Innovate or be Disrupted: The Agility Imperative

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Innovate or be Disrupted: The Agility Imperative - Gaurav Sharma, IDC.

In this presentation, we will take an inside look at some CIO playbooks of successful innovators from around the world, including here in Asia/Pacific. How to innovate is unique to the DNA of each organization. We identify four categories that organizations may find themselves in, and some of the investments which will give the flexible and trusted foundation to go forward into the world of the 3rd Platform.

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Innovate or be Disrupted: The Agility Imperative

  1. 1. Innovate or be Disrupted: The Agility Imperative Gaurav Sharma gsharma@idc.com Bengaluru, India 08-Oct-2015
  2. 2. Innovate or be Disrupted: The Agility Imperative Synopsis In this presentation, we will take an inside look at some CIO playbooks of successful innovators from around the world, including here in Asia/Pacific. How to innovate is unique to the DNA of each organization. We identify four categories that organizations may find themselves in, and some of the investments which will give the flexible and trusted foundation to go forward into the world of the 3rd Platform. Agenda • The third platform and the innovation accelerators • Four playgrounds for disruptors (with cases of successful innovators) — existing market not viable — barrier to entry has dropped — non-premium brands are good enough — competition for high-margin business is isolated • Investments in flexible and trusted foundations • The IT Executive as a value creator
  3. 3. Innovate or be Disrupted: The Agility Imperative Content Accelerating innovation Four playgrounds for disruptors Foundational investments IT Executives as value creators
  4. 4. Innovate or be Disrupted: The Agility Imperative © IDC Visit us at IDC.com and follow us on Twitter: @IDC 4 The World in 2020 Connected “Things” 29.5Billion Market Opportunity US$1.7Trillion Source: IDC APeJ Internet of Things Market Forecast, April 2015 @CRASingapore
  5. 5. Innovate or be Disrupted: The Agility Imperative 3rd Platform's innovation stage The 2.5 IT platform land The 4 pillar deployment rush The innovation accelerator promise
  6. 6. Innovate or be Disrupted: The Agility Imperative Inevitable Transition – Why? 18% Followers 12% Disruptors (+3% points YoY) 16% Creators (+3% points YoY) 20% Opportunists 33% Optimizers Source: IDC Asia/Pacific C-suite Barometer 2015 (N=1,452 in APAC)
  7. 7. Innovate or be Disrupted: The Agility Imperative Aligning to C-suite : Innovation & Simplification Develop innovation cells to harness ICT to gain competitive advantage Improve or simplify IT infrastructure Building better management tools Better supplier mgt and develop a stronger relationship mgt framework Develop/enhance enterprise architecture Building a more secure IT environment 11% 9% 9% 8% 7% 7% Organization’s top ICT priorities Source: IDC Asia/Pacific C-suite Barometer 2015 (N=1,452 in APAC); ICT priority list goes beyond these top 6
  8. 8. Innovate or be Disrupted: The Agility Imperative Content Accelerating innovation Four playgrounds for disruptors Foundational investments IT Executives as value creators
  9. 9. Innovate or be Disrupted: The Agility Imperative Four playgrounds for disruptors Images courtesy respective Organizations
  10. 10. Innovate or be Disrupted: The Agility Imperative Four playgrounds for disruptors P L A Y G R O U N D 1 Market is no longer viable P L A Y G R O U N D 2 Barriers to enter have dropped P L A Y G R O U N D 3 Non-premium brands are good enough P L A Y G R O U N D 4 Competition only taking high margin
  11. 11. Innovate or be Disrupted: The Agility Imperative Four playgrounds for disruptors P L A Y G R O U N D 1 Market is no longer viable P L A Y G R O U N D 3 Non-premium brands are good enough P L A Y G R O U N D 2 Barriers to entry have dropped P L A Y G R O U N D 4 Competition only taking high margin
  12. 12. Innovate or be Disrupted: The Agility Imperative P L A Y G R O U N D 1 Market is no longer viable Call to action Domestic parcel volume continues to drop (-15M in 4 yrs). Margins continue to run towards zero Customer relationship Consumer - efficient, convenient delivery of eCommerce purchases Enterprise - agile eCommerce enablement Internal disruption Become complete eCommerce solution provider (website, warehouse, delivery, customer care, analytics) [$312.5M investment from Alibaba]
  13. 13. Innovate or be Disrupted: The Agility Imperative Four playgrounds for disruptors P L A Y G R O U N D 2 Barriers to entry have dropped P L A Y G R O U N D 3 Non-premium brands are good enough P L A Y G R O U N D 1 Market is no longer viable P L A Y G R O U N D 4 Competition only taking high margin
  14. 14. Innovate or be Disrupted: The Agility Imperative P L A Y G R O U N D 2 Barriers to entry have dropped Call to action Engineering design either stolen or possible to replicate "well enough". Competing on price against own design Customer relationship Give farmers machines with fewer outages and insights into yield. Help drive customer revenues Internal disruption Build hosted analytics services, with data and crop scientists. Sell the value of analytics to a customer base with potentially low experience
  15. 15. Innovate or be Disrupted: The Agility Imperative Four playgrounds for disruptors P L A Y G R O U N D 3 Non-premium brands are good enough P L A Y G R O U N D 2 Barriers to entry have dropped P L A Y G R O U N D 1 Market is no longer viable P L A Y G R O U N D 4 Competition only taking high margin
