MASTER 2 IN DEVELOPMENT ECONOMICS AND INTERNATIONAL PROJECT MANAGEMENT [302550]

PARIS EST CRETEIL UNIVERSITY

FACULTY OF ECONOMICS AND MANAGEMENT

MASTER 2 IN DEVELOPMENT ECONOMICS AND INTERNATIONAL PROJECT MANAGEMENT

THE JOURNEY TOWARDS SUSTAINABLE DIGITAL INNOVATION. A CASE STUDY ON ARVAL BNP PARIBAS

Student: [anonimizat]: Julie Lochard

October 2017

OUTLINE:

ABSTRACT…………………………………………………………………..…………1

1.INTRODUCTION………………………………………………………………..……2

2. LITERATURE REVIEW AND THEORETICAL FOUNDATION…………..….3

2.1 Trends in the environment……………………………………………….….3

2.2 The concept of Digital Mastery………………………………………………4

2.3 Why should companies aspire for digital maturity?……………………………….6

2.4 How to achieve Digital Mastery?…………………………………………………………..8

2.5 The digital transformation compass………………………………………..12

2.6 Impact of digitalization on automotive market……………………………16

2.7 Trends driving innovation in the automotive industry……………………17

3.METHODOLOGY AND CASE STUDY……………………………………………19

3.1 Research design………………………………………………………………20

3.2 Case study: ARVAL BNP Paribas……………………………………….…..21

3.3 Introduction to ARVAL BNP Paribas………………………………..…….21

3.4 The history of ARVAL……………………………………………………….22

3.5 ARVAL’s journey to Digital Mastery……………………………………….24

4. THE ANALYSIS………………………………………………………………………30

The four levels of Digital Mastery……………………………………………….30

4.1.1 The leadership capabilities………………………………………………..32

4.1.2 The digital capabilities…………………………………………………….35

4.2 The digital Transformation compass……………………………………………37

4.2.1 Framing the digital challenge…………………………………………….38

4.2.2 Focusing investment………………………………………………………39

4.2.3 Mobilizing the organization………………………………………………40

4.2.4 Sustaining the digital transition………………………………………….42

4.3 What is next?……………………………………………………………………………………………44

5. CONCLUSION……………………………………………………………………….45

6. BIBLIOGRAPHY…………………………………………………………………….47

7.APPENDIX…………………………………………………………………………….49

ABSTRACT

Digital Mastery is a notion which describes the state of sustainable innovation acquired through appropriate use of digital technologies. This thesis starts with a review of the theory of Digital Mastery and the literature upon which it is based. It continues with the case of Arval BNP Paribas, a company currently trying to stay competitive by keeping the pace of innovation. The study of Arval BNP Paribas shows that the company has just entered the conservatives’ category, a [anonimizat]. Thus, there is still a lot of hard work required at Arval to become a digital master. [anonimizat] a [anonimizat].

INTRODUCTION

This thesis seeks to explain why it is important for companies to achieve Digital Mastery. Second, it looks at how the theory of Digital Mastery can be used to help companies like ARVAL BNP Paribas achieve better mastery over their information and digital technologies.

[anonimizat]’ performance. Those that achieve digital mastery can outperform and outcompete their field.

Moreover, according to Moore’s law, over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years. In other words, every two years the smartphone you are carrying, the computer or tablet you are using or your TV at home gets twice as powerful, while the cost of that computing power dramatically reduces over time. Therefore, information and digital technology is developing at a pace that makes it impossible for any person to understand all the possibilities. This increased speed means that companies need to learn how to take advantage of new technology much faster than earlier.

That is why, there were developed new theory that guides companies towards Digital Mastery. To do so, the theory suggest encouraging the IT department to take a more business oriented approach to IT development, and the business side to get a better understanding of what can be done with IT.

The main questions to be answered are:

What is digital Mastery?

Why should companies strive for Digital Mastery, and how can they achieve it?

What was done at ARVAL?

To what extent did the transformation at ARVAL bring them closer to Digital Mastery?

What are the next steps in ARVAL’s journey towards Digital Mastery?

The first two will be answered in a literature review, while the third will be answered in a case study. The last two will be the topic of the analysis and the following discussion.

Due to the workload of the employees and a lot of them being in vacation at that period of time, as well as a limited time, the pool of respondents ended up being small. However is provided a substantial insight about relevant processes within the company.

LITERATURE REVIEW AND THEORETICAL FOUNDATION

2.1 Trends in the environment

Digital technologies have not always been available, but are a result of a string of developments and trends in the environment. The purpose of this section is to identify relevant trends and explain how they have made Digital Mastery a necessity for companies whic want to be competitive.

Growing importance of enterprise culture: Modern enterprises succeed when they adapt to industry and marketplace shifts and incorporate new technology into company culture and regular operations. However, digital transformation isn’t only about technology, it’s about bringing together the power of technology with a culture that embraces the change that it can lead for the organization. We can change our technologies, our infrastructure, and our processes, but without addressing the human element, lasting change will not happen (Kane et al. 2015). And so, by addressing the human element, takes a full advantage of the digital technologies, which ultimately leads to better customer experience: The customer experience whose importance represents the main goal of any digital transformation. Customers have been spoiled. Thanks to companies such as Amazon and Apple, they now expect every organization to deliver products and services with same quality level. A sound user experience is the best way to get loyal customers. This is a comprehensive process. Anywhere and everywhere customers can interact with your business, the experience must be consistent and positive. Intuitive interfaces, permanent availability, real-time fulfillment, personalized treatment, global consistency, and zero errors, this is the world to which customers have become increasingly accustomed (Markovitch, Willmott 2014). Thus, one of the most important technologies that is improving every day the customer experience beside other advantages is big data and analytics: The importance of big data in the business world can’t be overstated. In the age of Digital Transformation, almost everything can be measured and analytics has become the basis of how businesses operate. Every important decision can and should be supported by the application of data and analytics. Moreover, it can point the way to various business benefits, including new revenue opportunities, more effective marketing, improved operational efficiency and competitive advantages over rivals. Analytics drive business by showing how your customers think, what they want, and how the market views your brand (Chen, Chiang, Storey 2012).

Internet of Things (IoT) is changing how daily life operates by helping create more efficient cities and leaner enterprises. Thanks to cloud-hosted software and readily portable devices like tablets, remote work is already a solid option for many professional positions. When IoT technology becomes commonplace, and all devices are manageable on one network, it will become even easier to manage everything remotely. Given one tablet and an Internet connection, you may be able to manage an entire production line, or an entire store. (Kopetz 2011). According to Gartner, Inc., the number of interconnected devices will more than double to 13.5 billion by 2020 from 6.4 billion today.

Digital Goods: Digital technologies are changing consumption patterns by making intangible goods and services, like music, books, information, games and other types of “software” easily available to everyone. Digitization of these goods changes their economic properties, forcing us to treat them differently than the standard physical goods and services which have been the foundation of our economy in the past. Digitization paves the way for new business models which will force a shift from the customer-centric focus to an everyone-to-everyone (E2E) economy (Berman, Marshall 2014) where everyone can participate as a seller or buyer, and where trade is mostly conducted in virtual marketplaces.

2.2 The concept of Digital Mastery

Digitally mature companies so called digital masters are the companies that apply digital technologies to generate higher levels of profit, productivity and performance (Westerman, Bonnet & McAfee 2014).

According to Westerman et al.(2014), one of the main ideas of digital mastery is that it is necessary to create a balance between digital capabilities and leadership capabilities, as well as an efficient communication between IT and business people to become true digital masters. To find this balance, the company must develop both digital and leadership capabilities.

Digital capability is the extent to which a company is able to make the right digital technology investment decisions. It does not describe a company’s financial situation or large investments capabilities that would produce the digital desired results, however it is about investing for the right reasons, in the right technology and achieving the desired result in the first attempt. So digital capabilities are about having knowledge about which digital technologies available on the market and assessing which are the most suitable for your company and which can support the business goals in the most efficient way.

Digital technology is very new as a factor of strategic importance, which means that what it can be used for is not widely known. Since the speed of developments in the field is high, it makes very hard for companies to stay informed, so, the main challenge of digital capabilities is to keep track of the new developments and regularly evaluate which digital technologies can be applied to achieve the business goals.

Leadership capability is the extent to which a company has the ability to transform the company and gain full usage from new capabilities or to meet new challenges. It is about top-down leadership, setting direction, building momentum, and ensuring that the company follows through. (Westerman, Bonnet & McAfee 2014). Top-down leadership means strong governance and coordination. The main challenge here is no ensure that all the parts of a complex company moving in the right direction and at the right pace, and the true advantage comes from linking different digital activities, and that can only happen if people are on the same page. The necessity for leadership capabilities is not something new. There are many researchers who have written papers about Leadership capabilities and change management in the last 20 years (Kotter 1996, Schein 1996), and all of them share that leadership is important for change projects.

Where your investments go in, is important to a point. How you use those investments to transform your enterprise is what matters the most and this is the key to success. Neither digital capabilities nor leadership capabilities is sufficient on its own. Each dimension brings a different type of financial performance, and each generates only a partial advantage. Westerman et al (2014). However, when combining them, it offers digital masters a substantial advantage over their competitors.

Thus, the idea that all the parts of a complex company should move in the right direction and at the right pace has brought the notion IT-Business alignment. IT-Business alignment is about combining the skills and perspectives of business and IT leaders so that they drive transformation together (Westerman, Bonnet & McAfee 2014). It is one of the most crucial factors of IT governance. IT governance in general helps companies defining who is responsible for what and how IT decisions are made. IT-business alignment help companies to meet their business objectives, and to generate more profit from the investments. The IT business alignment survey conducted by Deloitte in 2008 on about 300 Business and IT decision makers found out that alignment of the business and IT strategies remains a topic seldom discussed at top level. According to their results only in 33% of the companies’ strategic alignment sessions are regularly being held. Both business and IT representatives indicate that the primary focus is on financial alignment of the investment portfolio and to a lesser extent evolution activities and IT changes. Preston and Karahanna (2009), introduced the concept of Shared Understanding. And so, there is a Shared Understanding in a company when the chief information officer(CIO) and the Top Management Team integrate their respective higher levels of knowledge and perspectives about business and IT knowledge, allowing them to create a shared understanding of how technology can be applied to enhance organizational capabilities. Shared Understanding makes it possible for the CIO to understand the strategic goals of the Top Management Team and use this knowledge to influence the strategic decisions made by Top Management Team about the use of technology for the better in the company. IT-driven business innovation should be driven by the chief executive officer (CEO), the chief information officer (CIO) and the manager of the business unit which is being transformed Yodakawa (2007). The Digital Agenda Business 2014 published by Gartner, also supports the idea of a strong relationship and collaboration between CEO, CIO and the manager of the business unit being transformed. The most frequent reason for a weak relationship is usually the mindset of the CIO or its lack of business understanding. No matter how much any CIO might like to believe that it’s the executive team’s responsibility to understand the value of IT, the fact is that it’s IT’s responsibility to deliver and communicate that value (Hunter, Westernman 2009). So, in order to change the mindset of IT team, the first step is to help IT employees think, and talk, differently about what they do. The second step proceeds to showing very clearly how well or how poorly IT delivers value for money—the right services at the right quality and right price, and where problems still exist. And then the third step moves to changing the way IT and business leaders make investment decisions and assess the returns that projects deliver. Through transparency around roles, performance, and investments, both sides can make smoother decisions and work together to identify and deliver innovations.

2.3 Why should companies aspire for digital maturity and how can they achieve it?

In order to better understand why companies should aspire to digital maturity, it is important to understand what are different levels of digital mastery and what each level imply.

According to Westernman et al. (2014), there are four level of digital mastery:

Beginners аre just аt the stаrt of the digitаl journey аnd they trying to gаin certаinty before they аct. Some believe the digitаl opportunity is not suitаble for their industry. Others hаve weаk leаdership cаpаbilities to drive digitаlizаtion. Аs а result, Beginners hаve only bаsic digitаl cаpаbilities. Аnd they lag behind their competitors on multiple meаsures of finаnciаl performаnce. Mаny Beginners use regulаtion or privаcy аs аn excuse for inаction. For exаmple, insurаnce compаnies lаg behind in terms of digitаlizаtion becаuse they use legаcy technology аnd regulation’s, so they use them аs аn excuse for inаction.

Fаshionistаs аre not waiting to аct. They buy аll the trendiest digitаl innovаtions. They аre motivаted to bring digitаl innovаtion, but the digitаl trаnsformаtion strаtegy is not bаsed on reаl knowledge of how to mаximize business benefits. This is а result of lаck of strong digitаl leаdership аnd governаnce, they wаste much of whаt they spend. Or they find thаt they need to reverse whаt they hаve done so thаt they cаn integrаte аnd scаle their cаpаbilities. One compаny Westernman et al (2014) studied in the research, built employee collаborаtion plаtforms in different pаrts of the business using different аnd incompаtible technologies. Employees could collаborаte within their silos, but could not shаre knowledge аcross the compаny. Building а wide vаriety of incompаtible processes аnd systems mаy seem like progress, but it limits bigger opportunities. This incompаtibility impedes а coordinаted аpproаch to customer engаgement аnd а unified view of operаtions

Conservаtives hаve а cаpаbility profile thаt is the opposite of Fаshionistаs. Аlthough Conservаtives hаve useful digitаl leаdership cаpаbilities, excess prudence prevents these firms from building strong digitаl cаpаbilities. Unconcerned аbout technology fаshion, the compаnies focus on ensuring thаt every digitаl investment is cаrefully considered аnd strongly coordinаted. Leаders in these compаnies don’t wаnt to mаke mistаkes thаt would wаste their scаrce time, effort, аnd money. This cаution cаn be useful, especiаlly in highly regulаted industries such аs heаlth cаre аnd finаnciаl services. But it cаn аlso creаte а governаnce trаp thаt focuses more on controls аnd rules thаn mаking progress. By focusing on control аnd certаinty, Conservаtives find it hаrd to mobilize top mаnаgement —аnd the rest of the organization, to see the bigger prize thаt digitаl trаnsformаtion cаn bring. In trying to prevent fаilure, these compаnies fаil to mаke much progress аt аll.

