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ValOli presentation 2021

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This presentation represents my vision and activities in the arena of digital transformation

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ValOli presentation 2021

  1. 1. Introduction ValOli BV Changing The Game With A Digital Strategy In the new world, it is not the big fish which eats the small fish, it’s the fast fish which eats the slow fish — (Klaus Schwab/WEF) Aad Vredenbregt Mastering the Challenge of Digital Transformation “In this digital age the pace of change has gone into hyperspeed”
  2. 2. CONTENT OF MY PRESENTATION (Mega)Trends Exponential Technology Digital Transformation Change the Game: Be Digital, get Digital or Perish How can ValOli Help
  3. 3. Take-away THE ACCELERATING PACE OF CHANGE IN TODAY’S SOCIETY CAUSES CHANGE TO BECOME AN EVERYDAY PART OF ORGANIZATIONAL DYNAMICS MORE THAN EVER IT IS KEY TO STAY RELEVANT “In the next 10 years, we’re going to reinvent every industry on this planet.” Dr. Peter H. Diamandis, Founder & Executive Chairman of the XPRIZE Foundation, Executive Founder and Director of Singularity University, named as one of the World’s 50 Greatest Leaders (Fortune Magazine) “In this presentation we should be more explicit on step two”
  4. 4. New Technology adoption curves Source: Kleiner Perkins, Internet Trends 2018 0% 25% 50% 75% 100% 1900 1915 1930 1945 1960 1975 1990 2005 2017 Adoption [USA] G r i d e l e c t r i c i t y R a d i o R e f r i g e r a t o r A u t o m a t i c T r a n s m i s s i o n C o l o r T V S h i p p i n g c o n t a i n e r s M i c r o w a v e C o m p u t e r C e l l p h o n e I n t e r n e t S o c i a l M e d i a U s a g e S m a r t p h o n e U s a g e
  5. 5. Reframing at fast pace …. Airlines Automobile Telephone Electricity Credit Card Television ATM PC Cell Phone Debit Cards Internet PayPal iPods YouTube Facebook Twitter Number of years for a product to reach 50 million users 68 yrs 62 yrs 50 yrs 46 yrs 28 yrs 22 yrs 18 yrs 14 yrs 12 yrs 12 yrs 7 yrs 5 yrs 4 yrs 4 yrs 3 yrs 2 yrs
  6. 6. Competing in a world without borders
  7. 7. We are living in an age of mounting complexity and speed. Companies are operating in a competitive environment that is six times more complex than it was in 1955, when the Fortune 500 was launched. For the best companies, this complex world is an opportunity to gain a competitive advantage over their rivals. But, for too many companies saddled with approaches to management that are outdated and ineffectual, it presents a seemingly insurmountable challenge
  8. 8. Megatrends shape the World KNOWLEDGE & PRODUCTION SOCIETY IMMATERIALIZATION DEMOCRATIZATION A C C E L E R A T I O N & C O M P L E X I T Y T E C H N O L O G Y D E V E L O P M E N T S U S T A I N A B I L I T Y N E T W O R K E C O N O M Y D E M O G R A P H I C D E V E L O P M E N T F O C U S O N H E A L T H POLARIZATION GLOBALIZATION COMMERCIALIZATION I N D I V I D U A L I Z A T I O N E C O N O M I C G R O W T H SOURCE: COPENHAGEN INSTITUTE FOR FUTURE STUDIES
  9. 9. From Empires to Networks Empires Networks
  10. 10. 1900 1960 1990 2010 Age of Manufacturing Age of Distribution Age of Information Age of Connected Customer Mass manufacturing makes industrial powerhouses successful Global connections and transportation systems make distribution key •Ford •Boeing •GE •Philips •Wall-Mart •Toyota •P&G •UPS Connected PCs and supply chains mean those that control information flow dominate •Amazon •Google •Comcast •Capital One Empowered buyers demand a new level of customer obsession •Macy •Salesforce •Amazon
  11. 11. The Macro Sources of Disruption Your organisation 3. Infrastructure 2. Education 1. Wealth distribution 4. Government 5. Geopolitics 6. Economy 7. Public health 8. Demographics 9. Environment 10. Media & Telecom 11. Technology
  12. 12. Make new markets Hyperscale platforms Unconstrain supply Reimagine business systems Create new value propositions Undistort demand Supply Demand Uncover latent supply Make capacity available in smaller increments Change supply-side cost structure by automating, virtualizing or disintermediating Enrich the product or service with information, social content or connectivity Do more of the customers’ work for them Address unmet demand by unbundling or tailoring Make it easy and make it now •Find new -cheaper and easier- ways to connect supply and demand Face new competition and/or opportunities by leveraging customer relationships or information Create or fight network effects Degree of change in the nature of supply and demand Digitization can disrupt industries when it changes the nature of supply, demand or both Modest change Extreme change
  13. 13. Een digitale revolutie brengt fundamentele verandering teweeg in de economie en het leven van mensen.
  14. 14. ‘Alles wat gedigitaliseerd kan worden zal in waarde afnemen’ (Technologiecongres Stockholm) RvB’s (zelfs van Fortune 500-bedrijven) hebben vaak geen idee van doorbraaktechnologie die om de hoek gemaakt wordt en het voortbestaan van hun bedrijf in gevaar brengt. Andere manieren van werken: zonder hiërarchische structuren en georganiseerd in kleine flexibele eenheden (“Agile”). Google behoort inmiddels tot de gevestigde orde en zal op haar beurt door disruptie getroffen worden. ‘In de technologiesector komt vernieuwing per revolutie, niet per evolutie’
  15. 15. Connectivity Connected Devices Connected Homes Connected Workspaces Healthcare Connected Buildings Industrial (internet) Autonomous Cars Connected Transportation Augmented Reality Surveillance Ubiquitous Smart Cities
  16. 16. ubiquitous adjective present, appearing, or found everywhere.
  17. 17. Digital transformation is quite simple. Digital transformation is adopting what are becoming mainstream digitization technologies such as Cloud, IoT, Blockchain, mobilizations, Customer engagement, Artificial Intelligence, big data and data analytics. Your challenge: How do you use those technologies to improve the value of your product, being the value your customers get out of your product or the value they get out of your service.
  18. 18. Digital transformation at its basic level • Grow revenue • Improve Customer experience • Reduce costs • Boost loyalty and retention • Differentiate competitively • Cloud • Mobility • IoT • Analytics • Artificial Intelligence • Virtual reality • Collaboration • Security • Insurance claim filed via smartphone, electronic form plus photo • Car schedules service call or gasstation • Sensors vs people monitor remote oil rigs • Employees use digital tools to work remotely Innovative Application Technology Drives Value Improves product experience
  19. 19. Digital transformation: Deciding on the Right Business Model Make it yourself (using yr own ingredients, on yr own infrastructure, yr labour, at yr own premises) Make it yourself (using yr own ingredients, process & people, on someone else’s infrastructure) Customize yourself (using yr won ingredients with someone else’s main process/tools and their infrastructure) License to many (your IP, but rely entirely on someone else’s processes, people & infrastructure, yr name on the box, highly scalable Traditional On-Premises (“on-prem”) Infrastructure- as-a-Service (IaaS) Platform- as-a-Service (PaaS) Software- as-a-Service (SaaS) Heavy CAPEX Medium CAPEX Low CAPEX Asset light Lowest risk | Low Return total IP protection & control e2e UX, totally differentiated, less time and capital to innovate, hard to scale Low risk | Some Return lower CAPEX, maintain differentiation except UX, total IP protection, more flexibility, capital & time to innovate, low risk Medium risk | Good Reward low CAPEX, more flexibility, capital & time to innovate, some loss of differentiation re: delivery & cooking process (commoditized) Higher risk | Higher Reward little labour or assets, services delivered digitally by partners, most flexible, highly scalable, higher margins, more time/ resource to innovate, license IP- higher risk Service Delivery Types The Service Stack Elements & processes Service Models Service Financial & Risk Models high value to low value Pizza Dough Sauce & Toppings Cook the Pizza Oven Kitchen Delivery Delivery Kitchen Oven Pizza Dough Sauce & Toppings Cook the Pizza Delivery Kitchen Oven Cook the Pizza Pizza Dough Sauce & Toppings Delivery Kitchen Oven Cook the Pizza Pizza Dough Sauce & Toppings You Manage Someone else manages Example: Pizza-as-a-Service
  20. 20. Digital Disruption has already happened World’s largest taxi company owns no taxi’s (Uber) Largest accommodation providers own no real estate (AirBnB, Booking) Largest phone companies own no telco infra (Skype, WeChat) World’s most valuable retailer has no inventory (Alibaba) Most popular media owners create no content (FB, Instagram a.o.) Fastest growing banks have no actual money (SocietyOne) World’s largest movie house owns no cinemas (Netflix) Largest software vendors don’t write their apps (Apple, Google)
  21. 21. Connectivity will Revolutionize how Organizations Function Technological and Digital Productivity Shifts in Ways of generating Business Value Shifts in Resource Distribution Changing Workforce Culture and Values Changes in the demand for Talent Changes in the supply of Talent Automation Big Data and Advanced Analytics Access to information and Ideas Simplicity in Complexity Agility and Innovation New Customer Strategies New Demographic Mix Skill Imbalance Shifting Geopolitical and Economic Power Diversity and Inclusion Individualism and Entrepreneurship Well-Being and Purpose
  22. 22. Software has strong impact on productivity Productivity - GDP per hour worked in the US $70 $60 $50 $40 $30 $20 $10 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 Software contribution to Productivity Growth 31% 17% 52% 44% 7% 49% 30% 24% 46% 1974-1995 1995-2004 2004-2012 Software Increased Workforce Skills Other Source: OECD “The US Software Industry: Engine for Economic Growth and Employment, 2014
  23. 23. Disruptive innovation Growth Non-disruptive innovation Disruptive innovation Offering a breakthrough solution to an industry’s fundamental problem or barrier Redefining an existing industry problem and solving the redefined problem Identifying and solving a brand-new problem or seizing a brand-new opportunity
  24. 24. Digital Media consumption is growing, everything else is shrinking 2011 2012 2013 2014 2015 TV Radio Print Other Digital 41% 35% 14% 12% 6.6% 3% 30% 43% Mobile desk/laptop Consumer Media Consumption Share (US)
  25. 25. From tech evolution to customer revolution Access Conversation Personalization Customer expectations 1998 2008 2018 Internet Social networks Computing everywhere 147M internet users 1.6B Internet users 38M smartphone users 6M Twitter users 4.2B Internet users 3B smartphone users 336M Twitter users Time + $411B Cloud market 2020
  26. 26. Digital is the new Oil Oil Software $362.5b $348.5b $279.0b $230.0b $225.9b $203.5b ExxonMobil General Electric Microsoft Citigroup BP Royal Dutch Shell 2006 Market Capitalization of the world’s most valuable public companies Other $905b $896b $875b $817b $494b $476b Microsoft Apple Amazon Alphabet Facebook Berkshire Hathaway 2019
  27. 27. Global Top100 companies with largest relative increase in market capitalization 2019 vs 2009 6.081% 3.187% 2.937% 2.679% 1.934% 1.443% Netflix Tencent Salesforce Amazon DowDuPont Nvidia Naspers 1.394% Adobe 1.060% Oil Software Other
  28. 28. Market valuation of sectors Oil & Gas
  29. 29. Products are coming to life! Products are becoming digital, get connected and are starting to produce and collect data.
