Australia and The Fourth Industrial Revolution

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1 Australia and The Fourth Industrial Revolution Perth, 17 th May 2016 Sally Parker, Research Director Data Driven Intelligence

2 Agenda The Fourth Industrial Revolution Third Platform Innovators Digital Transformation Australia in Perspective IDC Visit us at IDC.com and follow us on 2

3 Themes at Davos in 2006 Key Themes Growth potential of India & China Corruption & transparency US deficit Global Competitiveness Rankings New Zealand #23 Australia #18 IDC Visit us at IDC.com and follow us on 3

WEF Founder and Executive Chairman As a society, we are entering uncharted territory Marc Benioff, CEO Salesforce There has

4 Themes at Davos in 2016 The 4th Industrial Revolution is the fusion of technologies across physical, digital and biological worlds, creating entirely new capabilities and having dramatic impacts on political, social and economic systems Klaus Schwab, WEF Founder and Executive Chairman As a society, we are entering uncharted territory Marc Benioff, CEO Salesforce There has never been a time of greater promise or greater peril Klaus Schwab, WEF Founder IDC Visit us at IDC.com and follow us on

5 IDC s Third Platform for Digital Transformation (DX) Pursuing DX initiatives without a cloud IT foundation will be utterly impossible 12.7% -5.1% 2 nd Platform 1 st Platform IDC Visit us at IDC.com and follow us on 5

6 Internet of Things $1.46T Global 10x Increase in new applications and new services >30B Devices Cost of Sensors Accessibility The value of the IoT solution is proportional to the speed & number of times IoT data is analysed Vernon Turner, IDC Asia Pacific IDC Visit us at IDC.com and follow us on 6

7 IoT is not a paintball project - don t create standalone solutions - look at IoT holistically Manufacturing Vernon Turner, IDC Retail Healthcare IDC Visit us at IDC.com and follow us on 7

development teams will be using deep learning and artificial intelligence in their solutions over the next 3 years

8 Cognitive Computing FSI Cognitive services will become pervasive the challenge will be for marketeers to rehumanise the Healthcare interaction Gerry Murray, IDC 2016 Automotive The Value of IoT is in the AoT (Analytics) 50% of development teams will be using deep learning and artificial intelligence in their solutions over the next 3 years IDC, 2016 Chess Master Golf Pro Watson APIs Ampsy Siri Cortana IDC Visit us at IDC.com and follow us on 8

9 3D Printing Product Lifecycle Parts Manufacturing From Need to order Cost that part to Let me print that for you Implications of 3D car maintenance Propensity to disrupt markets Healthcare & Dentistry What s Next? IDC Visit us at IDC.com and follow us on 9

Surgery Enterprise first focus IDC Visit

10 Augmented Reality & Robotics From cool technology to life changing aids Consider the impact on Services industry Product design cycles Postal deliveries Surgery Enterprise first focus IDC Visit us at IDC.com and follow us on 10

Scalability and Data Driven Intelligence are Key By 2020 organisations able to analyze all relevant data & deliver actionable information will achieve an

11 Scalability and Data Driven Intelligence are Key By 2020 organisations able to analyze all relevant data & deliver actionable information will achieve an extra $430B in productivity benefits over their less analytically oriented peers Dan Vesset, IDC IDC Visit us at IDC.com and follow us on 11

12 The Digital Divide is Widening Exponentials, Unicorns and the App economy rise at the expense of traditional Brick Mortar companies Disruption is not a destination IDC Visit us at IDC.com and follow us on 12

13 An Evolving Business Landscape Who Am I? 75% of S&P 500 will be replaced by 2027 the world s digital industrial company, transforming Industry with software-defined machines and solutions that are connected, responsive and predictive IDC Visit us at IDC.com and follow us on 13

The Era of Digital Transformation (DX) DX is the continuous process by which enterprises adapt to or drive disruptive changes in their customers and markets by leveraging digital competencies to

14 The Era of Digital Transformation (DX) DX is the continuous process by which enterprises adapt to or drive disruptive changes in their customers and markets by leveraging digital competencies to innovate in the creation of new business models, products, and services that seamlessly blend digital and physical, and enhance business and customer experience while improving operational efficiencies and organizational performance IDC Visit us at IDC.com and follow us on 14

enabled, board level initiative Source: IDC, Digital Transformation

15 Most organisations are Just Starting Their DX Journey DX presents the opportunity to redefine the enterprise value chain DX is a technology enabled, board level initiative Source: IDC, Digital Transformation Maturity Model Benchmark, 2015 IDC Visit us at IDC.com and 15 follow us on

16 What about Australia?

17 WEF Global Competitive Index IDC Visit us at IDC.com and follow us on 17

18 Australia on the World Stage IDC Visit us at IDC.com and follow us on 18

19 Australia on the World Stage Global Corruption Index (transparency.org)? IDC Visit us at IDC.com and follow us on 19

20 Australia on the World Stage Global Corruption Index (transparency.org) IDC Visit us at IDC.com and follow us on 20

21 A Third of the TOP 20 market share leaders, in most industries, will be significantly disrupted by new competitors with new offerings, new business models and new cost structures Australia is a high wage economy. Technology is a key enabler for remaining competitive on the world stage IDC Visit us at IDC.com and follow us on 21