The last level to which every company should aspire is Digital Mastery. Digital Masters have overcome the difficulties that challenge their competitors. They know how and where to invest, and their leaders are committed to guiding the company powerfully into the digital future. They are already exploiting their digital advantage to build superior competitive positions in their industries.

So, some companies have the digital maturity not only to build digital innovations, but also to drive enterprise-wide transformation. And they benefit from their actions.

According to Westerman, Bonnet, McAfee (2014) the two critical elements of digital mastery, digital capabilities and leadership capabilities are associated with different types of performance; companies that excel in a particular dimension outstrip industry competitors in some performance measures while lagging in others. Meanwhile, Digital Masters companies that excel in both dimensions—have the highest performance, far outperforming other firms on multiple financial measures. Digital Masters are 26 percent more profitable than their industry peers and generate 9 percent higher revenue from their physical assets.

Therefore, in order to survive in today’s digital economy, it is important for companies to build the ability to achieve competitive advantage by utilizing digital technologies and to rethink or be innovative about the way they do business. Companies need to focus on building a sound IT infrastructure platform, but also on building change leadership capabilities and digital capabilities which will help them be innovative, and this is what digital maturity is all about.

2.4 How to achieve Digital Mastery?

To answer this question, it is crucial to understand what is Digital Transformation. So digital transformation is the way in which companies implement digital technologies to their operation, business processes as well as in the process of interaction with costumers.

Digital transformation implies three main pillars of change: customer experience, operation processes, business processes. A successful digital transformation is not achieved exclusively by implementing new technologies but also by transforming enterprise processes, which leads to increased profit margins and identifying new possibilities for innovation.

Changing costumer experience is about updating the ways a company perceives its costumers and interacting with them. This can be achieved only by introducing new technologies into the customer experience. For digital masters, websites, mobile apps, customer analytics etc., are not goals or some signals for investors, they use them as tools to get closer to customers, facilitate communication and improve the analytical abilities of the company. (Westerman, Bonnet & McAfee 2014).

Implementing a proper costumer experience creates value for both customers and firms. It drives sustainability and generates customer loyalty. However, one of the main challenges here is integrating new digital technologies into existing operations which can be quite challenging, and since this type of change will mainly affect the customer dealing with business units, while other units will only be affected slightly in areas where they are connected to the customer facing units. Then, the second challenge here is to make sure that the change is uniform in the entire company, and not just the company facing business units.

The second pillar in the transformation process is changing the operational processes which is about optimizing the internal processes of a company by using digital technologies to change core processes, change the way employees work, create real-time transparency, or make smarter decisions. Change in operational processes can be done on two levels. On the lower level, the purpose is to digitally optimize the internal core processes. Often this implies to reach the same level as competitors in terms of price, quality and product (Westerman, Bonnet & McAfee 2014). When all the operational processes are optimized and digitalized the company has to move to the upper level, where technology will allow the company to rethink the way they do business. This can be achieved by getting rid of outdated assumptions that appeared from the limits of older technologies regarding the possibilities the technologies can give you, and thinking outside the box, being innovative. This level is about doing something new and standing out from the competitors (Westerman, Bonnet & McAfee 2014).

A very important thing worth taking into consideration in the process of changing operational processes is that, in order to become a digital master, it is important to focus on rethinking the way business is done, and not on fashionable technologies that are on the market. When a company is implementing a new digital technology, it should keep in mind that not every trendy digital technology will match its organizational processes, and so, before applying a new technology, it should make sure that it is the best suited and it is the best match for its needs.

The last pillar in the transformation process is changing the business models by the introducing a new product or service that is either embodied or enabled by digital technology and which generate additional revenues. (Westerman, Bonnet & McAfee 2014). Thus, the new digital technologies are modifying or reinventing the existing business models by redefining the value that organizations deliver to its customers.

There are five types of business model reinvention driven by digital technology: reinventing industries, substituting products or services, creating new digital business, reconfiguring value delivery models and rethinking value proposition (Westerman, Bonnet & McAfee 2014).

Reinventing industries means changing substantially the structure of an industry or adapting it to the radical changes of the consumer behaviors. It is considered as a complex and risky process and enterprises most of the times have to get outside of the comfort zone of the core business to deliver new values. It also requires new competencies, new modes of operation and new economic models.

The next type of business model reinvention is substituting products or services. This happens when the main products or services delivered by a company can be replaced by a new digital version of those products and services. Sometimes, enterprises are pushed to transform the business model, because the core product or service provided is being replaced by new digital technology, and in order to align with the competitors and to survive on the market, they need to transform. A company’s ability to create value for its customers will depend on how easily it can digitally augment its core capabilities and realign to deliver the outcomes that customers really desire.  Digital business models are not about technology.  They are about creating new business designs that utilize digital technologies to improve the ways that an organization serves its customers, collaborates and operates.

Another way to transform a business model is creating new digital businesses. This implies the creation of new products and services that generate additional income. Usually, startups and the new entrants are the adepts of creating a new digital business, because large enterprises most of the time are focusing on growing the current business and protecting its current assets, so for them it is hard to find a new source of growth by reinventing the business model.

Some companies do not develop new digital models, however they reconfigure value delivery models. This involves reintegrating services, products and data to redesign the way a firm engages in the value chain. Here, it is not about changing the rules of an industry, replacing products or services, or creating a new digital business, it is about using technology to connect all your products, services, and information in a different way so that the relation with customers improves and the firm gains competitive advantage.

There are case when companies are not able to achieve the demands of the existing or new customers, so they try to rethink the value propositions by applying new digital technologies to target the unachieved demands for existing or new customers, thus reinforcing presence on the current market. This can involve combining products and services in innovative ways: making better use of analytics, designing new economic models, or repackaging their offering.

Westerman et al. suggest that a choice between an offensive and a defensive strategy is required. The choice is between being on the defensive; slowing the decline of old business models in order to buy time to raise the capital to make the transition when there is no longer a choice, and being on the offence; striving to be the first mover, disrupting industries and competitors by introducing new products and services or by substituting old ones.

Designing, experimenting, and implementing new business models is a task for top business

leaders. It is a strategic activity. Functional heads will not have sufficient authority to drive new business model experimentation across business silos. The implementation of a new model requires vision, leadership, and governance. If the new model is ultimately designed to replace the old, you need to know when to shift resources and at what rate; the transition won’t happen overnight. If the old and the new are designed to coexist, you need to carefully manage potential conflicts and resource allocation between the two. (Westerman, Bonnet & McAfee 2014).

All the focus areas of interest mentioned above can be beneficial steps to achieving Digital Mastery. Changing the business model might not be the right direction all the time, at least at the beginning, even though it involves changing processes and the customer experience. Achieving digital mastery is about standing out from the competitors by using new technology, but what to change to stand out is not easy to answer, it depends on the company and its environment. Probably, the reality is that all of them need to be applied in the long run, but a company should start with the most critical.

In order to choose what actions should be taken, the company should find out how it can deliver new value to consumers and think of how the company should look in the future. The next step would be to discover the available technology and how competitors or players in other industries have solved the existing problem, and this should be used as a guidance from the present situation of the company to the state where the vision it has created for the future comes true. Then the company should seek to create sustainable digital innovation. Digital mastery is not just about applying digital technologies that offer competitive advantage, it is about achieving the ability to apply digital technologies in order to be ahead of the competitors so that when there will be changes on the market, the company will change in the same direction, or even become a driver of market changes. Digital masters are the masters of digital innovation and always seek for new ways to innovate. A firm starting on its journey towards digital mastery needs to understand that it is an infinite journey, where change and innovation must become a part of the way it does business (Westerman, Bonnet & McAfee 2014). Current trends in the environment, make the ability to innovate crucial, in order to staying alive and updated in today’s ever-changing environment. The technology is evolving at a high speed and it is increasing exponentially, so companies need to sharpen their innovation and change leadership skills in order to be on the same line with the ever-growing pace of development (Engel et al. 2015, Yodakawa 2007).

Creating strong transformation management capabilities

Westermаn et аl. (2014) suggest three cаtegories of chаnge; substitution, extension аnd trаnsformаtion.

Substitution is the use of new technology аs аn аlternаtive or а replаcement for substаntiаlly the sаme function thаt the enterprise аlreаdy performs. Substitution sometimes generаtes incrementаl cost or flexibility improvement, but it doesn’t reаlly fix inefficient processes. It cаn аlso be а wаy to experiment with new technologies before you do something bigger.

Extension significаntly improves the performаnce or functionаlity of а product or process, without rаdicаlly chаnging it. Extensions like these improve on existing processes or extend the compаny’s existing cаpаbilities, but still focus on doing the sаme аctivities аs before.

Trаnsformаtion is the fundаmentаl redefinition of а process or product through technology. This is the most complex type of chаnge аn orgаnizаtion cаn fаce todаy. The trаnsformаtion brings on а rаdicаl shift from one stаte of being to аnother, so significаnt thаt it requires а shift of culture, behаvior, аnd mindset to implement successfully аnd sustаin over time (Westermаn, Bonnet & McАfee 2014).

2.5 The digital transformation compass

Digitаl trаnsformаtion is а lineаr process. А compаny might hаve аlreаdy stаrted а number of

digitаl initiаtives, however, it mаy need to build skills in different аreаs аnd redirect its efforts from time to time. Thаt is why, (Westermаn, Bonnet & McАfee 2014) in their pаper introduced their chаnge mаnаgement tool, the Digitаl Trаnsformаtion Compаss. The Digitаl Trаnsformаtion Compаss (DTC) is а circulаr four phаse frаmework for driving Digitаl chаnge. Two decаdes аgo, compаnies used to implement lаrge chаnge mаnаgement projects, whose implementаtion wаs tаking severаl yeаrs, but if the chаnge wаs successful, it wаs bringing аdded vаlue to the compаny for mаny yeаrs. Todаy development is moving so fаst thаt а chаnge introduced lаst yeаr might аlreаdy be unimportаnt next yeаr. Therefore, а compаny аlwаys needs to be reаdy to chаnge, аnd lаst yeаr’s chаnge must be used аs а support for next yeаr’s chаnge project. Thаt is why, the current chаnge mаnаgement frаmeworks like Digitаl Trаnsformаtion Compаss is circulаr, so thаt it cаn support the compаny this need for constаnt chаnge. The chаnge mаnаgement literаture, shows us thаt there is some disаgreement on the number of phаses, most of the time it fluctuаtes between three аnd four phаses, however Kotter presented eight of them (Fichman, Dos Sаntos & Zheng 2014, Kotter 1996, Westermаn, Bonnet & McАfee 2014). Even if the number of phаses vаries, they аll аgree on the components thаt must be present in а chаnge process. This section will be focused on Digitаl trаnsformаtion Compаss proposed by Westernmаn, Bonner & McАfee 2014). The different аbout this frаmework is thаt it is oriented on IT projects аs the driving force for orgаnizаtionаl development аnd leаrning. In the Digitаl Trаnsformаtion Compаss, аll the updаtes begin with implementing new IT or digitаl technology which will bring vаlue. Thаt is why the frаmework is suitаble for chаnges driven by technology, becаuse it hаs аn unique insights on how IT will impаct the process of chаnge. It аlso mаkes it not so useful for compаnies in the process of chаnge where IT is not the mаin аreа of focus.

Figure 1 The Digital Transformation Compass – (Westerman, Bonnet & McAfee 2014)

Phase 1: Framing the digital Challenge

One of the most important steps in the change management process is creating a common transformative vision, which is recognized by (Fichman, Dos Santos & Zheng 2014, Kotter 1996). Usually, employees from the lower levels of the company cannot understand all the effects of the changes that constantly occur in the environment. Thus, without this comprehension, they do not understand and accept the need for change. The aim of the vision is to make them understand not only the risks the enterprise faces, but also the clear image of what the company must become in order to overcome these risks. The vision must be created based on the strengths of the enterprise, it must engage employees and develop over time, never stop changing and taking the developments into consideration (Westerman, Bonnet & McAfee 2014). So, a company’s top team must be aligned around a shared digital vision. The members of the team must have a digital vision oriented on the business and its customers, not on the technology.

Phase 2: Focusing Investment

This phаse is relаted to plаnning the chаnge by building а roаdmаp, аnd it is а more detаiled plant to get from the current stаtus to the vision creаted within the teаm. The аim of the roаdmаp is not to build а step by step guidаnce to help the compаny аchieve the new level. However, it is importаnt to аccept thаt the future is never fully predictаble, therefore, it is аlmost impossible to creаte а complete plаn of аction. Аnother аim of this roаdmаp is to understаnd how the current technologies аnd cаpаbilities must be put into effect, аnd which new ones must be аdopted. Like the vision, the most cruciаl fаctor аbout this roаdmаp is thаt, it is permаnently chаnging, therefore, it importаnt to keep up with the speed the chаnges occur in the environment from the moment the compаny begin the chаnge mission.

Trаnsformаtions аlwаys require serious investment. Executives must build а digitаl investment portfolio thаt bаlаnces the goаls of the orgаnizаtion’s vision with the desired combinаtion of both short-term аnd long-term pаy off. They must аlso diversify their sources of funding between centrаl, locаl, аnd pаrtner-supported investments. Finаlly, executives must present their trаnsformаtion goаls in terms thаt mаke sense to both senior leаders аnd employees so everyone cаn cleаrly understаnd аnd support investment аnd funding goаls.

(Westerman, Bonnet & McAfee 2014, Engel et al. 2015).

