© Marko Luhtala 2016
Click to edit Master title style
Thoughts on digitalization
WHAT I HAVE LEARNED IN 17 YEARS
August 2016
MARKO LUHTALA

© Marko Luhtala 2016
Personal journey in digitalization
2
Early adopter
eBusiness director at Nokia, 1999–2002
Solution provider
Sales director/Enterprise solutions at Nokia, 2002–
2005
User of digital technology widely in commerce
Director/ VP of Retail at Nokia, 2006–2010
Solution provider, SaaS-entrepreneur
CEO at NearMe Services, 2010–2016
MARKO LUHTALA
© Marko Luhtala 2016

© Marko Luhtala 2016
Discussion topics
What digitalization means in my view
How I saw a hype turn into
industry transformation
Customer is sitting on the driver’s seat
Don’t let technology take over the customer!
Five points to consider for a CEO

© Marko Luhtala 2016
What digitalization means
in my view

© Marko Luhtala 2016
What digitalization means in my view
Digitalization means applying digital technology to improve
your business. At the dawn of eBusiness we talked about
“doing business with e”.
Digitalization can be used in communicating, interacting and
transacting with your customers, suppliers and employees.
Media can be smartphone, tablet, computer, digital display and
kiosk,
or other similar devices.
The purpose is not to digitize everything but to use it where it
makes sense, which is quite often.
All industries will be impacted and many disrupted.
While digitalization is by default about technology, it has big
impact in processes, organization, skills, KPIs, leadership and
many other areas
of the business.
5

© Marko Luhtala 2016
How I saw a hype
turn into
industry transformation

© Marko Luhtala 2016 7
First digital faceoff was almost
20 years ago
DOT-COMS
versus
BRICK’n’MORTARS
© Marko Luhtala 2016

© Marko Luhtala 2016
Ever since, it has been a rocky road…
8
…causing headache and opportunities to many
– including me
Dot-Com hype
Early adopters
burn their
fingers
Explosion
of digital devices &
use of Internet
Businesses
underinvest in
digital
Digital
tsunami hits many
industries
1996 2006 2016
Radical change
in customer
behaviour

© Marko Luhtala 2016
eCommerce
Online payment
SaaS
Real-time
24/7
Global
On-demand
Market places
NEW BUSINESS MODELS
Digitalization offers wide and deep
opportunities
9
Examples of how I have used digitalization in business:
Online sales &
marketing
Personalizing and
customizing
Targeted advertising
Marketing automation
Online support & self-
help
Online communication
Social networks
Interactive engagement
CUSTOMER INTERFACE
Internal communication
Recruitment
Supplier management
Automated and fail-safe
processes
Online KPIs and
reporting
Remote teams
Field force management
Increasing management
clock speed
INTERNAL EFFICIENCY

© Marko Luhtala 2016
Half-a-dozen reasons why digital services are
attractive
10
>90% of potential
customers can access
your services at home,
at work, on the move or
anywhere
Reachable
Like a dream employee –
lightning fast, same
output every time
Fast and
consistent
You can offer digital
service relatively easily to
millions or even billions of
people
Scalable
24/7 is not a problem
– bits never sleep
Available
You can track all
events with a great
detail
Measurable
Often 10x or 100x
efficiency gains are
reported comparing digital
to current processes
Effective

© Marko Luhtala 2016
World is already a different place
11
Finland’s biggest corporate
tax payer is a 200-people
mobile games company
Supercell
Alibaba, a Chinese
ecommerce company,
features close to
1 billion products and
has a sales record of
14BUSD in one day
90 million people follow
Katy Perry, a pop singer,
in social media
And by the way,
you don’t need to
get lost again, ever
100 million people
chase cartoons on
the streets in
summer 2016

© Marko Luhtala 2016
Customer is sitting on
the driver’s seat

© Marko Luhtala 2016 13
Customers are already digital
and mobile
99% of Finns under 55 and
76% of Finns over 55 use
Internet for personal
purposes.
Source: Consumer barometer with Google
Internet use is
pervasive across all age
groups
60% of Finns use
smartphone equally or more
often than computer to
access Internet.
Source: Consumer barometer with Google
For most
people, Internet access
is smartphone-centric

