Harnessing the Hurricane - Melbourne CSHE...All CxOs COOs 66% 50% 43% 32% 25% 24% 46% 7 ©2015 IBM Corporation CxOs expect industry convergence to have the biggest impact on their

Harnessing the HurricaneHow Can Higher Education Ride the Storm?

©2015 IBM Corporation2

A small group of leading innovators across industries consistently outperform their competitors: these are the Torchbearers

Torchbearers

24%of the total population are Leading Innovators

20%of Leading Innovators areOutperformers; thus

5%of the total populationare Torchbearers

*Peer level

Market Followers

Leading Innovators

24%42%34%

2% 5% 20%

*

Outperformers in revenue growth and profitability

Market perception of the enterprise


To get their views we surveyed

industry leaders…

Chief Executive Officers (CEOs)Chief Financial Officers (CFOs)Chief Human Resources Officers (CHROs)Chief Information Officers (CIOs)Chief Marketing Officers (CMOs)Chief Operating Officers (COOs)

818

643

601

1,805

723

657


were university leaders or education experts104


We wanted to know . . . what’s putting the world’s top executives on edge?


What’s putting the world’s top executives on edge?

“The ‘Uber syndrome’ – where a competitor with a completely different business model enters your industry and flattens you.”CIO, Transportation, United States


Industry convergence is the biggest trend on the horizon

Industry convergence

The “anywhere” workplace

Rising cyber riskThe redistribution of consumer purchasing powerThe sustainability imperativeAlternative finance and financing mechanismsThe sharing economy

Top trends to impact business (in 3 to 5 years)64%

49%

50%

44%

30%

28%

26%

All CxOs COOs

66%

50%

43%

32%

25%

24%

46%


CxOs expect industry convergence to have the biggest impact on their business

Total CEO CFO CHRO CIO CMO COO

70%

60%

50%

40%

30%

20%

10%

0%

Industry convergence

The “anywhere” workplace

Rising cyber risk

The redistribution of consumer purchasing power

The sustainability imperative

Alternative finance and financing mechanisms

The sharing economy

Top trends to impact business (in 3 to 5 years)


“The boundaries of competition are becoming ambiguous.”Yong Eum Ban, CFO, JoongAng Media Network, South Korea


“New competitors from different industries are entering our market. We need to look at what these companies are doing, rather than watching how other enterprises in our industry behave.”Gustavo Hernan Garcia, HR Director, ICBC, Argentina


“The biggest threat is new competitors that aren’t yet classified as competitors.”Piotr Ruszowski, CMO, Mondial Assistance, Poland

©2015 IBM Corporation 10 August 201610


CEOs again selected technology as the most important external force that will affect their enterprise

External forces impacting the enterprise (in 3 to 5 years)2006 2008 2010 2012 20152004

Technology factors

Market factors

Regulatory concerns

Macro-economic factors

Socio-economic factors

Globalization

People skills

Geopolitical factors

Environmental issues

2013


“We’re experiencing ‘a technological onslaught.’”Dr. Mubbashir Iftikhar, CIO, KPJ Healthcare Berhad, Malaysia


So what does this mean for universities?

2. Universities must adapt and keep pace with the emerging ecosystems of industries that could use technology to occupy a core percentage of the space dominated by asset-heavy providers susceptible to disruption by asset-light providers

1. Universities can leverage lessons from market leaders to help improve service delivery and transform business and operating models


Be Ready to Redefine BoundariesKey initiatives to take on the disrupters

Put more scouts on the front line

Share to shine

Seize the middle space

Create a panoramic perspective

Cultivate your cognitive capabilities

Form your own futures squad

Take an eco-centric view of the world

2

Prepare for the digital invaders

1

Be first, be best, or be nowhere

3 Investigate unfamiliar territory

Go offline to test for the best

Create – and capture – the moment


How to prepare for the new digital competitionDecentralize and delegateIn fast-moving markets, historical data has limited value. Delegate all but the most important decisions to the people who are closest to your customers. With decentralized decision-making, you’ll have more enterprise representatives with greater freedom of action. Pooling the local intelligence they provide with input from your partners will give you a much clearer idea of how customer needs and expectations are changing. It will also enable you to develop close alliance with partners and forge stronger relationships with them.

Share to shineRatchet up your plans to form new partnerships, and be ready to “reciprocate” by sharing key resources with partner learning and research organisations so you can grow together. Start by defining what you can share and what sort of partner you want. Look for enterprises with a strong record of innovation and skills that could be combined with your own to create new opportunities. Once you’ve found a suitable ally, conduct small experiments to learn together.

Seize the middle spaceWhat do disruptors like Alibaba, eBay, Spotify and WhatsApp have in common? They’ve each become the linchpin in a virtual network via which other companies reach their customers. Building an online forum where many different buyers and sellers can meet to trade, share information and swap insights, and stimulating the development of a healthy ecosystem, can be a highly profitable strategy. It also prevents you from being cut out of the picture by somebody else.



