25. GC Führungssymposium

Transcription

1 Heidelberg goes digital! Transforming the printing industry with digital business models 25. GC Führungssymposium Rainer Hundsdörfer, Chairman of the Management Board of Heidelberger Druckmaschinen AG Munich, 19 April 2018 Heidelberg goes digital!

2 Heidelberg. Key facts and figures The portfolio is based on 3 market segments: Commercial Label Packaging 2

3 Heidelberg Capabilities. Data as a strategic Asset There is big data combined with central analytical and predictive logic to provide the base for Heidelberg s Predictive Monitoring Performance Services It is one of the biggest knowledge sources in the print media industry The Heidelberg Cloud 3

4 Smart Print Shop. Heidelberg a system & software solutions provider. Value Chain WEB Offset & Digital MIS Offset & Digital PREPRESS Prinect Offset & Digital PRESS Offset & Digital POSTPRESS Media Payment and Shipping Customer 4

5 The new Heidelberg digital portfolio. The fire products. Primefire Omnifire Prinect DFE Versafire Labelfire 5

6 Healthy Fundamentals. PPV is still growing Development Print Production Volume (PPV) per technology [Bill. EUR] Source: Heidelberg estimate July 2016, industry statistics, PIRA, Jakkoo Pöyry, Primir (GAMIS), Global Insight Digital: Only Digital Production Devices are taken into consideration *Base Year

7 Competitive Customers. Expected to triple Productivity with improving OEE over the next decade OEE 100% Reduced average production speed Maintenance and technical availability Minimum 2 min. makeready per job 90 mio. Impressions 50% 30 mio. Impressions 0% Average run length 7

8 Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. The analog Dilemma

9 Challenges. Despite healthy market fundamentals Just a decreasing, more industrially organized number of customers Customers struggle to evaluate effect of value offering on profits Business is located in a persistent price fight OEM oust producers with own vertical sales channels Increasing competitive pressure in service because of Freelancer Copied spares (i.e. from china) 9

10 Analog business Model. Business is all about producing and selling a better product on marginal cost...the 80ies Source: M.Porter (1980) 10

11 traditionell Traditional Invested well in technology digital / transformed Transformed Companies that have digitally transformed....are 26% more profitable than those that have not. Source: MIT s 2013 study of 184 public companies Technologie leader Revenue = +6% Profit = -11% Strong technology and strong leadership Revenue = +9% Profit = +26% Integrated experience Integrated customer experience despite complex operations Seamless omni-channel competencies Customized offerings specific to each customer Future ready Customer and operating agility Innovative and lean Great customer experience Strong architecture and data platform Data is a strategic asset 15% % 16.0 Neither Revenue = -4% Profit = -24% Strong leadership Revenue = -10% Profit = +9% Kundenerlebnis Silos and spaghetti Decentralized enterprise performing similar tasks different ways Insufficient data sharing Complex landscape of processes, systems and data Industrialized Established an effective model and supporting architecture with IT investment mindset Comprehensive underlying data platform serving as the single source of truth Standardized applications and automated functions 51% % 4.6 Invested well in leadership Traditional traditionell Key: Operative Exzellenz Transformed digital / transformed Percentage of firms Percentage points above or below i ndustry average net margin 12

12 Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. Going Digital

13 But what is digital? New York: 7th Avenue 2012 New York: 7th Avenue

14 A digital business model is radical: it requires business model disruption business model evolution Focus on efficiency improvements through digital technology Digital value upgrade of products and services Digitization of product functions Product related digital services Radical customer value and service orientation Open concepts instead of proprietary systems Value creation within platforms and Eco-systems Deployment of disruptive technologies 15

15 Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. Changing the Way we Create Value

16 The Subscription Economy a global phenomenon The purchase behavior of customers has changed drastically 80% Of customers are demanding new consumption models The Economist % Of German companies have dealt with the issue of subscription business models. IDG Research Services $420B Spent on subscriptions in the US in 2015; up from $215B in Credit Suisse THE WAY PEOPLE BUY HAS CHANGED FOR GOOD We have new expectations On-going value Memorable experiences On-demand fulfilment Anywhere, real-time Personalized service Source: 1608_Subscribed Sydney 2016; page 6, 16, 17 17

17 The subscription based model employs a completely different approach than transactional business Product based business model Subscriber based business model Product focus SKU based pricing One-time orders Backward looking financial metrics Customer focus (Long term, Loyalty) Plan based pricing (Bundles, Usage, Add-Ons) Recurring transactions (Subscriptions, Upselling) Forward looking financial metrics (ARR, Churn, Growth Efficiency) Source: 1608_Metrics that matter_zuora PP, page 6; 1608_Subscribed Sydney 2016_Zuora, page 46; Intro Slide page

18 Source: 1608_Subscribed Sydney 2016; page 30 19

19 Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. Changing the Sales Approach

20 Sales Approach Shifting Product transaction management to Customer life cycle management From Product/ Solution Offering hunting Product Value = + Manufacturing Cost + G&A Cost + Sales Cost + Profit Key Account Transaction Features Customer To Customer Customer Value + Solution + Applikation + Service Productivity Increase Need Consideration Engagement Evaluation Product/ Solution Purchase Usage Installation 21

21 ONE Face to the Customer does not mean ONE Sales Rep per Customer 17% of the B2B sales process covered by visits from key accounts Your time! 22

22 B2B Sales in Industrial Manufacturing is Changing Significantly Covering the ENTIRE PORTFOLIO Information Self-Services Parts & Emergency Parts Products & Equipment Software & Services Simplified Business Consumer-grad User Experience Web Channel as a One-Step-Shop Unified Configuration, Pricing, Source: Global SAP Sales Converence October

23 Let customer promote vs. the Company explain. Net Promotor Score NPS Explain product Get insight usage Measure Understand Strategic change Action 1:1 24

24 Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. It s not the Product, it s The Journey

25 Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. Changing the Way we Work

26 Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. We live and compete in a VUCA world

27 Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. Volatile The nature, speed, volume, & magnitude of change Uncertain The unpredictability of issues & events Complex The number & interactions of changing external factors Ambiguous The haziness of reality & the mixed meanings of conditions

28 VUCA Medicine: Balancing learning and performance. Performance organization Internally oriented Focused on making the numbers Rewards consistency Dislike of ambiguity & deviations Rule and procedure oriented Learning organization Externally focused Inquisitive Experimental & innovative Fluidly shares information Rewards risk-taking Relies on cross-functional teams 30

29 Engage different stakeholders. Assess initial stakeholder support Champion Supporter Indifferent Antagonist Makes it happen Helps it happen Lets it happen Keeps it from happening 31

30 Typical faults and roadblocks A low level of ambitions. Many small, isolated steps Trying to do everything on our own and with our own resources and traditional R&D and IT expertise Unstructured and late started process for the identification of technologies and skills Limited digitalization of individual processes, close to the core business Limitation to an introduction of digital features instead of creating a digital customer journey Get stuck in long inhouse-development projects 32

31 Summary. It takes six steps to the digital future of the industry. #1 Assess your current business model. #2 Look at your customers. #3 Pull customers (don t push). #5 Understand roadblocks to transformation. #4 Identify your way in to digital business while balancing performance & learning. #6 Building a digital business culture. 33

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