Grab ‘n Go

Velkommen

til den

digitale

revolutionMichael Borges

This is not a car

2

The 4th Industrial Revolution

3

Digital

Revolution

Machines replace

knowledge work

IT

Revolution

Machines replace

repetitive and tedious work

Industrial

Revolution

Machines replace

dangerous and heavy work

Industry 1.0 and 2.019th century

Industry 3.020th century

Industry 4.021st century

Exponential technology advances

4

RobotsDrones

Network

capacity

Digital communications

Machine translation

Cognitive computing

New materials

Bio tech

Speech recognition

3D printers

Mobile devices

Virtual reality

Sensors

Web 2.0

Cloud computing

Processing power

Data storage

Energy storage

Internet of everything

Exponential technological advances drive changes in business models.

Products, services and processes are innovated in order to create

competitive advantage. Entire industries may be disrupted.

The Digital Revolution

5

Product or service enhancementsImproved customer relations

Cost reductions

Disruptive business models Strong differentiation

Incremental innovation Radical innovation

6

Different types of digital innovation

Middle and back office

Operational efficiency

Cost reductions

Quality improvements

Compliance

Front office

Differentiation / disruption

Revenue growth

Customer service

improvements

Digital innovation

Digital business models and

services

Digital customer

experience

Data-driven insight

Business automation

7

Different types of digital innovation

Digital innovation

Digital business models and

services

Digital customer

experience

Data-driven insight

Business automation

Examples of digital business models

8

Digital business models

eCommerce

Digital advertising

Crowd sourcing

Servici-fication

Additivemanu-

facturing

Platform economy

Digital payments

Data-driven government

Smart city

Examples of digital business models

9

Digital business models

eCommerce

Digital advertising

Crowdsourcing

Servici-fication

Additivemanu-

facturing

Platform economy

Digital payments

Data-driven government

Smart city

Servicification

Diffe

rentiatio

n

Data-driven servicification

Analog

products

Smart

products

Connected

services

Outcome

economy

Remote diagnostics as a service

Predictive maintenance as a service

Remote calibration as a service

Insight as a service

Products as a service

Quality management as a service

Business model innovations enabled by the industrial IoT

Value chain as a service

Pay per product - Data monetization - Service subscription – Pay per use - Pay per outcome

Com

moditiz

atio

n

10

Servicification at Vestas.

11

Connected services at Volvo.

12

Connected services at Volvo

13

14

Different types of digital innovation

Digital innovation

Digital business models and

services

Digital customer

experience

Data-driven insight

Business automation

Data is not what it used to be

Internal

CRMERP

R&D

Str

uctu

red

External

Un

str

uctu

red

Data sources

Insig

ht fo

r o

pe

rational

pro

ce

sse

s

Insight for management

Insig

ht a

s a

se

rvic

e

BI

From data to insight

What

happened?

Why did

it happen?

What will

happen?

What do we

want to

happen?

De

scriptive

Pre

dic

tive

Pre

scriptive

Internet of Everything

Analyze data

Bu

sin

ess o

utc

om

e

Co

llect d

ata

An

aly

tics o

utc

om

e

From data to insight

Sensor Data

Video & Picture

Text

Voice & Sound

Spreadsheet Data

DatabaseR

eg

res

sio

n Linear Regression

Non-Linear Regression

Ordinary Least Squares

Maximum Likelihood

Neu

ral

Netw

ork

Feedforward NN

Recurrent NN

Convolutional NN

Kohonen Self-

Organizing

Ran

do

m

Fo

res

t

Decision Trees

Classification

Regression

Kohonen Self-

Organizing

Clu

ste

rin

g K-Nearest Neighbors

Principal Components

Support Vector Machine

Gaussian Mixture Model

What

happened?

Why did

it happen?

What will

happen?

What do we

want to

happen?

De

scriptive

Pre

dic

tive

Pre

scriptive

Analyze data

Bu

sin

ess o

utc

om

e

An

aly

tics o

utc

om

e

Math StatisticsData

Management

VisualizationArtificial

intelligence

Programming Business Modeling

Th

e d

ata

scie

ntist

Internet of Everything

Co

llect d

ata

An example of data-driven insight.

An example of data-driven insight

20

Different types of digital innovation

Digital innovation

Digital business models and

services

Digital customer

experience

Data-driven insight

Business automation

Blue Collar Productivity

White Collar Productivity

Manufactoring,

transport etc.

Financial services,

insurance etc.

51

-10

-20

-10

0

10

20

30

40

50

60

2009-2015

Types of white collar automation

© 2016 Deloitte 23

Head work

Cognitive

Automation

Hand work

RPA

BRM

Business Rules

Management

BPM

Business Process

Management

Model and execute a

entire workflows using

advanced visual tools

combined with back

end integration

Model and execute

business rules

in order to automate

complex decisions

Artificial Intelligence

Machine Learning

Advanced Analytics

Identify patterns in

previous behavior

in order to add

”judgement” to future

decisions

RPA

Robotic Process

Automation

Emulate simple,

repetitive manual tasks

via front end

interaction.

