The document discusses major trends affecting large global companies, including the rise of data and analytics, increasing natural disasters, constraints such as fragmented standards, and enabling technologies like artificial intelligence. It provides statistics on the world's largest companies and examines how they are exploring strategic opportunities around issues like supply chain resilience, data-driven business models, and developing internal resources to take advantage of artificial intelligence.

1. Peter Evans, PhD
Vice President
Center for Global Enterprise
H2O Open Tour
New York, NY
July 19, 2016
1
Business Transformation | Strategy |
Large Companies | Age of AI

2. World's 500 largest companies
2
Revenue $ 31.2 trillion
Profits $ 1.7 trillion
# Employees 65 million
Collective Size
Source: Fortune Global 500 2015 and Center for Global Enterprise.
Countries

3. 3
Strategic Fit

4. 4

5. A framework for understanding change
5
• Major world shaping trendsMegatrends
• DisruptorsShocks
• Restrictions on market actorsConstraints
• Facilitators (e.g. tech innovation)Enablers

6. 6
Mega Trend

7. Rise of the data layer
7
New locus of value creation and capture
Agriculture
Physical Layer
Energy
Physical Layer
Healthcare
Physical Layer
Banking
Physical Layer
DATA Layer DATA Layer DATA Layer DATA Layer

8. Startups with “data” in their name
Over 100 companies have raised over $1.4 billion
8
Source: CrunchBase, March 2015

9. Large companies explore “data lakes”
9
ANALYTICS BASED MAINTENANCE
CUSTOMER PERFORMNACE
ANALYTICS
DESIGN
EFFECTIVENESS
FLEET PERFROMANCE INSIGHTS
PRODUCTION INSIGHTS
RELIABILITY PROGRAM
EFFECTIVNESS
Source: Tech Mahindra, NABE Big Data Conference, Boston, June 2016

10. 10
Shocks

11. Shocks
11
political
financial
military
natural
disaster

12. Current hazards, events
12
Source: http://atlas.pdc.org/atlas/

13. World-wide natural disaster trends
13
Source: “NAT CAT 2014: What’s Going on with the Weather?” Munich Re, January 7, 2015
Annual rate of events has more than doubled since 1980

14. Growing attention to resilience
14

15. Applications of AI … supply chain resilience
15
supply chain management
Companies with large supply chains are
exploring AI, which develops
appropriate work orders based on an
understanding of demand fluctuation.
By integrating the AI into business
systems, it may become possible to
realize smarter, more efficient
operations in a diverse range of areas
More data-driven and more
autonomous supply chains provides an
opportunity for new levels of
optimization in manufacturing, logistics,
warehousing and last mile delivery.

16. 16
Constraints

17. Constraints
17
regulatory
talentresources
Organizational
structure

18. Firms developing IoT technologies
18
Source: Peter Evans IoT Alliance Database, CGE, 2015
Companies most actively developing new products and services
3,046 companies
<$1billion sales
220 companies
>$1billion sales

19. 19
“Before you go to war, assemble allies”
“Before you go to war, assemble allies”
Art of Standards Wars
Carl Shapiro and Hal R. Varian

20. Fragmented/conflicting standards
20
2016
Today
2001 2004 2007 2010 2013
Open Mobile
Alliance
Source: P. Evans, CGE, 2015
Internet of Things alliances

21. IoT companies by alliance
21
Source: Peter Evans IoT Alliance Database, CGE, 2016

22. Playing IoT standard’s the field
22
Source: Peter Evans IoT Alliance Database, CGE, 2016

23. 23
Enablers

24. Ideas as enablers
24
Classic economic ideas
 Free market economies are always stable
 Trend toward full employment & full production equilibrium
 Freely fluctuating prices in three key areas ensure this outcome
(goods, money and labor markets)
Keynesian economic ideas
 Free market economies are unstable
 Equilibrium yes, but not necessarily for full employment/ full production
 Demand becomes a much bigger driving force
 Supply will always adjust to demand

25. Technology as enabler
25
Yahoo! Directory - 1994 - 2014Telephone switchboards, 1890 – 1960s
Traffic Service Position System (TSPS) Web indexing algorithms

26. APIs enable platform data capabilities
26
Revenues
Reach
Engagement
Innovation
Integration
Application
Programming
Interface (APIs)
Definition: Standardized machine-readable digital
communication interface for a system, which can be designed to
have open or restricted access and be exposed both internally
and externally of an organization’s network
Exchange and value creation

27. 27

28. 28
API Economy: Core vs. Periphery
Source: Peter Evans and Rahul Basole, with data from
ProgrammableWeb, Center for Global Enterprise, 2015
Social media / web
Job search / work
E-commerce
Tools / analytics / big data
Payments
API Clusters
Messaging services
Companies
Enterprise
Amazon SNS
Alexa Web Inform
Amazon
Marketplace
Amazon
SimpleDB
Amazon Product
Advertising
Amazon
CloudWatch
Amazon
Flexible
Amazon
Redshift
Amazon SC2
Amazon S3 Amazon
Mechanical TurkAmazon RDS
Amazon DynamoDB Amazon Queue Service
Walmart
28

29. AI and enterprise strategy
29
Explosion of interest in articles related to “ai” and “business strategy”
Number of articles focused
on AI and business strategy
has grown by
Increase 25 a quarter in 2013
to over 150 a quarter in 2016
from 2013 to 2016
6x
Source: Data and visualization from Quid, July 2016

30. AI and enterprise strategy
30
• How do alert leadership teams take advantage of AI?
• Is AI similar to other computer technologies?
• What types of internal resources are most needed?
• What types of business processes are required?
• What types of external communities/ ecosystems support competitive advantage?
The search for strategic fit

31. Council of Economic Advisors report on AI
31
“The biggest worry I have about AI is that
we will not have enough of it, and that we
need to do more to make sure we can
continue to make groundbreaking
discoveries that will raise productivity
growth, improving the lives of Americans
and people throughout the world.”
Jason Furman
Chairman
New York University
New York, NY
July 7, 2016

32. Looking ahead … strategic landscape
32
Age of Data
Megatrends
Natural
disasters
Shocks
Fragmented
IoT Standards
Constraints
Artificial
Intelligence
Enablers

33. Peter Evans, PhD
Vice President
Center for Global Enterprise
H2O Open Tour
New York, NY
July 19, 2016
33
Business Transformation | Strategy |
Large Companies | Age of AI