IoE value index Brazil


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  • To better understand this definition, we must first break down IoE’s individual components. People: As the Internet evolves toward IoE, we will be connected in more relevant and valuable ways. Today, most people connect to the Internet through their use of devices (such as PCs, tablets, TVs, and smartphones) and social networks such as Facebook. In the future, people will be able to swallow a pill that senses and reports the health of their digestive tract to a doctor over a secure Internet connection. In addition, sensors placed on the skin or sewn into clothing will provide information about a person’s vital signs. According to Gartner, people themselves will become nodes on the Internet, with both static information and a constantly emitting activity system.Process: Process plays an important role in how each of these entities — people, data, and things — works with the others to deliver value in the connected world of IoE. With the correct process, connections become relevant and add value because the right information is delivered to the right person at the right time in the appropriate way. Data: With IoT, devices typically gather data and stream it over the Internet to a central source, where it is analyzed and processed. As the capabilities of things connected to the Internet continue to advance, they will become more intelligent by combining data into more useful information. Rather than just reporting raw data, connected things will soon send higher-level information back to machines, computers, and people for further evaluation and decision making. This transformation from data to information in IoE is important because it will allow us to make faster, more intelligent decisions, as well as control our environment more effectively. Things: This group is made up of physical items like sensors (e.g. pressure, radio activity, image, temperature, vibration), consumer devices, enterprise assets that are connected to both the Internet and each other,RFID (a simple tag that can used to identify an object) and "actuator". An actuator is an object that makes an "action": for example, it could turn off an engine, a light, or start a process to control a more complex system. In IoE, these things will sense more data, become context-aware, and provide more experiential information to help people and machines make more relevant and valuable decisions. Examples of “things” in IoE include smart sensors built into structures like bridges, and disposable sensors that will be placed on everyday items such as milk cartons.
  • There are five main drivers of the $14.4 trillion in IoE Value at Stake. These findings allow business leadership to begin planning how they can benefit from IoE. The amount of Value at Stake is somewhat evenly distributed across each of the five drivers.Asset utilization ($2.5 trillion in Value at Stake) – IoE reduces selling, general, and administrative (SG&A) expenses and cost of goods sold (CoGS) by improving business process execution and capital efficiency. Employee productivity ($2.5 trillion in Value at Stake) – IoE creates labor efficiencies that result in fewer or more productive man-hours. Supply-chain / logistics efficiency ($2.7 trillion in Value at Stake) – IoE eliminates waste and improves process efficiencies. Improved customer experience ($3.7 trillion Value at Stake) – IoE increases customer lifetime value and grows market share by adding more customers. Innovation ($3.0 trillion Value at Stake) – IoE increases the return on R&D investments, reduces time to market, and creates additional revenue streams from new business models and opportunities. The fact that each of these areas has roughly the same amount of Value at Stake suggests that firms must examine how IoE can impact every aspect of their business processes. To reiterate an earlier point, IoE initiatives that involve both cost-cutting and revenue-raising activities need to be considered.In addition, to benefit from IoE, firms must combine technology-enabled security capabilities (both logical and physical) with policies and processes designed to protect the privacy of company and customer information. IoE’s growth potential in the private sector over the next decade will rely heavily upon the success of companies’ security and privacy efforts.
  • Cisco Consulting Services used the latest, most sophisticated techniques to interview respondents and conduct analysisContacted tens of thousands of executives across 12 countries – selecting the 7,501 most qualified based on their industry, line of business, knowledge of IoE value drivers Ambitious survey design possible only through online survey techniques, global network of partners, innovative quota tracking developed by Cisco Consulting ServicesComparison: IBM CEO survey done once every 2 years, has only 1,700 respondentsFor analysis, used R, open source statistical software that includes analytics and machine learning from the most innovative minds in statistics and data analytics – years before they are available in expensive “off the shelf” softwareUsed exhaustive search multiple regression to determine which factors best predict a company’s ability to realize value from IoE. In essence, we let the IoE tell us about itself…
  • Top 3 Business Drivers of IoE:Accelerating pace of innovation: 36%Customer demand... 35%Need to automate business processes: 35%
  • New types of devices: 33%Volume of data generated: 32%Cloud: 31%
  • New threats to data / physical security: 42%Inability of IT systems to keep pace with change: 38%Regulatory or compliance challenges: 32%
  • Need to invest in new technology infrastructure: 43%Ability to integrate new technologies with legacy IT environments: 38%Ability to update processes to absorb new technologies: 36%
  • Operational efficiency: 46%Customer service: 34%Collaboration within company: 31%
  • German companies have extracted the most value from the IOE to date at 62.3%. Emerging markets show the greatest upside in value still to be realized.Firms in Germany, Japan, and France have realized most 2013 VAS. Long history of investment in IOE, coupled with supportive technology and innovation environment.High level of competitive parity observed across companies in different geographies (~15-pt gap from top to bottom)Firms in USA, UK, and Canada have realized majority of 2013 VAS.Firms in India, Brazil, and China highly confident about IOE outlook, and investing heavily for future success. Firms in India, Brazil, China, Australia, Russia, and Mexico have most untapped potential.