  30. 30. Smart Systems Product Smart Product Smart, connected Product Product System System of Systems Planters Tillers combine harvesters Farm Equipment System Farm Equipment System Seed Optimization System Weather Data System Irrigation System rain, humidity sensors weather forecasts weather applications field sensors irrigation nodes
  31. 31. The connectivity market is huge 270m connected cars by 2021 130m health devices by 2021 2.7m pets being tracked by 2021 660m smart meters by 2021 400m connected home security & automation by 2021 70m drone shipments by 2021 85m connected streetlight shipment by 2021 73m connected point of sale devices by 2021
  32. 32. But we’re only at the beginning…. Manufacturing Education Provider Services Transportation Wholesale Insurance Financial Services Govnmt Telecom Retail Healthcare Providers Media Information Technology Health Payer Utilities Energy Natural Resources Trailing Life Sciences 0% 0% 50% 100% 100% 50% Digital Processes (Internally Facing, Average%) Digital “Business” (Externally Facing, Average % Revenue) Sustainable New Business Models Low Cost Old Business Models High Cost New Business Models Old Business Models No Industry is Fully Digitalized Yet !
  33. 33. Reframing Strategy in a Digital Economy Corporations need new strategies in a world of digital disruptors. That means setting ambitious visions and coming up with concrete action plans. The new C-suite mantra: “What can we offer today that we couldn’t establish yesterday?”
  34. 34. The new C-Suite (business trends) Business Impact Organizational adoption Incremental Transformational Exponential Bleeding Edge Early Adopters Mainstream The Holistic Employee Digital M&A Aids Smart Infra Digital Compliance Customer privacy Tech Consolidation Time to Value Digital crisis playbooks Cybersecurity leadership Remote working Centers of Excellence Smart Manufacturing Digital Talent Mngt Employee engagement programs Industry 4.0 Products over projects Chief Digital Officer Customers experience design Digital Operating Models Digital Transformation Programs Digital Business models Digital Ecosystems/ API economy Digital Management Theory Data-centric management Network leadership Networks of Excellence Sharing Economy Growth Hacking Collaborative Business Networks Digital disruption Innovation management ©2010-2018 Constallation Research
  35. 35. Elements of speed define digital leadership Make decisions fast enough Execute plans with speed required Differentiated products and services Measure progress vs. competition IT organization operates at speed needed Clear and compelling vision Launch new economic models Improve customer engagement through digital Aggressively fund digital Right people, skills, positions 8,4% 6,8% 8,4% 6,5% 4,6% 5,7% 4,2% 4,0% 3,9% 3,7% 3,6% [Relative importance in determining digital leadership] Source: Bain Digital Insights, 2018
  36. 36. Transforming to digital business Traditional business Bolt on Better products Functional efficiency Safety and cost reduction Digital touchpoints Value proposition Organizational alignment Technology attitude Digital business Digitally integrated products and services Enhanced personal value ecosystem Cross-functional agility Speed and innovation “The Digital Business Imperative”
  37. 37. Go Digital or Keep Crawling Nine out of ten companies say they’re engaged with digitization, but….… 70% of Digital transformations fail • Sole ownership to one person or group (82%) • People management issues (75%) • Communication issues (70%) • Lack of tech and tech knowledge (52%) • Lack of new business model and strategy (33%)
  38. 38. Components of Digital Business Customers Partners Employees Data Data Management Data
  39. 39. The end of the 20th century company Where Customers Navigated Siloed Departments MARKETING SALES SERVICE Activities Metric of Success Technology Create content, events, ads No of leads generated Marketing Automation Develop Relationships Sales closed CRM React to calls, emails etc Problems solved efficiently Call Center
  40. 40. Age of Connected Customer: Customers have more than Ever 77% 83% 82% Percentage of business buyers who agree: “Tech has changed expectations of how companies should interact with me.” “Tech has kept me more informed about product choices than ever before.” “Tech makes it easier than ever to take my business elsewhere.” Source: Salesforce Research, october 2016
  41. 41. The customer decision journey has radically shifted towards digital touchpoint 23 8 30 22 8 9 Consideration 36 8 10 13 18 15 Evaluation 30 8 9 9 39 5 Purchase Digital Inbound commercial hotline Traditional media Word of mouth Fysical store Direct marketing Derived Influence Index “Path to Purchase” McKinsey & Company, January 2013
  42. 42. Organizations in the Age of the Connected Customer Old Style linear digital business Participation in digital ecosystems with platform offerings • Continuously grow ecosystem • Move faster than competitors • Engage with start-ups whose products/services will plug into the digital ecosystem • Aware of cost and skills required for innovation Technologies Offerings Process Level Solutions
  43. 43. Competing in a digital world Four lessons from the software industry: 1. Moving from products to platforms or pipelines 2. Accelerating revenue by creating new business models 3. Accelerating cycle time and co-creating with customers 4. Creating an agile organization
  44. 44. (Software)Technology drives the business CIO CTO Governance Enterprise Architecture Project Management Developers Analysts Project Managers Team Leaders Operations Business Users Sponsors Support Units (Legal, HR, Compliance) Contractors Service Providers Vendors IT Management IT Staff Stakeholders & Providers D e l i v e r y D i r e c t s & S u p p o r t s • Applies technology to what business does today • Good at maintaining status quo • Focus on efficiency, economy of scale, continuity • Well-defined processes designed to monolithic IT • Explores how technology re-imagines the business • Good at managing constant technology change • Focus on responding to opportunities at scale • Dynamic self-organizing process for small IT in volume Change Agents Vendors Service Providers Support Units Contractors Sponsors Business Users Operations Network Leaders Change Managers Analysts/ Developers CIO CTO COO CMO Old School IT centralized hierarchical automation of business New School IT decentralized enablement of digital transformation
  45. 45. Cost Reduction (Employee) Productivity Customer engagement DIGITAL TO ADDRESS 3 COMMON BUSINESS THEMES Seen across many regions and industries, including Public Reduce cost of products or services, incl government services Empower employees to meet 21st century consumer-level expectations, while maintaining control and keeping users accountable Technology-empowered, digitally savvy customers are changing your business. How you respond determines whether you win in the age of the customer.
  46. 46. Factors affecting Business Themes most Role of Technology Market factors Macroeconomic factors People skills Regulatory concerns Socioeconomic factors Source: “Redefining competition: Insights form the Global C-suite Study” - IBM Institute for Business Value 2016 2004 2006 2008 2010 2012 2013 2014
  47. 47. The role of technology has shifted Historically, business requirements collected from “business users” drove the technology that then enabled the business to advance. Technology purely played a supporting role in this model. Technology creates new opportunities and fundamentally transforms businesses in all aspects— operations, business models, strategies. It not only enables the business, but also drives its growth and can be source of competitive advantage. Old School New School
  48. 48. Technologies Attracting Most Venture Capital 36,2% Software 2% Telecom m unication 6% Inform ation Technology 9,5% M edia & Entertainm ent 2,6% Financial Services Biotechnology 17,3% 5,8% Industrial energy 7,1% M edical devices & Equipm ent 3,9% Consum er Products & Services 2,1% Networking & Equipm ent [Share of venture capital investment] Source:: analysis of 4,164 investments in US by Martin Prosperity Institute
  49. 49. Companies are allocating higher proportions of their R&D budgets to software and service offerings 50% 40% 30% 20% 10% 0% 2010 2015 2020 Service Offerings +5% Product-based Offerings -19% Software Offerings +43% Allocation of R&D investment per offering type Strategy&’s annual Global Innovation 1000 study (examines the 1,000 public companies that spend the most on R&D)
  50. 50. EVERY BUSINESS IS GETTING DIGITALLY REMASTERED “I expect many industries to be disrupted by software” – Marc Andreesen
  51. 51. SOFTWARE IS EATING THE WORLD de Wet van Moore (die een verdubbeling in processorcapaciteit voorspelt binnen een gegeven tijd) zal ook gelden voor het tempo waarin wetenschap en techniek zich ontwikkelen. “Many industries to be disrupted by software” de rekenkracht van computers groeit dermate snel dat rond 2020-2040 de denkkracht van een computer die van de mens zal overtreffen (Ray Kurzweil) Intel 4004 1971 Intel Core i5 2015 3.500 x performance 90.000 x efficiency 60.000 x lower cost
  52. 52. EXPONENTIAL TECHNOLOGY “What we call disruption is a symptom of Kurzweil’s law of accelerating returns which we’ve seen having an impact in just about every part of society and every aspect of technology the world over”
  53. 53. EVERY COMPANY A SOFTWARE COMPANY The Digital Transformation (DX) economy will be “driven primarily by code”. Enterprises’ ability to grow and compete will increasingly depend on their digital “innovation capacity”—the size and talent of their software development teams. In the DX economy, “code plus data equal innovation.” This will make “software developer” the sexiest job of the 21st century. Enterprises will compete to hire for these essential jobs and software developers will be key for the creation of the new, revenue-generating, productivity-enhancing applications, tapping into the potential of new technologies (e.g., IoT) and embedding data analytics.
