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Digital, Data & Analytics, Disruption in Deals


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Presentation at the PwC Midwest Deals Summit by Dr. Anand Rao, John Sviokla and Andrea Fishman.

The presentation looks at impact of digitization, data and analytics and the disruption they cause in retail, healthcare, agribusiness, and financial services. We look at how this is leading to more deals across the spectrum from large M&A's to private equity to venture capital

Published in: Data & Analytics
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Digital, Data & Analytics, Disruption in Deals

  1. 1. PwC Digital, Data, Disruption in Deals John Sviokla, PwC Andrea Fishman, PwC Anand Rao, PwC
  2. 2. PwC Deals! Deals! Deals! Warming Economy will Boost 2015 M&A – Wall Street Journal, Jan 16, 2015
  3. 3. PwC 3 Polling Question: With new technologies providing organizations access to significant amounts of data, this has created a new era of disruption and is impacting organizations in all industries. In which way has this impacted your organization the most? Volume, Variety, Velocity, and Veracity of Data is driving the ‘Big Data’ Revolution 10% 10% 15% 18% 23% 5% 15% 3% A. Aqui-hire - (buy companies to gain skills) B. Organizational change - - new roles , remapping of accountability C. New techniques (e.g., machine learning), new technologies (e.g. Data), and new skills (e.g., Data Scientist) D. New focus on data security and risk management / mitigation E. Improved insights from data and analytics into customer F. Needs / expectations G. New partnerships or ways to interact with customers H. I don’t know.
  4. 4. PwC 4 Deals were larger and also spanned all sectors globally 2014 was a huge year for M&A and private equity - Fortune Magazine
  5. 5. PwC Deal activity was strong across all areas of capital raising M&A $3.5 Trillion in M&A activity globally – 47% increase from 2013 Private Equity $562 billion in global private equity – 43% increase from 2013 Venture Capital $48.3 billion in VC funding – 61% increase from 2013 Crowdfunding $16.2 billion in crowdsourced funding – 167% increase from 2013
  6. 6. PwC | page 6 Race to dominate Personalized Content Delivery Anywhere, Anytime on Any Device Media AT&T + Direct TV
  7. 7. PwC | page 7 Race to dominate Precision Agriculture & increase productivity significantly Agribusiness Monsanto + The Climate Corporation
  8. 8. PwC | page 8 Race to dominate Personalized Medicine & Commoditization of Drugs Healthcare GSK + Novartis
  9. 9. PwC | page 9 Race to dominate Robo-Advice and guide advisors, investors, and institutions towards a secure future Financial Services Northwestern Mutual + Learnvest
  10. 10. PwC Disruption Disruption across all industries is driving the deals activity
  11. 11. PwC 11 Common drivers across all disruptions – Digital, Data & Analytics
  12. 12. PwC The world is in beta. Technologies, trends, markets and economies are in a constant state of flux. Acquiring or having access to new technologies, techniques is essential Acquiring and motivating your talent becomes your greatest asset Competitive advantage is transient Speed & Scale are critical for a sustainable business model Right Now
  13. 13. PwC 79% Of smartphone users are using devices to shop at least once a month 10% Higher revenue growth forecast for companies who prioritize innovation to a greater extent than their peers 50 Billion Predicted number of connected devices by the year 2020 79% Of enterprise IT spend is outside of the CIO’s budget Disrupt or be disrupted?
  14. 14. PwC Disruption in Advice Digitization is transforming how people discover, engage and transact with business in VC funding for Robo-advisors in 2014 $290M of Adults have Mobile Devices within Arm’s Reach 24/7 91% Mobile Internet Users by 2020 3.8 Billion Internet Users by 2020 5 Billion
  15. 15. PwC Disruption in Healthcare Genomics, wearables, ingestibles, and nanotechnology are making Personalized Medicine a reality per year in Personalized Medicine revenues $286 Billion in smart wearables global market by 2020 $22.9 Billion Unit sales of wearable devices by 2020 200M for genome sequencing in 15 years $100M-$1K
  16. 16. PwC Data & Analytics Digitization is leading to increased volume, velocity and variety of data requiring advanced analytics to draw insights
  17. 17. PwC Insights driven by - Big Data, Analytics, Technology and Mindset
  18. 18. PwC 18 Big Data - New sources of data… …structured, unstructured, audio, image, video, sensors, and social Volume, Variety, Velocity, and Veracity of Data is driving the ‘Big Data’ Revolution
  19. 19. PwC 19 Big Data Analytics - New Analytic Techniques… …backward & forward looking, statistical & computational, art & science Descriptive, Diagnostic, Predictive, and Prescriptive Analytics are enhancing the value of Data Graph Networks System Dynamics
  20. 20. PwC 20 Big Data Technologies - New emerging technologies …distributed stream processing, GPU’s, NoSQL databases Cloud computing, open-source software, multi-core processors, hybrid architectures are fuelling big data technologies
  21. 21. PwC | page 21 Precision Agriculture • Sensor, satellite, weather station, and visual data • Bayesian learning, monte-carlo simulation • Cloud infrastructure, agile (3 wk) research & analytics • Crop insurance to yield management • Elimination of claims process & real-time exposures
  22. 22. PwC | page 22 Precision Medicine • Sensor, electronic health data, genomic, proteomic data • Cognitive computing, NLP, deep learning, bio- informatics • Digital DNA sequencers, mobile diagnostics, ingestible devices • Outcome based care, personalized medicine • Preventative (well-being) vs Curative (disease)
  23. 23. PwC | page 23 Robo-Advice • Event data, aggregation, sensor, unstructured, video • Data enrichment, agent-based simulation, behavioral economics • Cloud infrastructure, digital, social, and mobile devices • Cost-effective, sophisticated, personalized advice • Cost-effective, sophisticated, personalized advice
  24. 24. PwC Digital Experience Talent Management
  25. 25. PwC Digital Experience Digital is transforming customer experience, operations, and back-end processes
  26. 26. PwC 26 Today’s most successful organizations are known for more than just great products. They create amazing customer experiences.