  • Asset Utilization has realized the highest share of 2013 VAS. Not surprising as this has been the starting point for many areas of IOE innovationEmployee Productivity and Innovation rank high, possibly due to high penetration of collaboration solutions in global enterprisesMost room for improvement in Customer Experience and Supply ChainVariation among domains is relatively narrow. Progress being made in all areas
  • Little variation observed across company size bands in terms of value realizedSmaller mid-sized companies slightly outperforming larger enterprises in terms of % value realized, although differences are insignificant
  • Most IT-intensive industries score highest on value realizedHigh Tech and Telecoms, Financial Services lead the way due to significant installed base environments of collaboration, analytics, and other IOE-related solutionsRetail / wholesale / hospitality, energy, and manufacturing have greatest IOE upside potential
  • Manufacturing FirmsM2MStrongest area: Managing the consumption of energy through smart and connected systems. Use case: Smart buildings. Biggest opportunity area: 1) Remotely tracking location of physical assets with wireless technology. M2POverall, manufacturing firms are very strong in M2P connections (Analytics)Strongest area: Ability to view key performance indicators through information dashboards.This is a typical form of M2P – common in ERP systems. Biggest opportunity area: Being able to support decisions through real-time, multi-dimensional data analysis (sometimes called OLAP)P2PStrongest area: Unified communications.Biggest opportunity: Integrated video collaboration. This can be important for manufacturers because design and manufacturing are increasingly in different locations (example: GE’s immersive telepresence).
  • Energy FirmsM2MOverall, energy firms are very strong in M2M connectionsStrongest area: Ablity to remotely monitor its equipment to diagnose problems and prevent breakdowns. Use case: Smart factories. Biggest opportunity area: 1) Making operations more sustainable and reducing waste by using sensor data; 2) providing smarter products and services to consumers. Use case: Smart grid.M2PStrongest area: Analyzing large volumes of data (Big Data).Biggest opportunity: Predictive analytics – making predictions using advanced statistical tools and data mining. Energy firms are more confident in their ability to gain insights from big data, than in their ability to use data to make predictions that could improve their performance.P2PStrongest area: Unified communications.Biggest opportunity: The ability to locate experts. This can be especially important in an industry where highly specialized experts can be both urgently needed and dispersed across locations.
  • Retail FirmsM2MStrongest area: Remotely tracking inventory.. Biggest opportunity area: Location-based marketing Use case: connected marketing and advertisingM2POverall, retail firms are very strong in M2P connections (Analytics)Strongest area: Ability to view key performance indicators through information dashboards.This is a typical form of M2P – common in ERP systems. Biggest opportunity area: Data visualization – being able to gain insights from data by using graphical, interactive toolsP2PStrongest area: Unified communications.Biggest opportunity: BYOD. Getting retail employees to use their own devices (smartphones and tablets) cuts costs and makes it easier to roll out new web-based training and sales resources. Use case: Next-gen workforce, BYOD
  • We looked at how different enablers drive competitiveness and value realized in the IoE economy. We created a model of people, process, data and things as enablers of this value. Our model explains some 66.2% of changes in value realized (the other 33.8% is undefined but would include macro-economic conditions, industry-specific dynamics, etc.). The key learning here is that technology is foundational to the IoE opportunity—it’s the table stakes to participate in the IoE economy—and is the single most important factor. By itself, however, it explains only around 20% of changes in value realized. IT, in short, is part of the IoE story, but it does not equal the IoE. Instead, it is the people and process issues, which together account for more than 50% of changes in value realized, that are critical. Interestingly, we believe data quality and quantity are perhaps better understood as by-products of IoE value rather than as enablers of it. This is an important corrective in the marketplace in terms of sources of value.