  54. 54. Industries are moving at different pace to implement digital transformation Business urgency Political urgency Communications Banking Retail Manufacturing Transport & Logistics Utilities Government Insurance Healthcare Oil & Gas Consumer Intensive Asset Intensive Risk & Investment Intensive
  55. 55. EXPONENTIAL TRENDS & TECHNOLOGIES 81% Advanced Analytics 48% Internet of Things 43% Digital Security 40% Business Algorithms 22% Machine Learning 19% Virtual Customer Assistants 13% Augmented Reality 10% Blockchain 7% Autonomous Vehicles 6% Robots Percentage of respondents to select each technology in top three EXPONENTIAL TRENDS & TECHNOLOGIES
  56. 56. THE WHEEL OF DISRUPTION WEARABLES MAKERS B E A C O N S I O T SHARING V I R T U A L A I A R P A Y M E N T S APPS E P H E M E R A L G E O L O C A T I O N MESSAGING GAMIFICATION B I G D A T A 2 N D S C R E E N EXPONENTIAL TRENDS & TECHNOLOGIES REAL TIME S O C I A L M O B I L E C L O U D C L O U D In the centre is “The Golden Triangle: Social, Mobile, Real Time plus Cloud driving the core of today’s disruptive technologies
  57. 57. Examples of Disrupted Industries 1950 2000 $20 $40 $60 Billions of 2014 Dollars $19.9B $17.9B $16.4B Newspaper incl Digital Newspaper Print Only Facebook Revenue Advertising Revenue: Adjusted for Inflation, 1950-2014 $0 Google Revenue 1960 1970 1980 1990 2010 2020
  58. 58. Examples of Disrupted Industries 0 50 100 150 2000 Unit Sales (millions) Digital Camera iPhone 2005 2010 Worldwide Digital Camera & iPhone Unit Sales (Millions) 1999 2001 2002 2003 2004 2006 2007 2008 2009 2011 2012 2013 2014
  59. 59. 2017 Emerging Technologies Disruptive Potential Timeframe Disruptive Potential Change the World Change Industries Major Advantages <1 year 1-3 years 3-5 years 5 years Cloud-native application platform Containers and container management Real-time interaction management Spatial analytics Insight platforms Security orchestration IoT software and solutions Intelligent agents Augmented and Virtual reality IoT analytics Identity and data management Customer journey analytics AI/Cognitive Hybrid wireless Edge computing Blockchain Drones
  60. 60. Internet Social Mobile Cloud Big data/Analytics 3D printing Renewable energy IoT Cognitive Systems Nanotechnology Robotics Smart Grid Connected Car Smart Homes Next Gen Education Smart Cities Connected Healthcare Sharing economy Autonomous vehicles Maker Economy Energy internet Logistics internet Healthy Life Extension Artificial intelligence Blockchain Future Scenarios Emerging Technology Foundations Genomics Drones Artificial Narrow Intelligence Automation of Everything Cyberwar Money 2.0 Circular Economy Artificial General Intelligence Institution 2.0 Transport 2.0 Empowerment Economy Decentralization of Everything Food 2.0 Democracy 2.0 Human 2.0 DISRUPTION SCENARIO
  61. 61. Biotech Neurotech Nanotech Energy & Sustainability ICT & Mobile Sensoring 3D (printing) Artificial Intelligence Robotics Drones Technology Domains Past Present Future very little overlap between different technological domains Technologies merging at accelerating pace A wave of technological innovations will disrupt existing businesses Speed of technological change EXPONENTIAL GROWTH OF TECHNOLOGY WILL DISRUPT INDUSTRIES AND CHANGE OUR LIVES “When material becomes digital, it gets the characteristics of information and can develop exponentially” Healthcare Infrastructure Construction Energy Monitor our own bodies 3-D-printing of buildings Households producing their own energy Technological Development Over the past 20 years technology has become exponentially cheaper, faster, smaller and more energy efficient The speed of wireless networks doubles every The number of smartphones worldwide doubles every 18 months 48 months Example applications: Technologies ready for disruption: smart cities 3D-printing autonomous vehicles IoT Virtual- & Augmented Reality Blockchain
  62. 62. How Disruptive Technologies can be applied Example Use Cases • Identity management • Voting • Peer to peer transactions • Supply chain management • Smart contracting • Provenance / traceability • Asset registration / ownership • Trade finance • Record management Blockchain Example Use Cases • Insurance claim validation • Precision farming •Infrastructure inspections •Cargo delivery •Railway safety •Construction site management •Forestry management •Facility inspection (wind turbine, oil rig, etc) Drones Example Use Cases • Inventory/material tracking • Real-time asset monitoring • Connected operational intelligence • Customer self-service • Usage/performance benchmarking •Data integration/analytics •Service parts management •Remote service •Real time market insights •Flexible billing and pricing Internet of Things Example Use Cases •Manufacturing •Hazardous industries •Hotels and tourism •Service industry •Automation of predictable tasks •Data management Robots Example Use Cases • Healthcare/ medical devices • Tools and end use parts • Prototyping • Construction manufacturing •Supply chain optimization •Customized products • Remote location production •Rapid prototyping 3D-printing Example Use Cases • Immersive journalism •Virtual workplaces •Manufacturing/product design •Architecture & construction •Education&training •Gaming •Big data management •Entertainment •Healthcare •Merchandising •Travel and Tourism •Virtual Showrooms •Printing and advertising Virtual and Augmented Reality Example Use Cases •Managing personal finances •Trading systems •Real time fraud and risk management •Automated virtual assistants •Underwriting loans and insurance •Customer support, transactions and helpdesks •Data analysis and advanced analytics Artificial Intelligence
  63. 63. Disruptive Capability with greatest impact on your business over the next decade Artificial Intelligence | Machine learning Digital tech | IoT Fin tech solutions Cloud Computing Blockchain 44.3% 26.2% 11.5% 8.2% 4.9%
  64. 64. Machine Learning & Artificial Intelligence AI Pattern recognition Statistics Databases Knowledge discovery Neurocomputing Datamining Machine learning Machine learning is a category of research and algorithms focused on finding patterns in data and using those patterns to make predictions. Deep learning
  65. 65. What can artificial intelligence do? AI can sense…. Hear See Speak Feel AI can think…. Understand Assist Perceive Plan AI can act…. Physical Creative Cognitive Reactive • Natural language • Audio and Speech • Machine Vision • Navigation • Visualization • Knowledge and representation • Planning and scheduling • Machine learning • Deep learning • Robotic process automation • Deep questioning and answering • Machine translation • Collaborative system • Adaptive systems Statistics Econometrics Optimisation Complexity theory Computer Science Game theory Foundation layer
  66. 66. What can artificial intelligence (AI) contribute? Artificial intelligence (AI) refers to the ability of a computer or a computer-enabled robotic system to process information and produce outcome in a manner similar to the thought process of humans in learning, decision making and solving problems Artificial intelligent system Learns from experience Uses the learning to reason Recognises images Solves complex problems Understands language (nuances) Creates perspectives
  67. 67. AI recommended Use Cases 34% 29% 20% 23% 16% 16% 15% 15% 13% 13% 9% 10% 10% Customer Engagement Applications Call Center Service & Support Digital Marketing platforms Cyber Security Financial Management Systems Vertical Specific Software Manufacturing & Operations Supply Chain Management Employee Collaboration Suites Field Service & Support Asset Performance Management None (not integrating AI) Other Other: •BI analytics •Data analytics •Data management & preparation •Document management AI •Medical imaging •Prediction of Molecular Properties •Self service knowledgebase
  68. 68. Tech radar Artificial Intelligence (AI) Technologies Business value-add, adjusted for uncertainty Ecosystem phase High Medium Low Negative Creation Survival Growth Equilibrium Decline Deep learning platforms Semantic technology Biometrics Image and video analysis Swarm intelligence Speech recognition Natural language generation Robotic process automation Text anlyatics and NLP Virtual agents Machine learning platforms AI optimized hardware Decision management Significant success Minimal success Trajectory: Time to reach next phase: 1 to 3 yrs 3 to 5 yrs 5 to 10 yrs Q1, 2017
  69. 69. Artificial Intelligence is not just one technology … but a variety of different sorts of software that can be applied in numerous ways for different applications VIDEOANALY T I C S B I O M E T R I C S FA C I A L R E C O G N I T I O N RECOGNITION GESTURE N E U R A L N E T W O R KS M I N I B O T S N ATURAL LANGUAGE PROCESSING Robotic Process Automation Expert Systems Inference Engines Machine Learning Computer Vision Knowledge Representation Sensor Processing Deep Learning
  70. 70. Artificial intelligent system Artificial Intelligence is more than just an algorithm Optimisation & Recommendations Image Recognition Text Recognition Deployment Decision Support Data Management Data Visualisation
  71. 71. How Machine Learning works 1 2 ++ + -- - - Select data: Split the data you have into 3 groups: training data, validation data and test data Model data: Use the training data to build the model using the relevant features Validate model: Assess the model with your validation data 3 Input Process Output Feedback Test model: Check performance of the validation model with your test data Use the model: Deploy the fully trained model to make predictions on new data Tune model: Improve performance of the algorithms with more data, different features or adjusted parameters 6 5 4
  72. 72. The pace of progress in AI and machine learning is accelerating rapidly DeepMind Technologies Ltd. in London, U.K., has developed a system to scan 1 million images from eye scans and is training itself to spot early signs of degenerative eye conditions. Rethink Robotics Inc. of Boston, Massachusetts, made massive upgrades to its Sawyer robots to help nonexperts program routines that instruct the robot how to carry out complex tasks. H&R Block’s tax preparers began using IBM’s Watson computer system to maximize customer deductions. Watson “knows” thousands of pages of federal tax code and will continually update changes as they occur. Forward, a San Francisco, California, is attempting to shift traditional health care away from immediate and reactive care procedures, to proactive care through the use of AI and wearable sensors.