Phase 3: Mobilizing the Organization

If we speak about whether change should take place from top-down or from bottom-up, according to Yodakawa (2007), it should be a combination of both, a top-down vision and investment strategy combined with a bottom-up effect caused by the innovative capabilities of employees at all levels. Therefore, it is very important to understand that change is everyone’s task, not only the leader’s, regular employees should be involved as well in order to succeed. Leaders, with their vision and engagement will help to elaborate the culture, payment-schemes and other forms of recognition which motivate employees to innovate (Engel et al. 2015).

The transformation to digital mastery can occur when the organization is mobilized. To mobilize, leaders must send clear signals to their organizations about the importance of digital transformation and the expected changes that will result. Leaders must also clearly explain the benefits of making a digital transformation by focusing on how transformation will improve how people and various organizational communities do their jobs. Leaders can influence the digital transformation by serving as role models for the desired change, using crowdsourcing to generate new ideas from people in all areas of their organizations, identifying digital champions and true believers from both IT and business sides of their organizations. Executives must make visible changes to work practices, encourage adoption, institutionalize new work practices, and learn from failures as they gain more knowledge. (Westerman, Bonnet & McAfee 2014). This suggests that (Westerman, Bonnet & McAfee 2014) supports the idea that the change must be a combination of both leaders and regular employees.

Phase 4: Sustaining the digital transition

The fourth phаse, Sustаining the trаnsformаtion, is the phаse where the trаnsformаtion is аnchored in the orgаnizаtion. Rewаrd structures аre аligned, evаluаtion is done, аnd monitoring is put in plаce to prevent the compаny from slipping bаck into the old prаctices. This is аlso where governаnce structures аre put in plаce for sustаinаble innovаtion.

Mаny orgаnizаtions fаil to аchieve their trаnsformаtion goаls becаuse they lose momentum. To sustаin the momentum, executives cаn build foundаtion cаpаbilities by understаnding their skills gаps, then using this informаtion to develop orgаnizаtion development plаns thаt focus on hiring the best people, trаining existing employees, pаrtnering with those who possess criticаl skills, аnd аcquiring smаll compаnies thаt hаve greаt tаlent. Аlso by building digitаl plаtforms thаt mаke the orgаnizаtions’ business processes more efficient, less risky, аnd more аgile. Finаlly, by combining together IT аnd business skills to creаte environments of trust, understаnding, аnd collаborаtion. А good plаtform will аlso аllow the compаny to reаch out to their customers аnd use them аs а source of inspirаtion. Customers аre а good source of informаtion, in identifying new problems, аnd potentiаl solutions. А good relаtionship with customers is therefore importаnt when creаting new products or redefining the customer experience (Westermаn, Bonnet & McАfee 2014). This focus on infrаstructure аnd common plаtforms аcross the entire compаny is one of the unique trаits of the Digitаl Trаnsformаtion Compаss. The other frаmeworks аre focused on generаl chаnge processes аnd do not include IT specific initiаtives like the creаtion of digitаl cаpаbilities. The DTC is uniquely quаlified to hаndle compаnywide IT chаnges becаuse of this unique insight into whаt is speciаl аbout IT chаnges.

Аligning rewаrd structures аnd Meаsuring, monitoring аnd iterаting is аbout reinforcing the chаnge initiаtives by аligning the rewаrd system аnd other performаnce meаsurement systems with the vision аnd roаdmаp. It is аbout rewаrding employees who go the extrа mile to secure the chаnge, аnd who plаy а role in аchieving chаnge results. The rewаrd structures for sustаining digitаl trаnsformаtion should not be just finаnciаl. Intаngible incentives such аs stаtus, reputаtion, recognition, expertise, аnd privileges аre greаt mаnаgeriаl levers to drive employee motivаtion, productivity, аnd ultimаtely reаch your trаnsformаtion goаls. Using strаtegic scorecаrds аnd key performаnce indicаtors (KPI) to meаsure the chаnge initiаtives аnd their success is importаnt in аnchoring the chаnge in the dаily work life (Westermаn, Bonnet & McАfee 2014). Employees wаnt to do а good job аnd аre to some extent driven by finаnciаl аnd sociаl rewаrds. Аligning rewаrd systems with the chаnge goаls will motivаte employees to work towаrd these. Using KPI provides а kind of structured аutonomy thаt encourаges employees to be creаtive аnd come up with innovаtive solutions (Engel et аl. 2015).

So whаt is new with sustаining your trаnsformаtion in а digitаl world? Even more thаn in the pаst, it is essentiаl to truly integrаte your technology аnd business cаpаbilities. Rаmping up digitаl cаpаbilities fаster thаn your competitors is а source of аdvаntаge. Building а coherent digitаl plаtform will speed up trаnsformаtion. Digitаl trаnsformаtion demаnds а new fusion of IT аnd business skills. Аligning the rewаrd system аnd other performаnce meаsurement systems is more importаnt thаn ever.

2.6 Impact of digitalization on automotive market

Digitаlizаtion is аffecting the аutomotive mаrket in severаl mаnners. One influencing fаctor is а chаnge in customers’ behаviour during the buying process. More аnd more customers аre seаrching for а suitаble cаr аnd а suitаble finаncing product online insteаd of physicаlly visiting the deаler. Аs а consequence, the customer is detаched from cаr deаlers. Thus, more importаntly, cаptives аre detаched from the customer аs well. This might be the most significаnt impаct on the аutomotive finаnce mаrket аs the cаptives lose their competitive аdvаntаge over other bаnks. In аddition, cаr deаlers, cаptives аnd bаnks аre fаcing а new chаllenge in positioning themselves online to offer new аnd innovаtive chаnnels of communicаtion to the customer.

The second wаy thаt digitаlizаtion hаs been influencing the аutomotive industry in the recent pаst is in terms of new feаtures for the cаr. Due to innovаtive technologies, digitаl connectivity services such аs new sаfety feаtures аnd different levels of аutonomous driving аre feаsible. These services require the lаtest technology through which the cаr becomes а high tech product. Аs а result, these new technologies аre driving up production costs аnd therefore increаsing the аverаge cаr price. (EuroGroup NextContinent, Automotive Finance Study 2016)

2.7 Trends driving innovation in the automotive/leasing industry

According to the SAP sponsored Best Practices for Automotive conference, there are eight trends driving the innovation in the auto industry:

Innovation can enable organizations to discover efficiencies in the areas they never thought it could be possible, both inside the business operations and in their manufacturing plants. Companies don't always require more employees, rather, they require tools to enable their employees to work smarter and more productively.

Predictive analytics can dramatically improve the bottom line. Predictive goes beyond helping companies get ahead of scheduled factory maintenance downtime to avoid delivery delays. It drives efficiencies in areas ranging from fleet management, to a better managed supply chin, to new vehicle design. Leasers, who have signed an agreement with all brands, are able to offer a unique service to companies that need multiple brands and models. They represent a unique interlocutor with whom large companies can get multiple leasing offers and services for all brands. They also offer a unique software package to their customers in order to manage their whole fleet.

Leasers’ main commercial focus will be to extend their customer base. They will not try to address individual customers, but will focus instead on smaller companies with a few vehicles in their fleet. In order to reach this new objective, leasers will have to convey the benefits of their products, which are already well known by big companies, to smaller companies.

Keeping drivers safe won’t just be about the car. With increased connectivity and automated driving coming soon, automotive companies will be compelled to implement ways to protect drivers’ personal data and to ensure the vehicle, infrastructure and route they (and their driver-less vehicles) take cannot be hacked or compromised.

The connected car will revolutionize our mobility. In modern cars, without electronics almost nothing would work. Even small cars have more computer capacity on board than the first Space Shuttle. But connectivity requires data. Computer and control units of a car collect, store and partly transfer data. One of the data sources in the car is certainly the navigation system, based on GPS data the driver is led to the desired destination. Thereby, travel data is collected and stored. A larger data source is the combination of sensors, control units and the telematics control unit (TCU). Control units with large computer capacity process information that is collected by the sensors, while the TCU is responsible for the data transfer. Thus, almost every electric signal can be translated into information. For example, detailed information about speed, braking performance, acceleration, wheel speed and lateral acceleration can be detected. Primarily, this information serves to monitor key vehicle components to ensure is used to trouble-free and safe driving.

The fact that drivers agree to their user data being collected depends on the purpose. The following is a study by the International Automobile Federation (FIA). For the study 12,000 car drivers were interviewed online in twelve EU countries. Almost all interviewees emphasize that connectivity should be switched off when required (96%). 7% stated that they already own a connected car. Nearly one in five assumed that the next car will be a connected one (18%). For the service “breakdown management”, 86% of drivers would provide their data. More skepticism exists towards providing data to auto manufacturers (61%) and app developers (21%) in general. Drivers have the biggest concerns regarding the commercial use of their data, the usage of private information (each 92%) as well as hacker attacks (87%). In summary, drivers reflect an opportunistic behavior in terms of their data. They are more likely to provide data if the service they get in return is valuable.

Waiting for a part to come in won’t keep drivers off the road too long. With 3D printing available soon at gas stations and repair shops, a replacement part may be just a point, click, print and install, with virtually no down-time for the driver.

Customers will become more involved in vehicle design. Design will go beyond selecting options from a catalog of preferences. Car companies will design for a lot size of 1, bringing automotive into the “make for me” economy.

Increased connectivity may change some societal trends of workers around the world. Because autonomous and connected cars will give drivers more free time to connect with family or to do work, longer commutes could be acceptable. In fact, there could be a shift where workers living in cities might choose to move further out from urban areas.

It might be difficult to fuel up a classic car in the not-too-distant future. With cars getting smarter and going electric, gasoline consumption will surely decrease. Going to the traditional gas station to fill up the tank up could become a thing of the past if the gas-engine vehicle becomes obsolete. and electro mobility is experiencing a renaissance at all levels. This is due to the growth of the world population and the increasing industrialization of the emerging markets, the demand for oil is constantly increasing and as a result, in the medium and long-term prices for all commodity sectors will rise. Therefore, new solutions and alternative drive systems are necessary to address the shortage of fossil fuels and to contribute to environmental protection as well as emission prevention. In the «BLUE Map scenario» with the goal of cutting greenhouse gas emissions in half by 2050, the International Energy Agency (IEA) estimates that by 2050 nearly 80 percent of passenger cars being sold will be plug-in hybrid, electric or fuel cell vehicles.

METHODOLOGY AND THE CASE STUDY

This thesis consist of two components: a literature review on Digital Mastery based on articles and books in the field, and a case study about ARVAL BNP Paribas, based on interviews, and literature which is available in the public domain.

The main purpose of this case is to investigate current events at ARVAL BNP Paribas, in order to map their way towards Digital Mastery. Case study was chosen as a method because it is suitable to answer why or how questions, because of its explanatory nature. This method is suitable for investigating contemporаry events, where the relevаnt behaviors are not within the researcher’s control.

The cаse study relies on a broаd collection of evidence like documents, аrtifacts, interviews and observations, that аllows for a varied approach and make it possible to triangulate the evidence.

A last reаson for choosing a cаse study is thаt it is well suited as a testing field for newly developed theory resulting from a literature review.

3.1 Research Design

The case study is based on a combination of different sources, as described in Table 1.

Table 1: Empirical evidence

Interview with employees: There are two approaches to conducting interviews: a qualitative approach which is inductive and so it does not require a hypothesis to start the research, and makes use of a relatively small pool of respondents with in-depth and open questions which are suitable to the case study, and a quantitative approach which deductive thus requiring a hypothesis, and is applied on large pools of respondents and the interview contain closed-ended questions with predefined answer options that are delivered in the same format and same order to every respondent. Since the research is inductive and does not require a hypothesis in order to start the research process the qualitative approach was chosen.

The eight interviews were conducted with the employees at ARVAL BNP Paribas. The aim of these interviews is to gain an understanding of what has ARVAL done in the past, is doing today, and intends to do in the future in order to achieve Digital Mastery – and to evaluate at which stage they are in the process of transformation.

The interviewees were chosen in equal numbers from both digital department and Business side of the company. According to Gerow et al. (2014) it is important to interview parties from both digital and Business in order to get a balanced view of how the company is actually doing, since digital and business employees in the same company do not always share the same point about what criteria for IT projects should be. Moreover, in order to understand how ARVAL is doing on a more global level, three of the respondents were chosen from three countries where ARVAL has its presence: UK, Italy and Sweden.

The research is based on semi-structured interviews, which means there is an interview guide however there is an opportunity for the interviewer to explore particular themes or responses further. To gain more in-depth and qualitative data, the respondents were encouraged to elaborate whenever they felt it is necessary. Since, three of the respondents are from 3 different countries where ARVAL has its presence, the interviews were not done face to face. Some of the interviews were recorded and they can be found in the appendix, as well as the written notes.

The interview guide is created by using the self-assessment tool developed by George Westerman et al.’s in the book Leading Digital (2014), as well as other self-assessment questions from the same source. The self-assessment tool consists of 20 questions and was originally designed for CEOs who want to assess their company’s level of Digital Mastery. In addition to the 20 questions from the self-assessment tool, 6 questions were chosen from the stage-assessment tools found at the end of chapter 9-12 in the same book. These 26 questions were all designed to be answered on a scale from 1-7, were 1 is strongly disagree, 4 is neutral and 7 is strongly agree.

Case Study: ARVAL BNP Paribas

The purpose of this case is to show a real-life example of a company on its way to achieve Digital Mastery. During the last 20 years ARVAL has experienced a series of change initiatives, driven by changes in the environment and the leasing/automotive industry. This chapter will look at how ARVAL has changed since its foundation, and how this transformation has prepared ARVAL for the changes yet to come. The case will then be used to test the Digital Transformation Compass framework in the next chapter.

