"If you told me that Europe would become a digital continent a year ago, I would say that they should, but it's not likely to happen. But if you asked me today, I would say France is going to lead, Germany to follow, and the UK after that." – John Chambers, CEO of Cisco1
France has made great strides towards a digital economy in the past five years. The vast majority of this focus, however, has been on the way in which digital transformation can improve the customer experience through digital technology.
Cisco's partnership with the French company Citelum2, for instance, has enabled extensive digital transformation projects that provide lighting to 25 million people worldwide, as well as solutions for parking, security, mobility, communication effectiveness and traffic management across Europe and the United States. Their focus on the customer experience has brought impressive results and should be viewed as a success story for any organisation.
While customer experience is essential for organisational growth and success, it's important not to overlook internal digitisation. French companies, such as Airbus3 and Emakina France4, for example, focus their digital transformation projects on the customer experience by developing software and ecosystems which allow greater communication between employees and customers. This is a critical step towards even greater potential for change within organisations.
Digital transformation leaders, such as Betrand Duperrin5, Head of Digital Transformation at Emakina, have commented on this hidden potential in any organisation: "Most conferences on digital transformation focus incorrectly, in my opinion, on transformation of the customer experience and not on transformation within a company. It's not as popular to talk about, but it can affect even greater change."
Digital Transformation Versus Digitisation
Before further exploring internal digital transformation within an organisation, it is essential to distinguish between digitisation and digital transformation. To quote Duperrin again6:
Digital transformation, on the other hand, is much more than that – it's about changing a company's entire business model. Tesla and Airbnb are examples of companies that were able to successfully execute digital transformation in a way that presented an entirely new business model to the hotel and automobile industry.
Disrupting the business model in this case brought enormous benefits: operational efficiency increased, company growth expanded, external and internal communication synchronized, and completely new types of revenue streams appeared. With this type of transformation comes challenges of change management.
As Herve Coureil7, the Chief Information Officer of Schneider Electric, says: "The challenge with digital transformation is that it’s a continuous process, you can’t just look at a year’s work and say ‘I’m done here’."
A Shift from External Focus to Internal Change from Within
Since digital transformation completely disrupts the business model8, the French government quickly realised the opportunity for employment and economic growth across all industries, both public and private. This realisation was followed by heavy investment by the government, led by then Prime Minister Manuel Valls and economic minister Emmanuel Macron.
There's still work to be done, however. According to a McKinsey report9, the French digital economy is only 5.5. percent of the GDP in France, above Italy at 4.0 percent and below Sweden at 6.0 percent. By those same measurements, France is only operating at 12 percent of its digital potential, with industries such as information and communications technology, professional services and media being highly digitised, and health care and retail having low digitisation. This is again in contrast with the Netherlands, who are more highly digitised across sectors, and Germany, who has lower levels of digitisation in government and real estate. Overall, it is estimated that Europe could gain €2.5 trillion GDP in 2025 by additional digitisation.
Where is the greatest untapped potential for French digital transformation?
These statistics, combined with digital transformation experts' opinions we have mentioned, demonstrate that potential for the greatest changes lies in greater internal communication between employees and managers. There is also still room for further digitisation of higher levels of management and their processes. With advanced digital tools for efficient meetings that enable better decision-making at the management level, digital transformation now impacts the C-Suite.
France's Strong C-Suite Leadership at BNP Paribas and Orange
One industry where France has focused its investment in digital technology is in the financial industry. CEO Jean-Laurent Bonnafé of BNP Paribas, France's biggest bank, announced a 2020 transformation plan of €3 billion10 early last year. The announcement came alongside many other European banks such as Deutsche Bank, but was comparably costlier and outlined publicly in greater detail. In addition to digitalising the customer experience, BNP would also be implementing internal digitalisation as well, with data management tools and agile methods for its employees and managers. The ability to transform a global company such as BNP, with 192,000 employees around the global in 201611, in the next three years is no small task. They will need both strong leadership and the right tools to affect change of such magnitude.
