JPK

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up

Anil Inamdar – Byte Size Inc

Anil is a Technology Executive with Big Data, EDW, BI, Data Science, Analytics and MDM technologies. His strength is his ability to Bridge the Gap between Business and

Technology. He is a Business & Technology Strategist, Product Manager, Program Manager (PMO), Architect and a Delivery Expert. He has a vast knowledge of

everything in the Data Domain - DW, BI, MDM, Big Data, Governance, Tools and Databases.

Anil is also the author of a book on leadership: Avatars of Steve Jobs.

View presentation online at: https://jpkgroupsummits.com/sandiegols2019-attendee

Password: JPK

2019 Leading Strategy ForumJune 20-21, 2019  •  San Diego, CA

Session: Digital Transformation Journey: From Yellow Cab to Uber!

June 20, 3:30 pm

Digital Transformations

From Yellow Cabs to Uber

By

Anil Inamdar

Consultant: Big Data, Digital TransformationAuthor: Avatars of Steve Jobs

22

Index

2

1. What is Digital Transformation?

2. Culture

3. Operating Model

4. Technology & Methodology

5. Conclusion

6. Questions

33

Digital Transformation Quiz

1. The field of study that gives computers the capability to learn without being explicitly programmed is called

2. The shift from mechanical and analog electronic technology to digital electronics is termed?

3. In what year was the transistor invented?4. Which year is often referred to as the

beginning of digital age?5. Which of the following is a phenomenon of

digital transformation? Drawing, Cryptocurrency, Electric, Coining

Machine Learning

Digital Revolution

1947

Cryptocurrency

2002

Sources: https://www.proprofs.com/quiz-school/quizshow.php?title=3dq-what-do-you-know-about-digital-transformation&q=9

44

What is Digital Transformation?

555

Digital Transformation

“You see things; and you say, ’Why?’But I dream things that never were;

And I say, ‘Why not?’”

George Bernard Shaw (Back to Methuselah)

66

Digital Transformation

6

77

Digital Transformation

7

� New millennium – new type of business� New Business Model (GE – Thrust as a Service)� New Processes (Uber)� New Technology (Nest Thermostat)� New ways to interact with customers (Mobile Checks Deposits)

� Characteristics of the new business� Digitally born!� No legacy thinking, systems or processes

� Every company wants to adopt this new transformation

88

Digital Transformation

8

� Digital Transformation – How� Easy to adopt to technology� How to change legacy mindset?� How to change legacy operating model?� How to change legacy culture?

� Three steps to Journey to Digital Transformation1. Transforming Culture & Legacy Mindset2. New strategy and Operating Model3. Adopting new technology & methodology

99

Digital Transformation –

CULTURE

1010

Digital Transformation: Culture

10

1111

Digital Transformation: Culture

11

� What is culture / business culture?

� Social Culture: � Culture is the characteristics and knowledge of a particular group of people,

encompassing language, religion, cuisine, social habits, music and arts.

� Business Culture: � Corporate culture refers to the beliefs and behaviors that determine how a

company's employees and management interact and handle both inside and outside business transactions.

� Culture is critical to bring upon change / accelerate change

1212

Digital Transformation: Culture – contexts

12

1. Be Data Driven

2. Eliminate Department Silos

3. Be Customer Centric

4. Results over Process

5. Calculated Risk vs Risk Averse

6. Longitude vs. Latitude

1313

Culture: Be Data Driven

13

� Digital Transformations� Unique focus on data & analytics

� Data (1950 – 1985)� Automation of manual process� Data played secondary role – appendage of application

� Data (1985 – 2005) � Separate but equal treatment – OLTP vs OLAP� Data & Analytics practice – EDW, BI, MDM, Governance, tools� Competitive differentiator

� Data (2005 – now)� Data is the new disrupter� Changes to business models, processes, recommendation egines

� Leadership must embrace data culture� Fact based decision making� Ex-CEO Sara Lee (Barry Baracha) – “In God we trust, all others bring data”

1414

Culture: Eliminate Department Silos

14

� Traditionally strong, independent departments / business unites –music, consumer product, computers, service etc.

