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Jaakko Kankaanpää - IoT Took My Money - Mindtrek 2016

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Jaakko Kankaanpää - IoT Took My Money - Mindtrek 2016

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Jaakko Kankaanpää - IoT Took My Money - Mindtrek 2016

  1. 1. IoT Took My Money: The business case for IoT Jaakko Kankaanpää, Mindtrek IoT Event 18.10.2016
  2. 2. My dream: From this...
  3. 3. The tech is already here FROM MINORITY REPORT TO BURBERRY
  4. 4. http://nordicapis.com/20-emotion-recognition-apis- that-will-leave-you-impressed-and-concerned/
  5. 5. …to this: Things just happen when or prior to when I need them and the whole purchasing & payment process is somewhere in the background. I will not even have to make the conscious decision to buy – things just happen in one smooth flow. IoT took my money.
  6. 6. Case #2: Flat tire “Dear driver my tire broke. In 2 km I will steer to the next rest zone by the road and help will arrive in 15 minutes. I have also updated your calender, renewed the tickets for the next show and notified your friends.“
  7. 7. We all know the story….
  8. 8. By Sonera Getting the data is not enough It’s not true IoT before you act & automate! Sense & Connect Aggregate & Analyze Act & Automate • Sensors & modern hardware (pre & retro fit) • Connectivity & software management • Device management • Data aggregation and management for customers (i.e. dashboards, reporting, tools) • Custom analytics • Data Quality & Privacy management • Predictive maintenance & Asset management • Convergent charging • Real-time offer management From data collection to business innovation through IoT
  9. 9. (The tech is easy)
  10. 10. (Best practices and methodology are readily available)
  11. 11. And we have Lean to run our development 
  12. 12. 30.9.2013 www.ambientia.net 15 Even large organizations have undergone their pilots and POCs
  13. 13. Customers don’t call them Internet of Things applications.” The people that will benefit the most from these concepts are the end users. They will be the people to drive the need and demand for this technology. http://www.automationworld.com/its-not-internet-things-its-business-case Are we ready to stop tinkering and start being serious? What is the true business effect of IoT / digitalization?
  14. 14. Esittely The inherit Claim #1: IoT is not a technical project Tech is nothing if not combined with business strategy
  15. 15. Digitalization is actually not just one thing…it’s a convergence of trends and developments in technology Smart / Connected devices Advanced integration Data visualization Mesh Networks: sensors Prescriptive algorithms 3D printing Mass Customization Autonomous vehicles Cognitive Automation Content Analytics Machine to Machine communication Predictive and content analytics Internet of Things / internet of everything Consumer telematics AI Crowdsourcing Location intelligence Big Data Open Data Machine learning
  16. 16. The 8 game changers (P. Diamandis) 1. Computation 2. Internet of Things (Sensors & Networks) 3. Robotics/Drones 4. Artificial Intelligence 5. 3D Printing 6. Materials Science 7. Virtual/Augmented Reality 8. Synthetic Biology
  17. 17. Information is the key driver “Information is the oil of the 21st century, and analytics is the combustion engine”Peter Sondergaard, Gartner © Cyclecious
  18. 18. © McKinsey 21 How will digitalization proceed and what is the scale?
  19. 19. Let’s take a look at (the winners of) the internet revolution:
  20. 20. Fabrizio Loncini From CD’s to Ipod
  21. 21. http://expandedramblings.com/index.php/airbnb-statistics/ This year 2 million listings in 192 countries and 57.000 cities – that’s some hotel chain! 500.000 customers / night
  22. 22. Wayfair: reaching 1 billion sales by selling furniture utilizing state of the art algorithms
  23. 23. www.ambientia.net 26
  24. 24. Where will Apple grow next? Revenue - Devices - Software - App Store (3rd parties included)kset) - Content - Perfect ecosystem control Over 800 million credit cards
  25. 25. © Asymco 2012: 43.62% 2013: 9.55% 2014: 7.24%, 2015: 28.22% This is the growth rate in Apple’s revenues over the last four years, for an annual average of 21.7%. In 2015, the company racked up more than $231 billion in sales. High rates of growth aren’t typically associated with such a large revenue base, yet Apple has defied convention. Growing revenue by just 10% in 2016 would require finding a new $23 billion business. To put that in perspective, that’s more than Time Warner Cable made in all of 2014. mattcollinsblog.com/
  26. 26. Claim #2 In (almost) any business the next phase is to focus on combining the digital and physical to create new value chains
  27. 27. The big boys lead the way….Sensors, Automation, A.I., Robotics = physical By Sam Churchill
  28. 28. 4 pillars of Amazon (Bryan Eisenberg) • Customer Centricity • Culture of optimization • Culture of innovation • Culture of agility “We are not in the business of selling books, but of helping our customers buy books.” Jeff Bezos
  29. 29. The home front
  30. 30. 33
  31. 31. We already have our own trailblazers
  32. 32. Example of how to expand strategically: who owns IoT www.ambientia.net 35
  33. 33. Other IoT effects: Smart & evolving products Could the price of a used car actually rise?
  34. 34. Marketing and other functions will be affected as well Virtual reality + buying shoes + charity + emotion = unforgettable shopping & brand connection