  73. 73. How Humans and Machines can work together Perception Near vision Speech clarity Fine manual dexterity Coordination Precision Rate control Strength Basic speech Sound localization Speech recognition Dynamic flexibility Night & peripheral vision Reaction time Stamina Regular object manipulation Selective attention Positive sensitivity Oral & written expression Oral & written comprehension Inductive & deductive reasoning Creativity Category flexibility Scalable processing capacity Fast recall Computation Complex problem solving Judgement Applying expertise Active listening Management Critical thinking Ethics Handling ambiguity Operations analysis Routine reading comprehension Equipment operation & repair Pattern recognition Impartiality Logic System design Novelty detection Condition monitoring Structured interference Data discovery Persuasion Empathy Emotional intelligence Social perceptiveness Negotiation Abilities Psychomotor, sensory, physical Cognitive Skills Content, process, system Social HUMANS MACHINES INTELLIGENT AUTOMATION ENHANCED ROLE SPECIALIZATION IMPROVED DECISION-MAKING INCREASED PRODUCTIVITY, INNOVATION, EFFICIENCY
  74. 74. AI to achieve mainstream traction WISDOM KNOWLEDGE INFORMATION DATA c o n t e x t m e a n i n g i n s i g h t integration, applied, actionable patterns, decision making learning, concept, notion organized, structured, categorized, calculated
  75. 75. Four Key domains in which to benefit from AI
  76. 76. Artificial Intelligence (AI) predictions: • In five years, more than half of your customers will select your services based on your AI instead of your traditional brand. • In seven years, most interfaces will not have a screen and will be integrated into daily tasks. • In 10 years, digital assistants will be so pervasive they’ll keep employees productive 24/7/365, operating in the background for workplace interactions.
  77. 77. When Will AI Exceed Human Performance? Beat humans at GO Win the World Series Poker Fold laundry Transcribe speech Assemble any LEGO Read text aloud Write a high school essay Drive a truck Translate a new language Replace retail sales person Write NY Times bestseller Perform surgery Research Math Most human tasks 2017 2027 2037 2047 2057 2067 Study by Yale and Oxford Universities
  78. 78. AI’s Effect on Business across Industries WHAT EFFECT WILL THE ADOPTION OF AI HAVE ON YOUR ORGANIZATION’S OFFERINGS AND PROCESSES TODAY AND IN FIVE YEARS?
  79. 79. Regional gains from AI North America Latin America Northern Europe Southern Europe China Developed Asia Total impact 5.6% of GDP $1.2 trillion Rest of World Total impact 14.5% of GDP $3.7 trillion Total impact 5.4% of GDP $0.5 trillion Total impact 9.9% of GDP $1.8 trillion Total impact 11.5% of GDP $0.7 trillion Total impact 26.1% of GDP $7.0 trillion Total impact 10.4% of GDP $0.9 trillion
  80. 80. Top 10 Predictions 30% of IT organizations will extend BYOD policies with “bring your own enhancement” (BYOE) to address augmented humans in the workforce Number of people with disabilities employed will triple due to AI and emerging technologies reducing barriers to access. WHO will identify online shopping as an addictive disorder as millions abuse digital commerce and encounter financial stress By 2020, Algorithms Will Positively Alter the Behavior of over 1 Billion Global Workers By 2022, a Blockchain- Based Business Will Be Worth $10 Billion 2023 2023 2024 2020 2022 AI identification of emotions will influence more than half of the online advertisements you see. Individual activities will be tracked digitally by an “Internet of Behavior” to influence benefit and service eligibility for 40% of people worldwide 40% of professional workers will orchestrate their business application experiences and capabilities like they do their music streaming services 50% of people with a smartphone but without a bank account will use a mobile-accessible cryptocurrency account By 2020, Employees Can Cut Their Healthcare Costs by Wearing a Fitness Tracker 2024 2024 2023 2025 2020
  81. 81. INCREASING DYNAMICS Disruptive technologies already have begun transforming industries and markets, requiring executives to pivot faster than in the past. The ability to adapt to –data-driven– change is a significant competitive advantage.
  82. 82. To become a data-driven organization Business Decisions & Analytics “What are you using analytics for ?” 01 Data & Information “Do you have access to the right data?” 02 Technology & Infrastructure “Do you have the right systems and tools?” 03 Culture &Talent “How to build a data-driven culture?” 06 Process & Integration “Are your business processes optimized for data?” 05 Organization & Govenance “Do you have the right structure and governance?” 04 02 01 03 04 05 06 Build & leverage analytics capabilities to improve business outcomes
  83. 83. DIGITAL TRANSFORMATION Digital transformation (DX) will drive “everything that matters in IT” over the next several years. Succeeding in the DX economy means using technologies such as mobile, cloud, big data analytics, IoT, AI and robotics to “create competitive advantage through new offerings, new business models, and new customer, supplier, and distributor relationships.”
  84. 84. Holistic Approach to Digital Transformation WHY WHAT HOW Business needs Inspiration Pace Define the vision Digitalize the core Build new digital offerings Planning Commercial activities Operations Support functions Create new businesses Strengthen and disrupt the core Solidify the foundation Structure and processes People Data and systems Partner ecosystem Change management
  85. 85. Elements of Digital Transformation Transforming Customer Experience •Customer Understanding •Top-Line Growth •Customer Touch Points Transforming Operational Processes •Process Digitization •Worker Enablement •Performance Management Transforming Business Models •Digitally Modified Businesses •New Digital Businesses •Digital Globalization
  86. 86. 10 Guiding Principles of a Digital Transformation 1 2 3 4 5 6 7 8 9 10 Secure senior management commitment Set clear, ambitious targets Secure investment Stage 1 Defining Value Stage 2 Launch and acceleration Stage 3 Scaling up Start with lighthouse project Appoint a high- caliber launch team Organize to promote new, agile ways of working Nurture a digital culture Sequence initiative for quick returns Build capabilities Adopt a new operating model Roadmap for a Digital Transformation, McKinsey 2017
  87. 87. Business and technology leaders cited an urgency to accelerate digital transformation based on key trends 71% 62% 51% 34% 27% Rising influence of consumerization Evolution of security from defense to differentiator Relentless regulatory demands Restructuring of industry business models Emergence of IT as the driver of business change Industry Trends 75% 56% 55% 46% 44% Rationalize & modernize IT to reduce run costs Generate customer & business insights for better/ faster decision making Protect the organization from cyber and other emerging threats Develop real-time end-to- end digital processing Adopt new delivery models (SaaS, PaaS, cloud, outsourcing) Technology Priorities 62% 50% 50% 50% Generate customer & business insights for better/faster decision making Protect the organization from cyber and other emerging threats Business Priorities Cost Reduction (Employee) Productivity Customer engagement
  88. 88. DIGITAL TRANSFORMATION GROWTH DRIVERS OPERATIONAL IMPROVEMENT Demand Generation Reach & Selection Customer Purchase Process Customer Experience Process Efficiency Asset Utilization Agility New Business Models Business Driver Levers Business Enabler Levers Brand awareness and brand interest through social media marketing Big data analytics to discover new customer segments Being where customers can easily find us Location based services Access to customers across multiple/all devices Improved understanding of customer expectations via ongoing engagement with customer Social listening across all digital media channels Big data to improve customer experience Clear, seamless, and secure ways to purchase Mobile payments Big data analytics to better understand purchasing behavior Digitized and automated processes Improved process governance and efficiency through real- time insights Optimized production/ inventory planning based on demand forecasting Data-based preventive asset maintenance Task automation optimization through digital technology such as sensors Utilize remote access and collaboration and mobility tools for employees Integration with partners in digital ecosystem to optimize service delivery Virtual organizations enabled by mobility and seamless cooperation Analytics-based commercializa-tion (marketing, commissions, trade promotions) to target investments and track returns Customer self- service XaaS opportunities to digitize the technology and infrastructure assets
  89. 89. Cost reduction Strategic flexibility Focus and specialization Exploit new market/ product opportunities Share or reduce risk and capital investment Move from fixed to variable cost Why engage in business innovation by digital transformation? 0% 10% 20% 30% 40% 50% 60% 70%
  90. 90. Benefits of Digital Transformation A vast majority of respondents believe their companies see value in becoming digital enterprises. The most expected benefits are: 80% 40% 0% Increased employee productivity Increased customer satisfaction Lowered cost for the company Competitive advantage
  91. 91. Digital Transformation drives value in business: enhanced connectivity, automation of tasks, improved decision making and product/service innovation McKinsey: Digital Value Chain Model Connectivity with customers, colleagues and suppliers Innovation of products, business models and operating models Automation of manual activity, replacing labor with technology Decision making based on big data and advanced analytics Customer experience Product/ Service innovation Distribution, marketing and sales Digital fullfilment Risk optimization Enhanced (Corporate) Control •Seamless (multichannel) experience •Whenever, wherever service propositions •New digital products/services •Co-creation of new products •Digital marketing with higher ROI •Digital augmentation of traditional channels •Full straight-through processing and automatic provisioning •Virtual servicing and administration •Improved targetting with customer insights •Embedded/automated controls and risk profiling •Improved, real-time management information systems and decision making •Seamless integraation into third parties