� Departments many times compete hurting the organization� Establish culture of Organization before Department

� Sony Corporation (The Silo Effect by Gillian Tett)� Analog Walkman in 1970s� Strong brand, consumer product experience, music label� Everything under the roof for Digital Walkman or iPod

� Apple� A computer hardware company� Struggling in late 1990s � No experience in consumer products or music� Introduces first popular iPod

1515

Culture: Be Customer Centric

15

� Traditional companies� Pride in products & services (Blockbuster late fees)� Preference changes, technology changes, market changes� Customer needs must be constantly reevaluated

� Traditional companies � Excessive focus on shareholders� Hierarchy is Shareholders then Customers� Must be changed to Customers then Shareholders� Amazon & Apple have continually ignored shareholders yet provided them

with huge returns

� Digitally born companies� Continuous innovation of their products / services� Amazon, Apple, Facebook, Google continuous improvement / features

1616

Culture: Results over Process

16

� Traditional companies� Red tape of process, policies � Process does not keep pace with changes in customer preferences� Incentive structure rewards adherence to process � Lufthansa Airlines

� Mumbai – Frankfurt flight, wanted to upgrade to economy plus� Went on the website clicked the right option paid $230 � It changed my class – to upgradable! Now I can pay additional $350 to

upgrade� Told them I don’t want to upgrade but they won’t refund my $230

� Digital born companies� Focus on result over process� Continually invent new processes / improve existing processes – Amazon

one-click, prime membership, recommendation engines � Uber – entirely new process of hailing a taxi

1717

Culture: Calculated Risk vs. Risk Averse

17

� Traditional companies� Success makes them risk averse – gun shy about change� Continue to hire leaders that play safe� Propagates a culture of status quo vs change� Border Book store vs Amazon

� Digital born companies� Calculated risk have paid off from the very beginning of capitalism� 1914 Henry Ford – doubled the minimum wage to $5/day� Worker turnover reduced, productivity increased and factory workers

became the customers� Tesla and Amazon continually take risks – Auto pilot, delivery in the car,

drones, etc.

1818

Culture: Longitude vs Latitude

18

� Longitude – Imaginary half circle lines from pole to pole� Latitude – Imaginary circles in north & south directions of the equator� For navigation both latitude and longitude is necessary� In 1700s (age of exploration) – finding latitude was easy but longitude was difficult –

resulted in accidents � Board of Longitude (British Gov) – John Henry solved the longitude problem (Longitude

by Dava Sobel)� Most Organizations

� Business strategy is amorphous, elusive – “Acquire customers for life while striving for innovation”

� Statement is right, necessary but not sufficient; latitude but longitude� Most corporate strategies are not specific at all to take action

� Must focus on both latitude and longitude for strategy� Apple 2001 – “Digital Hub” � Mac will be the Hub surrounded by many digital devices� Introduced – iTunes, iPod, iPhone, iPad – many of the devices were not even conceived when

the strategy was laid out� “Digital Hub” was clear, succinct as well as uses Apple’s core competency – “the whole widget”

1919

Digital Transformation –

OPERATING MODEL

2020

Digital Transformation: Operating Model

20

2121

Digital Transformation: Operating Model

21

� Operating Model� Bridge between strategy and operations

� Strategy is not constant due to � Changes in customer expectations� Changes in technologies� Changes in business boundaries

� Change in strategy renders operations out of sync� How to keep strategy and operations in sync?

� Operating Model � It’s components could be tweaked to keep strategy and operations

in sync

2222

Operating Model: Business Model Canvas

22

� How to review existing strategy and identify strengths and weaknesses

� Several ways – one popular method is “Business Model Canvas” by Alexander Osterwalder

� Works with both internal and external entities and their impact to the strategy

2323

Operating Model: Business Model Canvas

23

� Nine components� 4 External Customer components

� Customer Segments� Customer Relationships� Channels� Revenue Streams

� 4 Internal Organization components� Key Activities� Key Partners� Key Resources� Cost Structures

� 1 Common Component� Value Proposition

2424

Digital Transformation: Operating Model

24

2525

Business Model Canvas: Customer Segments

25

� Who are the customers?

� What needs are we fulfilling?

� Can we group these customers into segments� B2B, B2C, Demographics, Socio-economical

� How do we effectively exploit these segments

2626

Business Model Canvas: Value Proposition

26

� Define value proposition

� Why would customers pay for the product or service?

� Features of the offer� Cost benefit, additional features, ease of use, differentiation from

the competition

� Different “customer segments” may warrant different “value proposition”

2727

Business Model Canvas: Channels

27

� Connects customer segments with value propositions

� Avenues through which products or services are sold� Social media� Word of mouth� Apps� Marketing campaigns

2828

Business Model Canvas: Customer Relationships

28

� Defines organization’s interactions with customers� Before sale� During sale� After sale

� Relationships � Self-service through website� Customer Support� One-on-one interactions with key customers� Support customer community – conferences, meetups etc.