Another example of an industry where digital transformation of management is present is the telecommunications industry. Guillaume Boudin, CEO of Sofrecom (a subsidiary of Orange) stresses that although digital transformation must include all employees, it must originate from the executive level. These digital tools, he says, will disrupt the internal operations of organisations, and force both managers and employees to create new business models. As he puts it:
Boudin has also said that work methods and management styles will need to be more flexible and collaborative12, with virtual meeting rooms and the ability to store and share documents. This is particularly important in a world where more and more employees are taking part in the gig economy.
The Essential Tools of Change Management of the C-Suite
The most influential player in digital transformation of any organisation is the CEO. The CEO is responsible for leading the company's vision and enabling change in the organisation, which includes digitalisation. The more disruptive the transformation, the stronger the leadership the CEO must demonstrate, and the more tools management will need at their disposal to affect this change. Since digital transformation tends to move lightspeed, making quick and effective decisions at the management level is essential, as well as having the tools with which to do so.
Take, for example, Sherpany's app, a meeting management software tailored for top executives and boards of directors to help them simplify the preparation of meetings and enable them to focus on value-added activities. As a result, the software enhances the decision-making process. This is particularly essential in an agile organisation to ensure proper management of meetings and handling of sensitive corporate documentation. The software addresses the needs of those responsible for preparing formal meetings and allows them to significantly improve the process in an efficient and less time-consuming manner.
Beyond software and digital tools, however, strong leadership is essential. Returning to the subject of the CEO's influence - Bonnafé's strong leadership is essential to the success of BNP's digital transformation. He has already demonstrated this leadership by outlining a clear strategy in detail, stressing the importance of creating a seamless experience for customers.
To take it to the next level, however, he and the C-suite will need to manage change enablement, especially in an organisation such as BNP which can only enact this change from the top down. Bonnafé believes deeply in the power of digital transformation to bring growth and change to BNP. It is not by accident that the announcement of the 2020 transformation plan came alongside full year results – it's a subtle message of how much growth remains for BNP after it is completed. Estimates are that the investment in digital transformation will generate 3.4 billion in savings by 2020 and 2.7 billion every year13 after in recurring savings.
The Future of French Digital Transformation
With estimations of a gain of €2.5 trillion GDP in 2025 by additional digitisation, France is on track to benefit significantly from this surge in economic growth. The leadership of its CEOs and the rest of the C-suite, its emphasis on internal change in addition to external change, and its implementation of the right digital management tools will all help to facilitate this growth.
In addition, technologies today develop at a faster pace than ever before. As a result, management must work with the board to adapt the business strategy while introducing new working practices at a similarly rapid pace14. It is digital management tools that will most effectively and quickly promote these changes – whether it be through better organisation of corporate information, quicker access to this data, faster preparation of meetings in a safe and secure manner, and better work performance on the move.
This is what will prove John Chambers’ prediction correct in the very near future.
1 Gilbert, Jack. "France will lead European digital transformation", says Cisco CEO. Channelnomics.
2 Menon, Anil. "Vive la Smart France – Digital Transformation Efforts Across France and Beyond!". Cisco Blog.
3 Kirkland, Rik. "How Airbus is navigation a digital transformation". McKinsey.
4 "Innovation and digital transformation: Those companies that have won the bet". Alpict and Tech Nation.
5 Duperrin, Bertrand. "Digital Transformation in 2017: the end of dreams and miracles".
6 Dupperin, Bertrand. "What does achieving digital transformation mean?".
7 "Transforming Business". Microsoft Cloud Blog.
8 Dupperin, Bertrand. "What does achieving digital transformation mean?".
9 Banfi, Francesco, Bressand, Florian, Hazan, Eric and Labaye, Eric. "Closing France's €100 billion digital gap". McKinsey.
10 Williams-Grut, Oscar. "The French bank BNP Paribas is spending €3 billion to `build the bank of tomorrow". Business Insider.
11 Statista. "Number of employees at BNP Paribas from 2003 to 2016 (in thousands)".
12 Boudin, Guillaume. "New collaborative practices mean rethinking the internal organization of companies". Orange blog.
13 Williams-Grut, Oscar. "French bank BNP Paribas is spending £3 billion to `build the bank of tomorrow". Business Insider.
14 "Is Your Digital Transformation Also Disrupting Your Board?". Sherpany Board Brainery.
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