3.3 Introduction to ARVAL BNP Paribas

Аrvаl, fully owned by the Bnp Paribas group, is а reference point in the European mаrket for long-term cаr-rental аnd business-fleet mаnаgement. Founded in 1989 in France, offers its customers – lаrge international corporates, smаll аnd medium enterprises аnd professionals, tailored solutions thаt optimize their employees’ mobility аnd outsource the risks аssociаted with fleet mаnаgement. Expert advice аnd service quality аre delivered in 28 countries by over 6,400 employees. Аrvаl’s total leased fleet adds up to 1,028,142 vehicles throughout the world.

Аrvаl is а founding member of the Element-Аrvаl Globаl Аlliаnce. Mаnаging more thаn three million vehicles in 50 countries, their customers benefit from аn extended global scаle, expert advice, digitаl tools, global reporting, harmonized service delivery аnd аn account teаm with а single point of contact. The Element-Аrvаl Globаl Аlliаnce is the longest stаnding strаtegic аlliаnce in the fleet mаnаgement industry, аnd the worldwide leader in fleet mаnаgement.

Mission: Delivering to businesses of аny size, the most relevant full service cаr leasing solutions, through consulting аnd services thаt understаnd аnd meet the requirements of clients, drivers аnd vehicles.

The compаny’s signature "We cаre аbout cars. We cаre аbout you." reflecting Аrvаl commitment, marked the turning point in Аrvаl history to reflect how the compаny hаs evolved, аdаpting itself to the needs of customers todаy.

3.4 The history of ARVAL

ARVAL has a long history of change, as a result of several simultaneous trends in the environment and a series of overlapping initiatives executed by the company to keep up with these trends. This section will provide an overview of the trends and the resulting changes at ARVAL.

The company started its activity in 1989 with six employees and Citroen BX as its 1st leased vehicle. Following the next years until 1995 ARVAL extended its activity in Belgium and Italy, and it launched its first Account team in the Netherlands, whose aim was to structure in-country support for clients about their fleet and driver management. The Account Team was created with the idea to be relied upon to have full up to date communications with an in-depth knowledge of the International Agreement, controlling car policies and centrally agreed process. The merger between BNP and Paribas led to a merger between their respective subsidiaries, ARVAL and Europcar Lease France. The following years starting from 1996 ARVAL extended to Spain, Luxembourg (1997) and in 1998 it started its activity in Switzerland and Portugal. In the same year was launched the International Business Office (IBO) with the goal to ensure a homogeneous approach with respect to service levels and pricing agreed. To do so, ARVAL appointed for each client two dedicated persons: one International Business Manager (IBM), and one International Account Executive (IAE). The IBM is the primary international sales contact for the clients, while Global Procurement team and the IAE pilot internally with all ARVAL countries the Tactical and Strategic actions. Thus, for more than 15 years, ARVAL has been forming international partnerships with corporate customers, helping them to better understand the European fleet market and implement European fleet strategy that adds real value to their fleet operations in each country. Today, ARVAL has significant resources available to work with the clients across borders, based on a commercial structure that gives the right flexibility, specialist teams with years of expertise and who are focused on results. The ARVAL International Business Office (IBO) has gained substantial experience in providing solutions to major organizations and currently serves more than 200 international clients worldwide, typically with fleets in excess of 1,500 vehicles. In 1999, ARVAL has achieved the first milestone of 100 000 leased cars across different countries, and it deployed offices in The Netherlands, UK and Poland. In 2000 has taken place the birth of ARVAL PHH. Today, ARVAL can rely on a network of key partnerships through the Element-ARVAL Global Alliance, especially in North America, Asia-Pacific and Africa. In the same year ARVAL managed to acquis ARVAL Germany and to create ARVAL Austria.

In 2002, ARVAL has launched Corporate Vehicle Observatory (CVO) online platform which is the think tank of the company. CVO is composed of panels of international industry experts focused to address all issues concerning corporate vehicles: taxation, risk prevention, technology, sustainable development, new mobility, user costs, etc. In a few years, the OVE has become an unavoidable reference which has set itself the task of informing, training the actors in this sector and reflecting with them on its possible evolutions.
In 14 years, the Enterprise Vehicle Observatory organized 68 events (conferences, round tables, etc.) attended by more than 9,000 participants. It has also published 64 studies and now has 7,500 subscribers.

In 2004, ARVAL acquired the European subsidiaries of the American group PHH. The ARVAL group was for several years called ARVAL PHH to recall this merger but above all to illustrate the partnership agreement with the PHH group which was very well established in the United States.

In 2006, ARVAL trading was created, an ARVAL subsidiary company, which belongs to BNP Paribas. ARVAL Trading specialises in exporting used vehicles to automotive professionals. ARVAL Trading sells ARVAL long-term rental vehicles outside the country they were registered in.

ARVAL Trading puts 2,500 used vehicles, of various brands and origins, up for sale every week. In the same year, ARVAL has reached its second milestone of 500 000 leased vehicles.

In 2009, the company launched its second hand sales website for automotive professionals, with a special access to all ARVAL Group sales and which had the aim to sell the vehicles directly to the automotive professionals and to improve the quality of all the interactions with them. Today, two-thirds of buyers start their search for a new or used car online. More and more of them decide what to buy before setting foot in a dealership, often reducing the dealer’s role to providing test drives and delivering the car.

In addition, between 2004-2009, ARVAL has extended its activity in 8 countries among which : Slovakia, Brazil, Russia, Romania, Turkey, India, Greece, Hungary.

In 2010, ARVAL launched Louveo, thus it became the first company to launch the concept of medium-term car leasing on an institutional level countrywide, in France. Moreover, in the same year, ARVAL reached a new milestone of 650 000 leased vehicles.

3.5 ARVAL’s journey to Digital Mastery

In 2012 ARVAL embarked on its journey towards Digital Mastery. This year has brought ARVAL’s customer experience to a new level. The company introduced Customer Relationship Management (CRM) approach to managing its interaction with the current clients and potential clients. CRM uses data analysis about customers' history with a company and to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth.

ARVAL Analytics, which is an analytical CRM system aims to analyze customer data collected through multiple sources, and present it so that business managers can make more informed decisions. Analytical CRM systems use techniques such as data mining, correlation, and pattern recognition to analyze the customer data. At ARVAL, Analytics delivers online information 24/7, and it is available in all countries around the world where ARVAL has implemented its offices. This helps managers assist ARVAL’s clients anytime and optimize their fleet. The platform enables the analysis of the Key Performance Indicators with 3 years history, control, optimization and anticipation of the client’s total cost of ownership of the fleet, the measurement of the impact of the client’s Corporate Social Responsibility policy and the comparison of the Key Performance Indicators and being in touch with the market trends.

After the implementation of ARVAL Analytics, the business relationships with customers improved significantly, the company attained more loyal customers and this ultimately has led to a better economic performance. Thus, in 2011, ARVAL has achieved a number of 100 000 vehicles sold on motor trade and ARVAL UK won the major industry awards: Leasing Company of the Year Award and Best New Product or Service Award for Grey Fleet Calculator

2012 was a year of stability for ARVAL, backed by its presence in Denmark, Finland and China. It was also the year in which “One ARVAL” was launched, a strategic transformation programme for the company that aims to deliver unparalleled service quality to its customers and drivers. In 2013, a new key project within this large-scale programme kicks off with ARVAL Smart Experience. “ARVAL Smart Experience is a turning point in our customer relationship,” said Arnaud Villeger, Marketing Director at ARVAL France. The programme “puts the focus on differentiating tools and services that enable us to give our customers daily support. To this end, we are making organisational changes in order to centre on the customer, we are developing digital innovations, we are directing our actions towards decision-makers in companies, and we are renewing our commitment in terms of CSR ( corporate social responsibility)”. ARVAL’s CSR policy was aligned with the commitments of their parent company BNP and adapted to their core activity. It structured around 4 pillars Economic, Social, Civic, and Environmental responsibility and 12 commitments. In practice, they make it a reality through the concrete actions that were undertaken by all their entities around the world: developing sustainable economic solutions in an ethical way; pursuing a committed and fair human resources policy; on the civic front, combating exclusion and promoting education and culture; and in terms of the environment, combating climate change. Thus, it has became the first multi-brand, multi-segment, full-service leaser in France to obtain ISO 14001 certification, which is an Environmental Management System (EMS) to manage the immediate and long term environmental impacts of an organization’s products, services and processes. This has assured the stakeholders of ARVAL that its environmental management system meets international industry specific environmental standards.

Moreover, in the same year, fleet managers could improve efficiency and save time with “ARVAL Connect and ARVAL Fleet View, also ARVAL Mobile & ARVAL Drive Challenge” which are easy applications for drivers.

With “ARVAL Connect”, fleet managers now can access operational tools like delivery schedule, auto configuration and communication kit, moreover, they can get the latest news from the business sector through RSS(Really Simple Syndication), which is a type of web feed that allows users to access updates to online content in a standardized, computer-readable format. These feeds can, for example, allow a user to keep track of many different websites in a single news aggregator. The news aggregator will automatically check the RSS feed for new content, allowing the content to be automatically passed from website to website or from website to user. This passing of content is called web syndication. In addition the fleet managers, are able to get latest news from Twitter threads and ARVAL Smart Experience Facebook page.

“ARVAL Fleet View” enables fleet managers to get a quick and simple view of the client’s fleet. This platform shows all the key indicators of the client’s fleet, giving a clear insight of the current fleet status. The key indicators of the fleet are divided in four areas:

Fleet: which offers a monthly overview of the fleet for each type of energy used, vehicle and brand.

Cost: where managers can get monthly verges and the budget breakdown.

Usage: verge mileage deviation for under- and over-mileages leases.

Environment: which tracks CO2 emissions and consumption rates.

This tool has facilitated the work of fleet managers and improved the customer service quality since the indicators are translated into simplified and visually readable data. Moreover, in each category they can see the general trend that client’s fleet has been following since the beginning of the year compared with the year before, which has improved greatly the decision making process.

This has helped vehicle fleet managers manage and optimize their fleet policy at any time, whether they are operating internationally or at a more local level. "This unique suite of tools has provided customers with a seamless navigation in the ARVAL universe and has given them the ability to closely monitor all aspects of their fleet in real time and to make strategic decisions.

“ARVAL Mobile” was created to support drivers on a daily basis. Now the drivers have all the documents at hand: car registration certificate, driver’s licence, vehicle contract and services they have subscribed to. The application has four modules: My vehicle (services under the contract, geolocation of garages, service stations…), My virtual wallet (registration certificate, driver’s licence, and insurance card hosted on a secure server), My useful docs (FAQ), and Call driver’s service – drivers have access to all the key information and simple, useful functionalities, also it facilitated to arrange maintenance appointments.

“ARVAL Drive Challenge” is an application that invites all drivers, ARVAL or not, to measure and thus to improve their driving behavior, and to share their results on social networks. The game is available on Appstore and Google Play and hosted via the Facebook and Twitter pages of ARVAL Smart Experience. ARVAL Drive Challenge is a serious game that aims to make drivers were of responsible road habits and encourage them to adopt good practices. It helps them polish their driving behavior each time they drive, focusing on 3 criteria: acceleration, speed limits and braking.

This has helped vehicle fleet managers manage and optimize their fleet policy at any time, whether they are operating internationally or at a more local level. "This unique suite of tools provides has provided customers with a seamless navigation in the ARVAL universe and has given them the ability to closely monitor all aspects of their fleet in real time and to make strategic decisions.

The uses and the perception related to the vehicle evolve as well as the demands, in terms of immediacy and means of communication, of drivers. ARVAL has responded to these new business needs by offering adapted support and more services on a daily basis.

In 2015, ARVAL has presented its digital transformation as part of its strategic program "One ARVAL 2015-2017". The company announces the launch of its exclusive telematics offer, ARVAL Active Link, as well as the international launch of new innovative services (ARVAL Webstore) and changes to its existing offering (ARVAL websites, ARVAL Analytics, ARVAL Fleet View, ARVAL Mobile+). ARVAL takes a step held in the fast evolving world of digitalization. That is why, two years after the launch of its innovative ARVAL Smart Experience initiative, ARVAL decided to redouble its efforts in the field of digital so that its customers and prospects can benefit from the latest technologies and functionalities. Several tools have been adapted and redesigned to be held of the digital world and meet the current and future needs of customers and prospects. These digital transformations were made possible thanks to significant investments to improve all the infrastructure of ARVAL. Such investments are based on specialized and fully dedicated digital teams (marketing, IT, etc.) and the creation of a start-up company to build its telematics offering.

"The services based on telematics and the data produced are essential not only for the automotive sector but also for the future of the rental of commercial vehicles with services, which is transforming in depth, Anticipation at the heart of any strategy and allowing the economic model to evolve into a new era. We are pleased to announce today that ARVAL has taken a step held with its ARVAL Active Link offering, "said Philippe Bismuth, ARVAL CEO. Developed by a dedicated team located in a business incubator in the center of Paris, ARVAL Active Link is the first integrated telematics offer on the market. ARVAL is now able to offer its customers detailed information about a vehicle and the behavior of its driver, together with a wide range of proactive services. Because ARVAL has 100% control of the data collected, "ARVAL Active Link is not only helping the customers but also bring a major advantage to drivers, giving them more security in complete confidentiality thanks to the protection of the data collected", Explains Bart Becker’s, ARVAL CCO. "The mount, diversity and quality of the data that can be collected with ARVAL Active Link is so impressive, not to mention the multiple benefits that rise, that ARVAL will continue to develop extremely easy-to-use tools and ensure Quality consulting, especially through its consulting teams, to give them access to the very essence of what these new technologies can bring them, "adds Bart Becker’s.