  92. 92. The New Elements of Digital Capabilities BUSINESS MODEL Digital Enhancements Information-based service extensions Multisided platform businesses CUSTOMER EXPERIENCE OPERATIONS EMPLOYEE EXPERIENCE Experience design Core process automation Augmentation Customer intelligence Connected, dynamic operations Future-readying Emotional engagement Data-driven decision making Flexforcing DIGITAL PLATFORM Core Externally facing Data Updated framework: emphasis on employee experience and business model innovation. Digital platform powers other elements and enables further innovation
  93. 93. Who’s engaging in business innovation by digital transformation? Technologies that companies in selected regions plan to include in their strategies in 2017: Germany US Worldwide Predictive marketing 18% 70% 42% IoT 42% 30% 39% Virtual Reality 40% 5% 26% Machine Learning 20% 25% 25% Artificial Intelligence 22% 16% 23% Augmented Reality 13% 6% 16% Source: “Future Technology Survey” conducted by Qualtrics, Jan 2017
  94. 94. Innovative Companies Generate Premium Shareholder Returns 15 10 5 0 7.5 4.0 6.7 2.9 2.3 3.1 14.0 6.9 Three- and ten-year annualized total-shareholder-return (TSR) premiums of innovative companies compared to their industry peers, by region Three- year premium Ten- year premium Global Americas Europe Asia-Pacific Annualised TSR premium (%)
  95. 95. DISRUPTION @ BUSINESS LEVEL Analog Web E-business Digital Marketing Digital Business Autonomous Focus Build relationships that drive business or lower cost Extend relationships into new markets and geographies Tranform sales channel into a global medium to drive efficiencies Exploit the nexus to drive greater efficiency Extend potential customers from people to things Smart (semi)autonomous things become the primary “customer” Outcomes Optimize relationships Extend relationships Optimize channels Optimize interactions Build new business models Maximize retention of and relationships with things Disruption Emerging technologies Internet and digital technologies Automation of business operations Deeper customers relationships analytics Creation of new value and new nonhuman customers Smart Systems as customers Technologies ERP CRM CRM Web EDI BI portals Mobile Big data Social Sensors 3D-printing smart systems Robotics Smarter machines Automation past present future
  96. 96. HIGH STRONG WEAK LOW Communities A Platforms B Traditional Oligopolist C Infrastructure Organization s D A B C D Accelerate innovation through many small, trial-and-error bets by individuals fueled by diverse motivations Provide support to communities, enabling them to scale. Subject to network effects and thus tend toward “winner takes all” fragile monopolies. Seek innovation and efficiency through vertical integration, incremental improvements to products/services, and averaged economies of mass Provide open access to the benefits of hyper scaling in scale- and utilization- sensitive activities. Focus on efficiency, not innovation U NCERTAINTY ECONOMIES OF MASS Digital Disruption Has Enabled New Institutional Options with Distinct Economics Industrial ecosystems : BORGES MAP Navigating a World of Digital Disruption
  97. 97. CONTINUOUS INDUSTRY TRANSFORMATION 1st Platform 2nd Platform 3rd Platform: Apps, connected devices Mobile Cloud Social Business Big data Innovation Accelerators Robotics Natural Interfaces 3D Printing IoT Cognitive Systems Natural Interfaces Next Gen Security “Future of Work” “Immediacy” “Abundance” “Efficiency” “Personalisation" Sensors Analytics
  98. 98. BUSINESS LEVEL: COMPANY DARWINISM
  99. 99. COMPANY DARWINISM (*) 1973 1983 1993 2003 2013 COMPANIES NEW TO THE FORTUNE 1000 COMPANIES FAILING 35% 45% 60% >70% (*) When technology and society evolve faster than your ability to adapt The new normal: no business is too big to fail or too small to succeed companies designed to success in the 20th century are doomed to fail in the 21st
  100. 100. CITIGROUP predicts “Over the past two decades, technological disruption affected approximately 10% of global public companies by market capitalization. In the coming decade, up to 47% could face pressure to adapt to some form of technological disruption, according to our analysis of the most promising emerging innovations today.” Citigroup’s Financial Strategy and Solutions Group, 2016
  101. 101. Business, even in a long-established industry, can become altogether obsolete if a company fails to transform in time 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10% 12% 14% 16% S&P500 Asset-heavy industries EBITDA growth peaks then decelerates EBITDA declines faster than revenue EBITDA and revenues briefly recover Prolonged decline in EBITDA and revenue Operating Margin Asset-heavy: telecommunications, utilities, energy, materials, automotive, and industrials “Big Bang” changes from consumer products, information technology, and financial services; others sectors experienced more gradual changes
  102. 102. IDC PREDICTS One-third of the Top 20 firms Industry analyst firms such as IDC and Gartner are expected to tell us what the future will look like and they provide the goods. in industry segments will be disrupted by new competitors within 5 years and that is a matter of “innovate or perish”
  103. 103. KEY DRIVER Digital innovation identified as the key driver of success in the modern arena. Companies that neglect digital are unlikely to thrive — and they'll also lose talent, as employees across all age groups want to work for businesses committed to digital progress.
  104. 104. Types of Innovation Signature or superior methods for doing your work Distinguish features and functionality Complementary products and services Support and enhancements that surround your offering How your offerings are delivered to customers and users Representation of your offerings and business Distinctive interactions you foster How you make money Connections with others to create value Alignment of your talent and assets Most big breakthoughs in history comprise some combination of these 10 types of innovation
  105. 105. INNOVATE 0% 10% 20% 30% Innovatie van producten en diensten 28% Sterk netwerk 12% Aantrekken van de markt 11% Acquisitie 9% Belangrijkste aanjagers van groei onder Nederlands snelst groeiende ondernemingen (Functioneel) verbeteren van bestaand product 55% Organisatie, cultuur verbeteren 14% Focus op marketing & design 15% Anders 16% Voorkeur voor innovatievormen onder FD Gazellen “create competitive advantage through new offerings, new business models, and new customer, supplier, and distributor relationships.”
  106. 106. DIGITAL INNOVATION IDENTIFIED AS THE KEY DRIVER OF SUCCESS Customer Engagement Strategy The focus of a customer engagement strategy is the development of customer loyalty and trust — and, in the best cases, passion. Companies choosing this approach offer seamless, omnichannel customer experiences, rapid responses to new customer demands, and personalized relationships built upon deep customer insights. Recognizing the always-rising bar of customer expectations, companies with a great customer engagement strategy are constantly identifying new opportunities to connect with their customers. Digitized Solutions Strategy A digitized solutions strategy transforms what a company is selling. It seeks to integrate diversified products and services into solutions, to enhance products and services with information and expertise that help solve customer problems, and to add value throughout the life cycle of products and services. Over time, digitized solutions can transform a company’s business model by shifting the basis of its revenue stream from transactional sales to sophisticated, value-laden offerings that produce recurring revenue. Targets superior, personalized experiences that engender customer loyalty. Targets information-enriched products and services that deliver new value for customers.
  107. 107. The innovation radar develop innovative new products/services Offerings (What) Process(How) Improve efficiency and effectiveness Customers (Who) unmet customer needs or underserved segments Presence (Where) innovative points of contact, new channels Platform common components or building blocks Solutions integrated, customized offerings that solve end-to-end customer problems Customer Experience optimize customer interactions across all touch-points Value Capture innovative new revenue streams Brand leverage brand into new domains Networking create intelligent and integrated network-centric offerings Supply Chain think different about sourcing and fulfillment Organization adjust form, function or activity scope
  108. 108. Investment in R&D Innovate Israel Z-Korea Japan Zweden Oostenrijk Zwitserland Denenmarken Finland Duitsland US Belgie Oeso Frankrijk Slovenie Singapore IJsland Australie China Nederland Tsjechië Noorwegen Engeland Canada Ierland Estland Hongarije Italie Luxemburg Portugal Spanje Slowakije Investeringen in R&D in % van het bbp (2015) Nederland gaf in 2015 ruim €13,6 mrd uit aan onderzoek en ontwikkeling. Bijna de helft van dat bedrag heeft de eigen industrie voor zijn rekening genomen, een derde is gefinancierd door de overheid en 15% door buitenlandse organisaties. Bron: OESO 4 3 2 1
  109. 109. 10 Digital Transformation Predictions that will shape the Future of IT By now, at least 55% of organizations will be digitally determined, transforming markets and reimagining the future through new business models and digitally enabled products and services. By 2022, digital will have become fully embedded, more than 60% of CEOs will have spent part of their careers leading digital initiatives. The paramount importance of customer advocacy will result in 60% of B2C brands embracing net promoter score as their leading success metric by the end of 2020. By now, 80% of enterprises will create data management and monetization capabilities, thus enhancing enterprise functions, strengthening competitiveness, and creating new sources of revenue. By now, 30% of G2000 companies will have implemented advanced digital twins of their operational processes, which will enable flatter organizations and one-third fewer knowledge workers. By 2023, 35% of workers will start working with bots or other forms of AI, requiring company leaders to redesign operational processes, performance metrics, and recruitment strategies. By now, 30% of G2000 companies will have allocated capital budget equal to at least 10% of revenue to fuel their digital strategies. By 2021, prominent in-industry value chains, enabled by blockchains, will have extended their digital platforms to their entire omni-experience ecosystems, thus reducing transaction costs by 35%. By 2021, about 30% of manufacturers and retailers globally will have built digital trust through blockchain services that enable collaborative supply chains and allow consumers to access product histories. By 2023, 95% of entities will have incorporated new digital KPI sets — focusing on product/service innovation rates, data capitalization, and employee experience — to navigate the digital economy.
