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© Marko Luhtala 2017
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Digital Due Diligence
– Discover the full potential of digitalization –
23.9.2017
MARKO LUHTALA
Ajantasalla Yrityspalvelut
© Marko Luhtala 2017
Are your companies ready for the digital
economy?
2
YOU NEED DIGITAL DUE DILIGENCE TO KNOW:
Does the company have untapped opportunities to deliver
unique customer value with digitalization?
How can digitalization accelerate company growth and drive valuation?
Is digitalization likely to cause a disruption in the industry?
How can the company turn data into a strategic asset?
What is the company’s capability and readiness to embrace digitalization?
© Marko Luhtala 2017
Investors have a clear interest
in digitalization…
3
…because companies who
apply digital technologies typically:
GROW
FASTER
BUILD
A UNIQUE
ADVANTAGE
COMMAND
HIGHER
VALUATION
Building a competitive edge today without digital technology is difficult.
Tomorrow it will be impossible.
© Marko Luhtala 2017
Digital DD is an integral part of any investment
process
4
Digital
Due
Diligence
IDENTIFYING NEW
BUSINESS
OPPORTUNITIES
Map and prioritize untapped digital
opportunities.
Focus on delivering unique customer value,
accelerating growth and building a
competitive edge.
ASSESSING DIGITAL
READINESS AND
CAPABILITIES
Evaluate implementation
readiness.
Focus on vision, leadership,
competences and technical readiness.
A forward-looking process
covering two areas
© Marko Luhtala 2017
We examine the common sources of digital
business opportunities
5
MAKE YOUR PRODUCTS
AND SERVICES SMARTER
APPLY NEW DIGITAL
BUSINESS MODELS
1 2
SCALE YOUR SALES
AND OPERATIONS
3
TURN DATA INTO A
STRATEGIC ASSET
4
© Marko Luhtala 2017
Digitalization has a huge impact on
the investment case
6
Innovative companies generate total shareholder
return premiums of
7.5 percent over their industry peers
Source: BCG
Recurring revenue is worth 3–4x as much as one-time
revenue in company valuation
Source: High tech industry statistics
Digitalized processes deliver
10x to 100x efficiency gains compared to the
current processes
Source: Own experience based on several cases
Creation and use of unique stocks of data capital
correlates with 7x faster productivity growth
compared to the industry average
Source: OECD survey on manufacturing and service industries
© Marko Luhtala 2017
A company’s readiness for digitalization depends
on 4 areas
7
Clear and attractive
Realistic roadmap
Vision for the
digital
economy?
Company
culture?
Digital experience
Understanding digital tasks and
roles
Network of digitally
savvy partners
Availability and quality of data
Status of backend systems
e.g. ERP, CRM
Size of the ICT team and investments
Competences?
ICT
infrastructure?
Invests in what’s new
Encourages trial and error
Agile and fact-based decision
making
© Marko Luhtala 2017
Digital Due Diligence is
a clear process
8
BASED ON DIGITAL
DUE DILIGENCE
Amend the investment business case
Embed digitalization into the growth strategy
Build a digitalization roadmap
Appoint required skills in the board and management
Total duration: 2–3 weeks
Set targets with
the investor team
Due Diligence:
• 1-2 workshops
• Interviews
• Self-assessment
Validate opportunities
with
customers
Report and
recommendations
© Marko Luhtala 2017
Recommendations
for investors
9
1
ONE STRATEGY
Include digitalization in the strategies
at the investment phase or when
rebuilding the growth plans – don’t
make it a separate
exercise.
2
PRIORITIZE
Compare the digital
opportunities against the execution
challenges.
3
QUICK WINS
Identify quick wins that deliver fast
returns and get you on the learning
curve.
4
COMMON ASSETS
Consider building
common digital assets and
competences for your company
portfolio to
accelerate implementation.
© Marko Luhtala 2017
© Marko Luhtala 2017
Marko Luhtala – your digital expert
10
MARKO LUHTALA has almost 20 years
of experience in digitalization in several industries ranging from
retail and consumer electronics to construction and agriculture.
He has a rare background combining international corporate
executive experience and technology entrepreneurship.
As an international sales and marketing executive Marko has
applied digitalization extensively in his own business
operations globally. Later, as a SaaS and digital marketing
entrepreneur he has developed digitalization solutions
successfully for dozens of client companies.