  • $14.4 trillion in Value at Stake (VAS) is “up for grabs” for private-sector firms over the next 10 years (2013-2022) in the Internet of Everything economy.VAS = newly created value, or value that will migrate among companies, based on their ability to harness IoE.For 2013, firms have realized just over half of their potential Value at Stake (53.0%), leaving more than half a trillion dollars “on the table”Emerging-market countries and midsized companies are poised to realize significant value from IoE, enabling them to quickly achieve parity with — or even outrun — developed countries and larger firms, respectively.This “democratization of value” has the potential to alter competitive landscapes in record time. Data has become ubiquitous. IoE’s ability to combine data with people, process, and “things” is essential to creating competitive differentiation.Technology — including the network — is foundational to the IoE opportunity, but “people” and “process” capabilities have the biggest impact on Value Realized.Executives view IoE as a net positive in terms of jobs, wages, and security.
  • List of deliverables and dates around IoEE Phase 3 (IoE Connections Index): Launch date:June 12 Final TL Content due:May 28 Executive reviews: complete by May 16 Internal Deck: 20-slide deck describing survey results used to brief internal stakeholders (preliminary results). Final: May 6Top 10 Insights Document: 3-page summary of key findings from the survey report; will be translated for launch. Final: May 20Global Survey Report: 25- to 30-page white paper describing survey results as well as qualitative analysis and roadmap for enterprises to capture value of the IoE Economy; will be translated after launch. Draft: May 20. Review (PR/AR/GA) complete: May 22. Final: May 28FAQ: 5- to 10-page document outlining and answering anticipated questions; will be translated after launch. Final: May 28External Deck/PowerPoint Presentation: 20-slide deck used to brief press and analysts. Final: May 28Blog: 400- to 500-word blog post on topic related to IoE Connections Index and research results. Final: May 28One-Page Messaging Document**: 1-page high-level messaging document to tie survey results, brand, and business benefits together for executives. Final: May 28Slidecast: 10-minute walkthrough of PowerPoint deck with voiceover. Final: June 4Mini Slidecast Series:Website: Include links to all assets on the IoE external website, including design adjustments.GMCC Content Review: Review and edits to GMCC content assets, e.g. infographics, videos, etc.Stakeholder Content Readouts: Stakeholder briefings to occur the weeks of May 6 & May 13.IoEE Interactive Diagnostic Tool: Development and launch of tool. *Communications strategy and execution (Alicia) funded from separate ATL budget.**Ewan Morrison (ATL) is responsible for the one-page messaging document.  Localization/translation will be driven by Susie Hamlin
  • IoE value index Brazil

    1. 1. Cisco Confidential 1© 2013 Cisco and/or its affiliates. All rights reserved.The Internet of Everything(IoE) Value IndexBrazil
    2. 2. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2• IoE Value Index background, keyfindings, model, and definitions• Trends, drivers, challenges, and impact• IoE value realized by country, value driver, companysize, and industry• How to capture value realized
    3. 3. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 3Delivering the rightinformation to theright person (ormachine) at theright timeProcessLeveraging datainto more usefulinformation fordecision makingDataPhysical devicesand objectsconnected to theInternet and eachother for intelligentdecision makingThingsConnecting peoplein more relevant,valuable waysPeople
    4. 4. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 4• SG&A and CoGS reduction from improvedbusiness process execution• Improved capital efficiency• Improved labor efficiency• Fewer or more productive man-hours• Improved customer lifetime value• Additional market share (more customers)• Improved RD&E speed, reduced TTM• New business models and new sources ofrevenue• Improved process efficiency• Reduced waste in supply chainIoE Valueat Stake:$14.4T(2013-202210-yearNPV)** Net present valueAsset utilization:$2.5TImproved customerexperience: $3.7TSupply-chain / logisticsefficiency: $2.7TInnovation: $3.0TEmployee productivity:$2.5T21usecases
    5. 5. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 5• Conducted ground-breaking online survey of 7,501 business and ITdecision-makers, split between enterprises and mid-sizedcompanies• Study executed by the Cisco Consulting Services Research &Economics Practice• MIT Center for Digital Business provided advice on questionnairedevelopment, but not on the IoE Value Index design or Value atStake / value-realized estimates• Fielded in 12 of the largest global economies (70% of worldwideGDP):Australia, Brazil, Canada, China, France, Germany, India, Japan, Mexico, Russia, U.K., and U.S.• Estimates actual value realized by firms in 2013 as a share ofpotential Value at Stake; explores key IoE enablers(people, process, data, things) that drive value
    6. 6. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 6Global Value at Stake2013-2022(10-year total)$14.4T*2013$1.2TValue at Stake 2013(Jan. – Dec.)$1.2TValuerealizedin 2013IoE Value Index$613B(53%)$544B(47%)Value“left on table”in 2013Note: chart is not to scale* $14.4T is conservative because it is based on a set number (21) of private-sector use cases and discounts future cashflows due to uncertainty around privacy and regulatory issues.