  16. 16. Innovate or be Disrupted: The Agility Imperative Call to action Asian markets contain the largest world populations and middle class growth. New brands penetrating 2 nd and 3 rd tier cities Customer relationship CPG customers are often hidden behind retailer. Voice of customer critical. Unilever created Axe Twist as a co-design with consumer input Internal disruption Existing brand design has bias. Building platforms for leveraging 3 rd platform. Major partnership with BrandTone (IN, ID, CN, TH, PH)
  17. 17. Innovate or be Disrupted: The Agility Imperative Four playgrounds for disruptors P L A Y G R O U N D 4 Competition only taking high margin P L A Y G R O U N D 2 Barriers to entry have dropped P L A Y G R O U N D 1 Market is no longer viable P L A Y G R O U N D 3 Non-premium brands are good enough
  18. 18. Innovate or be Disrupted: The Agility Imperative P L A Y G R O U N D 4 Competition only taking high margin Call to action OTT services killing the voice and sms business. Margins on mobile data dropping, from local competition. Fourth telco entering market Customer relationship SingTel aims for higher end of market, and the highest QoS. Expanding that to the best available analytics services for businesses Internal disruption Had to take funding, skills, and data from existing LoB in the bigger organization. Required significant involvement from the execs
  19. 19. Innovate or be Disrupted: The Agility Imperative Content Accelerating innovation Four playgrounds for disruptors Foundational investments IT Executives as value creators
  20. 20. Innovate or be Disrupted: The Agility Imperative 5 Pillars of Digital Transformation Develop a vision for the digital transformation of the business Attract and grow loyalty with customers Leverage information for competitive advantage Leadership transformation Omni-experience transformation Information transformation Make business operations more responsive and effective Transform the way talent is accessed, connected and leveraged Operating model transformation Worksource transformation
  21. 21. Innovate or be Disrupted: The Agility Imperative Ad Hoc Opportunistic Repeatable Managed Optimized Stage of maturity 14.2% 31.8% 32.4% 13.6% 7.9% Global 16.9% 33.9% 33.1% 10.6% 5.5% India Source: IDC Digital Transformation MaturityScape, Aug 2015
  22. 22. Innovate or be Disrupted: The Agility Imperative 3rd Platform technology value investments Cloud Consumption-based pricing for dev & test (Initiatives are measured for revenue contribution, and development costs are contained. Strong commercial and open source options) Mobile Experience Omni-experience is the low bar for CX (Digital transformation is attracting executive attention and funding. Focus on experience on mobile, and common across all platforms) Big Data Platform Platform to process un/semi-structured data (The biggest sources of data being leveraged are structured operational, followed by semi- structured clickstream, sensor, and customer interactions) © IDC Visit us at IDC.com and follow us on Twitter: @IDC
  23. 23. Innovate or be Disrupted: The Agility Imperative Is it a Wave or a Tsunami?
  24. 24. Innovate or be Disrupted: The Agility Imperative Business alignment requires IT to be agile Agile DevOps is a huge challenge, and not optional Traditional months-long application development strands the business Start project-by-project and focus on automation Agile Devops Traditional /non-agile 33.6% 66.4% Agile DevOps in place Not in place or satisfactory Source: IDC Asia/Pacific C-suite Barometer 2015 (N=667 CIO/CTO in APAC)
  25. 25. Innovate or be Disrupted: The Agility Imperative Investing in the open source community Different classes of open source: non-profit foundation governed • far larger group of contributors • standards adopted by vendors • trust on case-by-case basis single vendor projects • direct accountability • follow a suite strategy • backed by services Source: OpenHUB (2015)
  26. 26. Innovate or be Disrupted: The Agility Imperative Content Accelerating innovation Four playgrounds for disruptors Foundational investments IT Executives as value creators
  27. 27. Innovate or be Disrupted: The Agility Imperative "Tesla is as much a software company as it is a hardware company." Elon Musk, CEO Tesla "We are a technology company" Lloyd Blankfein, CEO Goldman Sachs "We … increasingly use technology as the backbone of our relationship with guests" Arne Sorenson, CEO Marriott Worldwide What kind of business are you?
  28. 28. Innovate or be Disrupted: The Agility Imperative Aligning the CIO office with the C-suite CIO office’s time/resources/ budget share of wallet VS&MIT ops Governance Innovation 19%34% 24% 23% Source: IDC Asia/Pacific C-suite Barometer 2015 (N=1,452 in APAC)
  29. 29. Innovate or be Disrupted: The Agility Imperative The role of IT in a changing marketplace Primary sources of innovation Internal financial stakeholders Tech vendors Tech vendors and open innovation Open innovation Tech vendors and ecosystem partners Open innovation and tech vendors with ecosystem partners CIO CIO CIO+LoB or LoB IT Tech CxO, transformation entity/vision Tech CxO with an innovation executive sponsor/team 18% Followers 12% Disruptors (+3% points YoY) 16% Creators (+3% points YoY) 20% Opportunists 33% Optimizers Source: IDC Asia/Pacific C-suite Barometer 2015 (N=1,452 in APAC)
  30. 30. Innovate or be Disrupted: The Agility Imperative YOUR INDUSTRY 2016 Innovator YOUR ORGANIZATION? Innovate based on your "playground" CIO + LOB = Value Creation Agile Platforms
  31. 31. Red Hat Forum 2015 Innovate or be Disrupted: The Agility Imperative

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