Embedded cognitive intelligence

Invasive SolutionsNon-invasive Solutions

The automation of knowledge work.

The automation of knowledge work

The future of knowledge work

26

Sixty percent of CEOs believe that the emergence of smart machines capable

of absorbing millions of middle-class jobs within 15 years is a "futurist

fantasy”. However, Gartner predicts that smart machines will have

widespread and deep business impact within only seven years through 2020.

Garner, 2013

“47 percent of total employment

is “at risk” from computerization

over the next decade or two”

Study from Oxford University

“By 2029 robots will have

reached human levels of

intelligence”

Ray Kurzweil, Director of

engineering at Google

“By 2030, 90 percent of jobs as we

know them today will be replaced

by smart machines”

Gartner

““The smart machine era will be the

most disruptive in the history of IT”

-Gartner

In the not so distant future.

28

Different types of digital innovation

Digital innovation

Digital business models and

services

Digital customer

experience

Data-driven insight

Business automation

29

The market place is changing

One vocal customer now reaches

1375 people

89% began doing business

with a competitor following a

poor experience4

46% of the customers of

financial institutions will be

Gen Y by 20203

72% of all Internet users are now

active on social media1

The largest social network, Facebook,

currently has more than 1.28 bn.

monthly active users

1% of customers feel their expectations

for a good customer experience are

always met2

90% of Denmark’s families

have Internet access

85% of the Danish Internet users

browse the Internet for product

information and service comparison

On average, a smartphone is checked

150 times a day

Decreasing customer loyaltyIncreasing customer

expectations

1. Socialmediatoday.com

2. New Media Trendwatch

3. Deloitte

4. Rightnow.com

y

Increasing importance of the

online channel

30

Understand and improve the customer journey

Increased

Market Share

Value creation Increased

Share of

Customer

Wallet

Higher Margin

Product

Portfolio

Lower

Acquisition

Costs and

Cost to Serve

Accelerated

Time to

Market

Improved

Customer

experience

Improved

Lifetime Value

of Customer

Sales and order management

Customer Service

Customer engagement

Omni-channel Engagement

Digital capabilities

Marketing automation

Product and service development

Customer journey

Strategy and Transformation

Mobile

Social

Direct

Marketing

Contact Center

Media &

Advertising

In-store

Web

Discover

Choose

Evolve

Service

Use

Buy

Customer

insights

Customer analytics

Business(Viability)

Technology(Feasibility)

People(Desirability)

EXPERIENCE

INNOVATION

Emotional

innovation

Process

Innovation

Functional

Innovation

HOW DOES IT WORK ?Creative experience design (thinking)

32

Traditional and digital retail are the future.

33

Traditional and digital retail are the future

34

New ways of engaging customers.

35

What does it take?

Digital innovation

Digital business models and

services

Digital customer

experience

Data-driven insight

Business automation

Who is responsible?

CIO

CEO

Chief Operating OfficerChief Digital Officer

Chief Data Officer

Chief Analytics Officer

Chief Marketing Officer

Chief Financial Officer

Chief Innovation OfficerChief Customer Officer

Focus short term as well as long term

1 Understand the business

and where to focus2 Ideate and conceptualize

digital use cases3 Implement and test

digital protypes

1 Make “innovation” part

of the strategy mix2 Define the

“digital innovation radar” 3 Design and implement

an “innovation factory”

Drive a multi-year innovation program (that never ends) to

harness the power of new digital opportunities

Identify and test digital use cases

A portfolio of digital use cases

”The digital radar”

Act0-6 months

Investigate6-18 months

Explore+18 months

Digital business models and services

Data-driven insight

Digital customer experience

Business automation

Investigate6-18 months

Explore+18 months

Customer experiences

and engagement

Value propositions

and differentiation

Ecosystems and

collaboration models

Operating models and

organizational impacts

Digital innovation requires something completely new

Traditional IT Fast IT

IT industrialization Era Digital transformation

Core systems of record

IT operationsFocus

Systems of differentiation

Systems of innovation

Inside-out

Outsourcing

Atomization

Service level culture

Waterfall

Risk averse

Approach

Outside-in

Business centricity

Co-creation

Entrepreneurial culture

Agile

Fail fast

Behavioral

psychologists

Graphic

designers

User experience

designersScience fiction

Writers

Artists

Data

scientists

”Right speed IT” ”Purple skills”

In summaryThe digital revolution is here It involves different types of innovation

We need a new approach And we need to act