    7. 7. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 7N=7,501 respondents79%Viewed IoE pervasiveness as having―increased‖ or ―significantly increased‖over past 3 years84%Believe IoE pervasiveness will―increase‖ or ―significantly increase‖over next 3 yearsKey Trends
    8. 8. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 84%5%3%4%1%19%5%6%2%28%2%26%17%42%27%36%32%50%77%47%67%33%65%Information Security - TotalInformation Security -BrazilWages - TotalWages - BrazilJobs - TotalJobs - BrazilDo Not Know Lower / Worse No Change Higher / Better3-Year Outlook as Result of IncreasingIoE PervasivenessN=7,501 respondentsKey Trends
    9. 9. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 9N=7,501 respondents#1Accelerating pace ofinnovation#2Satisfying customerdemand for new waysof interacting#3 Need to automatebusiness processesKey DriversTop 3 Business Drivers of IoEIncreasingly globalizedsuppliersNeed to automatebusiness processesGreater use of strategicoutsourcingBrazilTotal
    10. 10. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 10#1 New types of devices#2 Volume of datagenerated#3 Cloud-basedtechnologyN=7,501 respondentsKey DriversTop 3 Technology Drivers of IoEBrazilTotalIncreasing availability ofmobile devicesNew types of connecteddevicesLower computing andstorage costs
    11. 11. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11Biggest Downsides of IncreasedIoE PervasivenessN=7,501 respondents#1 New threats to data /physical securityInability of IT systemsto keep pace withchange#2Regulatory orcompliancechallenges#3Key ChallengesBrazilTotalInability of IT systemsto keep paceCompetition from newrivalsRegulatory or compliancechallenges
    12. 12. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 12N=7,501 respondents#1 Need to invest in newtechnology infrastructure#2Ability to integrate newtechnologies with legacyIT environments#3Ability to updateprocesses to absorbnew technologiesTop Challenges to Realizing Value from IoEKey ChallengesBrazilTotalStrengthening employees’communication skillsNeed to invest in newtechnology infrastructureRecruiting workers withspecialized skills
    13. 13. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 13Top Business Benefits of IoEN=7,501 respondents#1Operational efficiency(VAS drivers: assetutilization, supplychain, employee productivity)#2Customer service(VAS driver: customerexperience)#3Collaboration withincompany(VAS drivers:innovation, employeeproductivity)ImpactBrazilTotalOperational efficiency(VAS drivers: asset utilization, supplychain, employee productivity)Strategic decision-making(VAS drivers: assetutilization, innovation)Profitability(VAS drivers: assetutilization, supply chain)
    14. 14. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 14Executives’Confidence in Their Firms’AbilityTo Capture Value from IoEN=7,501 respondents8.2 Indian business and IT leaders8.0 Chinese business and IT leaders7.9 Brazilian business and IT leaders6.7 Non-emerging market business and ITleaders7.4 Mexican business and IT leadersImpact10-point scale: 1 = extremely weak ability; 10 = extremely strong ability
    15. 15. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 15N=7,50147.1%47.7%47.9%48.8%51.0%52.5%53.1%53.4%53.5%54.2%57.7%62.2%52.9%52.3%52.1%51.2%49.0%47.5%46.9%46.6%46.5%45.8%42.3%37.8%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%MexicoRussiaAustraliaChinaBrazilIndiaCanadaU.K.U.S.FranceJapanGermanyIoE value realized IoE opportunityFirms in:Value at Stake2013 ($B)$87.5$71.2$59.4$472.9$53.3$56.8$34.8$34.0$157.7$74.4$35.6$19.6
    16. 16. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1651.1%52.0%51.1%49.5%54.2%49.2%54.5%53.2%56.4%55.9%48.9%48.0%48.9%50.5%45.8%50.8%45.5%46.8%43.6%44.1%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Customer experience - TotalCustomer experience - BrazilSupply chain - TotalSupply chain - BrazilEmployee productivity - TotalEmployee productivity - BrazilInnovation - TotalInnovation - BrazilAsset utilization - TotalAsset utilization - BrazilIoE value realized IoE opportunityValue at Stake2013 ($B)$194.51$202.83$164.8$310.75$284.31$1.8$7.8$1.4$14.9$8.1
    17. 17. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 17N=7,50154.1%52.4%53.3%51.0%52.4%50.9%45.9%47.6%46.7%49.0%47.6%49.1%0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%500 to 1,999 employees - Total500 to 1,999 employees - Brazil2,000 to 9,999 employees - Total2,000 to 9,999 employees - Brazil10,000 or more employees - Total10,000 or more employees - BrazilIoE value realized IoE opportunityValue at Stake2013 ($B)$639.9$299.4$217.9$18.8$8.8$6.4