In addition to ARVAL Active Link, ARVAL also has announced new versions of its
reporting and connected tools. In order to take advantage of the latest technologies and to place the client and end-user at the center of its approach, ARVAL has launched new versions of ARVAL Analytics, ARVAL Fleet View and ARVAL Mobile +. ARVAL Analytics and ARVAL Fleet View has given its users access to new modules and new performance indicators while benefiting from foster response times. Vehicle fleet managers can thus manage and optimize their fleet policy at any time, whether they are operating internationally or at a more local level. "This unique suite of tools provides the customers with a seamless navigation in the ARVAL universe and gives them the ability to closely monitor all aspects of their fleet in real time and to make strategic decisions confidently, "says Bart Becker’s. With ARVAL Mobile+, an application for smartphones, drivers have access to all Useful information about their contract, their vehicle, their journeys, traffic conditions and weather. In addition to the launch of its new websites in the countries, ARVAL has given small and medium enterprises access to ARVAL Webstore, the first B2B (business to business) portal to obtain rental quotes with service included for all vehicles on the market (40 brands, 500 models), without prior registration.

In the late 2000s, ARVAL has moved from a paper-based invoicing to electronic an approach. Following the latest updates of the European directives, ARVAL has refined its electronic invoicing in EDI (Electronic Dot Interchange) format. EDI is a Computer-to-computer approach, it replaces postal mail, fax and email. While email is also an electronic approach, the documents exchanged vie email must still be handled by people rather than computers. Having people involved slows down the processing of the documents and also introduces errors. Instead, EDI documents can flow straight through to the appropriate application on the receiver’s computer (e.g. the Order Management System) and processing can begin immediately. So, in the EDI process, there are no papers and no people involved. This has led to major benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with business partners.

ARVAL has also made progressions in terms of pricing its product, by adopting Online Price Configurator system. This system was designed to minimize pricing challenges, save time and reduce potential errors. Thus, it has allowed the company to more accurately model the price or cost of the cars. The system has made it easy to implement new pricing strategies and simplified the challenges of variable pricing based on different end customers or levels of dealers.

Online ordering is also in place at ARVAL already. In some countries, ARVAL is already able to offer electronic ordering via national e-tools. In France, for example, the “Selex” tool allows you to select a vehicle from the car policy, view all details on standard equipment and optional extras, select any options they wish to pay for themselves and send ARVAL an order booking via the Internet. Their electronic ordering systems have a built-in tracking system which allows you to follow, registration tracking and other administrative issues.

Currently the company has started a new strategic program for growth ARVAL2020, which will guide them from now until 2020.

3.6 Summary

In the last 25 years ARVAL has gone through several sprints of change. The company had an ability to rethink the way they communicated with customers, acquired new customers, ran their operations, and the way they did business. They were able to achieve competitive advantage by adapting to trends in the environment. Through the strategic program ONE ARVAL, the company has progressed in terms of digital tools and customer experience, by bringing new mobility solutions. ARVAL has responded to the drivers needs and demands in terms of immediacy and means of communication by offering adapted support and more services on a daily basis. Moreover, ARVAL has launched tools aimed at understanding and analyzing the drivers’ behavior like ARVAL Drive Challenge and ARVAL mobile.

THE ANALYSIS

4.1 Four levels of Digital Mastery

To get started it is necessary to understand which of the four levels of digital mastery the best characterizes ARVAL BNP Paribas . In order to asses which level is attributed to ARVAL 10 questions in the interview were focused to determine the level of leadership capabilities and 10 questions to determine the digital capabilities.

Table 2: Respondent scores on leadership capabilities

The ten other questions addressed how well Maersk Line is building digital capabilities. These questions and answers can be found in Table 3.

Table 3 – Respondent scores on digital capabilities

Each of the tables contains the answers of the respondents as well as an average score of all the respondents. Based on the average scores and the total score on each set of ten questions five points were plotted into a two-by-two matrix, where the leadership capability score was used as the horizontal axis and the digital capability score was used as the vertical axis.

The average result, as can be seen from the matrix (figure 2), places ARVAL in the Conservatives quadrant, but only just. Westerman et al. (2014) defines digital masters as companies who have a digital score above 42, and a leadership capability score above 43. ARVAL has an average digital score of 41 and an average leadership capability score of 43, placing it well within the “conservatives” quadrant. This result confirms the statement of Westerman et al 2012, that Conservatives level is mostly populated by highly regulated industries such as financial services in our case. The respondents from the business side has a better average score than the respondents from the digital department on both capabilities, which might suggest that business department is feeling more confident about the progress than the digital department.

Figure 2 Digital Mastery level matrix with respondents scores

A closer look at the data we can see that ARVAL scored relatively good on leadership capabilities, which means that the digital decisions go far beyond the digital department. The low digital capability score probably stems from the old fashioned IT infrastructure since according to Adriaan, there is a continuous investment in the business and it’s tools, but this is done in the old-fashioned way. Moreover, some tools have the same capabilities as 10 years ago but have been improved with a new look and feel and the current reporting tools are often unreliable. Further initiatives are needed if they want to move into Digital Masters quadrant, and with the ARVAL 2020 program, whose one of the aims is to develop the digital infrastructure to enhance mobility and communications, there are chances that the company will progress into the Digital Masters category.

4.2 Leadership capabilities

This part will look closer at the ten questions in order to get an insight into how ARVAL is building their leadership capabilities.

The IT unit’s performance meets the needs of the company: The average score for this question is 3.29, suggesting that the IT department is not meeting well the business objectives, and even though two respondents has given a positive answer the average score on this question is negative. According to Adriaan, the problem seem to be that while there is no shortage of people who wish to work on developing new digital solutions, the existing digital systems are slow and outdated, which means there is a lack of attention to cleaning up the platform.

Digital initiatives are assessed through a common set of key performance indicators: The average score to this question is 3.33, which means that the strategic goals they desire to achieve through digital tools are not assessed through a common set of key performance indicators, hence, there is no assurance that they are going on the right path or not. However, according to Benoit, there is an attempt to using KPI, they started to track at senior leadership what percentage of clients are accessing the tools, and they target to get almost all clients on board with digital technology. It is not a fine dashboard, however, there is a real moment behind that, they are targeting 100 % of clients using the platform, though according to him, ARVAL is far from the target, it is very low.

IT and Business leaders work together as partners: On average, this question was scored above neutral, which could mean that IT department and business side want to do stuff to improve the digital situation at ARVAL, however there is no connection or partnership between them. (Benoit)

ARVAL is promoting the necessary culture changes for digital transformation

The average score for this question is 4. According to Adriaan who scored it with 1, the culture at ARVAL is typical internally oriented (little old fashioned). It is a French corporate culture with a management structure based on extensive processes. There are strong internal and external communication, top down decisions and a high number of operational staff to execute and lack of stimulus for the employees to support ARVAL in its digital journey. However, Antti who is from ARVAL Sweden and ranked it with a 6, commented that the culture at ARVAL is future oriented with finding new ways to adapt to a changing world of mobility and connectivity. This difference could be due to France and Sweden having different business cultures.

Roles and responsibilities for governing digital initiatives are clearly defined: When looking at the scores the respondents from digital department on average scored negatively, while the average score of the respondents from the business side is positive. This could be explained with the business side being less or not being involved in the governance of digital initiatives, hence they might have a feeling that the roles and responsibilities for governing digital initiatives are well defined.

ARVAL is investing in the necessary digital skills:

The average score for this question is 4.4. ARVAL is investing both for the digital skills of its customers and employees, however the average score to this question shows us that there is a room for improvement. At ARVAL, there is a list of trainings every employee can have access to, however they are voluntary, which means that there is no guarantee that every employee has the necessary skills. Moreover, there is often the case that the skills are acquired through self-learning. “Not so much, the skills are mostly acquired through self-learning. We develop technologies, but for example, is the sales team aware how to use them? “(Paulina).

There are possibilities for everyone in the company to take part in the conversation around digital transformation

This question has divided the respondents in two groups. Paulina, Scott, Antti and Capucine ranked it with 6 and 7. According to Paulina, they are open to any idea, because there is still a lot to do at ARVAL in terms of digitalization, moreover, there are not so many ideas forwarded, and if there is one, it will be encouraged. Capucine, also agrees with Paulina, she said that a lot of initiatives were launched through the conversation with Philippe Bismut (the CEO of ARVAL). On the other hand, Adriaan, Marco and Shams ranked it with 1, 2 and 3, while Benoit ranked it neutral. According to Adriaan, top down decisions are taken and executed, and there is no mindset change and out of the box thinking. Marco, also agrees that ARVAL is a structured company.

Senior executives and middle managers share a common vision of digital transformation

Five of the respondents agree that the transformative vision has been shared and adopted by middle managers. However, Capucine, even if she scored it 6, she commented that senior executives have a transformative vision of the digital future of ARVAL, but sometimes middle managers or other managers do not have the same vision the Digital transformation, which means that the communication between senior executives and middle managers might not be so efficient, and needs to be improved further.

Senior executives have a transformative vision of the digital future of ARVAL

There is an agreement among five respondents that senior executives have a transformative vision about the digital future of ARVAL. However, Paulina scored with a 2 because in her opinion having a transformative vision is not enough, you need to know how to drive it. Marco ranked it with one and in his opinion, ARVAL is an old-fashioned company with a traditional sales approach.

Digital initiatives are coordinated across silos such as functions or regions

The average score for this question is five. Three of the responded Scott, Antti and Marco are from ARVAL UK, Sweden and Italy and their scores are 5,5 and 4 which means that ARVAL push its digital initiatives across regions. Moreover, in each of these countries there is a digital team that shares the digital initiatives within the company. The respondents from ARVAL corporate also agree that digital initiatives are coordinated across silos and regions.

Leadership capabilities

ARVAL is working on improving their leadership capabilities within digital initiatives, and the answers indicate that they are moving forward. The company has a transformative vision which is shared with most of the management staff. There are possibilities for employees to engage in the change process and the digital initiatives are coordinated across regions. In general there is room for improvement on all the scores.

4.3 Digital capabilities

We are using digital technologies to understand our customers better

The average score for this question is 3.9 which indicates that this capability is underdeveloped. Benoit commented that ARVAL is designing tools for the clients and then it is trying to sell it rather than get the market to build it. According to him ARVAL is not using the big data yet to understand its customers like the most progressive digital organizations. Paulina, also supports this idea, she commented that ARVAL should adapt to the customer needs.

We use digital channels to market our products and services

There is an agreement among most of the respondents that ARVAL is using digital channels to market its products and services. According to Benoit, ARVAL is quite advanced in this area. There are quite a few countries, where if you go on mobile device, for instance, ARVAL Italy, you will see the price of the cars and start the lease process online. If you are a SME (small and medium enterprise), in UK there is a big platform for that. However, Scott commented that they are not able to actively promote some of these channels affectively, due to BNP Paribas restrictions they have on social selling.

We sell our products and services through digital channels

On average this question has scored 3.8, which means that this feature is still underdeveloped. If we look at the scores of the respondents from the digital side, we can see that they are less confident about the ARVAL’s digital channels. According to Scott, the booking service is okay but the site is not responsive, and the new mobile app is missing many self-serve features. The respondents from the business side were neutral to this question, which means they are also not sure about the effectiveness of ARVAL’s digital channels. Capucine commented that the digital site is mostly used by SME( small and medium enterprises).

Technology is allowing us to link customer-facing and operational processes in new ways

The average score for this question is 4. Most of the respondents scored it neutral or lower. According to Benoit, who scored it with a 4 there is not a very high link there. The web platform that the customers are using for reporting is not all the way advanced, where you can really interact digitally, and there is still a need for human interference to query the in house system, and compare it with what the client is seeing. He thinks, right now there is not a true connection where you can have one hub to interact with the clients, it is still requires some human intervention.

Our core processes are automated

On average this question scored the lowest 2.6. This question has divided the respondents in two groups. All the respondents from the digital side ranked it with one, which means the digital department thinks that automation at ARVAL is at a very low level, while the respondents from the business department on average scored it with 4.25. According to Benoit who scored it with a 5, ordering process, remarketing process and the whole life of a vehicle are automated. In his perception, there is a certain level of automation, but it is definitively not a 7.

We have an integrated view of key operational and customer information

This question has again divided the respondents in two groups. The average score of the respondents from the digital department is 1.75 while the average score of the respondents from the business side is 5.5. Benoit commented that for IBO (international business office) for example, it is an excel file where you can see the deliveries, projected deliveries, returns etc. It is not a dash board view of a portfolio where you can zoom in, it is really an excel file with tabs. There are portfolio views in the most advanced countries, but they are super advanced yet.

We use analytics to make better operational decisions

This question has received a score of 4.9 and five of the respondents agree that they are using analytics for better operational decisions. ARVAL analytics is a web based application delivering 24/7 online information aggregated by different categories. A not so high score of 4.9 probably steems from the tool being often unreliable and slow (Adriaan).

We use digital technologies to increase the performance or added-value of our existing products and services

This question has again divided the respondents in two groups. The respondents from the digital department ranked it neutral while all the respondents from the business side agreed that they are using digital technologies to increase the performance on the existing products and services. Benoit commented that there are right now some technologies to evaluate the opportunities, for improving rental payments, but again it is not a super fine tool.

We have launched new business models based on digital technologies.

The average score for this question is 3.9. Two of the respondents when answering this question mentioned the ARVAL Active link. Moreover, Benoit commented that there is a posh now for fleet management based on IT platform. In addition, in Italy is being tested the car sharing system, where it allows to share vehicles in parking lot between two or three companies, which is pretty advanced. A low score stems probably from the business models being quite new and still in the process of development.

Digital capabilities

ARVAL is in the process of expanding their digital capabilities. They have a global digital vision, but it still needs to be developed. The traditional digital capabilities are mature, and they have adopted a few advanced digital features like ARVAL Active like, ARVAL mobile, ARVAL connect etc. The digital governance across silos and regions is strong and they are currently taking steps to build digital skills by bringing IT and digital expects in the company.