Interactions with constituents moving increasingly online…

no change

no change

Business landscape change (in 3 to 5 years)

More face-to-face interaction More digital/virtual interaction

Global Public Sector


Create more individualized customer experiences

no change

no change


More focus on customers as segments More focus on customers as individuals

Global Public sector


Torchbearers pay greater attention to customer feedback than universities typically have done …

External sources to identify and explore new trends and technologies

Customer feedback

Public SectorGlobal Torchbearers


… and they place far more weight on next generation technologies

Cognitive computing Advanced manufacturing technologies

New energy sources and solutions


Technologies revolutionizing business (in 3 to 5 years)


Cloud and mobile will have the greatest impact on business in the future

Cloud computing and services

Mobile solutions

Internet of Things (IoT)

Cognitive computing

Advanced manufacturing technologies

New energy sources and solutions

Bioengineering

Man-machine hybrids

Technologies revolutionizing business (in 3 to 5 years)

63% 79%

61% 72%

57% 54%

37% 38%

28% 13%

23% 17%

12% 6%

10% 5%



“There’s no one technology that matters most. It’s connecting the dots between

them all that’s important.”Mike Mancuso, Executive Vice President & CEO, Philips Healthcare, United States



Industry convergence – redefining boundaries

Prepare for the new digital competition



Context



How to create a panoramic perspective

Form your own futures squadSet up a specialist forecasting team, equipped with the right technologies and skills. Recent research shows people trained to use probabilistic reasoning techniques, and recognize and eliminate bias, produce better forecasts. Working in teams likewise increases the odds of predicting the future accurately. Consider designating someone within your enterprise specifically to scan for new technologies and monitor the marketplace.

Cultivate your cognitive capabilitiesThere’s no technology that can tell you exactly what will happen in the future. However, using predictive and cognitive analytics to scrutinize the real-time data you receive from across your extended enterprise and mission area will help you forecast what might happen with a greater level of confidence. It will also enable you to generate “what-if” scenarios and risk assessments, allowing you to prepare for different outcomes before they occur.

Take an ecocentric view of the world Assess the caliber of all the enterprises in your ecosystem. Are you leveraging all their contacts, skills and assets? Are there any weak links? Are there any missing skills? Ask yourself whether your ecosystem has the right expertise to exploit new trends and technologies and boost its power to compete. If not, where should you look? The fate of your organization now rests on the collective abilities of the ecosystem in which you operate, including its ability to read – and prepare for – the future.



Industry convergence – redefining boundaries

Prepare for the new digital competition



Context



Technology will force universities to reassess most aspects of their business

Product/service portfolio

Operating model Partnerships Delivery channels Revenue model Customer typesor segments

Parts of the business most impacted by technology



of global CxOs are experimenting with different business models or thinking of doing so



Nobody said it would be easy: universities face many obstacles when deploying new business models



… and whether launching a new business model or product offering, Torchbearers prefer to be first

Preference to reach the market first


©2015 IBM Corporation29 ©2015 IBM Corporation29

How to be first, or best

Investigate unfamiliar territoryFocusing on your existing strengths and learning from your immediate peer organizations will only help you do the same things you’re already doing – slightly better. Listen to your customers and partners, and actively collaborate with them. Concentrate on building broader networks and look at what organizations in unrelated industries are doing to get completely different ideas.

Go offline to test for the bestSet up an innovation center outside your current organizational structure for incubating and piloting new business models and offerings. Give it the latitude to experiment properly, including sufficient time and resources. Test the most promising prototypes on a select group of knowledgeable, impassioned customers and constituents; you’ll learn far more from them than you will from a throng of uninformed users. And be ruthless about discarding all but the very best options. ‘Good’ isn’t good enough in a transparent digital environment.

Create – and capture – the momentOnce you’ve decided to launch a new business model, product or service, move fast – and be prepared to bet big. It’s difficult to triumph as a pioneer when technological advances are occurring so rapidly they can render even recent innovations obsolete.


Context: Disruptive trends, dangerous timesContext: Disruptive trends, dangerous times

What to do: Redesign your operating model

How to do it: Innovate your ecosystem

What you need to do it: Boost yourdigital acumen


Operations


“Industry convergence will drive the need to differentiate based on brand reputation, quality of service and partner network.”

