Goethe University - Mobile Business From Idea to Digital Business. 13th December Andreas Nicklas

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1 Goethe University - Mobile Business From Idea to Digital Business 13th December Andreas Nicklas

2 Andreas Nicklas PwC Manager Digital Transformation & Strategy Mobile: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft Alsterufer 1, Andreas_Nicklas4 anicklas 2

3 Digital Transformation - PwC Germany Leaders Meeting Picture Credits: birminghammail.co.uk 3

4 U.S. Recorded Music Revenues by Format What can we learn from the music industry? Source: Recording Industry Association of America

5 U.S. Recorded Music Revenues by Format Loss of $70B What can we learn from the music industry? Digital Source: Recording Industry Association of America

6 e X? D X 8

7 Computing performance and internet speed are advancing exponentially Size per 1 US$ [nm] 180 Computing performance Clock speed [Ghz] Internet speed 10 G Cable Mobile 1 G >200 M >150 M M 24 M 14 M 21 M 42 M M K 256 K 1.2 M 56 K 384 K (bps) Source: Linley Group, T-Mobile 9

8 The number of new technologies is accelerating??? Printing Press The Accelerating Growth in Technology Steam Engine Telescope Telephone Light Bulb Car Telegraph Google Driverless Car Commercial AR Glasses First 3D Chip Drones 3D Movies Big Data Cloud Analytics IPad Tesla Facebook Blockchain Youtube Commercial Humanoid Robot Commercial VR Google IoT Man in Moon

9 Costs for access to technologies are falling dramatically 11

10 Technology connects everything with everything and everyone with everyone, anytime, anywhere With global average of >3 connected devices per person as of today, digital consumption is the new normal Total connected devices (in bn) World population (in bn) Connected devices per person Create living networks of ideas, insights, conversations and relationships 12

11 Consumers are changing digital native is about to become the new normal Digital natives will be the largest consumer segment by 2017 Percentage share of adult population Digital native Traditional consumers Occasionally online; high requirements for security Digital converts In search for online opportunities When you speak to one of us, you re speaking to thousands of us When I visit a store, I want to feel as if I am walking into a website My favourite search engine is YouTube I want digital convenience at work as well Digital native Digital consumers; focus on simplicity Are connected and always on Want digital and physical blurred Like all things visual, tactile and interactive Expect the same at work than in their private life Source: PwC Profitable growth in the digital age (2013); amended by Strategy& 13

12 Airlines Automobile Telephone Electricity Credit Card Television ATM PC Cell Phone Debit Cards Internet PayPal Acc. ipods YouTube Facebook Twitter Pokemon Go The speed of adaption new products and technologies has substantially increased over the past years the time is running Number of years it took for each product to gain 50 million users: Days Yrs Source: Linkedin 14

13 Vernetungsdichte steigt Rise in global integration Digital Transformation - PwC Germany Leaders Meeting Picture Credits: Facebook 15

14 e X D X 17

15 Steigerung der Komplexität Rise in complexity Digital Transformation - PwC Germany Leaders Meeting 18

16 complicatedness complexity 19

17 Complicatedness Demountable structures Mechanically determined Stable relationships Linear behavior Predictable Sum of the items Complexity Variety of independent elements Spontaneous / unstable relationships Differentiates to the environment Internal and external Interactions Adaptation to the environment Self organized Nonlinear behavior Emergent properties 20

18 Popcorn effect The Popcorn Effect Digital Transformation - PwC Germany Leaders Meeting Picture Credits: ifit 21

19 Taylor Linear Thinking Taylor s legacy Digital Transformation - PwC Germany Leaders Meeting 23

20 Today's management follows a pattern of stable conditions Reduction Cascading distribution of tasks to achieve a common, overarching goal. Linearity Assuming of linear relations, which allow simple if-then relationships. Emerging questions are answered by best practice. Extrinsic Motivation It relies mainly on simple, extrinsic motivational factors. More incentives should lead to more performance. Stable condictions The planning and subsequent implementation of a target state require stable conditions. 24

21 Management of complexity is fundamentally different to Management of complicatedness Control is pure self-deception It requires patterns of action that are able to deal with uncertainty. To dissolve uncertainty is simply impossible. W. Ross Ashby Ashby s Law: Only Variety can destroy variety. Increase of complexity (not reduction!) Simplification and complexity reduction can not be generalized answers to increasing complexity. (Ashby, 1956) 25

22 Cobra Effect Cobra effect Digital Transformation - PwC Germany Leaders Meeting Picture Credits: wikiwand.com 26

23 Cynefin Model Digital Transformation - PwC Germany Leaders Meeting 27

24 With a customer-centric and agile approach, Spotify manages to inspire and win customers over 16

25 29

26 What differentiates a startup from a traditional business? 30

27 Key Activities Value Proposition Customer Relationships Key Partners Customers Costs Revenue Resources Channels 31

28 An approach based on customer-centricity, business models and capability driven architecture has proven very effective Customer & Employee Journeys Business Models Prototypes Capabilities Architecture & Roadmap After creating different customer and employee journeys we ideate and derive business models and test them with prototypes involving customers to identify required capabilities along strategic dimensions resulting in an architecture blueprint with roadmap. 32

29 The business model canvas is a complex tool for developing new business models Comments: Key Partners Digitization Key Activities Key Resources Value Proposition Customer Relationships Channels Customer Segments Enables an opportunity to design business models creating value for business, customers, and society An easy to use method to illustrate ideas and dependencies of business models Cost Structure Revenue Streams Source: PwC; Business Model Generation, A. Osterwalder, Yves Pigneur, Alan Smith, et. al, self published, 2010

30 Your task Get familiar with the tool Establish teams of 4-5 people Try to analyze and describe the Business Model of Sixt or Europcar Time 20 min.

31 Your task Experience Change the Revenue Streams Dimension from Charge per day to Charge per Minute Adjust the other dimensions Time 20 min.

32 What s Next? 36

33 Prototyping Description The prototype is an early model or experiment to rapidly create solutions to identified challenges and problems Paper-based prototype Customer journey Benefit Make any business model, product or service idea tangible and visualized Test it with the potential customers or employees Paper-based prototype - Click dummy Needed material Apps like Spark or LEGO Movie Maker Paper & pencils Other arts & crafts material Divers physical artifacts like Others Video prototype - LEGO Movie Maker Behavior prototype - Simulation with physical artifacts

34 The most appropriate way to test a hypothesis is to get out - apply in the most simple way (MVP) and gain direct user feedback Digital Transformation - PwC Germany Leaders Meeting 38