© Marko Luhtala 2017
© Marko Luhtala 2017
ADVISOR, CONSULTANT
marko.luhtala@ajantasalla.fi
+358-50-3879903
www.ajantasalla.fi
MARKO LUHTALA
I HELP COMPANIES WIN IN THE DIGITAL
ECONOMY

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Digital due diligence - Discover the full potential of digitalization

  • 1. © Marko Luhtala 2017 Click to edit Master title style Digital Due Diligence – Discover the full potential of digitalization – 23.9.2017 MARKO LUHTALA Ajantasalla Yrityspalvelut
  • 2. © Marko Luhtala 2017 Are your companies ready for the digital economy? 2 YOU NEED DIGITAL DUE DILIGENCE TO KNOW: Does the company have untapped opportunities to deliver unique customer value with digitalization? How can digitalization accelerate company growth and drive valuation? Is digitalization likely to cause a disruption in the industry? How can the company turn data into a strategic asset? What is the company’s capability and readiness to embrace digitalization?
  • 3. © Marko Luhtala 2017 Investors have a clear interest in digitalization… 3 …because companies who apply digital technologies typically: GROW FASTER BUILD A UNIQUE ADVANTAGE COMMAND HIGHER VALUATION Building a competitive edge today without digital technology is difficult. Tomorrow it will be impossible.
  • 4. © Marko Luhtala 2017 Digital DD is an integral part of any investment process 4 Digital Due Diligence IDENTIFYING NEW BUSINESS OPPORTUNITIES Map and prioritize untapped digital opportunities. Focus on delivering unique customer value, accelerating growth and building a competitive edge. ASSESSING DIGITAL READINESS AND CAPABILITIES Evaluate implementation readiness. Focus on vision, leadership, competences and technical readiness. A forward-looking process covering two areas
  • 5. © Marko Luhtala 2017 We examine the common sources of digital business opportunities 5 MAKE YOUR PRODUCTS AND SERVICES SMARTER APPLY NEW DIGITAL BUSINESS MODELS 1 2 SCALE YOUR SALES AND OPERATIONS 3 TURN DATA INTO A STRATEGIC ASSET 4
  • 6. © Marko Luhtala 2017 Digitalization has a huge impact on the investment case 6 Innovative companies generate total shareholder return premiums of 7.5 percent over their industry peers Source: BCG Recurring revenue is worth 3–4x as much as one-time revenue in company valuation Source: High tech industry statistics Digitalized processes deliver 10x to 100x efficiency gains compared to the current processes Source: Own experience based on several cases Creation and use of unique stocks of data capital correlates with 7x faster productivity growth compared to the industry average Source: OECD survey on manufacturing and service industries
  • 7. © Marko Luhtala 2017 A company’s readiness for digitalization depends on 4 areas 7 Clear and attractive Realistic roadmap Vision for the digital economy? Company culture? Digital experience Understanding digital tasks and roles Network of digitally savvy partners Availability and quality of data Status of backend systems e.g. ERP, CRM Size of the ICT team and investments Competences? ICT infrastructure? Invests in what’s new Encourages trial and error Agile and fact-based decision making
  • 8. © Marko Luhtala 2017 Digital Due Diligence is a clear process 8 BASED ON DIGITAL DUE DILIGENCE Amend the investment business case Embed digitalization into the growth strategy Build a digitalization roadmap Appoint required skills in the board and management Total duration: 2–3 weeks Set targets with the investor team Due Diligence: • 1-2 workshops • Interviews • Self-assessment Validate opportunities with customers Report and recommendations
  • 9. © Marko Luhtala 2017 Recommendations for investors 9 1 ONE STRATEGY Include digitalization in the strategies at the investment phase or when rebuilding the growth plans – don’t make it a separate exercise. 2 PRIORITIZE Compare the digital opportunities against the execution challenges. 3 QUICK WINS Identify quick wins that deliver fast returns and get you on the learning curve. 4 COMMON ASSETS Consider building common digital assets and competences for your company portfolio to accelerate implementation. © Marko Luhtala 2017
  • 10. © Marko Luhtala 2017 Marko Luhtala – your digital expert 10 MARKO LUHTALA has almost 20 years of experience in digitalization in several industries ranging from retail and consumer electronics to construction and agriculture. He has a rare background combining international corporate executive experience and technology entrepreneurship. As an international sales and marketing executive Marko has applied digitalization extensively in his own business operations globally. Later, as a SaaS and digital marketing entrepreneur he has developed digitalization solutions successfully for dozens of client companies. © Marko Luhtala 2017
  • 11. © Marko Luhtala 2017 ADVISOR, CONSULTANT marko.luhtala@ajantasalla.fi +358-50-3879903 www.ajantasalla.fi MARKO LUHTALA I HELP COMPANIES WIN IN THE DIGITAL ECONOMY