition to digital business. One of the
disruption and determine the most appropriate main concepts of the lenses is to focus on the
and immediate action. intersections between the three main elements of
digital business: people, business and things. You
Look beyond immediate disruptions for second- can use these different lenses to focus on critical
order effects and their related opportunities. issues at the intersections of people, business and
things. Then, you can zoom in on opportunities that
Use the digital business lenses to examine are illuminated by looking through these lenses.
mature businesses. Identify the cash flow that is
most vulnerable to a coming disruptor through Like with the Nexus of Forces (cloud, mobile, social
one or more of the digital business lenses. and information), the real opportunities lie at the
intersections rather than with the discrete items.
Use the digital business lenses to analyze your Looking at the intersection of cloud and mobile,
for example, leads to greater opportunity than
growth as business accelerates. Identify where
looking at each one separately. Digital business
you could add capabilities to boost growth and/
is similar, with some well-known focus areas
or where your competitors are flanking you.
for organizations. This includes the nexus forces
themselves, as well as prototypical examples
Analysis
of digital business such as 3D printing and the
Internet of Things (IoT). However, the real value lies
Introduction
at the intersections.
Digital disruption is happening all around us. There
are numerous examples of how new entrants have
10

FIGURE 1 Digital Business Lenses

FPO
Source: Gartner (October 2016)

The three lenses (see figure 1) are: The digital interacting lens is about how people
work and collaborate, interacting with businesses
Digital being: The intersection of people as employees and customers. This lens examines
and things how people will work and how customer-business
relationships will evolve in digital scenarios.
Digital interacting: The intersection of people
and business This lens highlights topics such as:

Digital operating: The intersection of business Digital customer interactions


and things
Digital workplace
The digital being lens is about how people
behave. This lens examines the digital effect on Cognitive (smart machine) support
peoples lifestyles and how they use technology to
improve themselves and their behaviors. It focuses The digital operating lens is about how the business
on issues such as: operates in a digital mode. This lens examines how
business operations and assets are used in a digital
Human augmentation context to develop new business models.

Digital ethics Viewing digital business through this lens reveals


how business operations change. This is where
Postmobile interactions (where the focus has new business models are developed and where
shifted from mobile devices to the mobility new types of digital assets are created. This lens
of people) highlights issues such as:

Digital humanism Digital assets, transformation and management


11

Digital BizOps (applying DevOps principles You could have partnered with other
to business) organizations to take advantage of
opportunities. More opportunities could
Bimodal operations be available by combining efforts to take
advantage of joint offerings that could leverage
The digital business lenses can be used in many intersections highlighted by the lenses.
ways. One of the best ways is using them to look
at a broad subject, market or set of offerings in You could be better prepared for second-order
order to uncover opportunities. This is described disruptions that often result from primary
in Use Digital Business Lenses to Focus on disruptions. Understanding the nature of a
Opportunities. However, these lenses are flexible disruption and what may come next has the
and can be used in broader scenarios. potential to provide significant
competitive advantages.
What If You Could Have Predicted Uber?
What if you had a tool that could identify Using the lenses in this way requires understanding
disruptions before they happened and, more where the inefficiencies or problems are in the
importantly, guide you to resulting opportunities? industry/process being analyzed. In the Uber
What if the tool allowed a way to filter those example, identifying the friction means having to
opportunities into component parts to enable the pay after the fact, having to tip, and/or knowing
identification of potential action items? What if who the driver was. Basically, it means applying the
you had something that could guide you toward lenses to known issues and artificial barriers.
asking the right preliminary questions? The lenses
provide the basis for such a tool. Applying the digital being, interacting and
operating lenses to transportation queuing
Lets look at a quintessential digital disruption highlights the following:
example Uber. What if you could have
predicted Uber? You could look at the category Digital being:
of transportation queuing, which describes the
broader situation. In this case, you could have used A simple, compelling, one-button
the lenses to identify questions to ask first, such as: engagement model