    18. 18. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1844.9%45.8%46.0%50.7%50.8%54.2%57.4%60.5%65.4%55.1%54.2%54.0%49.3%49.2%45.8%42.6%39.5%34.6%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Retail /Wholesale /…EnergyManufacturingTransportationOtherHealthcare / LifesciencesServicesFinancialservicesHigh tech /TelecomsIoE value realized IoE opportunity N=7,501Value at Stake2013 ($B)$118.3$115.2$276.9$98.7$65.4$23.6$224.4$55.0$179.6
    19. 19. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 19Type ofconnectionM2M M2P P2PShare of VAS 39.0% 40.3% 20.6%Top usecases• Smart factories• Smart grid• Supply chainefficiency• Connectedmarketing andadvertising• Next-genworkers• Faster time tomarketIoE enablers:currentstrengths• Managing energyconsumptionthrough smart,connectedsystems• Viewing KPIsthroughinformationdashboards• UnifiedcommunicationsIoE enablers:largestopportunities• Intelligentmachines/robots• Remote trackingof physical assets• Decisionsupport throughreal-time, multi-dimensionaldata analysis• Integrated videocollaborationThe largest opportunityareas for manufacturersare ―intelligent‖ robots,remote tracking of physicalassets, decision support,and integrated videocollaboration
    20. 20. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 20Type ofconnectionM2M M2P P2PShare of VAS 49.0% 23.6% 27.5%Top usecases• Smart factories /automation• Smart grid• Faster time-to-market• Next-genworkers• Smart buildingsIoE enablers:currentstrengths• Proactivelymonitoringenergyproduction andsupplyequipment• Analyze anduse largeamounts ofdata• UnifiedcommunicationsIoE enablers:largestopportunities• Makingoperations moresustainablethrough sensordata• Predictiveanalytics• Ability to locateexpertsThe largest opportunityareas for energy firms aresustainable operations,predictive analytics, andexpert location
    21. 21. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 21Type ofconnectionM2M M2P P2PShare of VAS 21.5% 47.7% 30.8%Capabilities• Connectedmarketing andadvertising• Innovativepayments• Connectedmarketing andadvertising• Connectedvending• Next-genworkersIoE enablers:currentstrengths• Remotelytracking inventory• Viewing KPIsthroughinformationdashboards• UnifiedcommunicationsIoE enablers:largestopportunities• Location-basedmarketing• Customizedofferings,marketing, andadvertising• Datavisualization• Predictiveanalytics• BYOD• Rich mediacustomerinteractionsThe largest opportunityareas for retailers arelocation-based marketing,data visualization, andBYOD
    22. 22. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 225.1%8.2%9.7%13.1%13.3%14.3%16.1%20.1%0% 5% 10% 15% 20% 25%Information accuracyInformation accessibilityInformation ease of useMeasurement practicesHuman capital practicesInformation management practicesInclusiveness practicesQuality of technology infrastructure andtoolsThingsPeople Process DataTogether, these factors explain 66.2% ofchanges in value realized (R2 = .662). This is arobust model of what predicts value realized.Relative Importance of IoE Enablers inPredicting Value Realized7.9%10.5%10.6%16.8%10.4%N/A11.7%14.6%0% 5% 10% 15% 20% 25%Total Brazil
    23. 23. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 23• Firms will capture just 53% of IoE’s Value at Stake for 2013, leaving $544B ofunrealized value• IoE is driving competitive parity, raising the stakes for differentiationamong companies and countries:Emerging-market countries and midsized companies are poised to realize significantvalue from IoE, enabling them to quickly achieve parity with — or even outpace —developed countries and larger firmsSmaller companies are already realizing as much IoE Value at Stake as someenterprises• To capture maximum value from IoE, firms should focus on the IoE-drivencapabilities that will benefit their industries most:Manufacturing firms: real-time, multidimensional data analysis; integrated videocollaboration; remote tracking of physical assets; intelligent robotsEnergy firms: integration of sensor data; ability to locate experts; predictive analyticsRetailers: data visualization and predictive analytics; BYOD; location-basedmarketing
    24. 24. © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 24• To capture more value in the IoE Economy, companies must:Invest in high-quality technology infrastructure and toolsAdopt and follow inclusive practicesDevelop effective information-management practicesMove from…Better is betterBigger is betterTo …CloutAccess to informationBig dataBusiness intelligenceConnectivityCloudBig judgmentIntelligence at the point of decisionConnectednessExpertise everywhere
    25. 25. Thank you.