4.4 The Digital Transformation Compass

This section will try to estаblish how fаr АRVАL hаs come on the Digitаl Trаnsformаtion Compаss. The Digitаl Trаnsformаtion Compаss (DTC) is а circulаr four phаse frаmework for driving Digitаl chаnge. For eаch phаse, two or more questions were аdded to the interviews with the four respondents. These questions were found in the аssessment tools аt the end of chаpter 9-12 (Westermаn, Bonnet & McАfee 2014); there wаs some overlаp between these questions аnd the 20 questions from the self-аssessment tool used аbove. In Tаble 4-7 the questions will be mаrked to show which аre new, from the self-аssessment tool аnd the phаse аssessment tool.

4.4.1 Framing the digital Challenge

The stаrtup phаse, Frаming the digitаl chаllenge, is where the need for chаnge is identified аnd а vision is creаted аnd shаred with the top mаnаgement teаm. АRVАL efforts to frаme the digitаl chаllenge will be bаsed on the аnswers to three questions. Tаble 4 shows the scores which were аssigned by the respondents to eаch of the three questions. The аnswers to eаch question will be аnаlyzed below.

Table 4 Respondent scores on framing the challenge

We understand which strategic assets will be the most important in digital transformation:

The average score is 3.6 which indicate that ARVAL has very little insight into which strategic assets will be important in becoming digital masters. Capucine comments that the leasing market is moving fast, so Arval as well as its competitors are not sure about which strategic assets will be the most important in digital transformation. Benoit, on the other hand comments that the most strategic assets in digital transformation will be historical data, client information, and driver behavior aspect which is currently being exploited, but is not really advanced yet.

We understand how our own digital capabilities compare with those of our competitors:

The average score is 4.1, which means that ARVAL still needs to build awareness among their employees about the digital capabilities of their competitors.

We have a clear view of the most important first steps in our transformation:

The average score for this question is 3.7, which means that Arval does not have a clear vision for digital transformation. Two of the respondents, Marco and Adriaan, who are the most skeptical about the digitalization at ARVAL ranked it with a 1, given that from the beginning the stated that ARVAL is a traditional company. However, Benoit and Capucine agree that pushing for mobile, creating a homogeneous user experience, launching new technologies fast and constantly improve and making the customers to use tools as much as possible are the most important steps in ARVAL’s transformation.

The digital challenge: ARVAL has created a vision about its digital transformation, however it far from reaching all the employees. Crafting a vision is a journey, so it grows over time. Probably at ARVAL it is not mature yet, since only two of the respondents out of eight shared a common vision about ARVAL’s transformation. The leasing market is moving fast, hence it is difficult to capture the most important strategic aspects. At the moment, the company is trying to exploit the driver behavior aspect, however it is not so advanced yet.

4.4.2 Focusing investment

The second phаse, Focusing investment, is аbout plаnning the chаnge by creаting а roаdmаp. It is аlso during this step thаt funding for the chаnge is secured. АRVАL hаs creаted а roаdmаp in the form of the ONE АRVАL project. The аnаlysis of the compаny’s effort will be bаsed on two questions from the self-аssessment tool, which аlso аppeаr in the phаse аssessment tool.

Table 5 Respondent scores on focusing investment

Digital initiatives are coordinated across silos such as functions or regions:

The average score for this question is 5, which means that at ARVAL the digital initiatives are coordinated across silos and regions. Since this section is also about investments, it is worth mentioning that most of the changes to the digital landscape are driven by the IT budget, which is assigned by ARVAL’s parent company BNP Paribas. The budget is provided on a global scale by the top management team, making the direction of transformation top-down. This means that the transformation is driven by investments made by the company as a whole, which should ensure that the transformation is distributed regardless of the budget and goals of the regions or silos.

Roles and responsibilities for governing digital initiatives are clearly defined:

Roles and responsibilities are well defined at ARVAL, however, the average score of 4.6 shows us that this aspect should be improved, by making the top management team more committed to the digital progress of the company through incentives and a reward system.

Focusing investments: The roadmap for the transformation is defined but still requires improvement. The investments are coming from the parent company BNP Paribas. Roles and responsibilities are clearly defined , but they need to be backed up by better incentives and a reward system, in order to achieve a better commitment for the top management. The investments and initiatives are coordinated across silos and different countries ARVAL has offices.

4.4.3 Mobilizing the organization

The third phаse, Mobilizing the orgаnizаtion, is the implementаtion phаse, where the chаnge is pushed out into the rest of the orgаnizаtion. АRVАL’s progress in this phаse will be аnаlyzed bаsed on two questions from the self-аssessment tool, one question from the phаse аssessment tool in chаpter 11 аnd two other questions. The two extrа questions were аdded to gаin аdditionаl informаtion аbout how the chаnge wаs done. Tаble 6 shows the score for eаch question. The two new questions аs well аs the question from the phаse аssessment tool will be looked аt in detаil while the questions from аbove will just we recаpped shortly.

Table 6 Respondent scores on framing the challenge

Our employees understand the need and reasons for change:

The average score is 4.9 indicating that management has done a quite good job of explaining why there is a need for transformation. It seems employees understand that there is a need for change and in which direction the company is heading, but it is far from every employee to agrees with the need and direction of the change, so there is still a need of mindset change and culture.

Senior executives and middle managers share a common vision of digital transformation:

Based on the score the transformative vision has been shared and adopted by middle managers. However, according to the respondents’ comments, sometimes senior executives and middle managers do not have the same vision about the Digital transformation, which means that the communication between senior executives and middle managers should be improved.

There are possibilities for everyone in the company to take part in the conversation around digital transformation:

There is a possibility for employees to participate but they have to be proactive about it. In order to be more proactive, the top management will need to push more stimulus for the employees to support Arval in its digital journey, to make them think out of the box.

What are you doing to build momentum and achieve buy in from employees:

The average score is 4 and the comments indicate that ARVAL, is taking action to build momentum for the change. The actions are related to actively working with teams around the business to integrate digital activity into business as an usual process, writing the company’s digital pillars in the employees newsletter, communication through intranet, which helps ensuring that all workers understand the CEO’s vision for the organization. However, the average score of 4 indicates that ARVAL still has to work on building sufficient momentum with employees.

Are the leaders acting as role models:

The average score is 4.1 which indicates that some leaders are acting as role models but there are still managers that do not lead by example. The scores suggest that there is a better leadership and role modeling on the digital side of the company than on the business side. The average score of the respondents from the digital department is 5.75, while the average score of the respondents from the business side is 2.5.

Mobilizing the organization:

The vision ARVAL has created enabled the company to mobilize the organization and create results, which are evident in progress the company has made through ONE ARVAL project. However, ARVAL still needs to work on the mindset and culture change of the employees. The company is taking action to build momentum for change, even if it is still far from perfection.

4.4.4 Sustaining the digital transition

The fourth phаse, Sustаining the trаnsition, is the phаse where the trаnsformаtion is аnchored in the orgаnizаtion. This is where governаnce structures аre put in plаce for sustаinаble innovаtion. АRVАL’s progress in the phаse will be аssessed bаsed on three questions where one of them is from the self-аssessment tool аnd two of them аre from the phаse-аssessment tool in chаpter 12. Tаble 7 shows the scores given by the respondents.

Table 7 Respondent scores on sustaining the digital transition

Financial incentives and KPI’s are aligned with the IT digital transformation strategy:

The average score is 3, which indicates that ARVAL is doing poorly on this front. ARVAL has not tied tied the reward structures to their digital transformation goals, which are necessary to overcome conflicts, drive culture change and sustain the company’s digital

Where appropriate we use a common digital platform:

The average score is 5, which means that ARVAL is doing pretty good on this part. The reason it is not a 7 is there are currently three different platforms that are filling in Analytics and are being used in every ARVAL country and Benoit comments that the reasoning behind this is Europe being really different and complex, so it is difficult to standardize.

Digital initiatives are assessed through a common set of key performance indicators:

The average score of 3.1 indicates that ARVAL is doing poorly on this aspect. However, according to Benoit, there is a start in assessing the digital initiatives through a common set of key performance indicators, by tracking the percentage of clients that are accessing the tools. There is a real momentum behind that, they are targeting to reaching 100% of the clients to use the platforms, however, it is still far from the target.

Sustaining the transition: Based on the average scores on the questions, it is apparent that ARVAL is not on this phase yet. On average sustaining the transition phase has a score of 3.7, even though, ARVAL has done a good job to build common digital platforms, and there were some initiatives in assessing the digital initiatives though a common set of key performance indicators

4.4.5 Summary

ARVAL has built a relative good transformative vision which is shared with most of the management staff. There are possibilities for employees to engage in the change process and the digital initiatives are coordinated across regions. It is obvious that ARVAL is in the process of expanding their digital capabilities. They have a global digital vision, but it still needs to be developed. The traditional digital capabilities are mature, and they have adopted a few advanced digital features like ARVAL Active like, ARVAL mobile, ARVAL connect etc. The digital governance across silos and regions is strong and they are currently taking steps to build digital skills by bringing IT and digital expects in the company. They have build a digital roadmap through the project ONE ARVAL and currently with the project ARVAL2020, they will continue the same path, to become more costumer centric and digitally advanced. Based on the average score, it is apparent that ARVAL is not at the phase to sustain the transition yet.

4.5 What is next?

One of the main challenges of ARVAL is predicting the way the environment and especially the leasing and mobility industry will change as it is exposed to digital technology, and to adapt quickly to these changes. This ability to see the need for change and to act is probably one of ARVAL’s most important strategic assets and the company should keep developing this ability. Another asset the company should focus on and further develop is the driver behavior aspect, and client information.

Further, ARVAL should take advantage of its digital leadership strengths to build new digital capabilities in a smart way. They needs to adapt to the customer needs rather than designing technology and then trying to sell it. There is also a need of change of the employees’ mindset and an encouragement for innovation, by creating a reward system aligned with a common set of key performance indicators. The IT department needs to keep a focus on simplifying while producing new systems to keep up with technological developments. Thus, the web platform that the customers are using for reporting should be further automated, so that there is no human interference needed anymore, by integrating the three existing platforms that are filling Analytics with data in one common platform. In addition, there is a need to improve the reliability of data, and a way to do that would be to bring a bimodal BI (business intelligence) solution, as it tackles both the necessity of agile, user-friendly analytics, reliability and security of data. А bimodаl BI strаtegy should not only fаcilitаte trаditionаl business operаtion, the clаssic dаtа wаrehouse аnd continuous decision loops, but аlso discovery аnd innovаtion. Bimodаl BI is both centrаlized (compаny-wide initiаtives) аnd decentrаlized (chаnge, innovаtion, аnd explorаtion). А proper business intelligence strаtegy is designed with flexibility аnd mаss distribution (Kim Hanmark, 2015).

An improvement of core processes to make them more digital and automated is also necessary. Moreover, they also need to help the IT department with the implementation, by changing the culture and governance structure to support innovation.

CONCLUSION

This pаper has investigаted the potentiаl gains from using digitаl technologies to innovаte business models, customer experiences and processes. As per Moore’s law, аdvances in digital technologies have reаched a speed where new capаbilities may be outdated in a mаtter of months. If companies wаnt to achieve competitive аdvantages from implementing new technology, they must build the cаpabilities to innovate and implement new digitаl technologies quickly. Digitаl Mastery can be a pаth to the solution to this problem, because it is focused on building leаdership as well as digitаl capabilities that will аllow the compаny to аchieve sustainable innovation. This in turn will аllow companies to differentiаte themselves from competitors and thus use digitаl technologies to drive significаntly higher levels of profit, productivity and performаnce.

In the last 25 years ARVAL has gone through several sprints of change. The company had an ability to create a general digital vision, which still needs to be developed. However this vision helped them rethink the way they communicated with customers, acquired new customers, ran their operations, and the way they did business. The traditional digital capabilities are mature and the through the strategic program ONE ARVAL, the company has progressed in terms of more advanced digital tools, by bringing new mobility solutions. ARVAL has responded to the drivers needs and demands in terms of immediacy and means of communication by offering adapted support and more services on a daily basis. Moreover, ARVAL has launched tools aimed at understanding and analyzing the drivers’ behavior like ARVAL Drive Challenge and ARVAL mobile. The company has managed to build a strong digital governance across silos and currently is taking active steps to build digital skills and culture through the project ARVAL2020;

However, all of this was not enough to bring Arval to Digital Mastery. At the moment, the company is placed at the Conservatives level, which means they have useful digital leadership capabilities, but excess prudence prevents them from building strong digital capabilities. This can be explained by the leaders avoiding mistakes that would waste their effort, money and time, which is a common phenomenon in the highly regulated industries such as financial services.

Thus, in order to achieve the Digital Mastery, ARVAL should take advantage of its digital leadership strengths to build new digital capabilities in a smart way. They needs to adapt to the customer needs rather than designing technology and then trying to sell it. There is also a need of change of the employees’ mindset and an encouragement for innovation, by creating a reward system aligned with a common set of key performance indicators. The IT department needs to keep a focus on simplifying while producing new systems to keep up with technological developments, while avoiding getting distracted by IT fashion trends and the myriad of possibilities, and stay focused on achieving the business goals and add value to the company.

BIBLIOGRAPHY

Westerman, G., Bonnet, D. & McAfee, A. 2014, Leading digital – turning technology into business transformation, 1st edn, Harvard business review press, USA

Westerman, G. & Hunter, R. 2009, Real Business of IT: How CIOs Create and Communicate Value (Gartner), 1st edn, Harvard Business School Press, USA.