How can you leverage the massive computing Use of existing mobile infrastructure and a
power available in peoples hands, along with mobile app construct
the pinpoint accuracy of GPS location?
Digital interacting:
How can you reduce friction and make
the transaction between the consumer and A payment mechanism, utilizing credit card
transportation provider much easier? and other cashless methods, that makes for
simple, easy transactions
How can you change the underlying operating
model to eliminate the ownership of assets or A way for drivers to get integrated access to
direct employment of drivers? passenger information, location and directions,
and not have to collect fares directly
Using lenses this way may smack of 20/20
hindsight, but the example is useful for several Digital operating:
reasons. Although you may not be in the
transportation queuing business, or had a vision Accurate and timely matching of drivers and
of disrupting it, understanding the nature of the passengers, resulting in quick service and
disruption has many potential benefits: high utilization

You could have been better prepared to provide The organization does not need to own
solutions to the disruptive entities. Although physical assets or directly employ the drivers
many of these organizations do a considerable
amount of original engineering, they still have Access to a workforce that doesnt need to
needs for products and services some of make significant investments in medallions/
which you may have or could develop. licenses (an example of an artificial barrier)
to participate
12

Disrupting the Disruptors Digital interacting:


Although Uber has clearly been a disruptor, it has
its own challenges living in a digital world. Issues Ethics: Issues such as liability, insurance and
around driver satisfaction and security have been prioritizing some occupants over others
well publicized. Also, the company itself is not
immune from disruption. The best example of Ownership and employment issues
this is autonomous vehicles. Although Uber has
embraced autonomous vehicles and has efforts Digital operating:
underway to leverage their use, the concept has
potential to not only disrupt Uber, but to pave the Urban design: Will we see a return to people-
way for additional, second-order disruptions. centric versus car-centric cities?

Using Lenses for Disruption Roads: Specialized roads as well as


Generally Uncovering Second-Order Disruptions retrofitting
You can also apply the digital business lenses to The digital business lenses are versatile and can
autonomous vehicles disruption and examine be used in many ways. Many potential disruptions
the intersections to uncover other second-order are yet to be experienced, and many more
disruptions. opportunities are to be uncovered beyond digital
business. Artificial intelligence, the API economy
Applying the digital being, interacting and and algorithmic business are just a few examples
operating lenses to the autonomous vehicles of concepts that stand to drive further disruptions.
disruption highlights the following:
Gartner Research Note G00316474,
Digital being: David Mitchell Smith, Daryl Plummer, David Yockelson,
05 October 2016

The vehicles themselves and the market


for them

The interaction between occupants and


vehicles different designs for the different
roles of occupants
13

About the Author


Mark Fulgham, President, Enterprise
Application Services, NTT DATA, Inc.

Mark Fulgham is the president of Enterprise


Application Services at NTT DATA, Inc., a Global
IT Innovator delivering technology-enabled
digital business services and solutions to clients
around the world. He leads a global team of
consulting, sales, solutions, service delivery and
client satisfaction professionals that partner and
guide our clients along the digital journey. Mark
also heads up the Office of the CTO for North
America, which defines the innovation strategies
and directions for the company worldwide. Mr.
Fulgham has 30+ years of experience in the IT
services industry, holds 16 patents in the area of
structured and unstructured data manipulation
and has advanced degrees in industrial and system
engineering from San Jose State University.

About NTT DATA


NTT DATA is a top 10 global business and IT
NTT DATA partners with clients to navigate and
services provider with 100,000+ professionals in
simplify the modern complexities of business and
more than 50 countries, and is part of NTT Group, a
technology, delivering the insights, solutions and
partner to 85 percent of the Fortune 100.
outcomes that matter most. We deliver tangible
business results by combining deep industry
nttdata.com/americas
expertise with applied innovations in digital, cloud
and automation across a comprehensive portfolio
of consulting, applications, infrastructure and
business process services.

Formulating a Successful Equation for a Digital Renaissance is published by NTT DATA. Editorial content supplied by NTT DATA is independent of Gartner analysis. All Gartner
research is used with Gartners permission, and was originally published as part of Gartners syndicated research service available to all entitled Gartner clients. 2017 Gartner,
Inc. and/or its affiliates. All rights reserved. The use of Gartner research in this publication does not indicate Gartners endorsement of NTT DATAs products and/or strategies.
Reproduction or distribution of this publication in any form without Gartners prior written permission is forbidden. The information contained herein has been obtained from
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