  35. 35. © The Digital Enterprise Why this (digitalization driven) disruption is different? by james mcquivey
  36. 36. The world of unexpected convergent consequenses • The combined disruptive effect creating and transforming business & value chains • Very difficult to predict based on current experiences and models
  37. 37. And it’s faster and do or die: The Accenture Shark Fin model: The age of binary success Digital disruption is speeding up innovation and changing traditional industry models from years to weeks • Volatile • Complex • Fast http://zafin.com/our-articles/infographic-shark- fin-model-digital-disruption/
  38. 38. Lack of speed: From eagle to pigeon – missing free-to-play
  39. 39. Global Institute research supports that belief, estimating that the impact of the Internet of Things on the global economy might be as high as $6.2 trillion by 2025. $6.2 trillion The ballpark?
  40. 40. Even the modest estimates are in the 100’s of billions for EU alone
  41. 41. No field of business will escape
  42. 42. The hype!
  43. 43. The view of the World Economic Forum By Blesblov & Pascal Charest
  44. 44. Could this really happen (again)?
  45. 45. Claim #3: This 4th revolution will demonetize and deconstruct the current value chains significantly • It is not enough to utilize IoT in one function or process or value chain element – the whole chain has to be retooled • The “old” laws of entering the field don’t apply • New competitors and completely retooled old competitors have the edge • Still “old” players who cover an industry/value chain end to end have an advantage at least if reacting first “Demonetizing & dematerializing are the key activities of disrupting business in the age of zero marginal cost” @PeterDiamandis
  46. 46. Not just us -> ATKerney: recommendations • Develop IoT objects and use cases in close cooperation with the customer and a firm understanding of the value chain • Bring IoT solutions to market in a way that maximizes their chance for adoption • Extend the customer relationship throughout the life cycle • Navigate the regulatory environment and public perceptions to avoid IoT being viewed as an intruder of privacy • Contribute to powerful industry relationships to ensure openness. https://www.atkearney.com.tr/strategic-it/ideas-insights/article/-/asset_publisher/LCcgOeS4t85g/content/the-internet-of-things-a-new-path-to-european-prosperity/10192?inheritRedirect=false&redirect=https%3A%2F%2Fwww.atkearney.com.tr%2Fstrategic-it%2Fideas- insights%2Farticle%3Fp_p_id%3D101_INSTANCE_LCcgOeS4t85g%26p_p_lifecycle%3D0%26p_p_state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3Dcolumn-4%26p_p_col_count%3D1
  47. 47. Gartner’s example: The digital edge – implementing digital (The Digital Edge / © Gartner) From context and outcomes to digital From tech to outcomes There are loads of great tools for the job
  48. 48. 30.9.2013 51 A model to map and plan implementig the digital dimension (The Digital Edge / © Gartner)
  49. 49. Examining the cooperation of digital and physical (The Digital Edge / © Gartner)
  50. 50. How it should be viewed : (Mark P. McDonald) – Let’s not develop an electric patient treatment card but the whole smart hospital http://blogs.gartner.com/mark_mcdonald/2013/01/23/digital-strategy-or-digital-tragedy/
  51. 51. Digitalization conjures forth completely new networks and value chains Claim #4 Developing a single process or plain optimization is not enough – the whole strategy must be viewed through the new paradigm © linh.ngân
  52. 52. 55 Why everyone is forced to act or die: A comparison to eCommerce 0 100000 200000 300000 400000 500000 600000 Amazon Walmart Safeway Turnover/ employee (dollars) Amazon Walmart Safeway Comparison (from Finland): Trad. vs. omnichannel cost structure -> 40 % VS 13 %
  53. 53. 56 GE: Evolution Series-veturi Jaksaa vetää 170:tä Boeing 747 -jumboa vastaavan painon Leikanneet polttoaineen kulutusta -6,3% Nostaneet nopeutta 10-20% GE Trip Optimizer
  54. 54. By Andrew Morrell A 1 percent change in fuel burn for an airline is worth hundreds of millions of dollars.” – Jeff Immelt We will experience the two of the most amazing events in human history: the creation of true machine intelligence and the connection of all humans via a common digital network, transforming the planet’s economy The Second Machine Age, Erik Brynjolfsson and Andrew McAfee 2 timelines for the benefits…
  55. 55. What about the deep end: The moonshots (10 X instead of +10%): • Should we tinker in the world where these companies already operate? • All these companies already have significant funding
  56. 56. Furthering our lifespan: the 72 is the new 30 Between 1910 and 2010 improvements in medicine and sanitation increased the human lifespan by 50 percent from 50 to 75 years. Today with the emergence of exponential technologies such as those being pioneered and advanced by HLI we have the potential to meaningfully extend the lifespan even further.
  57. 57. Mining asteroids
  58. 58. Even if we tone it down a notch…
  59. 59. And it’s working
  60. 60. To recap: IoT is not a tech project & The relationship between business strategy and digitalization • They should not be separate things but digitalization should be an integral part of the actual strategy
  61. 61. © LuAnn Snawder Strategic agility is the most crucial competitive advantage today.

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