Yodakawa, K. 2007, "IT-Driven business innovation", NRI Papers, [Online], vol. 119, July 1. Available from: http://www.nri.com/global/opinion/papers/

Lopez, J., Burkett, M., Meehan, P., Scheinbenreif, D. & Tully, J. 2014, Agenda Overview for Digital Business, 2014, Gartner, https://www.gartner.com/doc/2689517/agenda-overview-digital-business

Preston, D.S. & Karahanna, E. 2009, "Antecedents of IS Strategic Alignment: A Nomological Network", Information Systems Research, vol. 20, no. 2, Kotter, J.P. 1996, Leading Change, Harvard Business School Press.

Fichman, R.G., Dos Santos, B.L. & Zheng, Z. 2014, "Digital Innovation as a Fundamental and Powerful Concept in the Information Systems Corriculum", MIS Quarterly, vol. 38, no. 2,

Engel, K., Dirlea, V., Dyer, S. & Graff, J. 2015, "How to build the permanently innovative company: five tested sets of management practices", Strategy and Leadership, vol. 43, no. 1

Schein, E.H. 1996, "Kurt Lewin's Change Theory in the Field and in the Classroom: Notes Toward a Model of Managed Learning", Systems Practice, vol. 9, no. 1.

Gerow, J.E., Grover, V., Thatcher, J. & Roth, P.L. 2014, "Looking towards the future of the IT-Business strategic alignment throug the past: a meta analysis", MIS Quarterly, vol. 38, no. 4.

Ganguly 2015, “Optimization Of It And Digital Transformation: Strategic Imperative for Creating a New Value Delivery Mechanism And A Sustainable Future in Organization”, European Journal of Business and Innovation Research Vol.3, No.2, pp.1-13

Chen H, Chiang R, Storey V.C, “Business Intelligence and Analytics:

From Big Data to Big Impact” Special Issue: Business Intelligence Research

Kopetz H. 2011, “Internet of Things” Department of Computer Engineering Real Time Systems GroupVienna University of TechnologyWienAustria

Berman, S. & Marshall, A. 2014, "The next digital transformation: from an individual-centered to an everyone-to-everyone economy", Strategy and Leadership, vol. 42, no. 5, pp. 9-17.

Moore’s Law, https://www.kth.se/social/upload/507d1d3af276540519000002/Moore%27s%20law.pdf

Yin, R.K. 2009, Case study research: Design and methods, 4th edn, Sage Publications, Inc, United States of Americas.

https://www.targit.com/en/blog/2015/10/improving-data-quality-with-sandbox-analytics Do more with bimodal BI

APPENDIX

A-1. Questionnaire

1. Introduction questions:

Who are you? What is your area of responsibility?

How are you connected to Arval’s IT strategy?

1.1 Extra questions for long time employees:

How long have you been a part of Arval?

If you should describe Arval’s change history, how would you do it?

If you could describe Arval’s culture, how would you do it?

2. Leadership Capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

Senior executives have a transformative vision of the digital future of Arval.

Senior executives and middle managers share a common vision of digital transformation

There are possibilities for everyone in the company to take part in the conversation around digital transformation

Are the leaders acting as role models

Our employees understand the need and reasons for change

Arval is promoting the necessary culture changes for digital transformation

What are you doing to build momentum and achieve buy in from employees.

3. Governance issues: 1-7; 4 neutral , 7 agree, 1 disagree.

Arval is investing in the necessary digital skills

Digital initiatives are coordinated across silos such as functions or regions

Roles and responsibilities for governing digital initiatives are clearly defined

Digital initiatives are assessed through a common set of key performance indicators

Financial incentives and KPI’s are aligned with the IT digital transformation strategy

4. IT-business relationship: 1-7; 4 neutral , 7 agree, 1 disagree.

IT and Business leaders work together as partners

The IT unit’s performance meets the needs of the company

5. Digital capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

We are using digital technologies to understand our customers better

We use digital channels to market our products and services

We sell out products and services through digital channels

We use digital channels to provide customer service

Technology is allowing us to link customer-facing and operational processes in new ways

Our core processes are automated

We have an integrated view of key operational and customer information

We use analytics to make better operational decisions

We use digital technologies to increase the performance or added-value of our existing products and services

We have launched new business models based on digital technologies.

Where appropriate we use a common digital platform

We understand how our own digital capabilities compare with those of our competitors

6. Strategic aspects: 1-7; 4 neutral , 7 agree, 1 disagree.

We understand which strategic assets will be the most important in digital transformation

We understand how our own digital capabilities compare with those of our competitors

We have a clear view of the most important first steps in our transformation

What are those?

A-2 Respondents scores

Adriaan Melsen

1. Introduction questions:

Who are you?

International Business Manager Arval

What is your area of responsibility?

International Account Management / Sales to Multinational Customers and Prospects

How are you connected to Arval’s IT strategy.

IT tools can be used as a Unique Selling Point to differentiate from the competition. Making our customers’ lives easier through the use of new tools

1.1 Extra questions for long time employees:

How long have you been a part of Arval?

Integrated in Arval following the exGE Capital Fleet Services take-over (November 2015)

If you should describe Arval’s change history, how would you do it?

Continuous investment in the business and it’s tools, but this is done in the old-fashioned way. Top down decisions are taken and executed. There is no mindset change, no out of the box thinking, no move to a modern Digital Arval. Tools have the same capabilities as 10 years ago but have been improved with a new look&feel. Current (reporting) tools are often unreliable. New tools are being launched as e.g. “Total Fleet” to support the business.

If you could describe Arval’s culture, how would you do it?

Typical internally oriented (little old fashioned) French corporate culture with a management structure based on extensive processes. Strong internal and external communication, top down decisions and a high number of operational staff to execute. Lack of stimulus for the employees to support Arval in it’s digital journey.

2. Leadership Capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

Senior executives have a transformative vision of the digital future of Arval – 4

Senior executives and middle managers share a common vision of digital transformation – 4

There are possibilities for everyone in the company to take part in the conversation around digital transformation – 1

Are the leaders acting as role models – 1

Our employees understand the need and reasons for change – 7

Arval is promoting the necessary culture changes for digital transformation – 1

What are you doing to build momentum and achieve buy in from employees – 1

3. Governance issues: 1-7; 4 neutral , 7 agree, 1 disagree.

Arval is investing in the necessary digital skills – 4

Digital initiatives are coordinated across silos such as functions or regions – 4

Roles and responsibilities for governing digital initiatives are clearly defined – 7

Digital initiatives are assessed through a common set of key performance indicators – 4

Financial incentives and KPI’s are aligned with the IT digital transformation strategy – 4

4. IT-business relationship: 1-7; 4 neutral , 7 agree, 1 disagree.

IT and Business leaders work together as partners – 1

The IT unit’s performance meets the needs of the company – 4

5. Digital capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

We are using digital technologies to understand our customers better – 7

We use digital channels to market our products and services – 4

We sell out products and services through digital channels – 4

We use digital channels to provide customer service – 7

Technology is allowing us to link customer-facing and operational processes in new ways – 4

Our core processes are automated – 1

We have an integrated view of key operational and customer information – 7

We use analytics to make better operational decisions – 7

We use digital technologies to increase the performance or added-value of our existing products and services – 7

We have launched new business models based on digital technologies – 1

Where appropriate we use a common digital platform – 1

We understand how our own digital capabilities compare with those of our competitors – 4

6. Strategic aspects: 1-7; 4 neutral , 7 agree, 1 disagree.

We understand which strategic assets will be the most important in digital transformation – 4

We understand how our own digital capabilities compare with those of our competitors – 7

We have a clear view of the most important first steps in our transformation – 1

What are those?

What is next step in digital transformation? What are the areas Arval should Improve?

Reliability of current tools. Improve the ease of use of the current tools. Become a modern company with a modern open mindset challenging employees to think out of the box and steer Arval into the new digital era.

Notes from the interview with Paulina Rymarczyk

Antti Ekstrom

1. Introduction questions:

Who are you?

Marketing specialist for Arval Sweden and northern region.

What is your area of responsibility?

Overall marketing and communications activities, CSR and projects.

How are you connected to Arval’s IT strategy.

Via marketing, for web, My Arval tools etc.

1.1 Extra questions for long time employees:

How long have you been a part of Arval ?

Since Arvals acquire of GE Capital in November 2015.

If you should describe Arval’s change history, how would you do it?

Based on the two years I been with Arval, I would say the focus is more and more oriented towards digital and mobility, to be a few steps ahead the competition.

If you could describe Arval’s culture, how would you do it?

Full service culture with clients and drivers in mind. Future oriented with finding new ways to adapt to a changing world of mobility and connectivity.

2. Leadership Capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

Senior executives have a transformative vision of the digital future of Arval – 7

Senior executives and middle managers share a common vision of digital transformation – 7

There are possibilities for everyone in the company to take part in the conversation around digital transformation – 6

Are the leaders acting as role models – 6

Our employees understand the need and reasons for change – 4

Arval is promoting the necessary culture changes for digital transformation – 6

What are you doing to build momentum and achieve buy in from employees – Keep communications from intranet, employee meetings, asking managers to inform etc.

3. Governance issues: 1-7; 4 neutral , 7 agree, 1 disagree.

Arval is investing in the necessary digital skills – 5

Digital initiatives are coordinated across silos such as functions or regions – 5

Roles and responsibilities for governing digital initiatives are clearly defined – 6

Digital initiatives are assessed through a common set of key performance indicators – 4

Financial incentives and KPI’s are aligned with the IT digital transformation strategy – 4

4. IT-business relationship: 1-7; 4 neutral , 7 agree, 1 disagree.

IT and Business leaders work together as partners – 7

The IT unit’s performance meets the needs of the company – 7

5. Digital capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

We are using digital technologies to understand our customers better – 7

We use digital channels to market our products and services – 7

We sell out products and services through digital channels – 5

We use digital channels to provide customer service – 4

Technology is allowing us to link customer-facing and operational processes in new ways – 4

Our core processes are automated – 1

We have an integrated view of key operational and customer information – 3

We use analytics to make better operational decisions – 2

We use digital technologies to increase the performance or added-value of our existing products and services – 4

We have launched new business models based on digital technologies. – 6

Where appropriate we use a common digital platform – 6

We understand how our own digital capabilities compare with those of our competitors – 6

6. Strategic aspects: 1-7; 4 neutral , 7 agree, 1 disagree.

We understand which strategic assets will be the most important in digital transformation – 4

We understand how our own digital capabilities compare with those of our competitors – 5

We have a clear view of the most important first steps in our transformation – 5

What are those?

What is next step in digital transformation? What are the areas Arval should Improve?

We can improve core processes to make them more digital and automarted. And make more use of client and driver interactions via digital tools

Marco Cerrato

1. Introduction questions:

Who are you? Marco Cerrato

What is your area of responsibility? Web Marketing

How are you connected to Arval’s IT strategy. For the communication and web / lead generation strategy

1.1 Extra questions for long time employees:

How long have you been a part of Arval ? 3 years

If you should describe Arval’s change history, how would you do it? I’ m not so old in the company

If you could describe Arval’s culture, how would you do it? Arval is very structured company , very focus oriented based on an very traditional sales approach.

2. Leadership Capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

Senior executives have a transformative vision of the digital future of Arval. 1

Senior executives and middle managers share a common vision of digital transformation 1

There are possibilities for everyone in the company to take part in the conversation around digital transformation 2

Are the leaders acting as role models 7

Our employees understand the need and reasons for change 1

Arval is promoting the necessary culture changes for digital transformation 3

What are you doing to build momentum and achieve buy in from employees. Write some pillars inside de employees newsletter

3. Governance issues: 1-7; 4 neutral, 7 agree, 1 disagree.

Arval is investing in the necessary digital skills 3

Digital initiatives are coordinated across silos such as functions or regions 4

Roles and responsibilities for governing digital initiatives are clearly defined 1

Digital initiatives are assessed through a common set of key performance indicators 1

Financial incentives and KPI’s are aligned with the IT digital transformation strategy 5

4. IT-business relationship: 1-7; 4 neutral , 7 agree, 1 disagree.

IT and Business leaders work together as partners 1

The IT unit’s performance meets the needs of the company 1

5. Digital capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

We are using digital technologies to understand our customers better 1

We use digital channels to market our products and services 4

We sell out products and services through digital channels 3

We use digital channels to provide customer service 2

Technology is allowing us to link customer-facing and operational processes in new ways 5

Our core processes are automated 1

We have an integrated view of key operational and customer information 2

We use analytics to make better operational decisions 6

We use digital technologies to increase the performance or added-value of our existing products and services 4

We have launched new business models based on digital technologies. 2

Where appropriate we use a common digital platform 2

We understand how our own digital capabilities compare with those of our competitors 2

6. Strategic aspects: 1-7; 4 neutral , 7 agree, 1 disagree.

We understand which strategic assets will be the most important in digital transformation 3

We understand how our own digital capabilities compare with those of our competitors 2

We have a clear view of the most important first steps in our transformation 1

What are those?

Shams Dine El Mouden

1. Introduction questions:

Who are you? Shams Dine El Mouden

What is your area of responsibility? Head of International Internal Sales

How are you connected to Arval’s IT strategy.

1.1 Extra questions for long time employees:

How long have you been a part of Arval ?

If you should describe Arval’s change history, how would you do it?

If you could describe Arval’s culture, how would you do it?

