DIGITAL TRANSFORMATION

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1 DIGITAL TRANSFORMATION Pedro Lopes October 2016

2 DIGITAL IS MAINSTREAM Connected 7 billion devices connected and 50 billion by 2020 Consumers on average spend over 4 hours a day online. 40% of consumers are showing second screen habits when watching TV Mobile 7 billion people on the planet and 4 billion of them use a mobile phone More than 1.75 billion consumers have smartphones On an average day, smartphone users spend 132 minutes on-line Social Facebook has 1.55 billion users Every minute there are tweets, 2.4 million items shared on FB, 72 hours of video uploaded to youtube, 571 new websites and apps downloaded from Appstore

3 DOES IT GET MORE DIGITAL THAN THIS? Ben Innes and a flight attendant taking a 'selfie' with the EgyptAir A320 hijacker

4 DIGITAL IS CHANGING OUR LIVES Shopping Entertain ment Learning Exercising Traveling Paying

5 THE NEW CONSUMER IS CONNECTED, SOCIAL, EMOTIONAL, CONVERSATIONAL A REBEL! The Digital is an expression of the life-style and their values. People connect emotionally with the brands.

6 YOUR CUSTOMERS EXPECT YOU TO KNOW THEM EXPECT YOU TO DO MAGIC COMPARE YOU WITH OTHER INDUSTRIES NOT YOUR COMPETITION ARE MORE LOYAL TO EXPERIENCES THAN TO YOUR PRODUCTS

7 COMPETITION IS MOVING INSURANCE TELCO RETAIL BETWEEN SECTORS AUTO ENERGY INTERNET GIANTS BANKING STARTUPS

8 FROM SELLING BOOKS TO PLUMBING AND GOAT GRAZING SERVICES

9 POWERWALL Energy Storage for a Sustainable Home

10 WHAT S NEXT FOR APPLE?

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12 FINTECH: UNBUNDLING THE BANKING INDUSTRY

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14 THE ANTS ARE EATING THE ELEPHANTS SLOWLY SMALL, GLOBAL PLAYERS ARE ERODING THE MARKET INCUMBENTS LEVERAGING THEIR DIGITAL NETWORKS WITH NEW PROPOSALS

15 ASYMMETRIC VIEW DIGITAL PLAYERS THINK IN TERMS OF LIFESTYLES, NOT SECTORS

16 IN THE DIGITAL WORLD SUCCESS COMES FROM FINDING ENTIRELY DIFFERENT WAYS TO INCREASE THE VALUE OF EVERY CUSTOMER EXPERIENCE AND BUSINESS INTERACTION, NOT JUST DOING THINGS DIFFERENTLY. BE CREATIVE.

17 Hijacking your Customers

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19 CREATE AN EMOTIONAL BOND WITH YOUR CUSTOMERS GAIN CUSTOMERS TRUST THROUGH REAL CUSTOMER CENTRICITY: Be present in their lives Personalized Products and Services Simplicity and transparency Antecipate their needs Convenience and Beauty

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21 CREATE SERVICES THAT ARE PART OF YOUR CUSTOMER S DAY TO DAY ACTIVITIES. THINK OUTSIDE THE SPECIFIC SECTOR AND BE READY TO PARTNER

22 FOR THE NEW DIGITAL PLAYERS TALENT, AGILITY AND FLEXIBILITY ARE THE KEY SUCCESS FACTORS

23 AND TECHNOLOGY AND BUSINESS ARE JUST TWO SIDES OF THE SAME COIN

24 The changing competitive environment and evolving customer expectations are rapidly reshaping the way traditional players need to deliver value Different business needs Respond to rapidly changing customer needs Disrupt and defend against disruptors Engage customers through multiple channels Manage costs and drive efficiency Reinvigorate flagging brands & services Maintain historically successful offerings Digital Business Legacy Business will require differing approaches Rapid time to market Focus on customer experience Trial and error fail fast Continuous development Innovation Provide operational efficiency Manage costs & seek solid business cases

25 IN THIS DIGITAL JOURNEY, TECHNOLOGY IS THE MAIN BUSINESS ENABLER The CIO s mission is to infuse technology in the business value chain, transforming IT from a cost center and support area into a value creator and business catalyst

26 BUT TODAY S CIOs FACE A DIFFICULT BALANCING ACT, TO ACHIEVE HIGH PERFORMANCE THEY MUST MANAGE TODAY, CONTROL COSTS AND DELIVER AT INCREASING PACE TOMORROW Align IT with the needs of the business, using IT to deliver greater business value Enhance efficiency, effectiveness, productivity, by removing complexity from the IT portfolio Optimize technology sourcing strategy Deliver day-to-day services Transform the operating model to cope with the new market dynamics Capitalize on modern technologies to gain competitive advantage and build new capabilities cloud, virtualization, SaaS Adapt to an increasingly changing workforce