  27. 27. PwC 27 People don’t see the world in silos For them it’s all one connected experience Connected Experiences Are Driving Transformations in How Companies Evaluate Deals and Growth Strategies
  28. 28. PwC | page 28 New Deals Driven to Heighten Customer Experience
  29. 29. PwC | page 29 They bought a bunch of companies that “help us grow our expertise to build best-in- class eCommerce technologies and talent” Retail Walmart + Small Society, One Riot, Kosmix, etc..
  30. 30. PwC | page 30 Enables in car connectivity for mobile devices and app developers Automotive Ford + Livio
  31. 31. PwC | page 31 Personal shopper to hand select clothing/accessories (web based) Personalization Nordstrom + Trunk Club
  32. 32. PwC | page 32 Third Era of Digital Disruption Merging physical and digital Entering the Digital Business Era
  33. 33. PwC Made for 1. 78% of consumers express a desire for some kind of content personalization Here. Now. People buy online because it’s 24/7, quick and doesn’t require a trip. Omni-Everything By 2025 over 80% of retailersare “seamless” in go-to-market, fullyintegratedand 360 omni-channel Customer Experience is being Transformed by Three Central Themes
  34. 34. PwC Tomorrow Today Made for 1 Personalized Mobile Stores Habit Trackers Retailer App integration Artificial Intelligence Personal Fabricators Printed Food Facial Recognition Shopping
  35. 35. PwC Tomorrow Today Here. Now. Evolving Retail Formats One-Click Ordering On-Demand Delivery Drone Delivery On-Demand Personalized Manufacturing Auto Restock Magic Text Concierge Auto Password Reads
  36. 36. PwC Tomorrow Today Omni-Everything Image Recognition PwC Total Retail Study Beacon Enabled Auto-Checkin Wearables Snap to Buy Omni-Currency vv 33% of shoppers research online before buying in store . .44% of shoppers compared prices on their mobiles while in store
  37. 37. PwC | page 37 How do you create that add value beyond the product itself? Experiences
  38. 38. PwC | page 38 This changing journey impacts organizations Transition from • Siloed functional teams • Tactical execution • Command and control • Clear escalation, empowerment and communications protocol • Centers of excellence Executive management Middle management and support staff Front-line staff
  39. 39. PwC | page 39 From hierarchical to customer centered Transition to • Customer-centric organization • Agile & collaborative by design • Empowered and engaged employee base • Operationally optimized • Responsive • Communities of practitioners Executive management Middle management Front-line staff Support staff
  40. 40. PwC | page 40 Why is digital transformation happening in the marketplace? Customer behavior is changing… • “B2C-like” experiences expected • Non linear decision process and online influencers playing large role • Look for digital self service tools for 24x7 convenience …and new market entrants are disruptive • Small nimble competitors coming to market with a “digital-first” mindset • Competitors do business online with minimal direct sales force costs • Increasingly flexible payment, billing and fulfillment methods for digital goods
  41. 41. PwC | page 41 Technological advances fueling changing customer behavior of CEO’s say ‘Technological advances’ will be the top driver transforming their business in the next five years. 28 39 58 69 86 Technological advances Demographic shifts Shift in global economic power Resource scarcity and climate change Urbanization Source: PwC CEO Survey, 2014 Trends that will transform business next five years (%) Where companies are investing to grow 6 11 15 15 20 25 39 39 41 44 0 10 20 30 40 50 Wearable computing 3-D printing Battery and power technologies Robotics Sensors On-demand business and technolog services Cybersecurity Mobile customer engagement Socially enabled business process Business analytics % 86% Digital IQ
  42. 42. PwC | page 42 What does the Internet of Things really do? Under the age of 16 The Internet of Things provides the data and services that creates an ecosystem that provides information and intelligence that drives contextual awareness about yourself and/or your surroundings.