2. Leadership Capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

Senior executives have a transformative vision of the digital future of Arval. 5

Senior executives and middle managers share a common vision of digital transformation 5

There are possibilities for everyone in the company to take part in the conversation around digital transformation 3

Are the leaders acting as role models 2

Our employees understand the need and reasons for change 6

Arval is promoting the necessary culture changes for digital transformation 5

What are you doing to build momentum and achieve buy in from employees 4

3. Governance issues: 1-7; 4 neutral , 7 agree, 1 disagree.

Arval is investing in the necessary digital skills 5

Digital initiatives are coordinated across silos such as functions or regions 6

Roles and responsibilities for governing digital initiatives are clearly defined 6

Digital initiatives are assessed through a common set of key performance indicators 6

Financial incentives and KPI’s are aligned with the IT digital transformation strategy 1

4. IT-business relationship: 1-7; 4 neutral , 7 agree, 1 disagree.

IT and Business leaders work together as partners 6

The IT unit’s performance meets the needs of the company 4

5. Digital capabilities: 1-7; 4 neutral , 7 agree, 1 disagree.

We are using digital technologies to understand our customers better 2

We use digital channels to market our products and services 6

We sell out products and services through digital channels 4

We use digital channels to provide customer service 5

Technology is allowing us to link customer-facing and operational processes in new ways 4

Our core processes are automated 4

We have an integrated view of key operational and customer information 3

We use analytics to make better operational decisions 3

We use digital technologies to increase the performance or added-value of our existing products and services 5

We have launched new business models based on digital technologies. 1

Where appropriate we use a common digital platform 6

We understand how our own digital capabilities compare with those of our competitors 3

6. Strategic aspects: 1-7; 4 neutral , 7 agree, 1 disagree.

We understand which strategic assets will be the most important in digital transformation 3

We have a clear view of the most important first steps in our transformation 4

What are those?

Change of mindset and culture, investment into a innovative company and get new technology.

What is next step in digital transformation? What are the areas Arval should Improve?

A-3 Resume of the interviews

Capucine de la Boulaye

How are you connected to ARVAL and its digital strategy ?

Let say, in the plan 2020 the pillar is digital transformation, you know that our CEO wants to make possible the direct connection to the driver, so there are a lot of initiatives related to Arval outsourcing solutions with SME, So I try to provide digital solution, even if it not my core business, but my objective is to be connected to the ARVAL IT and digital department to give the best answer.

Senior executives have a transformative vision of the digital future of ARVAL ?

I would say yes.

Senior executives and middle managers share a common vision of digital transformation ?

I would say 6 because our CEO has a clear vision of the digital future of ARVAL, but sometimes are middle managers or other managers do not have the same vision on the Digital transformation.

There are possibilities for everyone in the company to take part in the conversation around digital transformation ?

Yes because a lot of initiatives were launched through web site and through conversation with Philip Bismut, so I would say yes.

The leaders acting as role models

5/6

Employees understand the need and the reasons for change?

I hope so,I amnot sure that in a big French company everyone is ready for a radical chage. Change could be difficult. So would say 6, because in the meantime we can see that the leasing marker is moving very quickly, so Arval has to be innovate ,has to propose new solutions and so on. So I would say 6.

Digital initiatives are coordinated across silos such as functions or regions

So for me, digital within Arval is not really mature, but will be mature in the future; So for me Arval is a beautiful company, but in the meantime, it is a big boat to move, so it always diffuclt to move it. In my vision, to move and to coordinate a big company is hard mission. I amnot saying thatit is not possible, but I am saying it takes more time. But I have to say, we are quite well organized , there is IBO, but there is as well some regional directors in charge of a certain region, to let say to share what is the strategy of Arval.

Roles and responsibilities for governing digital initiatives are clearly defined

Yes

Digital initiatives are assessed through a common set of key performance indicators

No, I don’t see for the moment KPI linked to digital, so I would say 2.

Financial incentives and KPI’s are aligned with the IT digital transformation strategy

No

IT and Business leaders work together as partners

I hope so, im not directly working with IT.

The IT unit’s performance meets the needs of the company

Let’s say try to meet the needs of the company

We are using digital technologies to understand our customers better

Yes, so for me it is not only to understand the customer better, but is as well to meet their expectations. When we are talking about new applications addressed to the driver, when the client is looking for new mobility solution. When they are looking not only to the leasing solution, they are looking as well to mobility solution, so with Arval active link, Arval platform so indeed it helps us to understand our customer, but as well we will be able to answer to their requirement.

We use digital channels to market our products and services

SME is doing this mainly, with Arval smart solutions. So for me these are the digital channel, so if u talk about web site we have a web site as well; But we can do better.

We sell our products and services through digital channels

It’s is for SME mainly, because for international client it is not true digital channels for me; Because we are the leader and on the market, and then we have a web site, but for a large client it is mainly because the client knows Arval. So this big client does not need to go through the web site to understand the product, we are supposed to be proactive on this. However, for small company it is key to have a digital channel. For the big client they use our client references also.

We use digital channels to provide customer service

Yes

Technology is allowing us to link customer facing and operational processes in new ways

Yes

Our core processes are automated

Yes, but only in our main countries, like fr, uk, us; es, it ,de, nl, be.

We have an integrated view of key operational and customer information

Yes

We use analytics to make better operational decisions

Yes

We use digital technologies to increase the performance or added value of our existing products and services

Yes, telematics, global reporting tool, analytics, Arval smart experience

We have launched new business models based on digital technologies.

So for me it is not a business model, because, our business at Arval is to finance a vehicle, however, we have launched new digital technologies to improve our core business and services; So for me we are not chaging the business model, hhowever , we improve our mobility solution; core business.

Where appropriate we use a common digital platform

Telematics, website are common. Lets say we have a website dedicated for each country, and there is a common website dot com;

We understand how our own digital capabilities compare with those of our competitors

I don’t realy know

We understand which strategic assets will be the most important in digital transformation

The market is moving fast, and all the steakholders, or let say actors is looking at what’s going on, launching new services and product, so for me, at the moment Arval, but as well our competitors, don’t know exactly what would be next step in digitalization.

We have a clear view of the most important first steps in our transformation

What are those ?

Develop our apps, to understand where is going the leasing market and more than that where the mobility market is going, addressed to the companies but as well to the users and the employees.

Benoit Laflamme

Who are you?

Benoit Laflamme, VP Global Business Development for Element

What is your area of responsibility?

My role is to expand relationships with Europe-based companies towards North America and Australia/New Zealand.

How are you connected to Arval’s IT strategy?

Remotely connected. Not directly involved, except for the fact I am using Arval devices.

How long have you been a part of Arval ?

I’ve been working alongside Arval for 1 year.

If you should describe Arval’s change history, how would you do it?

Long and very well thought out process predominantly driven by security and data ownership concerns. Stepped innovation rather than transformation.

Digital initiatives are assessed through a common set of key performance indicators

There is a start ,like tracking what % of clients are accessing the tools. So maybe I could give it a 6, cause there is ow a tracking at senior leadership to get almost all clients on board with digital technology. There is a real moment behind that. There is a target of reaching 100 % of clients using the platform; but we are far from the target, it is very low.

Financial incentives and KPI’s are aligned with the IT digital transformation strategy

It is completely disconnected; I feel like Arval is not very incentive driven, it is more salary based, so there is not real addition motivator for people to say, I’m gonna push my clients to adapt on our digital tools or I’m going to become a digital worker. I think there is not any financial connection between what the organization is trying to do and the employee base.

IT and Business leaders work together as partners

I feel like it and business wants to do stuff and the IT has priority , but I feel like there is no connection or partnership.

We use digital channels to market our products and services

There is quite a few countries, where if you go on mobile device, for instance, Arval Italy, you will see cars with the payment you can actually buy, you can actually start the lease process online, if you are a SME, in UK there s a big platform for that, so I would say they are definitely advanced in that area.

We are using digital technologies to understand our customers better

I think Arval is doing more like the wrong things like preparing something and trying to sell it rather than the other way around where u trying to get what the clients want and then you produce something that the clients are looking for. I think it is right now it is more like we are designing it for the clients and then trying to sell it rather than get the market to build it and to desing it. The most progressive digital organizations are using like current data , big data about what are they selling the most, what markets, what type of customers etc; I don’t think Arval is there yet in terms of digital.

Technology is allowing us to link customer facing and operational processes in new ways

Not a very high link there; What technology? so I would say the web platform that the customers are using, but is not all the way advanced, where you can really interact digitally, I think there is still a need for human interference to query the in house system, and compare it with the client . I don’t feel like there is right now a true connection where you can have one hub to interact with the clients , I think it is still requires some human intervention.

Our core processes are automated

Ordering process, remarketing process, and the whole process around the life of a vehicle is automated. In my perception there is a certain level of automation but it is not a 7; There is still a room to improve.

We have an integrated view of key operational and customer information

For IBO for example it is an excel file where you can see the deliveries, projected deliveries, returns, so yeah it is not a 7, it is not a dash board view of a porfolio where you can zoom in, it is really an excel file with tabs, so I guess there is portfolio views in every country, probably the most advanced countries, but I don’t feel like it is super advanced yet, that’s why it is over neutral;

We use digital technologies to increase the performance or added value of our existing products and services

In digital it could be better understanding your portfolio, for example, remarketing results; if you understand your remarketing result well, you can perform well at residual values. So the better you perform on residual value, you can offer a lower payment then you end up with an increased lease performance. There is right now technology to evaluate opportunities for improving rental payment, but again it is not a super fine tool.

We have launched new business models based on digital technologies

Active link is one, There is also right now a posh for fleet management product based on IT platform. There is a Car sharing system that is being tested in Italy, where it allows to share vehicles in a parking lot between two or three companies around the parking lot and this is pretty advanced.

Where appropriate we use a common digital platform

There are now three different platforms that are being used in every Arval country. I find it is still a lot three, that is why I didn’t put a 7, but at the same time Europe is really different and complex and difficult to standardize, that’s why there are probably three different systems . In the end there is one platform where you can get an overall all country view, all of the 3 tools are filling in the analytics, but it is not revolutionary neither.

We understand which strategic assets will be the most important in digital transformation

I think historical data is extremely important, client information , what is becoming really important is the driver behaviors aspect, and there is an appetite two exploit this element, but it is not really advanced yet.

We have a clear view of the most important first steps in our transformation-6

What are those?

Push for mobile, create homogeneous user experience, launch fast and constantly improve, target top rating and maximum number of visits, push customers to use tools as much as possible.

What is next step in digital transformation?

What are the areas Arval should Improve? Expand email server capacity, allow employees to work remote, more cloud-based resources, better tools to digest and interpret data instead of scanning through huge Excel files.

Scott Deane

Who are you?
Scott Deane, UK Digital Manager, reporting to Head of Marketing Graham Nichols

What is your area of responsibility?
All UK Digital activity, including Web, Social, Apps

We use digital channels to market our products and services

I don’t think we are able to actively promote some of these channels affectively, because in the UK due to BNPP restrictions we have on social selling. Speaking to the UK Motortrade team, there is great opportunity to improve the promotion through this website, but I wouldn’t say it is done effectively at the moment and the UK team have trouble in getting the site updated.

What are you doing to build momentum and achieve buy in from employees
Actively working with teams around the business to integrate digital activity into business as usual processes

We use digital channels to provide customer service

Booking a service is okay but the site is not responsive. Booking tyres can be done online but this is hardly unique, and again, this is  not an Arval solution. The new mobile app is missing many many self-serve features. My Arval Community has only launched so could be brilliant but we don’t know yet. We have recently tried to create a customer support section on the UK website but this is something I created.

What is next step in digital transformation? What are the areas Arval should Improve?
Refocus on the core activities for example digital – too much effort spent across too many activities – we do many things well instead of a few things brilliantly.

Antti Ekstrom

Who are you?

Marketing specialist for Arval Sweden and northern region.

What is your area of responsibility?

Overall marketing and communications activities, CSR and projects.

How are you connected to Arval’s IT strategy.

Via marketing, for web, My Arval tools etc.

How long have you been a part of Arval ?

Since Arvals acquire of GE Capital in November 2015.

If you should describe Arval’s change history, how would you do it?

Based on the two years I been with Arval, I would say the focus is more and more oriented towards digital and mobility, to be a few steps ahead the competition.

If you could describe Arval’s culture, how would you do it?

Full service culture with clients and drivers in mind. Future oriented with finding new ways to adapt to a changing world of mobility and connectivity.

You have ranked IT and Business leaders work together as partners  with 7. Does it mean you think there is a perfect alignment between business and IT?  Both side have regular meetings to coordinate the digital/IT projects and there is a very good cooperation between them?

I am not able to say it is a perfect alignment, but our business strategy is digitally focused I guess it is a good alignment between the functions.

We are using digital technologies to understand our customers better” ranked with 7. Could you please tell me what are these digital technologies?

I would say we are focused on developing our client and driver tools, as well with our Arval Active Link service which will take the use of future telematics technology.

What is next step in digital transformation? What are the areas Arval should Improve?

We can improve core processes to make them more digital and automated. And make more use of client and driver interactions via digital tools.

Who are you?

International Business Manager Arval

What is your area of responsibility?

International Account Management / Sales to Multinational Customers and Prospects

How are you connected to Arval’s IT strategy.

IT tools can be used as a Unique Selling Point to differentiate from the competition. Making our customers’ lives easier through the use of new tools

How long have you been a part of Arval?

Integrated in Arval following the exGE Capital Fleet Services take-over (November 2015)

If you should describe Arval’s change history, how would you do it?

Continuous investment in the business and it’s tools, but this is done in the old-fashioned way. Top down decisions are taken and executed. There is no mindset change, no out of the box thinking, no move to a modern Digital Arval. Tools have the same capabilities as 10 years ago but have been improved with a new look&feel. Current (reporting) tools are often unreliable. New tools are being launched as e.g. “Total Fleet” to support the business.

If you could describe Arval’s culture, how would you do it?

Typical internally oriented (little old fashioned) French corporate culture with a management structure based on extensive processes. Strong internal and external communication, top down decisions and a high number of operational staff to execute. Lack of stimulus for the employees to support Arval in it’s digital journey.

What is next step in digital transformation? What are the areas Arval should Improve?

Reliability of current tools. Improve the ease of use of the current tools. Become a modern company with a modern open mindset challenging employees to think out of the box and steer Arval into the new digital era.