“Avanade is one of 10 global research patrons of the Center for Information Systems Research at MIT Sloan and it’s our privilege to host Dr. Kristine Dery at the NetHope Summit”. Pam Maynard, Chief Executive Officer, Avanade

©2019 Avanade Inc. All Rights Reserved 1 Dr. Kristine Dery Research Scientist [email protected]

Research team: Dr Peter Weill Nethope 2019 Dr Stephanie Woerner Dr Nick van der Meulen The Force of Work

This research was made possible by the support of MIT CISR sponsors and patrons. Oct 22, 2019 ©2019 MIT Sloan CISR 245 First Street p 617.253.2348 MIT CISR’s Mission th E94–15 Floor f 617.253.4424 Founded in 1974 and grounded in the MIT Cambridge, MA 02142 [email protected] | cisr.mit.edu tradition of rigorous field-based research, MIT CISR helps executives meet the challenge of leading dynamic, global, and information- intensive organizations. Through research, MIT CISR gratefully acknowledges the support and contributions of its Research Patrons and Sponsors. teaching, and events, the center stimulates CISR Research Patrons CISR Research Sponsors interaction among scholars, students, and AlixPartners LLP Aetna, Inc. CHRISTUS Health Scentre Group (Australia) practitioners. Avanade Air Canada Cochlear Limited Marathon Oil Corp. Schneider Electric (Australia) Industries SAS (France) 2019 MIT CISR Research Projects BT Allergan, Inc. Markel Corp. Allstate Insurance Co. Commonwealth Mater Private Hospital Standard Bank Group • Moving from Value Chains Cognizant ANZ Banking Group Ltd. Superannuation Corp. (Ireland) (South Africa) ISACA (Australia) (Australia) MLC Life Insurance (a State Street Corp. to Ecosystems: Building & Leveraging LTI Australia Post CPPIB (Canada) Nippon Life Group Stockland (Australia) Partnering Strength Credit Suisse (Switzerland) Company) (Australia) Australian Securities & Suncorp Group (Australia) • Coordinating Innovations: How Firms The Ogilvy Group, LLC Investments Commission CSBS National Australia Bank Swinburne University of Pegasystems Inc. (ASIC) DBS Bank Ltd. (Singapore) Ltd. Technology (Australia) Realize Greater Business Value PricewaterhouseCoopers Australian Taxation Office ExxonMobil Global New Zealand Govt.— Teck Resources Ltd. from Their Innovation Portfolio Services Company GCIO Office (Canada) Advisory Services LLC AustralianSuper • Developing Data Monetization Banco Azteca (Mexico) Ferrovial Corporacion, S.A. Nomura Holdings, Inc. Tetra Pak (Sweden) Banco Bradesco S.A. (Spain) (Japan) Trinity Health Portfolios That Pay Off Nomura Research Inst., (Brasil) Fidelity Investments USAA • Operating Models Banco do Brasil S.A. Fortum (Finland) Ltd. (Japan) Westpac Banking Corp. Bank of Queensland FrieslandCampina Nordea Bank (Australia) for Your Digital Business (Australia) (The Netherlands) Northwestern Mutual WestRock • Investing in Employee Experience OCP S.A. Barclays (UK) General Electric World Bank to Create Better Customer Experience Bayer AG Genworth Financial Organisation for Economic BBVA (Spain) GlaxoSmithKline (UK) Co-operation and • Decision Rights in the Digital Era Development (OECD) Biogen Grupo Santander/ PepsiCo Inc. • The Executive Committee & Board BMW Group Santander UK Hanover Insurance Group Pioneer Natural Resources Relationship in Digital Transformation BNP Paribas (France) USA Inc. BNY Mellon Heineken International • Guiding Your Enterprise to Future Ready B.V. (The Netherlands) Posten Norge (Norway) Canadian Imperial Bank Principal Financial Group (and Beyond) of Commerce Insurance Australia Group QBE CarMax Iron Mountain • What’s Next for the IT Unit? Raytheon Company Caterpillar, Inc. Johnson & Johnson Reserve Bank of Australia CEMEX (Mexico) Kaiser Permanente Royal Philips Chevron Corporation King & Wood Mallesons (Australia) (The Netherlands) 1 August 2019 Challenges:

• Work becoming more complex with multiple systems, faster, fewer boundaries, more data collection

• More technology, more people.