2929

Business Model Canvas: Revenue Streams

29

� Primary sources of revenue – iPhone

� Secondary source of revenue – “Apple Developer Conference”

� One time revenue

� Recurring revenue – licensing

� Dynamic pricing model – Uber, Lyft

3030

Business Model Canvas: Key Resources

30

� Resources that organization consumes

� Physical resources � Factories, buildings, human capital

� Financial resources� Working capital, investments

� Intellectual resources� Patents

3131

Business Model Canvas: Key Activities

31

� Activities performed to deliver its value proposition

� Factory production

� Service fulfillment

� Marketing

� R & D for cutting technology or pharmaceutical companies

3232

Business Model Canvas: Key Partnerships

32

� Critical business partners necessary for running the business

� Suppliers providing raw materials

� Partnerships with complementary companies storage, cloud

� Strategic alliances – consulting and database companies

� Partnerships necessary – optimize cost, reduce risks, extend revenue opportunities

3333

Business Model Canvas: Cost Structures

33

� Costs necessary to provide value propositions

� Identify major cost drivers

� Fixed costs – rent, salaries

� Variable costs – electricity, cloud usage

� Costs used to acquire “key resources” and perform “key activities”

3434

Digital Transformation: Operating Model

34

3535

Operating Model: Key Components

35

� Once strategy is established – one can translate it into effective operation through the operating model

� Critical components of the Operating Model:� Design Principles� Business Structure & Organization� Accountability Matrix � Governance & Management Principles� Business Capabilities

3636

Key Components: Design Principles

36

� Translates business strategy into specific, concise and clear statements

� “What matters most to our customers?”

� “What are some of our distinct capabilities”

� “What are some of our strengths?”

� “What are some of our weaknesses?”

� What can facilitate future acquisitions?”

3737

Key Components: Business Structure or Organization

37

� Creates new structures or business units across departments, lines of business and geographic locations� Facilitate improved decision making � Cross-functional teams

� Nike Traditional Business Units around products� Footwear� Apparel

� Customers were demanding “head-to-toe” gear personalized to their sports� Soccer – Shoes, Shirts, Shorts� Golf – Polo Shirt, Shoes, Pants

3838

Key Components: Accountability Matrix

38

� Closely linked to the structures discusses already� Describes roles and responsibilities of the entities in the

structure� Decision making abilities� P & L responsibilities� Incentive structures

� Focus: Reward customer value� Centralized to local

� Ritz-Carlton $2000 discretionary fund to front-desk to resolve customer complaints

� Local to centralized� Local Net Promoter Score (NPS) complicated for each country –

made it central and improved overall NPS

3939

Key Components: Governance and Management Principles

39

� Establishment of principles and policies with respect to organization and accountability (how to manage them)

� Principles not Rules� Business priorities and value proposition

� Performance Metrics, KPI� Feedback mechanism between frontline & back office operations,

between different organization levels, between geographies� KPIs / Metrics cannot be rigid rules - principles� Principles promote agility, rules encourage bureaucracy

� Intel has a long established principle – “disagree & commit”� Disagree openly without fear of retaliation� Once decision is made – follow through total commitment

4040

Key Components: Business Capabilities

40

� Business Capabilities: People, Process, & Technology

� Traditional Companies� How do we introduce new skills, processes, technology?

� Big Bang or Incremental?

� Approach� Modular architecture in an iterative fashion

� Envision overall system and architecture (Idealistic)� Implement in manageable chuck (pragmatic)

� Agile Methodology, DevOps, Cloud� Must make Critical hires and as well as focus on retraining

4141

Digital Transformation –

TECHNOLOGY & METHODOLOGY

4242

Digital Transformation: Technology & Methodology

42

4343

Digital Transformation: Technology & Methodology

43

� Last two decades:� New technologies – Big Data, Cloud, Mobile, AI / ML, Blockchain � New Methodologies – Agile, DevOps

� Technology is diverse & changing constantly

� Review 6 broad categories� Cloud Adoption� Hybrid Data Management� Polyglot Storage Architecture� Analytics & Insights� Agile, DevOps Methodologies� Emerging Technologies – AI/ML, Mobile, Blockchain

4444

Digital Transformation: Cloud Adoption

44

� “Cloud” Technology has come full circle� Mainframe (1950s) – Centralized architecture� Client Server – Distributed architecture� Cloud – Centralized architecture but nodes are powerful too

� Cloud Characteristics� Agility / Scalability� Cost (Operating expense not Capital)� Global Reach� Reliability� Performance� Focused Priorities

4545

Digital Transformation: Cloud Adoption

45

� Types of Cloud Services� Infrastructure as a Service (IaaS)� Platform as a Service (PaaS)� Software as a Service (SaaS)