  110. 110. HOW TO STAY AHEAD OF DISRUPTION: INNOVATE Offer/Join Platforms and Ecosystems — Not Just Products Totally eliminate persistent customer pain points Dramatically reduce complexity Cut prices continuously Make stupid objects smart Teach your company to interact with customers Be utterly transparent Make loyalty dramatically easier than disloyalty
  111. 111. Diagnostics Design Execution Streamline client relationships Diagnose customer experience journey Reform customer journey Collect feedback information Design experience dashboard Improve organisation structure Develop IT plan Execution of change management Building a customer-centric B2B organization
  112. 112. Innovation on Top of the Agenda In boardrooms around the world, innovation is top of the agenda •Transformative technologies move from lab to market, revolutionizing business models, industries and markets. • Key challenge for any company is the sheer volume and breadth of transformative technologies (such as genomics, nanotechnology, robotics, advanced materials, industry 4.0 and exponential technologies) poised to shake up the status quo. •Majority of executives (74%) state that innovation is more important than cost reduction for long-term success. • Executives may view innovation as a strategic ace for coping with transformative forces, allowing them to steer transformation instead of being crushed by it. Management Tools & Trends survey
  113. 113. Corporate Innovation Core Market New Market Incremental innovation Can do this from regular, mainstream business units Need a better idea Radical innovation Need a corporate incubator Need a different structure (not a regular corporate incubator)
  114. 114. Being bold on innovation gives companies a bigger economic advantage % of organizations’ digital offerings, by category Digital versions of formerly analog products/services Existing products/ services enhances with new digital features Entirely new digital offerings Top economic performers Others
  115. 115. The agile organization as the new dominant organizational paradigm From organizations as “machines”…. …to organizations as “organisms”…. Teams built around end- to-end accountability “Boxes and lines” less important, focus on action Quick changes, flexible resources Bureaucracy Top-down hierarchy Silos Detailed instructions Leadership shows direction and enables action
  116. 116. Business Model Innovation Leap of Faith Volume Chasing Support the Value Proposition with a new operating model Redesign the model to Capture Margins Build new Capabilities Leverage External Partners Redefine interactions with Customers Redefine the basis of Differentiation Develop a new Cost Model Find new Ways to Monetize Incremental Changes Redefine the Value Proposition Shift from Product to Service Shift from Product to Experience Shift from Product to Outcome
  117. 117. Product/Service Innovation Horizon #1 Extend and defend core business Horizon #2 Build emerging businesses Horizon #3 Create viable options Time [yrs] Profit New Market Existing market that we do not serve Existing market that we currently serve Knowledge of the Market Knowledge of Technology New Technology Existing technology that we do not use Existing technology that we currently use Exploration with new technologies NextGen products Improvement Extension Variants Cost Reductions 70% 20% 10% H o r i z o n 2 o p p o r t u n i t i e s H o r i z o n 3 o p p o r t u n i t i e s H o r i z o n 1 o p p o r t u n i t i e s Adjacent growth Exploration into new markets
  118. 118. Innovation Portfolio TRANSFORMATIONAL Developing breakthroughs and inventing things for markets that don’t yet exist ADJACENT Expanding from existing business into “new to the company” business CORE Optimizing existing products for exisiting customers USE EXISTING PRODUCTS AND ASSETS ADD INCREMENTAL PRODUCTS AND ASSETS DEVELOP NEW PRODUCTS AND ASSETS HOW TO WIN WHERE TO PLAY SERVE EXISTING MARKETS AND CUSTOMERS ENTER ADJACENT MARKETS AND SERVE ADJACENTCUSTOMERS CREATE NEW MARKETS AND TARGET NEW CUSTOMER NEEDS
  119. 119. Approaches to drive the next-generation operating model Lean process redesign Digitization Intelligent process automation Advanced analytics Business process outsourcing Digitize customer experience and day-to-day operations Introduce intelligent automation to replace human tasks Provide intelligence to facilitate decision making Drive the next wave of process outsourcing/ offshoring Streamline processes and minimize waste
  120. 120. Technology is causing a revolution 1782 Power Generation Mechanical Automation (first mechanical loom) Engineering Sciences Mobility Electronics Connectivity, IA 1913 Industrialization First assembly line 1954 Electronic Automation First programmable PC 2010 Smart Automation 1st INDUSTRIAL REVOLUTION Steam engine (GB) Conveyer Belt (US) Computer, NC, PLC 2nd INDUSTRIAL REVOLUTION 3rd INDUSTRIAL REVOLUTION 4th INDUSTRIAL REVOLUTION Introduction of mechanical production facilities with help of water and steam power Introduction of a division of labor and mass production with the help of electrical energy Use of electronic and IT systems that further automate production Introduction of the Digital Connected World
  121. 121. Industry 4.0 Customer Driven Engineering Connected Products Service Analytics Strategic Enabled Ecosystem Plug & Play Logistics Factory 4.0 Intelligent Procurement Collaborative Planning Omni- channel Enablement Demand Sensing & Shaping Social Media Analytics Productive Customer Insight Smart Product and Service Intelligent Marketing Digital Supply Chain
  122. 122. TECHNOLOGIES READY TO EXPLOIT ๏ Robottechnology ๏ Internet of Things ๏ 3D-printing ๏ Nano-technology ๏ Cloudcomputing ๏ VR, serious gaming ๏ Big Data and AI, ML Future proof
  123. 123. “SUCCES COMES TO THE ONES WHO KEEP ON TRYING” What most Corporates think What Startups illustrated What Startups learned Learn Learn Learn Learn
  124. 124. Manieren om smart business te ontwikkelen. Op afstand Verzamelen gegevens Integreren van functies Trainbaar of zelflerend Producten slimmer te maken Maatwerk Flexibeler Efficienter Kwalitatief beter Slimmer produceren Kennis Advies Producten Gebruik Dienst Data Op een andere manier geld verdienen Intercommunicatie “Crowd” als bron Verklein mensfactor Behoud aandacht Breakthrough technologie Startups Sector veranderen Future proof
  125. 125. INTERNET OF THINGS • Sensor technology will make devices aware of other devices and the world around them. • Embedded systems will equip them with ‘a brain’ to process and communicate their observations. • Cloud technology and Big Data solutions will collect, process, transport and store the massive amounts of information sensed and communicated by billions of devices. Together, these developments constitute the Internet of Things, an internet-style network of interconnected, intelligent machines.
  126. 126. The Internet of Things ecosystem Remote Internet Network Gateway IoT Devices Analytics Data Storage Analysis Command/RFI Data Analysis Data
  127. 127. Industries seeing largest returns from IoT investments industries with 2014 revenue gains from IoT > 30% Industrial Manufacturing Banking & Financial Services Telecom Energy Retail Travel, Transport & Hospitality High Tech Helath Care & Lifesciences Utilities Automotive Insurance Consumer Packkaged Goods Media & Entertainment 25% 0%
  128. 128. Digital technologies transforming the machinery landscape 3-D Printing Additive manufacturing can produce a fuel-nozzle for a Boeing aircraft, which is 5 times as durable and weights 25% less Cloud control Beckhoff Automation provides cloud-based machine control systems that work with MS Azure, SAP Hana and Amazon Web Services Data Insights John Deere collects data during planting, crop care and harvesting, and delivers insights to help farmers maximize yields Improved Efficiency Joy Global monitors mining equipment and provides data that help mining operators make real-time decisions on machine operations, potentially reducing downtime Continuous Monitoring Schaeffler monitors the condition of it’s bearings under various loads, to proactively recommend maintenance and upgrades
  129. 129. Digital technologies create new opportunities across machinery value chain Smart Factory Advanced Robotics Internet of Things Big Data Segment-of-one sales and marketing Digital Engineering 3D printing New product forms: smaller batches Advanced spare parts delivery Mobile Applications Digitally enabled field force Omnichannel preferences Key digitalization trends for machinery Digitally enhanced products; product development based on better customer insights Accelerated prototyping and testing; advanced design Monitoring of usage, failure patterns and optimized spending Co-development using digital prototypes; make vs buy for components Next-generation production and manufacturing (machine-to- machine augmented reality and self- governing systems) Autonomous delivery with real- time tracking of product flow Seamless customer journey across touch points tailored to customers’ needs and New business models based on data R&D Procurement Production Sales & Distribution Service
  130. 130. Industry 4.0 Levers mapped to main Value Drivers Value Drivers Service/ Aftersales Resource/ Processes Asset Utilization Labour Inventories Quality Supply/ demand matching Time to market Industry 4.0 levers ๏ Smart energy consumption ๏ Intelligent lots ๏ Realtime yield operation ๏ Routing flexibility ๏ Machine flexibility ๏ Remote monitoring ๏ Predictive maintenance ๏ AR for maintenance and repair ๏ Human-Robot cooperation ๏ Remote control ๏ Digital perf management ๏ Automation of knowledge work ๏ In-situ 3D printing ๏ Realtime supply chain optimization ๏ Batch size 1 ๏ Statistical process control ๏ Advanced process control ๏ Digital quality management ๏ Data-drive demand prediction ๏ Data-driven design to value ๏ Customer cocreation ๏ Open innovation ๏ Concurrent engineering ๏ Rapid experimentation ๏ Simulation ๏ Predictive maintenance ๏ Remote monitoring ๏ Virtually guided self- service 30 to 50% reduction of machine downtime 3 to 5% productivity increase 45 to 55% increased productivity in technical professions through automation of knowledge work 20 to 50% decrease cost for inventory holding 10 to 20% reduction cost for quality 85% increase of forecasting accuracy 20 to 50% reduction in time to market 10 to 40% reduction of maintenance costs Source: “Industry 4.0: How to navigate digitization of the manufacturing sector”, McKinsey 2015
  131. 131. State of Digital Transformation research by Brian Solis Six Stages of Digital Transformation BUSINESS AS USUAL Organizations operate with a familiar legacy perspective of customers. processes, metrics, business, models and technology, believing that it remains the solution to digital relevance PRESENT AND ACTIVE Pockets of experimentation are driving digital literacy and creativity throughout the organization while aiming to improve and amplify specific touchpoint and processes FORMALIZED Experimentation becomes intentional while executing at more promising and capable levels. Initiatives become bolder and, as a result, change agents seek executive support for new resources and technology STRATEGIC Individual groups recognize the strength in collaboration as their research, work and shared insights contribute to new strategic roadmaps that plan digital transformation ownership, efforts and investments. CONVERGED A dedicated digital transformation team forms to guide strategy and operations based on business and customer- centric goals. The new infrastructure of the organization takes shape as roles, expertise, models, processes and systems to support transformation are solidified INNOVATIVE & ADAPTIVE Digital transformation becomes a way of business as executives and strategists recognize that change is constant. A new ecosystem is established to indentify and act upon technology and market trends in pilot and ,eventually, ar scale. “Collectively, these six stages serve as a digital maturity blueprint to guide purposeful and advantageous digital transformation”.
  132. 132. Take-away Depending on how much organizations embrace digital transformation efforts, they will either be labeled leaders or laggards in the industry. — IDC, 2018
  133. 133. How can ValOli help to Survive and Thrive in a World of Disruption? If you want to go fast, go alone If you want to go far, join forces
  134. 134. “What about disruption, exponential technology and digital transformation? We’re trying to get some work done here ….” Mastering the Challenge of Digital Innovation
  135. 135. ValOli: Mastering the Challenge of Digital Innovation While the magnitude of the coming change shouldn’t bother us, it is the speed of the change we should be worried about. Digital transformation initiatives will take large traditional enterprises, on average, twice as long and cost twice as much as anticipated
  136. 136. Change management is a Dolphin not a Whale Delivery Delivery Delivery Delivery Change effort Change effort
  137. 137. Four interrelated trends unwind the old rules of management More connectivity •Rising interconnectivity speeds disruption, upending the principles for disruptive innovation •Free-moving information bypasses -and challenges- existing hierarchies Lower transaction costs •Barriers to entry and costs to achieve scale are evaporating •Internal bureaucracy presents more friction than external interactions and free-market transactions Unprecedented automation •Increased automation undercuts the mechanistic thinking upon which organizations were created •200 years of management thinking on control and predictability become obsolete Fundamental societal shifts •Gen Z and beyond will have new, fundamentally different career aspirations •Expect more variety and learning, more leadership and promotion opportunities, more social impact, and more career mobility
  138. 138. –McKinsey, January 2021 To become a future-ready company, leaders should embrace nine imperatives that collectively explain “who we are” as an organization, “how we operate,” and “how we grow.”
  139. 139. The nine organizational imperatives to become future-ready Radically flatten structure Treat talent as scarcer than capital Turbocharge decision making Take a stance on purpose Sharpen your value agenda Use culture as your “secret sauce” Build data-rich tech platforms Accelerate organizational learning Take an ecosystem perspective Who we are How we operate How we grow
  140. 140. Company of the Future: Bionic Personalized customer experience and relationships New offers, services and business models Bionic Operations Dynamic platform organizations Digital Talent Modular Technology Data and AI PURPOSE AND STRATEGY ENABLERS OUTCOMES HUMAN Organization, talent, and ways of working TECHNOLOGY Data and digital platforms Digitally enabled companies, combining technology with the flexibility, adaptability, and comprehensive experience of humans to achieve their full potential.