© Marko Luhtala 2016
I believe there is more to come in
online commerce
14
Where do customers shop?
YESTERDAY
Brick’n’mortar store
TODAY
Online store
Brick’n’mortar store
Mobile commerce turns any
physical surrounding to a point-
of-sales
TOMORROW
Online store
Brick’n’mortar store
Bus stop Display
window
Product
catalogue

© Marko Luhtala 2016 15
Because expectations have
radically changed
”People should go from
wanting to buying in 30 seconds”

© Marko Luhtala 2016
It is not online or offline,
but omnichannel
16
eCommerce is growing fast but 90% of
retail sales still takes place in physical
stores
Every fourth shopper searches products
on mobile, visits store to see the product
and ends up buying online
Customers mix the use
of mobile, computer
and stores in their path
to purchase
Over 50% of Google searches are done
on mobile devices
Over 80% of shoppers consult their
phones on purchases they're about to
make in a store.
At the same time the role
of mobile is rapidly
increasing

© Marko Luhtala 2016
Not everything is going digital
17
Role of human touch and physical retail stays e.g. in:
Large client account management
Retail sectors with high-touch sales or non-
standard products
Premium customer service
Shopping malls that are turning into leisure centers

© Marko Luhtala 2016
Don’t let technology
take over the customer!

© Marko Luhtala 2016
A million has become a thousand
19
2000 2016
Technology has become faster, easier and cheaper
Responsive
design Open source
Cloud
SaaS
EXAMPLE: Setting up an online store.
COST
TIME TO MARKET
YEAR
1M USD
10 months
1000 USD
10 days

© Marko Luhtala 2016
Leading to an explosion of offering
20
As a result, consumers and businesses are
suffering from technology overdose
Millions of
consumer apps
Thousands of
business
software
Tens of thousands
of technology
providers
2012 2016YEAR
350 1950Number of companies listed in annual
Marketing Technology Landscape

© Marko Luhtala 2016 21
However, customer experience is more important
than features
iPhone vs. Symbian Google vs. Yahoo
Winners make user experience intuitive and simple
regardless of the underlying complex technology

© Marko Luhtala 2016
Best digital business cases
22
Best digital business cases globally
are from innovations in:
Not latest technology
customer-centric services
and processes

© Marko Luhtala 2016
Five points to consider
for a CEO

© Marko Luhtala 2016 24
SOURCE
McKinsey study
1. Digitalization is about business
not IT
75% of CEOs consider growth
as the main intent
behind digital programs

© Marko Luhtala 2016 25
SOURCE
CMO Council survey
On average,
60% of a marketer’s time is devoted to
digital marketing activities
2. Digital is already impacting the organization

© Marko Luhtala 2016 26
3. Digitalization challenges the
company culture
Typical hurdles in digital transformation:
Lack of understanding of digital business models and business
cases
Lack of digital talents
Inflexible organization and processes
Data is too fragmented and of poor quality for decision making
Culture does not support “experimental or start-up mindset”

© Marko Luhtala 2016
4. The speed of innovation is
increasing
27
Current and emerging trends:
Big Data
Predictive
Marketing
Personalized
Customer
Experience
Artificial
Intelligence
Internet of
Things
Waiting does not pay off!
…in digital technology, processes and business models

© Marko Luhtala 2016 28
3-5 years to make digital business-as-
usual
from the customer interface but cuts
across the organization and
processes
a senior leader to see through the
transformation, typically a Chief Digital
Officer is appointed
5. Digitalization is a transformation
process
TAKES
STARTS
NEEDS

© Marko Luhtala 2016
The magnitude of impact of digitalization should not
be underestimated
29
Market positions will be redistributed
in the coming years
Industry leaders may fall, challengers rise and new
entrants become leaders.

© Marko Luhtala 2016
SEASONED DIGITAL EXECUTIVE
marko@luhtala.com
+358-50-3879903
MARKO LUHTALA
NEED HELP IN DIGITAL STRATEGIES AND
EXECUTION?