What do large enterprises need to know in the digital age? How should they develop a 'digital strategy'? A primer on what it means to be 'digital' today.

1. Cracking the Code: A Framework for Digital Strategy
How Large Enterprises Can Successfully ‘Digitize’
SILICON VALLEY, CAJULY 2014 www.elevarco.com

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About Elevar
Digital Strategy Point of View
Table of Contents

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Today, 3 out of 4 enterprises claim to have a digital vision, but their executives
struggle to define and execute a clear digital strategy
3
Only 17-21% of CEOs in large organizations
have a clear digital strategy vision
Yes No Maybe
Just 15% of corporate executives believe
they can deliver a digital strategy
Yes No
17-21%
15%
Although 74% of corporate executives claim to have a digital strategy in their organizations…
Sources: David Sealey, Digital Consultant; Forrester – The State of Digital 2014

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A digital strategy is about leveraging technology to achieve two goals: breaking
down siloes internally, and connecting with individual stakeholders externally
4
Front
Office
Middle
Office
Back
Office
Executive
Office
Shared
Services
Front
Office
Back
Office
Middle
Office
Shared
Services
Executive
Office
Internal Capabilities External Capabilities
Siloed Digital Capabilities Unified Digital Capabilities Digital Delivery Tools Stakeholders
Digital Strategy: A Uniform Definition
Supplier / Partner
Customer
A unified, cross-functional approach leveraging internal and external digital assets to enhance customer and
business benefits
 Connect departments and improve their relationships with new
technology
 Improve communication and data transfer across lines of business
 Enhance user experience to drive new internal revenue streams
and cost savings
Internal
Digital
Strategy
 Offer more service tools to engage all types
of users (i.e., suppliers, customers, etc.)
 Utilize analytics to increase personalization
 Stay ahead of the curve on emerging
innovation trends (i.e., mobile, social media)
External
Digital
Strategy
A B
Data Exchange
Siloed Digital Capabilities

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A digital strategy is distinct from other enterprise strategies – it’s about connecting
internal and external digital capabilities to drive individualized experiences
5
IT
Strategy
Digital
Strategy
 Internal technology capabilities
 Some cross-functionality, but mostly focused
on discrete internal business units
 Greater focus on internal operations
 Less focus on engaging users
Online
Strategy
IT
Strategy
Digital
Strategy
Business
Strategy
Online
Strategy
• Transcends the borders and barriers among
departments to unify business, IT and online
strategies into a set of digital initiatives
• Focuses on the use of technology to accomplish and
improve upon user (external) and business (internal)
objectives
The Role of
Digital
Strategy
Where does a digital strategy fit in? How does a digital strategy compare?
Business
Strategy
 Limited to deployment of online assets
 Discrete function with minimum cross-
functionality
 Heavy focus on user engagement
 Internal and external business capabilities
 Some cross-functionality, but generally
focused on individual departments
 Generally divided from IT, online, and digital
strategies
 Internal and external digital capabilities
 Holistic approach to unify siloed
technological initiatives in the enterprise
 Collect and analyze user information to drive
individualized experiences for stakeholders

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There are three phases across the digital strategy continuum – to date,
different industries have evolved to different phases of maturity
6
Digital Strategy Evolution
Augment Breakthrough Disrupt
Level
Health Insurance
Technology
Firms
A unified digital strategy vision is nearly
non-existent, but there are some unique
digital capability offerings
There is a unified digital strategy, centered
around a single platform with compelling
digital asset offerings
New and emerging
platforms drive the
business model
Banks
Health
Insurance  Emerging mobile apps, with
some simplistic functionality
 Redesigned web interface
 Basic tracking of customer
interactions
InternalExternal
ExampleIndustries
 Awareness of need for Big
Data analytics
 Some staff aligned to
predictive analytics, but
minimal formalized
departments Banks &
Airlines  Investment in “internet
of things” – i.e., kiosks
 “All-in-one” mobile app
 Investments in
innovation labs and
startups
 Use of internal Big Data,
business intelligence
and advanced analytics
lines of business
Tech
Firms
A
B
InternalExternalA
B
 Identifying use cases for
innovative new
platforms (i.e., Google
Glass, iWatch)
 World-class user
analytics
 Data driven culture
supported by innovative
IT technologies
InternalExternal
A
B

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Case study: Banks and airlines have developed ‘all-in-one’ mobile apps as part of
their digital strategy, achieving ‘breakthrough’ maturity – and bottom line results
7
Reduced customer service utilization
• 43% of customers said they make fewer phone calls
to their bank’s call center due to mobile banking1
Reduced issue resolution
• 35% said they visited branches less often than they
did before adopting mobile banking1
Increased customer loyalty
• 30% of U.S. mobile banking users say mobile banking
has made them more likely to stay with the bank
from which they receive the service1
Reduced customer service costs
• 80% reduction in per-check-in cost compared to
traditional counter check-in due to mobile check-in2
Enhanced consumerization
• 50% reduction in time required to launch new
services or channels to individual consumers3
Industry-wide impact
• 97% of the world’s carriers are investing in new
ways that passengers can use their smart phones to
“mobilize the entire journey”3
Banks Airlines
Industry Adoption of An ‘All-In-One’ Mobile App – A ‘Breakthrough’ Capability
1) Forrester Research - http://www.forrester.com/The+ROI+Of+Mobile+Banking/fulltext/-/E-RES58504
2) The IBM Software story for the Travel and Transportation industry http://www.ibm.com/smarterplanet/us/en/leadership/aircanada/assets/pdf/AirCanada_Paper.pdf
3) Microsoft in Aviation http://az370354.vo.msecnd.net/whitepapers/SingaporeAirshow_Infographic.pdf

