Digital Transformation Forum Nimbus90

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The
Impact
of
Digital
on
Future
Business
Models
Neil
Sholay
Head
of
Oracle
Digital
Europe,
Middle
East
&
Africa

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Transformation
We
are
entering
a
new
digital
industry
economy
where
everyone
will
be
a
technology
company.
Peter
Sondergaard
Gartner
Research,
2014

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The
worlds
largest
taxi
company,
owns
no
taxis…
The
worlds
most
popular
media
owner,
creates
no
content…
The
most
valuable
retailer,
has
no
inventory…
The
worlds
largest
accommodation
provider,
owns
no
real
estate…

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Disruption
is
less
a
single
event
than
a
process
that
plays
out
over
time,
sometimes
quickly
and
completely,
but
other
times
slowly
and
incompletely

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When
Do
Incumbents
Respond
To
Disruption?
1st Year
of
the
disruption.
A
disruptive
startup
enters
with
new
technology,
or
a
new
technology-­‐enabled
business
model.
Spread,
2-­‐3
years
…disruptor
starts
growing
in
popularity,
and
me
too
services
appear
Mainstream
Adoption
–
the
disruption
reaches
large
scale
acceptance.
Typically
four
years
from
its
arrival

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Why
Do
Incumbents
Respond
Slowly
to
Disruption?

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Response
Tactics
of
Successful
Incumbents

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1. Identify
the
strengths
of
your
disrupter’s
business
model
2. Identify
your
own
relative
advantages
3. Evaluate
the
conditions
that
would
help
or
hinder
the
disrupter
from
co-­‐opting
your
current
advantages
in
the
future
• When
determining
a
disrupter’s
strengths,
think
about
their
extendable
core— the
aspect
of
their
business
model
that
allows
the
disrupter
to
maintain
its
performance
advantage
as
it
creeps
upmarket
in
search
of
more
and
more
customers
Chart
The
Path
Of
Disruption
– To
Define
A
Strategic
Response

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What
Is
The
Extendable
Core
?
“
All
disruptive
innovations
stem
from
technological
or
business
model
advantages
that
can
scale
as
disruptive
businesses
move
upmarket
in
search
of
more-­‐demanding
customers.
These
advantages
are
what
enable
the
extendable
core;
they
differentiate
disruption
from
mere
price
competition
Michael
Raynor :
The
Innovator’s
Manifesto (2011)

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Illustration
:
Price
Competition
in
The
Hotel
Industry
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• Holiday
Inn
would
have
to;
Invest
in
internal
improvements,
prime
real
estate,
and
an
expensive
service
staff….
• Be
forced
to
adopt
the
same
cost
structure
as
the
Four
Seasons…
• And
So
would
have
to
charge
its
customers
similarly
Target
&
appeal
to
Four
seasons
customers
NOT
a
Disruptive
Innovation

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• A
disruptive
innovation
-­‐ A
new
entrant
can
maintain
its
advantage
while
it
improves
its
performance
• Air
BnB’s advantage
is
their
‘Networked
Platform’,
(coupled
with
the
‘experience’)
• They
connect
producers
&
consumers
(Hosts
&
Travellers)
and
facilitate
interactions
and
exchange
• They
solve
the
same
problem
as
traditional
incumbents
BUT
with
one
key
difference.
They
do
not
‘own’
any
inventory.
THIS
IS
THEIR
EXTENDABLE
CORE

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New
Platforms
Re-­‐think
The
Four
Fundamental
Assumptions
That
Govern
Business
TRADITIONAL
HOTELS AIR
BNB
RE-­‐THINKING
VALUE
CREATION
Only
those
with
significant
investment
in
property and
hotel
supporting
services
can
be
a
hotel
service
provider
Airbnb allows
anyone
with
a
spare
mattress
or
room
to
run
their
own
BnB,
by
giving
them
access
and
tools
to
market
themselves
to
a
potentially
global
market
RE-­‐THINKING
VALUE
CONSUMPTION
It
wasn’t
common
for
travelers
to
stay
at
strangers‘
apartments
in
a
new
city.
AirBnB created
a
new
behavior
and
changed
the
very
design
of
the
traditional
trip
RE-­‐THINKING
QUALITY
CONTROL
Hotels
are
known
for
their
service
quality
and
the
reliability
of
the
customer
experience
AirBnB,
on
the
other
hand
relies
on
a
peer
curation
mechanism
to
ensure
quality
and
reliability
RE-­‐THINKINGSCALE
Traditional
hotels
would
scale
by
adding
more
rooms
through
new
properties
Airbnb doesn’t
own
inventory.
Instead,
it
scales
by
improving
its
ability
to
match
users,
leveraging
better
data
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CHARACTERISTICS
OF
DIGITAL
LEADERS

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Assess
situations
by
looking
at
them
from
new
perspectives
and
multiple
angles
– often
Disrupting
They
‘Reframe’
Challenges

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HOME
PLUS
IN
SOUTH
KOREA
‘REFRAMED’
THE
SHOPPING
EXPERIENCE

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Expose
valuable
data,
processes
and
systems
as
consistent,
simple
&
re-­‐
usable
business
services
(APIs).
This
enables
a
‘Composable’
enterprise
Service
Enabled

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Create
a
common
platform
for
an
eco-­‐system
of
users
to
create
&
exchange
value
repeatedly.
This
provides
re-­‐use,
governance
&
consistency
Platform
OrientedPlatform
Oriented

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Verizon’s Connected
Car
Platform
• First
iPhone
for
controlling
vehicles
with
connectivity
• First
embedded
In-­‐Vehicle
App
Store
with
MB-­‐Apps
• First
Social
Network
telematics
app
launched
with
Drive2Friend™
• First
multi-­‐channel
Enhanced
Destination
service
with
Send2Benz™

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• A
culture
of
adopting
best
practices
&
processes
rather
re-­‐creating
new.
• Use
of
COTS
Apps
rather
than
customer
built
• Invest
in
Integrated
systems/suites
Don’t
Re-­‐Invent

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Acquire
as-­‐a-­‐service
capabilities
rather
than
build
their
own.
For
BOTH
internal
(Private)
and
external
(public)
use
Cloud
FIRST

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Zerinthia Patient
Support

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Business
Agility
Can
You
Launch
a
Service
in
3
weeks?

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Data
=
Value
Understand
that
knowledge
&
Insight
is
critical.
Invest
heavily
in
analysing
their
own
data
and
data
from
external
sources
to
establish
patterns
and
un-­‐noticed
opportunities.

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Ubank People
Like
You
(Real
Time
Data
in
Action)
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They
Are
NOT
governed
by
the
limits
of
I.T.
– they
design
an
experience,
then
figure
out
how
to
deliver
it
NO
Limits

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-­‐ Digital
Health
Platform
Ingestible
Sensor
:
made
from
organic
ingredients
Your
Body
:
powers
the
ingestible
senor
The
Patch
:
captures
&
relays
your
body’s
physiological
response
Applications
:
use
any
bluetooth
enabled
mobile
device

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What
We
Believe

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The
true
value
of
digital
is
derived
from
interactions
between
people,
places,
businesses
and
things

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Platforms
are
the
new
plane
of
competition
A
digital
platform
is
a
plug-­‐and-­‐play
business
model
that
allows
producers
and
consumers
to
come
together
to
create
&
exchange
value,
repeatedly
at
scale.

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Digital
is
about
data
-­‐ it
is
underpinned
by
data.
To
be
successful
in
digital
you
must
treat
data
as
a
form
of
capital

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BE
A
DISRUPTORDISRUPTOR

35. 35