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Before we go into our panel discussion I would like to take this opportunity to provide a little context and set the scene. On the right side of this picture we see the attributes of organisations live Google and Netflix, companies that we consider to be Digital Natives and are changing the world and in the middle we have a reference to the big technology machine that can make this happen.
But its still hard to identify what Digital Transformation really is.
Its probably easier to see when its isn’t Digital Transformation than when it is.
From personal experience I watched Tesco spend millions on doing Digital, they where the first to build an online grocery site and wanted to go into competition with iTunes and Netflix, blinkbox was a company that they purchased that offered a Digital streaming service. But all their efforts were focused on maintaining an existing business model which was being obliterated by Spotify, Netflix and Apple. Blinkbox was recently sold to talk talk.
The BBC, a globally recognised brand which would be considered Digitally savy recently cancelled a £100 million transformation program to move to full digitial video production, poor project management, reporting and lack of focus on business change
-------------------------------------------------------------------------------------------------- Kodak – They invented the digital camera but they stayed focused on the high profit margin business of film and paper production .Conversely Sony makes a loss on their smart phones but licenses the technology for the camera sensors to other smart phone manufacturers and makes enough of a profit to cover their own smart phone losses.
Blockbuster – In 2000 Netflix approached Blockbuster to do a partnership, in 2004 Blockbuster invested $200 million to build a digital platform & waived late fees, by 2010 they were bust
4 years ago the Visa .me program was created to build a competitor to PayPal. The progamme is still in play, yet the world has moves to Mobile payment solutions e.g. Apple Pay
Borders – Addressed customer experience with concept stores, digital kiosks, ebooks but eventually went bankrupt
They are bringing completely new business models to market New Supply chains New Value propositions New Business Models Distributions Networks
Often what you see is not what you get. Uber – Uber Rush an express delivery service Uber Eats a takeaway deliver services Uber Essentials a priority delivery service Building a crowdsourced logistics and distribution network.
Who knows how you will be competing against them.
Then you have the digital transformers
Apple - A devices manufacturer who now sell services, including music, payment engines and development platforms Philips – growing new revenue streams with new products –Wifi & Bluetooth enabled light bulbs and integrating into higher value services Walmart – Using Bluetooth enable light bulbs to track customers within their stores and sending location based targeted coupons to the customer. Innovation Centre.
Common themes They are have embraced change They are transforming their business models
Technology is changing That’s changing peoples habits These companies are reinventing their business to capitalise on those opportunities
------------------------------------------------------------------------------- Microsoft – A company who used to sell inventory, DVDs with operating systems on themto a services based industry. Disney – have redefined Magic at their theme parks with rfid tags in bracelets that enables Disney to track and interact with you across the park including telling you when to go to rides, paying for your food and providing a wealth of data and analytics for Disney to refine and better serve the customer. Ryanair – refocusing on customer experience and bringing new value propositions to market including “ Business Plus”, the mobile app is better Coca Cola– Full autonomous just intime supply chains and completely new customer experiences.
For a long time Digital has sat on the right hand side of the model, focused on customers and channels.
In 2010 Alex Osterwalder published a book called Business Model Generation
The book references a tool called the Business Model Canvas, a simple chart that can be used to draw out a business, what it does and how it does it.
Codelco, world’s largest copper mining company, a Chilean Government owned organisation who are revolutionising the mining industry through digital technologies.
Today 4 of their mines are fully autonomous with operations controlled remotely.
Their digital transformation is on the left side of the business model, they still sell copper
Codelco, world’s largest copper mining company, a Chilean Government owned organisation who are revolutionising the mining industry through digital technologies. This was a strategic initiative established by the CIO in 2003. Focusing on shifting Mining from a labour intensive process to a knowledge and technology intensive operation. Today 4 of their mines are fully autonomous with operations controlled remotely.
This was more than a technology challenge as it required a new company culture, employee engagement and new skills.
The have gone from Codelco 1.0: to Codelco 2.0, a real-time mining model with highly automated processes and they already have a vision for Codelco 3.0, intelligent mining
Boeing used to just sell airframes, but now they have become an information services company.
Taking all the data created by the planes and turning it into insight and knowledge, turning it into services and selling back into their customers to make them become the best airlines possible.
Boeing Edge – delivering inventory & parts management, Fleet Management, Flight Services and Information Services. All delivered on cloud technology, using the Internet of Things (Plane) and providing insight back to the airlines.
Coke spends 100s of millions on digital marketing. That’s an IT challenge not a Marketing challenge.
Integrated with Demand Driven supply chain. Mobile purchase Real time vending machines Big data Digital campaigns
Coca Cola Freestyle – Just in time supply chain, digital mixing, big data, mobile apps
No point building a customer experience that your back end systems cant support.
What will be the acorn for you?
Your data should be able to steer you in the right direction and if you don’t have the data then that might be a good place to start.
We have defined Digital Transformation
The building blocks
These technologies are now ubiquitous. They are democratising IT by providing free and open access They are accelerating the frequency of change
Outside – sentiment, engagement, feedback
Inside – collaboration, sharing, communication
Mobile used to mean building apps for iPhones and iPads and Android devices.
Today mobile means more, it means the mobility of your digital services. Starting on one device and finishing on another. Netflix, Apple Handoff, Office 365 Photos, Documents, Health data Payment Information
Insight When you are designing for these touchpoints user feedback is essential to build something that works and will be adopted, and once you have developed be prepared. The mobile ecosystems are changing on a 6 month refresh rate which means you will have to keep refreshing your applications to ensure that they work with the latest devices and conform to the latest trends. Its very easy to spot an app that was written a few years ago.
ThyssenKrupp – have taken analytics to the next level by taking all the data from their elevators, processing in realtime and using machine learning to predict when an elevator is going to fail.
The Cloud is the technology platform for the future
30% of all peak internet traffic in North America is delivered from AWS via Netflix
We need to change the way we build applications. A move from large monoliths to small Microservices.
Completely new value & supply chains
Who would have thought that a digital room thermostat would become an object of desire? The Nest has create a completely new value chain which is going to be the access point to the home.
The Amazon Dash button is a wifi enabled button that you can stick around your home at convenient places. The idea is that as you start to run out of your consumable package good you can click the Dash button which will connect to Amazon via your Wifi and automatically process a reorder. Not only is this a new supply chain, but its funded by the Brands who get to put their image around your house and also receive all the usage data. This obviously is only the beginning as the next iteration will be a washing machine that does the reordering for you.
Its not just white goods, IoT will transform everything included your standard old product.
Digital Transformation is about using the SMACIT technologies to change your business model, whether its operational excellence, new value propositions or completely new customer engagement models.
But it requires an iterative build measure learn loop to navigate the journey through a digital transformation.
To get started?
Leave the vision to the business, as an IT department you can stimulate the conversation by getting the building blocks in place. Getting your BI and Cloud strategy in place would be a great start. This should be closely followed with a productivity strategy, replacing traditional solutions with collaboration tools like Office 365.
The will ensure that you have the technology building blocks to support change and that your are stimulating the cultural change.
SMACIT: The technology trends driving business transformation
SMACIT: The technology trends driving business