Perceived Role of Technology CSUITE 2016 2015 2016 3% 39% 36% 3% Disruptor Optimiser Disruptor Optimiser 13% Creator 26% Opportunist 30% Creator 12% Opportunist 18%

22 Perceived Role of Technology CSUITE % 39% 36% 3% Disruptor Optimiser Disruptor Optimiser 13% Creator 26% Opportunist 30% Creator 12% Opportunist 18% Follower 19% Follower Source: IDC Asia/Pacific C-suite Barometer 2015 Source: IDC Asia/Pacific C-suite Barometer 2016 IDC Visit us at IDC.com and follow us on 22 22

23 Technologies of Competitive Interest CSUITE 2016 What is the most important technology for your organization to enhance its competitive positioning? Mobility Security BDA Mobility Cloud Big data and analytics Social media/business/marketing Internet of Things (IoT) 2015 on the categories 2016 Security/risk management/data governance but not the ecommerce Cloud IT and Line of Business agree prioritisation Robotics 3D printing Security & Governance BDA Cloud Source: IDC Asia/Pacific C-suite Barometer 2015 & 2016 IDC Visit us at IDC.com and follow us on 23

24 Australia: Top 5 CEO Challenges CSUITE 2015 What are the CEOs top business concerns, other than meeting financial goals? Escalating cost of operation 2. New Business Models 3. Customer buying patterns 4. New competitor s 5. New Gov. Regulation Source: IDC Asia/Pacific C-suite Barometer 2015 IDC Visit us at IDC.com and follow us on 24

Regulation 2016 1. New Business Models 2. New Gov. Regulation 3. Escalating Cost of Operations 4.

25 Australia: Top 5 CEO Challenges CSUITE 2016 What are the CEOs top business concerns, other than meeting financial goals? Escalating Cost of Operation 2. New Business Models 3. Customer Buying Patterns 4. New competitor s 5. New Gov. Regulation New Business Models 2. New Gov. Regulation 3. Escalating Cost of Operations 4. Customer Buying Patterns 5. New competitors Source: IDC Asia/Pacific C-suite Barometer 2015 & 2016 IDC Visit us at IDC.com and follow us on 25

Australia: Top 5 Business Priorities CSUITE

Competitive Leadership ranked 8th 2015 1.

26 Australia: Top 5 Business Priorities CSUITE 2015 In 2015 invest in R&D to Innovate for Competitive Leadership ranked 8th Operational Efficiencies 2. Invest to Increase share of wallet 3. Company Wide Cost Savings 4. Customer Engagement Initiatives 5. Market Expansion Source: IDC Asia/Pacific C-suite Barometer 2015 IDC Visit us at IDC.com and follow us on 26

27 Australia: Top 5 Business Priorities CSUITE 2016 In 2016 invest in R&D to Innovate for Competitive Leadership ranked joint 6 th Operational Efficiencies 2. Invest to Increase Share of Wallet 3. Company Wide Cost Savings 4. Customer Engagement Initiatives 5. Market Expansion Customer Engagement Initiatives 2 Operational Efficiencies 3. External Partners 4. Market Expansion 5. Company Wide Cost Savings Source: IDC Asia/Pacific C-suite Barometer 2015 & 2016 IDC Visit us at IDC.com and follow us on 27

Australia: Top 5 ICT Top 5 Priorities Q: What will be your

28 Australia: Top 5 ICT Top 5 Priorities Q: What will be your organisations top ICT priorities in ? CSUITE Move to an Build a More Secure IT Environment aas Model (new) 5. Improved Governance (new) 4. Develop or Enhance Enterprise Architecture Infrastructure Optimisation (up) Source: IDC Asia/Pacific C-suite Barometer 2016 IDC Visit us at IDC.com and follow us on 28

2016-2017 priorities for DX in Australia are Marketing and

29 CSUITE 2016 Organisations look to either the CIO/CTO or the CEO as being responsible for DX Business & IT agree that the priorities for DX in Australia are Marketing and Operations IDC Visit us at IDC.com and follow us on 29

30 Examples of Digital Innovation in Australia Cancer Research Organisations look increasingly to Open innovation but less to Crowd Sourcing $23B business IDC Visit us at IDC.com and follow us on 30

Essential Guidance Ascertain where you are on your DX journey

business Security and data governance are boardroom

early in DX planning Integrate Innovation Accelerators into

31 Essential Guidance Ascertain where you are on your DX journey from a business and IT perspective Cloud is the underlying platform for DX initiatives. Consider which cloud services are most relevant to your business Security and data governance are boardroom discussions in a digital world - keep them front of mind early in DX planning Integrate Innovation Accelerators into your plan with a focus on business solutions not technology IDC Visit us at IDC.com and follow us on 31

32 Thank You Sally Parker Research Director Data Driven

DIGITAL TRANSFORMATION (DX)

An IDC InfoBrief THE PROMISE OF DIGITAL TRANSFORMATION (DX) IN ASIAPACIFIC S LEADING INSTITUTIONS IDC PREDICTION: BY 2018 1/3 OF THE TOP 20 MARKET SHARE LEADERS IN VARIOUS INDUSTRIES WORLDWIDE WILL BE