  141. 141. Capabilities of Software Enterprises Data Services and Infrastructure
  142. 142. Aspects of Business Model Innovation Customer Needs Revenue Models Cost Structures Employee Competencies Process Capabilities Technological Capabilities Ecosystem Partners Channels Offerings Customer Relationships Customer Financial Model Capabilities Value Proposition Revenue Cost
  143. 143. Typical Transformation Journey Awareness Ambition Arange- ment Action Anchoring Why do we have to change? Where do we want to go? How do we structure the change? How can we implement the concept? What comes after the finish? Mastering the Challenge of Digital Innovation
  144. 144. Digital Transformation Initiative Digital departure DIGITAL STRATEGY Industry direction Company vision Waves and Stepping stones Leadership and sponsorship ORCHESTRATION Governance, sequenscing and metrics Funding and investor management Regulatory and community engagement Scaling Customer & Channel engagement Products & Services Economic model Operations BUSINESS MODEL Data & analytics IT systems Operationg model & partnerships People and culture ENABLERS
  145. 145. The recipe for successful digital-and-analytics transformation has 5 key building blocks Ambition • Vision and strategic priorities • Value at stake • Road map Journeys and use cases • Front end • Omnichannel/e- commerce • Digital marketing and personalization • Back end • Network and operations • Back office and service/ support functions • New business building Engine • IT systems and architecture • Technical enablers • Data backbone • Cloud • APIs and microservices • Product and process simplification Operating model • Digital organization and way of working • Agile • DevOps • Partner and vendor ecosystem • Program management, governance, funding and impact monitoring Capabilities, talent and culture • Capabilities • Product management • Design thinking • Personalization • Analytics • Employee capabilities • Talent strategy • Culture and leadership
  146. 146. Organizational Approaches Needed in Response to 4 Major Trends Purpose Speed Inclusiveness Transformative Behavior Change To deal with constant change, people want to feel that what they do matters , that they are part of a community and that they keep up with modern technology Digital has altered expectations, making it a must for companies react faster to demands from employees and customers - and to competition Employees want to be part of the conversation Companies must fundamentally change how they do business to respond to digitally driven forces
  147. 147. The prominent role of technology What can your company do that it couldn’t do yesterday? Mastering the Challenge of Digital Innovation
  148. 148. Key business initiatives for Digital Transformation 32% 31% 30% 24% 21% 21% 16% 16% 15% 13% 12% 12% 10% 10% 8% Modernizing legacy systems Migrating apps to the cloud Automating business processes Introducing new products and services faster Improving sales productivity integrating SaaS apps Improving customer onboarding Improving employee onboarding Creating a single view of customers Investing in mobile apps Developing omnichannel strategy Setting up an e-commerce platform Improving partner onboarding Rationalizing product portfolio Reconciling systems acquired through M&A What are the goals you would most like to achieve with your digital transformation initiatives?
  149. 149. Include only what you need to answer these five key questions What opportunities and threats are we facing over the period of our strategy? What does success look like given these opportunities and threats? What changes do we need to make to our business to achieve that success? How will we make sure that all of our decisions and actions are consistent with our definition of success? How will we measure the impact of the changes we are making?
  150. 150. 5 Principles of Innovation Strategy Strategy-driven Innovation spend Innovation spend is not the size of the budget but how it is spent from strategy through execution Viable Business Models For initiatives to deliver value, innovation efforts must be aligned with the company’s Corporate Strategy Open Innovation Models Traditional barriers must be broken down and a much wider ecosystem for ideas, insights, talent and technology must be tapped Human Experience Human experience and insights of all kinds are essential in shaping and delivering new ideas, solutions, products or services Technology- driven Innovation Technology has become the driving source of Innovation. Technology has ceased to be used mainly to keep pace with market demands and competitors’ innovation
  151. 151. Testing: do you really innovate? Aspire Choose Discover Evolve Accelerate Scale Extend Mobilize Do you regard innovation-led growth as critical, and do you have cascaded targets that reflect that? Do you invest in a coherent, time- and risk-balanced portfolio of initiatives with sufficient resources to win? Do you have differentiated business, market and technology insights that translate into winning value propositions? Do you create new business models that provide defensible and scalable profit solutions? Do you beat the competition by developing and launching innovations quickly and effectively? Do you launch innovations at the right scale in the relevant markets and segments? Do you win by creating and capitalizing on external networks? Are your people motivated, rewarded and organized to innovate repeatedly? “In this digital age the pace of change has gone into hyperspeed”
  152. 152. Process/use-case transformation Digital Center of Excellence Digital Business building “Buy & Scale” and corporate ventures Agile trans- formation Digital transformation Radically rethink selected journeys/ processes/functions to create lighthouses for larger transformations - e.g. digitizing the supply chain Transform by building a new ‘digital hub’ as nucleus for future organization inside existing organization Build a new business outside the existing organization, leveraging core skills wherever required. For example set up a new channel or format - such as e- commerce business, Amazon Go-like format, etc Establish org-wide agile way of working with multidisciplinary, product-focussed teams, e.g. introduce agile to functions like category management, HR, etc Invest and buy successful digital businesses and leverage their talent and capabilities as nucleus that can be scaled A combination of several ‘pathways’ can ensure a successful digital transformation Nucleus of new organization Existing organization
  153. 153. Technology holds the future for business AI IS THE NEW UI Experience above all AI is no longer just about how you do things - it’s who you are ECOSYSTEM POWER PLAYS Beyond platforms Multidimensional value chains for a digital world WORKFORCE MARKET PLACE Invent your future The rise of the on- demand enterprise DESIGN FOR HUMANS Inspire new behaviors Lock in your customers by walking in step with them THE UNCHARTERED Set new standards, invent new industries Define the new rules of the digital game
  154. 154. The three questions organizations who want to succeed over time must answer First, who are we? Organizations need to identify their purpose, understand how they create value, and develop a unique, purpose-driven culture. The second is: How do we operate? Companies that are more agile, have a flatter structure, make decisions faster, and put their talent into the critical roles are coming out thriving. And the third is: How do we thrive and grow? Organizations that have resilient ecosystems, the right technology and data platforms, and a learning mindset are far more likely to succeed and thrive over time.
  155. 155. Creating a Purpose-Driven Organization 1. Envision an inspired workforce. 2. Discover the purpose. 3. Recognize the need for authenticity. 4. Turn the authentic message into a constant message. 5. Stimulate individual learning. 6. Turn midlevel managers into purpose-driven leaders. 7. Connect the people to the purpose. 8. Unleash the positive energizers.
  156. 156. Management in Agile World DAILY ITERATION RELEASE ROADMAP VISION Heavy Involvement Minimal Involvement Most Frequent Least Frequent
  157. 157. (Big) Data Enablement Framework Opportunities Build a culture of innovation and experimentation Trust Establish trust among consumers to enable broad use of their data 1. Data Usage Platform Leverage flexible, scalable and efficient data systems Organization Develop capabilities to implement and leverage relevant data applications 2. Data Engine Participation Identify strategic partners that can help unlock new economic opportunities Relationships Create an open culture to support partnering and the share of data 3. Data Ecosystem
  158. 158. Futureproof organization: able to adapt on all timescales Business Model Evolution New Product ideation and creation Algorithm governance and validation A I Action D a t a Integrated learning systems Adaptable backbone systems Evolvable vision Slow-acting, fluctuating Fast-acting, repetitive Human tasks Machine tasks Ecosystem
  159. 159. The need to adapt with the times can be daunting
  160. 160. WHY ValOli SUPPORTS MANAGEMENT/C-SUITE 54% 7% 10% 30% Administrative coordination and control Problem solving and collaborating Strategy and Innovation Developing people and engaging with stakeholders How Managers have to spend their time: (from Accenture Survey) Research by PwC’s Strategy& shows that only 1 in 10 leaders are great at both strategy and execution.
  161. 161. C-Suite Objectives are now deeply dependent on Technology
  162. 162. E d g e B lo c k c h a in B i o m e t r i c s A d v a n c e d M a t e r i a l s 5G Function as a Service Affective Computing Swarm Computing Quantum Computing Hum anized UI B r a i n c o m p u t e r i n t e r f a c e s B i o t e c h Pho toni cs N a n o t e c h s 4 D P r i n t i n g Ingestibles/Im plantable/ Injectables IoT AI AR/VR Robots Intelligent Process Automation W e a r a b l e s D r o n e s Emerging Technologies those technologies that have not yet reached an inflection point, defined in terms of a series of criteria such as adoption rate, investments and business impacts Columns’ height represents current technology adoption in Europe IDC Worldwide Blackbook Live Edition, May 30, 2020 Short term Medium term Long term
  163. 163. Being Agile isn’t easy McKinsey Global Survey on organizational agility 28% in “start-up” mode 23% Trapped 27% Bureaucratic 22% Agile High High Low Dynamic practices (enabling speed, responsiveness) Stable practices (enabling efficiency and reliability) Top 3 challenges during agile transformation: Transforming the culture and ways of working Lack of leadership and talent Vision and implementation plan 76% 42% 34% Respondents rating their performance:
  164. 164. “If you can’t fly, run if you can’t run, walk if you can’t walk, crawl But by all means …..KEEP MOVING” Martin Luther King
  165. 165. ValOli prevents Leaders to underestimate the degree to which digital is disrupting their businesses 1. Fighting ignorance A. Raising your technology IQ B. Overcoming competitive blind spots 2. Fighting fear C. Define how leaders could remain relevant: behavioral shifts needed to gain “ownership” of digital initiatives and to become role models for their organizations D. Establish communities to provide peer support to help teams navigate the new landscape 3. Fighting guesswork E. The need for speed sometimes gives rise to guesswork F. Figuring out if there is sufficient value to make it worthwhile to invest something G. Take full advantage of real-time data and the opportunities they provide for experimentation 4. Fighting diffusion H. Responding to digital inevitably risks diffusion of effort or “spreading the peanut butter too thinly” I. Go through the portfolio business by business, focusing on three questions: Which emerging digital products and services were missing from the portfolio? Which product offerings and elements of the existing operating model should be digitized or fully digitally reengineered to improve customer journeys? And what areas should be abandoned? J. Better leverage foundational digital capabilities, such as automation, advanced analytics, and big data. These capabilities are key building blocks for the new digital businesses.