Marco Barioni, COO, Reale Mutua, Italy


+19%

Fending off these new rivals will entail providing more digitized, personalized offerings

75%

63%More digital interaction

More focus on customers as individuals 53%

62%

+17%


2013

2015

2013

2015

“Ultimately, computing is about networked intelligence, and from this technical perspective

the real impact of the Internet and devices will be seen once that translates into automation

and machine intelligence.”Brian Armstrong, COO, Telkom SA, South Africa


Context: Disruptive trends, dangerous times





Summary


Operations


COOs plan to review their operating models and offering portfolios in light of technological progress

Parts of the business most impacted by the next wave

Operating model

Product/serviceportfolio

Revenue model

Deliverychannels

Partnerships Customer types or segments

71%68%

60% 58% 57%

49%


“The ‘anchor’ for products won’t be the physical asset; it will be the digital entity – the product plus all the information associated with it.”Jesús Marín Rodríguez, COO, Allianz Spa, Italy


Torchbearer COOs are reviewing the core partsof their operations more actively

83%

68%

81%

55%

73%

54%

Parts of the business most impacted by the next wave

more35%

more22%

more47%

Reviewing operating model

Reviewing revenue model

Reviewingdelivery channels

Market Follower COOsTorchbearer COOs


“We’ll have to project an even more customer-centric, technology-savvy brand in

future and reach customers in a more real-time, targeted way.”

Michael Bullock, COO, ANZ Bank, New Zealand


Torchbearer COOs are investing more heavily in creating automated, real-time operations

61%

44%

60%

44%

Operational strategies

more39%

more36%


Implement IoT to sense, capture, and communicate operational data

Move to automation-intensive production


Align your digital operations strategy with your business objectives and automate learning content management and production.

Identify the best learning and research acceleration models based on total operational costs, bearing in mind the organization’s agility and customer responsiveness.

Optimize your digital operations sustainably. And explore the opportunities for crossing over into other delivery models, other sectors, and customer groups.







Summary


Agenda


Plan to create more innovative and agile ecosystems

Increase level of partnering to add value

Implement a predictive risk management strategy

Use collaborative digital strategies

Build agile and social networks

Partner for innovation

Have already done Plan to do in the next 2–5 years

47%

31%

26%

33%

58%

57%

57%

45%

“These days, it’s essential to build an ecosystem of customers and partners, and innovate continuously.”COO, Electronics, Japan

“The product lifecycle is becoming shorter, and there’s greater potential for disruption than ever before, which means we’ll have to make our operating model more flexible.”Bill Muir, COO, Jabil Circuit, United States


Torchbearer COOs are more likely to be reviewing and expanding their partnerships

69%

55%

75%

56%

Impact on partner networks

more25%

more34%


Reassess partnerships Expand partner network


Torchbearer COOs are putting more effort into creating agile operations to pioneer innovation

66%

38%

Preference to reach the market first

more74%








What you need to do it: Boost your digital acumen

Operations


Use advanced analytics, modeling and real-time data to gain a single, 360-degree view of the student

Adopt advanced analytics and modeling tools

Optimize flows for rapid market response

Use real-time data to predict demand

Synchronize all operations

Visibility and insight

32%

28%

42%

35%

63%

63%

47%

57%

Have already done Plan to do in the next 2–5 years


“Moving technology closer to the customerwill provide better client analytics. This

will allow customers to access and receivewhat they need, resulting in greater revenue.”

COO, Insurance, South Africa


Talent shortages are a big impediment to going digital

of CxOs know they’ll either have to hire people withthe relevant qualifications or train existing employees


Other IBV research shows there is a huge gulf between awareness and action

Create new business models

Invest in new technology platforms

Collaborate more with partners

Modify existing IT infrastructure

Digital operations strategies42%

38%

38%

42%

Change marketing strategy

Train existing employees

Create new leadership roles

Establish centers of talent-rich areas

Acquire relevant technology companies

Recruit new talent

37%

36%

26%

22%

27%

17%


What you need to do it: Boost your digital acumen

Use advanced analytics, modeling and real-time data to streamline operations, predict demand and create a more transparent learning “supply chain”.

Leverage analytical insights to predict – and accommodate – students’ desires and incorporate student input into your content production and learning processes.

Acquire and develop the talent required to manage this tidal wave of change. And move fast.

What to doRedesign your operating model

─ Automate the learning content, management, and delivery approaches─ Identify sustainable new ventures based on total operational costs─ Cross over into other industries, sectors, market segments

How to do itInnovate your ecosystem

─ Partner to produce value collectively and with greater agility─ Compare asset-light versus asset-heavy approaches─ Adopt a decentralized management style

What you need to do itBoost your digital acumen

─ Streamline operations through data and the use of artificial intelligence─ Acquire and develop talent─ Move fast


Harness the Hurricane

I invite you to continue the conversation

Dr Simon Eassom

Strategy and Solutions Leader

IBM Global Education Industry

[email protected]

0434 600 559

mailto:[email protected]

Documents

Harnessing the Hurricane - Melbourne CSHE...All CxOs COOs 66% 50% 43% 32% 25% 24% 46% 7 ©2015 IBM Corporation CxOs expect industry convergence to have the biggest impact on their