  43. 43. PwC | page 43 Why does the Internet of Things matter for Business? IoT is the “extension of the Internet to the physical world. The Internet has transformed digital industries, while the Internet of Things will transform physical industries.” • “In a manufacturing plant, assets are affixed with wireless sensors. Using remote monitoring technology, plant managers locate anxd track production inventory on the plant floor and within the supply chain in real- time.” • An automobile’s systems and subsystems produce information about a cars wear-and-tear, performance, and rider driving patterns. The data can be used for monitoring and maintaining the car remotely.
  44. 44. PwC What the “experts” are saying about the Internet of Things “50 Billion Devices connected by 2020 – a $19 Trillion dollar industry.” “If you look back a decade from today at the impact of the Internet of Everything, I predict you will see it will be five to 10 times more impactful than the whole Internet has been today.” John Chambers, Cisco CEO “Growth opportunities are in the overlap of Systems of engagement, Systems of record, and systems of insight.” David Gosen, Nielsen European Managing Director MWC 2014 Keynote “2013 $1 Billion total investments into IoT companies and $3.5 Billion in M&A activity in 2014.” Carlos Morales Telefonica, Global Managing Director of M2M MWC 2014 “IoT is moving to higher value by delivering actionable insights in the physical world – cloud based big data services and industry analytics will play a key role” Bob Fox, IBM Global Business Services - MWC 2014
  45. 45. PwC | page 45 Potential Business Model Impacts: Best Practices Under the age of 16 When we look to IoT innovators and first-movers we see a recurring common theme of best practices observed across sectors Automotive: Tesla best practice: push data to the cloud to capitalize on the level analysis, process optimization and scale enabled by distributed intelligence. Healthcare: AliveCor best practice: build additional value for your IoT platform by integrating with complimentary platforms via open standards.
  46. 46. PwC | page 46 Networked Business Model Canvas – Connected Personal Health Monitor Under the age of 16 Appendix Key Partners • Insurance companies • Hospitals & Clinics • Doctors Cost Structure • R & D for medical devices • Software platform development • Cloud-based services hosting infrastructure Revenue Streams • Sale of aggregate, non-personally identifiable health data • Sale of devices • Sale of varying service levels enabled by the interconnectivity of devices to patients, doctors, hospitals and clinics Key Activities • Manage specialist network • R & D for connected medical devices • Develop new services Value Propositions • Scaled Expertise – healthcare specialists not constrained to a physical location for monitoring or even examining a particular ailment specific to their specialization. • Ongoing Monitoring – continual monitoring of patients’ vital signs allows for more timely identification of anomalies and faster treatment if identified. • Hospital Prevention – ongoing monitoring minimizes unneeded and expensive hospital visits. Customer Relationships • Online • Via physicians Customer Segments • Insurance companies • Hospitals & Clinics • Doctors Key Resources • Specialist network • Cloud platform • Connected medical devices Channels • Primary Care Physicians • Specialists • Clinics • Online
  47. 47. PwC Get ahead of customer expectations Consider new partnerships Transform your human capital Where do you go from here? successful organizations
  48. 48. PwC Talent Management Acquiring, nurturing, and retaining talent is the biggest challenge to staying ahead of the competition
  49. 49. PwC Organizations need to find and keep talent ProducerPerformer Organizations need to find — and keep — at least a few exceptional Producers
  50. 50. PwC Mythic blue oceans.. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% %IndustryPopulation
  51. 51. PwC Evolution of a Billionaire 0% 20% 40% 60% 80% 100% Years of Experience 1 - 3 4 - 6 7 - 10 11 - 15 16 - 20 20+ 66% previously worked for large company 63% of executives say retaining top talent is a challenge
  52. 52. PwC Billionaire Dynamic Duos Solo Dynamic Duo 60% self-made billionaires in our sample who succeeded when paired with a performer partner
  53. 53. PwC “Producers” think and act in distinctive ways that enable them to create massive new value Empathetic Imagination Patient Urgency Inventive Execution Rational Risk Takers Producer/ Performer
  54. 54. PwC How can organizations attract, cultivate and retain their high potential talent Recognize a task that requires a producer 1 Hire, motivate, retain and inspire producers 2
  55. 55. PwC Four Ways to Attract & Cultivate Producers Organic Development Catalyst Hires Mergers & Acquisitions Get Produced 1 2 3 4
  56. 56. PwC Identifying producers and performers • What are the most important trends, and what opportunities will that create in your industry? • Have you ever creatively configured an idea to get it done faster, cheaper, differently? • Have you ever experienced a real failure, and what did you learn? • Describe an opportunity in your business that you are passionately interested in pursuing. • What is your track record of bringing ideas, people and resources together in a new way to create new value? • If you were given 20% of your time to work on an idea what would it be? Sample Interview Questions:
  57. 57. PwC Draft Thank You © 2014 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. * Data sources via similarweb