  166. 166. INCUBATOR / SEED ACCELERATOR SECOND STAGE BUSINESS ACCELERATOR CONSULTANCY MANAGEMENT CONSULTING Company Life Cycle ValOli support Funding Objective FOUNDERS & ANGELS VENTURE CAPITAL PRIVATE EQUITY PUBLIC MARKETS BUSINESS MODEL DEVELOPMENT SEED/STARTUP FUNDING SCALE-UP EFFICIENCY DIGITAL TRANSFORMATION ValOli SUPPORTS MANAGEMENT Mentoring ValOli role Consulting Interim Management Mastering the Challenge of Digital Innovation
  167. 167. STAGES OF DIGITAL TRANSFORMATION Digital Register Digital Explorer Digital Player Digital Transformer Digital Disruptor Business and IT digital initiatives are disconnected and poorly aligned with enterprise strategy, and not focused on customer experiences Business has identified a need to develop a digitally enhanced, customer driven business strategy, but execution is on a project basis. Progress is not predictable nor repeatable. Business Outcome Business is a laggard, providing weak customer experiences and using digital technology only to counter threats. “Ad Hoc” “Opportunistic” Digitally enabled customer experiences and products are inconsistent and poorly integrated. Business-IT goals are aligned at enterprise level around the creation of digital products and experiences, but not yet focused on the disruptive potential of digital initiatives. “Repeatable” Business provides consistent but not truly innovative products, services and experiences. Integrated, synergistic business-IT management disciplines deliver digitally enabled product/service experience on a continuous basis. Business is a leader in its markets, providing world-class digital products, services and experiences. Enterprise is aggressively disruptive in the use of new digital technologies and business models to affect markets. Ecosystem awareness and feedback is a constant input to business innovation. Business remakes existing markets and creates new ones to its own advantage and is a fast-moving target for competition. “Managed” “Optimized” Mastering the Challenge of Digital Innovation
  168. 168. Digital Maturity Process Digital Maturity Strategic Value Design (one size fits all) Real-time (Web) Analytics Traffic Acquisition (SEO, SEM) Email Marketing (basic) Design (responsive) Engagement Analytics Email Marketing (segmented) Content Distribution (multi-channel) Social (share) Sales Enablement (reporting) E-commerce (disconnected) Design (Device-aware) Predictive Analytics Traffic Acquisition (SEO & bid management) Email Marketing (automated) Content Distribution (cross-channel dialogue) Social (engage) Sales Enablement (CRM integration) E-commerce (integrated) Social (listen) Campaign Management Testing (A/B & MV) Profile Content & Visitors Campaign Attribution Community (integrated cross-channel) Testing (automated) Central Hub for Profiles Community (established) Personalization Recommendations Automation (basic) Machine Learning Adaptive Print Behavioral Targeting Automated Decision Big Data Predictions Data Lake Initiate 1 Align 2 Optimize 3 Automate, Transform 4 Improve 5
  169. 169. Route to 21st Century Fitness Alignment Effective Leadership Disciplined investment Compelling Vision Clear Strategy Robust Relationships Anticipation IT as Differentiator Balancing Risk Anticipating Change Adaptability Navigating Change Change Culture
  170. 170. Blue Ocean Strategy could help Competitive strategy Blue Ocean strategy Focuses on rivals within the industry Looks across alternative industries Focuses on competitive position within strategy groups Looks across strategic groups within industry Focuses on serving buyer group better Redefies industry buyer groups Focuses on maximizing value of product within industry boundaries Looks across to complementary products & services Focuses on improving price performance within the functional/emotional orientation of the industry Rethinks the functional/emotional orientation of the industry Focuses on adapting to external trends as they occur Participating in shaping external trends over time Mastering the Challenge of Digital Innovation
  171. 171. Tactical considerations to help you become digitally mature Software Innovation is now global Are you fully cognizant of your international competitors? Are you building your product and go-to-market for global scale? There are competitors in all segments of the market How aware are you of competitors upstream or downstream? What are your soft spots that any competitor could explore ? Product now drives software sales Does your product require detailed voice-over or speak for itself? Do you know what features drive adoption, loyalty and high NPS? Network effects and Ecosystems build moats and drive stickiness Does each incremental customer/user make your product more valuable? What are data or network moats that can keep competition at bay? AI and machine learning are enabling applications Are you leveraging AI and ML where appropriate in your product? Are you prepared for what a platform shift might entail for your market? Microservices architecture and rapid product delivery are now must haves How quickly can you deliver production features? Culture is paramount and employee feedback is public Are you keeping the talent bar high as you grow? Are your culture and diversity top priority? Find a wedge and change the market dynamic Is there a product gain in an incumbent solution that you can exploit? Is there a weakness in an incumbent’s business model that you can use to your advantage? Go Fast or Die slow Are you strategically using capital to capture your market? Are you moving to where the market will be, not just where it is today? Mastering the Challenge of Digital Innovation
  172. 172. ValOli SUPPORTS MANAGEMENT Digitally immature Careful, avoiding mistakes Hierarchical Intuitive Segmented Inert, slow Digitally mature organisations Daring, allowing pivoting Flat organisation structure Data-driven Cooperative (ecosystem) Dynamic & flexible Mastering the Challenge of Digital Innovation
  173. 173. Roles that drive value can be found across an organization Critical role New role Traditional approach Talent-t0-value approach Hierarchy heavily influences which roles are viewed as most important Within a hierarchical level, roles are assigned similar levels of importance Role importance is linked to an explicit perspective on value that can be created or enabled by role Not all roles in the same hierarchical level are assigned the same importance
  174. 174. VALOLI SUPPORTS STAFF TO ADAPT TO AGILE WAYS OF WORKING Fast-Paced Constantly adapting to changing market conditions Entrepreneurial Teams working autonomously, freedom within a frame Speedy delivery Short timelines, minimum viable products Continual feedback Problems identified and dealt with early Mastering the Challenge of Digital Innovation
  175. 175. Application Modernization Containers Security M icro services Mobility D e v O p s Data Modernization D a t a Legacy Applications Modern Applications IT systems 21st Century Fitness Artificial Intelligence
  176. 176. Challenges of disruption and mastering innovation 1. Effective innovation strategies are a cornerstone of the broader growth strategy for the enterprise 2. There must be a common definition of what innovation means 3. The company should have a set of guiding principles that defines “what must be true” for the organization to realize growth through innovation 4. Accelerating speed to market becomes possible through the formation of diverse teams that reflect all corners of the organization 5. It is critical to forge a connected perspective between leaders responsible for managing the innovation process and the rest of the business
  177. 177. ValOli frames digital transformation around three fundamental aspects You can’t analyze your way to the future; you need to invent it. Competitive evolution is no longer linear — it’s exponential and disruptive. Your strategy needs to reflect these dynamics. Your biggest hurdle may stem from an inability to catalyze the organization into action. 1 2 3 Mastering the Challenge of Digital Innovation
  178. 178. The biggest threat to innovation is internal politics and an organizational culture, which doesn’t accept failure and/or doesn’t accept ideas from the outside, and/or cannot change within required timeframe Mastering the Challenge of Digital Innovation
  179. 179. ValOli takes you through seven decisions that matter in a digital transformation DISCOVER Set the ambition for the business. Decision 1: Where the business should go DESIGN Create a plan for the digital transformation. Decision 2: Who will lead the effort Decision 3: How to ‘sell’ the vision to key stakeholders Decision 4: Where to position the firm within the digital ecosystem Decision 5: How to decide during the transformation DELIVER Execute the transformation plan, allowing for ongoing adaptation and adjustment. Decision 6: How to allocate funds rapidly and dynamically DE-RISK Increase the transformation’s prospects for success. Decision 7: What to do when Few decisions are more momentous than choosing the business direction. A program that will deliver the needed degree of transformation Making sure resources get to the right places, what the allocation process should be and at what tempo it should operate Decide how to sequence the transformation to prevent loss of momentum
  180. 180. 6-Phase approach for Digital Transformation Strategy Current State Future State Roadmap Implement Monitor 1 CHANGE MANAGEMENT & COMMUNICATION GOVERNANCE EVOLUTION PROJECT & PROGRAM MANAGEMENT 2 3 4 5 6 Mastering the Challenge of Digital Innovation
  181. 181. ValOli SUPPORTS MANAGEMENT To decide what kind of digital strategy to pursue (*): (A) customer engagement strategy targets superior, personalized experiences that engender customer loyalty. (B) digitized solutions strategy targets information-enriched products and services that deliver new value for customers. (*) For a great digital strategy choose one kind of strategy or the other, not both. (C) digital strategy aimed at operational excellence may appear to be a third choice, but increasingly, operational excellence is the minimum requirement for doing business digitally, not the basis for a sustainable competitive advantage. Strategy 1 Mastering the Challenge of Digital Innovation
  182. 182. Digital Readiness Assessment Development & Purchasing Production Marketing Sales Are my existing products and services digitized? Can my portfolio be extended with digital services or products? Does my digitalization help me to reach target groups? How do I use new digital marketing channels? How do I analyse customer data and user profiles How would I position myself along the value chain? Do I have (digital) partners in the technology industry? Does digitalization improve my relation with customers? Does digitalisation allow me to improve my payment systems? Future proof test Current State 2
  183. 183. Digital Maturity Assessment Future proof test Current State 2 Looks at technology capability including data architecture, analytics and process automation, as well as the nurturing of certain skills such as agile Looks at ways-of-working –including employee tools- to establish levels of collaboration, experimentation, acceleration and iteration Extent to which digital aspirations are clearly articulated in appropriate parts of the business and the effectiveness of governance models Assessing product/service lifecycles, customer involvement in design, level of product digitisation and channel customization Level of responsiveness of customer needs, including next best action effectiveness and use of data analytics Measuring the level of flexibility of the enterprise architecture including establishing the balance between cost and benefit BUSINESS MODEL STRATEGY & GOVERNANCE CULTURE CAPABILITIES PRODUCTS & SERVICES CUSTOMERS STRATEGY & GOVERNANCE CULTURE CAPABILITIES PRODUCTS & SERVICES CUSTOMERS BUSINESS MODEL Mastering the Challenge of Digital Innovation

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