In prior research, we showcased how digital leaders are using investments in digital technologies to transform key capabilities across customer experience and operations. However, in today’s volatile and disrupted world, capability leadership is not enough. As well as having the capabilities in place, organizations need to be nimble and flexible – dexterous – if they are to respond to ever-changing technology advances, emerging competitive disruptions, and changing customer needs. Enterprises that excel in both qualities – capability and dexterity – are digital organizations. This ‘digital elite’ reported that they outperformed their competitors on multiple key performance indicators including profitability, customer satisfaction, innovativeness and growth.

1. Assembly lines were made possible by electric power but appeared 30 years after the beginning of
the electrification era.
Adapted from Erik Brynjolfsson and Andrew McAfee, “The Second Machine Age”, January 2014
Digital Capability: Use of technology
Digital Dexterity: Ability to self-organize
% of organizations which score themselves as better than their competitors
LaborProductivity
Year
CAGR of 2.5%
over 15 years
(1915-1930)
CAGR of 1.16%
over 25 years
(1890-1915)
1913 - Ford’s
Assembly Line
Begins Operation
Productivity Surge
1890
40
60
80
100
120
140
160
180
1900 1910 1920 1930
1915 =100
Operations Efficiency Customer Experience Workforce Enablement
90% digital organizations
use digital to standardize
operations, whereas only
31% of all firms do so,
on average
70% digital organizations use
digital to reach customers
not accessible through
traditional approaches, while
just 16% of all companies do so
80% digital organizations
use digital to access
resources and talent that
they need to succeed, as
against just 26% of all firms
Digital capability: the use of technology to improve customer experience, operations
efficiency and workforce enablement
Digital dexterity: the ability to self-organize to deliver new value from digital technologies
Only 7%of firms
have become
digital organizations
Digital organizations are exceptions among a vast majority of followers
How can Companies Transform into Digital Organizations?
Digital Organizations outperform their industry peers
Productivity in the Electrification Era Surged Only after Companies Rethought their
Organizational Design
Today some leading companies are harnessing organization redesign to
take advantage of digital opportunities
Innovativeness
34%
80%
Customer Satisfaction Partner Relationship
Strength
35%
70%
41%
90%
Profitability Growth
35%
80%
46%
90%
All FirmsDigital Organizations
DigitalCapability:Useoftechnology
Digital Dexterity: Ability to self-organize
Stalling (16%)
Initiating (56%)
Engaging (21%)
Self-reinforcing (7%)
Digital Dexterity + Digital Capability = Digital Organization
As new digital opportunities
emerged, Nike adapted to leverage
digital in product development,
brand building and driving
operational efficiency.
Tesla Nike
In order to leverage digital to
drive a connected car
experience, Tesla established
partnerships with telecom
operators, content providers
and ecommerce platforms.
Digital Partnerships Adaptability Digital Expertise
100% digital organizations
establish partnerships
with ease, while only
17% of all firms can do
so on average
60% digital organizations easily
adapt operations to external
shifts, compared to just 8%
of all firms
70% digital organizations
easily find experts when
needed, whereas only 13%
of all firms can do so
DIGITAL ORGANIZATION
Digital-First
Mindset
Digitized
Practices
Empowered
Talent
Data Access
and
Collaboration Tools
Prioritize digital solution
Openly explore digital
solutions
Automate what can be Develop digital skills
across the firm
Utilize real-time customer
and operations data
Encourage collaborative
learning
Employ data-driven
decisions
Increase engagement Introduce collaborative
tools
Starbucks ensured a joined up
approach to digital, adding
responsibilities such as digital
marketing and loyalty management
under its digital unit. Now Starbucks
has one of retail’s most powerful
mobile ecosystems.
GE Starbucks
Earlier GE’s software efforts
were in silos. GE then created
GE Digital, consolidating its
IT capabilities to strengthen
its leadership in the
industrial internet.
How Mindset, Practices, Workforce and
Resources Need to Evolve for the Digital Age
Reach out: Interested in reading the full report?
Head to https://www.capgemini-consulting.com/digital-organizations
Follow us on Twitter @capgeminiconsul or email dti.in@capgemini.com
#digitaltransformation
Designing a
Digital
Organization
Organizational Design is Key to Reaping Rewards of Technology Adoption
Digital organizations are characterized by investments in technology -
digital capability, and the ability to rapidly self-organize - digital dexterity