Disruption in a digital environment

Transcription

1 Disruption in a digital environment Murray.howe@suncorp.com.au September 2011

2 A period of disruption intensity The dizzying pace of change has affected our original eight trends, which have continued to spread (though often at a more rapid pace than we anticipated), morph in unexpected ways McKinsey Quarterly. August 2010.

3 A period of disruption intensity Source: Gartner's Hype Cycle Special Report for 2010

4 A period of disruption intensity

5 A period of disruption intensity, so says Mary Meeker We believe the first 10 years of the Internet were a warm-up for what's about to happen. We are in or are entering TWO cycles instead of one broadband Internet and mobile. Mobile Rapid growth + Disruption Innovation unprecedented intensity? > Apple s epic re-invention > Unusually high levels of innovation from incumbents > Unusually high levels of innovation from new attackers > Unusually high level of global innovation Mary Meeker Internet Trends June 2010 Mary Meeker Top 10 Mobile Internet Trends February 2011

6 A period of disruption intensity - key enablers From To Bandwidth Dial-up 56kbps Cable 2000 kbps Mobile 380 kbps Storage $1250 per Mb $0.005 per Mb Processing Power <1MIPS 20 MIPS Devices Source:

7 Looking forward CBA s view to 2013> Tv2tMenhxA&vq=medium Source: CBA - Vision for

8 Looking forward what it tells us Smart Devices > reaching tipping point Bandwidth > getting there Applications > ubiquitous Operating systems > complexity remains

9 Looking forward sources of disruption 1. The internet of things 2. Data proliferation 3. Everything as a service 4. One channel, one conversation 5. Rise of the prosumer (social consumption / co-creation)

10 Looking forward sources of disruption 1. The internet of things 2. Data proliferation 3. Everything as a service Physical becomes connected Collect & communicate data New owners of data (tech, telco, retail, auto) Potential new business models Legacy information architecture risk 4. One channel, one conversation 5. Rise of the prosumer (social consumption / co-creation)

11 Looking forward sources of disruption 1. The internet of things 2. Data proliferation Rise of Big Data Within & beyond value chain 3. Everything as a service 4. One channel, one conversation 5. Rise of the prosumer (social consumption / cocreation) Lower risks New ways to access / pay for services Think data company not F/S company Competition from data experts

12 Looking forward sources of disruption 1. The internet of things 2. Data proliferation 3. Everything as a service Rise of the cloud Access assets per use 4. One channel, one conversation Lowers barriers to entry for low cost business models 5. Rise of the prosumer (social consumption / co-creation)

13 Looking forward sources of disruption 1. The internet of things 2. Data proliferation 3. Everything as a service 4. One channel, one conversation Unmet customer expectation Online will always be part of the conversation, not the only one Anticipate service online Carry offline, between contact Significant back-end barriers 5. Rise of the prosumer (social consumption / co-creation)

14 Looking forward sources of disruption 1. The internet of things 2. Data proliferation 3. Everything as a service 4. One channel, one conversation Increased ability to avoid or work around you Democratisation of data Trust in self / peers not brands Opportunity to crowd service 5. Rise of the prosumer (social consumption / co-creation) Risk of bad advice & reputation damage

15 The problem with disruption - for incumbents 1. Legacy systems 2. Operational complexity 3. Relative size 4. Incumbency

16 The problem with disruption - is its impact on 1. Value chains 2. Business models 3. Market structure

17 The problem with disruption - is its impact on 1. Value chains 2. Business models 3. Market structure 4. Organisational structure

18 The problem with disruption - is its impact on Organisational structure > Traditional Boundaries Marketing Brand DM Analytics Channels Sales / Service Product / Pricing PR IT

19 The problem with disruption - is its impact on Organisational structure > Marketing Brand DM Analytics New X-Functional Relationships Channels Sales / Service Product / Pricing PR IT Digital Social Data analytics

20 The problem with disruption - is its impact on marketing In many ways a need for rapid execution capabilities is not new, but it has been further impacted by consumer s growing ability to interact...in almost real-time. As mobile internet usage develops this real-time consumer voice becomes louder and more impactful... This increasingly complex environment requires an overhaul of marketing strategies to ensure that hard won reputations are not damaged or destroyed overnight. TNS Digital Life. Impact of Digital on Growth Strategies. CMO Imperatives for 2012

21 The problem with disruption - it has happened before 1. Book Publishing 2. Online transactions 3. Devices 4. Customer data 5. Technology

22 The problem with disruption - it has a re-occurring theme Information management Technology

23 The common denominator for Financial Services Applications The best free way to manage your money. Information Management Devices Data Bandwidth

24 Incumbents: How do we anticipate and respond? 1. Strategic function 2. Technology architecture 3. Data analytics 4. Operational agility

25 Incumbents: How to anticipate or respond to disruption? 1. Strategic function 2. Technology architecture Decision making systems to match Technical up-skilling in strategy Elevate e-commerce functions Disruption council 3. Data analytics 4. Operational agility

26 Incumbents: How to anticipate or respond to disruption? 1. Strategic function 2. Technology architecture Common platforms where possible Open source 3. Data analytics Partner for capability Reverse outsource 4. Operational agility

27 Incumbents: How to anticipate or respond to disruption? 1. Strategic function 2. Technology architecture 3. Data analytics A learned capability Scarce resources 4. Operational agility Think like a data company

28 Incumbents: How to anticipate or respond to disruption? 1. Strategic function 2. Technology architecture 3. Data analytics 4. Operational agility Tension between operational excellence and innovation Lower risk / cost of failure Compete with core expertise

29 A further problem for incumbents Does excellence in e-commerce equate to a strategic capability in anticipating and responding to digitally led strategic disruption?

30 A further problem for incumbents Kodak s story Number #1 in film Innovative culture Early leader in photo digital technology Denial? Incumbency - margins Transformational pain Film camera image What is their role now?

31 The final problem for incumbents Kodak s story

32 The final problem for incumbents Kodak s story 1995 Launches Digital Camera 2001 Launches EasyShare range 1975 Invents Digital Camera 2004 Flikr & Facebook launch 2007 i-phone launch % film & 85% camera US market share respectively Kodak bankruptcy

33 the world needs banking but it does not need banks records asset protection music news photos film & cameras news papers Bill Gates 2000 CDs music companies insurance companies