The document discusses how digital transformation requires more than just digitization and involves a profound and systemic change. It outlines several exponential technologies currently enabling data-driven business models and competitive advantages, including the Internet of Things, artificial intelligence, distributed ledger technology, and more. The document also examines how platforms are becoming the new normal across many industries and how they differ from traditional pipelines in terms of value creation, delivery, and capture. It closes by considering how emerging decentralized autonomous organizations combining AI and distributed ledger technology could challenge traditional platforms.

1. TURNING
DIGITAL TRANSFORMATION
INTO COMPETITIVE ADVANTAGE
@MicheleOsella
Michele Osella, PhD
Head of Business Model & Policy Innovation Unit
Istituto Superiore Mario Boella
Innovation Loop Live
Umeå, 12th December 2018

2. Umeå, 12th December 2018 2Innovation Loop Live
THE PERFECT (DIGITAL) STORM
An unprecedented wave of
digitization
• Relentless acceleration of
computing power (i.e., Moore’s law)
• Commoditization of the IT
infrastructure
• Data deluge (e.g., drastic reduction
of doubling time)
• Technology adoption among
consumers

3. Umeå, 12th December 2018 3Innovation Loop Live
DIGITAL TRANSFORMATION != DIGITIZATION
Strategy
Buy-in and support
from CXOs
Orchestration
Mutual reinforcement
among investments
Radicalness
Substantial discontinuity
with the status quo
Digital transformation means a profound and systemic change

4. Umeå, 12th December 2018 4Innovation Loop Live
ROLE OF TECHNOLOGIES IN INDUSTRIAL REVOLUTIONS
1st 2nd 3rd 4th
Time frame 1784-1840 1870-1914 1969-2000 Now
Technological
driver
Water and
steam power
Electric power Electronics and
IT systems
Cyber-physical
systems
Organizational
change
Factory
establishment
Division of labor Lean
manufacturing
Platform-
thinking
Main outcome Mechanization Mass production Automation Intelligence on
the shop floor
Digitization Digital transformation

5. Umeå, 12th December 2018 5Innovation Loop Live
EXPONENTIAL TECHNOLOGIES IN FULL SWING
Internet of Things
Data acquisition
5th Generation of mobile
Data transmission
Distributed Ledger Technology
Data trustworthiness
High Performance Computing
Data processing
Artificial Intelligence
Data interpretation
Augmented Reality
Data experience
Data intensity
as common denominator
Additive Manufacturing
Data ‘solidification’
IoT5G
HPC DLT
AIAR
AM

6. Umeå, 12th December 2018 6Innovation Loop Live
10 DATA-DRIVEN BUSINESS MODEL PATTERNS
1 2 3 4 5
6 7 8 9 10
Instant matching Radical
personalization
Predictive
offering
Dynamic pricing Open API
economy
Power by the
hour
BDaaS Orthogonal data
innovation
Extended
product
Attention
economy

7. Umeå, 12th December 2018 7Innovation Loop Live
WHERE DOES THE COMPETITIVE ADVANTAGE RESIDE?
DATA AS
INNOVATIVE
OFFERING
DATA AS MARKET
ORCHESTRATION
GAME-CHANGER
DATA AS REVENUE OPTIMIZER
Open API economy
Orthogonal data innovation
DATA AS CRM
BREAKTHROUGH
DATA AS
NOVEL INPUT
‘From data to dollar’ journey
BDaaS
Extended product
Radical personalization
Power by the hour
Instant matching
Attention economy
Dynamic pricing
Predictive offering
Value creation Value delivery Value capture

8. Umeå, 12th December 2018 8Innovation Loop Live
PIPELINES VS. PLATFORMS
Pipelines Platforms
Sides of the market One Multiple
Asset management Resource control Resource orchestration
Value configuration Value chain Value network
Unfair advantage Supply-side economies of scale Network effects
Pricing Cost + mark-up Cross-subsidization
Competition Company-based Ecosystem-based
Platforms
Connecting producers and consumers
Pipelines
Turning inputs into outputs

9. Umeå, 12th December 2018 9Innovation Loop Live
PLATFORM IS THE NEW NORMAL
Advertising E-commerce Ride hailing
Payment
networks
Industrial
automation

10. Umeå, 12th December 2018 10Innovation Loop Live
PLATFORMS MEET PIPELINES
Source: Forbes
Uber is leapfrogging iconic car makers in terms of valuation

11. Umeå, 12th December 2018 11Innovation Loop Live
PLATFORMS’ UNIQUE PROFITABILITY RECIPE
Asset-light structure Return on assets
Limited workforce Cost-effectiveness
Negligible marginal costs Scalability
Source: Harvard Business Review

12. Umeå, 12th December 2018 12Innovation Loop Live
THE AI LANDSCAPE
Smart conversational interfaces
Chatbots
Virtual assistants
Voice interfaces
Smart personalization
Content recommendation systems
Personalized medicine
Personalized advertisement
Smart anomaly detection
Bank and insurance frauds
Medical problems
Smart autonomous systems
Industrial robots
Self-driving vehicles
Self-navigating drones
Smart operations optimization
Air route planning
Inventory management
Predictive maintenance
Smart market intelligence
Dynamic pricing
Autonomous investing
Market predictions

13. Umeå, 12th December 2018 13Innovation Loop Live
THE DLT LANDSCAPE
Bitcoin Ethereum Coinbase BAT Steem
Off-chain
application logic
Utility or crypto
equity token
On-chain
application logic
Basic infrastructure
Source: ISMB

14. Umeå, 12th December 2018 14Innovation Loop Live
AI + DLT = DAO
Capital that learns
AI DLT
Main value proposition:
automated decision making
at scale
The trust technology
Main value proposition:
traceability and immutability
of recorded transactions

15. Umeå, 12th December 2018 15Innovation Loop Live
ON THE WAY TO NEXT-GENERATION PLATFORMS
Token
Ownership is based on
crypto-equity issuance
Consensus
Voting ensures that a majority
of stakeholders agree on
decisions made
Smart contracts
All bylaws are embedded into
clever software code
Independence
The entity is detached from its
creators and cannot be
influenced by outside forces
As DAOs challenge ‘traditional platforms’, are disruptors being disrupted?
Decentralized
Autonomous
Organization

16. Umeå, 12th December 2018 16Innovation Loop Live
SCIENCE FICTION OR REALITY?
Would you trust your child’s health to a doctorless hospital?

17. Umeå, 12th December 2018 17Innovation Loop Live
Michele Osella, PhD
Head of Business Model & Policy Innovation Unit
Istituto Superiore Mario Boella
Via Pier Carlo Boggio, 61 – 10138 Torino, Italy
E-mail: osella@ismb.it
Twitter: @MicheleOsella
Thanks for your attention!