� Types of Cloud Deployments� Public Cloud� Private Cloud� Hybrid Cloud

4646

Digital Transformation: Hybrid Data Management

46

� Historically since 1950s� Data management scope was limited� Mostly numbers and characters, structured� Remained so till the end of the millennium

� New Millennium� Data increased in – volume, variety, velocity� Rise of unstructured data – weblogs, music, photography, video� Different types of processing – batch, real time, streaming� Locations – local, international, on premise, cloud

� Emergence of Hybrid Data Management� Structured vs Unstructured� On-premise vs Cloud� Streaming vs batch

4747

Digital Transformation: Polyglot Storage Architecture

47

Functionality Considerations Database Type

User SessionsRapid Access for reads and writes. No need to be durable. Key-Value

Financial DataNeeds transactional updates. Tabular structure fits data. RDBMS

POS Data

Depending on size and rate of ingest. Lots of writes, infrequent reads mostly for analytics.

RDBMS (if modest), Key Value or Document (if ingest very high) or Column if analytics is key.

Shopping Cart

High availability across multiple locations. Can merge inconsistent writes. Document, (Key Value maybe)

RecommendationsRapidly traverse links between friends, product purchases, and ratings. Graph, (Column if simple)

Product CatalogLots of reads, infrequent writes. Products make natural aggregates. Document

Reporting SQL interfaces well with reporting tools RDBMS, Column

Analytics Large scale analytics on large cluster Column

User activity logs,CSR logs, Social Media analysis High volume of writes on multiple nodes Key Value or Document

4848

Digital Transformation: Analytics & Insights

48

4949

Digital Transformation: Analytics & Insights

49

� Types of Analytics� Descriptive Analytics

� What happened – sales were down last month

� Diagnostic Analytics� Why it happened – drills down into data

� Predictive Analytics� What will happen – sales would be down next month

� Prescriptive Analytics� What should happen – takes actions to address challenges,

recommendation engines

5050

Digital Transformation: Agile, DevOps

50

� Traditional development process� Long time to market� Waterfall methodology – requirements, design, development etc.� Waterfall developed for manufacturing systems (Ford 1913) – adopted for

software development in 1970� Both manufacturing and initial software was large, complex and

changes very slowly� New Millennium

� Internet era� Teams were smaller� Applications were divided into independent components (microservices) � Customers demanded rapid changes� Platforms & Tools changed continuously � Waterfall became a bottleneck

5151

Digital Transformation: Agile Development

51

� Collaboration over documentation� Self-organization over rigid management� Continuous changes vs waterfall� Concept of Customer, Product Owner and Development

Team� Many Agile frameworks – most popular is SCRUM

� Creates backlog of product features� Sprint planning� Individual sprints – 2/3 weeks� Sprint backlog from “in progress” to “done”� Daily Stand Up Meetings� Sprint ends with Retrospective

5252

Digital Transformation: DevOps

52

� Change in IT culture� Collaboration between development and operations team� Traditionally development and operations are at odds

� Development focuses on functionality, speed & agility� Operations focuses on maintenance, performance, support,

security and management of applications

� DevOps� Collaboration� Automation (Jenkins)� Continuous delivery� Rapid deployment – daily, weekly, monthly� Amazon deploys something every 11.6 seconds

5353

Digital Transformation: Emerging Technologies

53

� Emergence of several new technologies – AI, ML, Blockchain, IoT, Mobile etc.

� Transformation leaders must monitor this space, will focus on few

� AI, ML & Blockchain – adept at handling scale, complexity and continuous learning

5454

Digital Transformation: Artificial Intelligence (AI)

54

� AI – Bringing human features to technology

� Consumer World� Comprehending speech, vision, daily integrations � SIRI, Alexa

� Business World� Improving enterprise functions like logistics, marketing, finance,

operations� Recommendation engines

5555

Digital Transformation: Machine Learning (ML)

55

� Subset of AI

� Traditional computer algorithms� Step by step instructions

� Machine Learning� Learns from data iteratively� Becomes more and more intelligent as data grows� Many ML algorithms that can predict skin cancers better than

radiologists

5656

Digital Transformation: Blockchain

56

� Distributed ledger that stores and validates transactions cross multiple locations

� Validation mechanism that prevents anyone from making unvalidated changes

� Most prevent application is cryptocurrency

� Also used in creating contracts, storing patient prescriptions and medications

5757

Questions

5858

https://www.youtube.com/watch?v=V1eYniJ0Rnk

https://www.youtube.com/watch?v=Q70ulPJW3Gk