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Our research has shown that large enterprises without a clear digital strategy face
five pain points, common across different organizations and industries
8
Overarching Pain Points Sample Client Quotes Summary of Overarching Pain Points
 Website user interface and experience are subpar, creating
complaints
 Stakeholders cannot find the features they want
 No data captured on existing or potential customers
 There is no way of telling what these individuals require and how
to better engage them
 Employees cannot access data pertinent to them
 Lack of confidence that data is accurate and current
 Siloed units restrict a culture of data sharing
 Departments are unable to access relevant data
 Internal process automation is lacking and could be improved in
order to enhance the overall customer experience
 Organizations often lack the ability to utilize existing technology
to improve the customer experience
Friction points with
customers and users
Deep siloes across
internal departments
Data that’s wrong and
difficult to access
Labor intensive manual
processes
“For any given project, 30%
of the team’s time is spent
just finding the data.”
“For any given project, 30%
of the team’s time is spent
just finding the data.”
“It’s too difficult to find
anything on our website…”
“It’s too difficult to find
anything on our website…”
“Many related projects are
running concurrently, but
there is no systematic way
to share knowledge.”
“Many related projects are
running concurrently, but
there is no systematic way
to share knowledge.”
Limited ability to
understand the
individual customer
“We can’t capture
information on potential
customers who engage us.”
“We can’t capture
information on potential
customers who engage us.”
“Many customer service
problem call-ins could be
solved with a very simple
app.”
“Many customer service
problem call-ins could be
solved with a very simple
app.”
External Focus Internal FocusWithin enterprise:

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The good news is enterprises don’t need to be perfect – an effective digital strategy
can be implemented by focusing on pain points most relevant to company needs
9
External Focus Internal Focus
 Mobile app gives user/customer
the opportunity to self-correct
data in real time
 Basic website
 Mobile app consists of
website pulls
 Software and/or social
media tools to enhance
information exchange
 Significant investment in
automation tools across
departments
 Data is available,
but is often
outdated and wrong
 Limited info
sharing across
departments
 Most internal processes
are manual
Friction points with
customers and users
Deep siloes across
internal
departments
Data that’s wrong
and difficult to
access
Labor intensive
manual processes
Limited ability to
understand the
individual customer
Case Study – A Regional Health Insurance Client
Post-Digital Strategy TargetPre-Digital Strategy
 Inability to track
customer
interactions
 Predictive data synchronizes in real
time, supported by a dedicated
predictive analytics team
 Elegant redesigned website
 Dedicated mobile app with core
features
Augment Breakthrough Disrupt
This organization has
focused their digital
strategy primarily on
developing a better
understanding of their
customers
This organization has
focused their digital
strategy primarily on
developing a better
understanding of their
customers

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Industry Pain Point Digital Health Company Description
 An end-to-end digital health company developing
solutions to improve an individual's health
 Addresses health payers’ need to engage
customers beyond when they are sick
 Acts as a health and wellness tool for customers
 Develops a web application that provides
individual consumers with clarity around their
healthcare costs, usage, coverage, and choices
 Helps employers gain control over healthcare
spending
 Allows self-insured employers to optimize
healthcare investments and achieve the highest
quality outcomes for their workforce
 Developing an app for Google Glass that will allow
medical doctors to instantly access patient
information
 Reclaims hours that doctors spend on paperwork
in order to dedicate that time to patient
interactions
Case study: Healthcare enterprises have begun to partner with and acquire
emerging digital health companies to address long-standing industry pain points
10
Friction points
with customers
and users
Limited ability to
understand the
individual
customer
Optum, part of
UnitedHealth Group,
acquires majority interest
in Audax Health in 2014$56M in funding, with
24 year old CEO
Data that’s wrong
and difficult to
access Silicon Valley darling
founded in 2008 with
$177M in funding
Castlight empowers
employees of CVS
Caremark, a pharmacy
and drugstore company,
with healthcare price
transparency solutions
External Focus Internal Focus
Early-stage startup
founded in 2012 with
$7.3M in funding
Dignity Health, a large
hospital system, partners
with Augmedix to pilot
Google Glass devices in
clinical settings
Within enterprise:
Forward Looking Enterprise

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Stakeholder Behavior Emerging Technologies
1. Demand for Individualization
4. Digital Asset Adoption
2. Mobile App Proliferation
3. Industry Adoption of New Technologies
Convergence of Stakeholder Behaviors and Emerging Technology
• Loyalty is correlated with individualized
attention, service quality and cost
considerations
• Market surge in digital asset adoption, creating
higher expectations for features and services
• Mobile and digital assets have
become a fundamental part of
daily life
• Multiple industries have been rapidly adopting new
digital assets to engage with their customers
The Need For A
Digital Strategy
Rapid changes in behaviors, and an influx of emerging technologies signal that large
enterprises should prioritize their digital strategy or face long-term obsoleteness

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About Elevar
Digital Strategy Point of View
Table of Contents

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Elevar is a unique innovation management company – we operate digital
innovation labs for large enterprises
We are innovation advisors
 Elevar helps large organizations
innovate by partnering with high
potential startups
 We align enterprise problems with
startup solutions to drive low-risk,
high-impact innovation
 We represent the interests of both
enterprises and startups – ensuring
mutual benefit and a spirit of long-term
partnership for both sides
We operate digital innovation labs that
connect enterprises with startups
 First, we work closely with large
organizations to uncover their most
critical pain points
 Next, we align high potential startups
to innovate customizable, scalable
solutions for enterprise
 Once the most promising solutions are
selected by enterprise, we work hand-
in-hand to create transformative
partnerships between the parties
Who we are: How we operate:

14. For general inquiries, please contact Chris Edell: chrise@elevarco.com.
For intellectual capital inquiries, please contact Alek Bituin: alekb@elevarco.com.
www.elevarco.com