• Increased uncertainty

• Digitizing work to make it easier to do more complex work that needs humans

• Shortage of digital talent - harder to attract and retain

• Need to work in ways that are more meaningful in a Digital World

Dana Schultz: Building the Boat while Sailing (2012) What keeps your CEO up at night? Meet Rick…

Front-end web specialist Left school at 18 No formal training; self taught on the job 5–10 job offers a week Has worked at 4 organizations in the last 5 years Only interested in gig employment 8 years ago the Guardian described his job as “a relatively obscure internet discipline…”

Explosion of Apps and everyone needs a “Rick”

http://www.theage.com.au/it-pro/expertise/what-its-like-to-be-australias-top-tech-talent-20151016- gkbb0k.html?eid=email:nnn-13omn624-ret_newsl-membereng:nnn-04/11/2013-technology-dom- technology-nnn-age-u&campaign_code=13ITE006&promote_channel=edmail&mbnr=MTM0NTgwMDc Expectation: of employees will be significantly 67% affected by the transformation Source: MIT CISR 2017 Pathways to Digital Business Transformation Survey (N=400). Pathways for digital transformation present challenges for our people (NFP data for pathways)

Integrated Experience Future Ready

focus focus 19%(15) 7% (9)

32%(24) 11%(19)

Beneciery TRANSFORMED

Silos and Spaghetti Industrialized

Customer Experience Customer

TRADITIONAL Increasing customer / Increasing customer

TRADITIONAL TRANSFORMED Operational Efficiency Increasing automation, standardization, reuse, and productivity

Note: Pathway lines are based on a series of informal interviews (conducted between 2015 and 2017) on digital transformation with senior executives globally. The lines were confirmed via the MIT CISR 2017 Pathways to Digital Business Transformation survey (N=400). Explosions represent significant organizational changes. 2019 TMT and Transformation Survey, interim results (N=589). Not For Profit= Education, Healthcare and Social Assistance, and Public Administration, N=72. 2% of sample have not started a transformation Numbers in brackets are For Profit companies. EX

Employee Experience: The extent to which employees of an organization are enabled or constrained by its adaptive work environment and collective work habits to do their jobs today, and to reimagine their jobs of tomorrow Digitizing work vs Working Digitally

Get Rid of Get better at the junk working to add value

Efficiency Effectiveness Great EX delivers better business outcomes Why?

EMPLOYEE CUSTOMER INNOVATION PROFITABILITY EXPERIENCE SATISFACTION Top Performers NPS (industry % of revenues Increased adjusted) from new revenue, lower products/services costs

Dery, K. , and Sebastian, I. Building Value with Employee Experience” MIT CISR Research Briefing , Volume XVII, No. 6, June 2017. Based on data from 2016 MIT CISR Best Practices in Digital Workplace Design Survey (N=281) EX changes the options in the War for Talent

Integrated 10% Enabled 15%

TOP 25% TOP -1.7 +16.0 +39.5 37.3% +10.3 +22.0 +56.0 53.3%

Separated 53% Constrained 22%

EMPLOYEE EXPERIENCE EMPLOYEE -3.2 -8.5 +6.0 20.6% -2.1 -1.5 +6.5 25.0% BOTTOM 75% BOTTOM

EXTERNAL (<50% FTE) INTERNAL (≥50% FTE) TALENT FOCUS

Net Margin (adjusted) Time to Market Ability to Change Innovation

Note: Net Margin is industry-adjusted: values are percentage points above or below industry averages. Time to Market and Ability to Change are relative to competitors in the industry. Innovation represents the percentage of revenues from new products and services introduced in the last 3 years. N=279. ©2018 MIT Sloan CISR New Zealand Government (SIA) Data Exchange

The Social Investment Agency facilitates the Data Exchange to increase coordination among government agencies and NGOs • SIA facilitates implementation and training; data architects visit organizations to build trust and ensure data sharing facilitation agreements are in place between exchanging parties • 10+ government agencies and 20+ NGOs connected on multiple use cases across the social sector

Multi-organization use cases: • Collective impact initiative focused on the wellbeing of whānau • Agencies and NGOs securely share data via the Data Exchange. This helps NGO providers and service users to inform service decision making (e.g., housing, skills and employment, health) • Department of Corrections • Near real-time data sharing on service referrals, housing availability, placement status with multiple housing providers

Sources: Interviews with executives at New Zealand Government; https://www.digital.govt.nz/showcase/sia-and-the-data-exchange/; https://sia.govt.nz/assets/Posters/Data-Exchange.pdf; https://sia.govt.nz/assets/Posters/SIA-Multi-use.pdf; https://sia.govt.nz/assets/Posters/Te-Tihi-O-Ruahine.pdf © 2019 MIT Sloan CISR Where to next…….

Actively look for the Invest in Working Learn more about how to speedbumps to Digitize Digitally for your build great EX for Hybrid work organization work environments 15 Invitation to participate in the Pathways survey to get more NFP data

https://survey.qualtrics.com/jfe/form/SV_6y7LwhbsoB1kovz