27 The four key components of this transformation journey The first is the decoupling of systems of engagement from systems of record through the creation of a Digital Platform to improve Customer Experience. The use of everything as a service, a strong APIfication and IoT strategy are key in the new architecture. The second is the pace of change. This enables various speeds of delivery to co-exist and be governed through multiple delivery methodologies. Good Analytics and Robotics are the enablers of faster and better products delivered. The third is flexibility trough a streamlined IT operation model supporting different delivery speeds and a new approach to security. The fourth is culture and talent. A new IT workforce and sourcing strategy is needed to attract the necessary digital skills and ensure sustainability of the new model Decoupling Pace of Change Flexibility Talent

28 Decoupling A reference model 3 rd Party/OTT Systems of Engagement Experience Manager Digital Customer Interaction Back-end as a Services/Decoupling Layer Digital Services Enablement and Data Monetisaton API Exposure Systems of Engagement and Systems of Records Decoupling Experience Led Service Design Perfect Digital Customer Interaction APIs Exploitation Systems of Record (Traditional OSS/BSS) Core (Cross-Channels) Capabilities Big Data & Analytics Shared Core Capabilities supported by XaaS Digital Services creation & monetisation Infrastructure & Network Traditional Network Cloud SDN Virtualised Network and infrastructure

29 Pace of Change HUMAN CENTERED DESIGN For great Customer Experience design AGILE DELIVERY For quick developments that meet Business s expectations DEVOPS To promote collaboration between Development and Operations

30 External IT Services External IT Services Supply Supply Supply Flexibility Multspeed IT Model Journey Today Corporate Strategy Tomorrow Corporate Strategy Prospect Corporate & IT Strategy Demand BU Demand BU Demand BU BU BU BU BU Service Assembly BU Service Assembly BU Service Assembly Service Brokerage IT Strategy IT Strategy Traditional EAM Transformational EAM Digital EAM Legacy IT Change Run Legacy IT Agile IT IT Service Brokerage Agile IT External IT Services Traditional IT Multi-Speed IT Future IT Adopted from: Point of View Fast lane IT for the agile enterprise

31 Talent Automation Automation is taking over more routine and manual tasks. In the US alone, analysts predict that between 40 to 60 percent of all tasks that workers do could be automated. Rise of Freelancing 43% of the US workforce is expected to be freelancers by Pace of Innovation New technology is constantly emerging and the pace of adoption is faster than ever. 65% of kids will end up with jobs that have yet to be created. 2 A New Generation In 2015 Millennials became the largest share of the workforce. By 2025, that number will be 75% globally. 3 1 Intuit Forecast: 7.6 Mln People in On-Demand Economy by 2020, Intuit press release, August 13, 2015; 2 Cathy N. Davidson, co-director of the annual MacArthur Foundation Digital Media and Learning Competitions; 3 Millennials Surpass Gen Xers as the Largest Generation in U.S. Labor Force, Pew Research Center, May 11, 2015; Creating a Generation Connected Workplace, Workforce, May 1, 2015

32 Building cultures of purpose and the development of employee centric tools that blend functionality and empowerment is a priority Career as tours of duty Employees are treating their careers as a series of tours Each new employer is a way to establish a self-determined path, build critical skills and grow outwards Empower your people Employees want to feel inspired to work and focus on what matters to them Desired to be essential to the success of the company Want to be thought leaders who can make important decisions autonomously Embrace the person in your professionals Employees want to feel assured, open and included Consider that work should be a peer experience that is an extension of their social world Reward and recognize regularly Being acknowledged, feeling unified and supported with the right tools are all things employees want in an ideal work environment Money isn t the only payoff

33 Business leaders are realizing a more liquid workforce can become their new competitive advantage Siloed work generally aligned by business function (engineering, sales, marketing, design, etc.) Training is ad-hoc, as needed for a particular tool or technology (in which the company has generally already invested) The Present Low levels of collaboration Innovation generally practiced by specific non-official groups or lone wolfs in the organization Fragmented workforce management tools Consolidated tools and optimized workforce responsiveness with insightful analytics Failing fast and iterative; employees are empowered to innovate Project oriented working groups emphasizing collaboration, agility, and skill sharing The Future Increased expansion of workforce to external talent including both formation contractors and crowd platforms Continuous training as a core organizational competency Static workforce organized around specific skills and functions Adaptable workforces organized around projects, with embedded training

34 THE HUNT FOR THE DIGITAL CONSUMER IS ON

35 Thank you