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Digital Transformation
Kevin Bouwmeester12016 Apigee. All Rights Reserved. From Digitally Disrupted to Digital Disrupter
dramaticThe industrial revolution wasTools
Communication
Urbanization
DIGITAL REVOLUTION HAS HAPPENED IN One generation vs 10 generations FOR THE INDUSTRIAL REVOLUTIONThats why the new gen is so different THEY dont even see a change
Urbanization takes hold people moved from agrarian/farming to urban/factory New tools with power supplied by machines rather than by people and animalsNew communication via telephones, mail service, transportation
Industrial Revolution: 1760 1990
In two centuries daily life changed more than it had in the 7,000 years before
The digital revolution isdramatic
Chet, Scott, I dont love the data on the previous slide for dramatic and fast . what think of this data instead? dramatic on left fast on right. its very on pointFor every 100 people in the world there are
95mobile subscriptions
40internetusers
32active mobile -broadband subscriptions
25social media usersand fastTime to reach 100 million users world wide
TelephoneMobile PhoneWWWiTunesFacebookInstagramCandy Crush Saga187819791990200320042010201275 years16 years7 years 6 years, 5 months4 years, 6 months2 years, 4 months1 year, 3 months
http://www.businessinsider.com/it-took-75-years-for-the-telephone-to-reach-100-million-users-and-it-took-candy-crush-15-months
DIGITAL REVOLUTION HAS HAPPENED IN One generation vs 10 generations FOR THE INDUSTRIAL REVOLUTION
DRAMATIC:1. HALF THE WORLD NOW HAS A MOBILE PHONE; ACTIVE MOBILE CONNECTIONS ALMOST EQUALS WORLD POPULATION2. MORE THAN 40% HAVE INTERNET ACCESSFAST3. 750,000 new mobile users every day -- or 9 new users every second4. 10% growth every year in each of the last 4ANECDOTENew internet users are likely to onboard for the first time via a messaging app
IF THE INDUSTRIAL REVOLUTION BROUGH URBANIZTION, THE DIGITAL REVOLUTION BROUGHT APPIFICATION
The digital revolution hasbeen a personal one so farImmediate
Intelligent
z5kmInterconnected
How we liveWe know how to be digital as consumers
How we workWe are moving slowly to be digital as businesses
customers
partners
employees
A digital business creates value by delivering digital experiences
Not just about building apps about changin the way we do business.
Accelerating digital business
Culture being digital
Code delivering digital
Community amplifying digital
SO WHATS THE NEW?
Those of us who remember a world before 1995 are different from all the ones who are coming of age now - digital natives - with new habits
An example of how consumers CREATE value from common information on web, USE digital bits (git hub, mash up apps, etc.) and SHARE/AMLIFY through social network/community
Takeaway > the digital consumer thrives on CULTURE of open information, COMMUNITY of sharing & collaboration and CODE that is free and extensible.
Culture: Being Digital
New Reality: Two-speed Enterprise
DIGITAL EXPERIENCE
SYSTEM OF ENGAGEMENT
CRM
ERP
Data Warehouse
Database
SYSTEM OF RECORDESB /Integration
Data Lake
Old technology will not get you there.
WHY? A MISMATCH IN THE SPEED OF SoRs AND THE INTERACTION LAYER THAT MOVES AT THE SPEED OF THE APP STORE
So What are companies doing in practice to unlock the digital opportunity?
Implement systems of engagement the two speed enterprise
However
HAVING A TWO SPEED ENTERPRISE IS NOT ENOUGH
Helen (H) - removed the data lakefixed ESB/integration
relabel with New Reality: Two speed enterise
put the whole backend in a box :-)
more icons for the connected experience Helen (H) - make gray bar (system of record) thinner
make blue bar thinner
red layer fatter
eliminate ESB/integration lauyer and make it one of the items/icons in the backend gray layer
Would be cool if when the red layer comes in theres some kind of cog or connection between the two speeeds??
changed CONNECTED EXPERIENCE TOCONNECTED DIGITAL EXPERIENCEFrom control to contextProcesses
guiding principles interaction patternsRoles
small x-functional teamsend-2-end responsibilityCommunication
transparent and openpull vs. push
ExampleSROLESAPIGEE doesnt have Large functionally specialized engineering teams -- WITH OVER THE WALL approach DEVto-QA to- OPS to SUPPORT
RATHERSmall x-functional teams tasked with end-2-end problem solving BETTER QUALITY code/product, brings CUSTOMER FOCUS - builder (engineer) close to the end user (customer)
COMMUNICATIONA pull model as opposed to push WE USE wikis, hipchat, slack
PROCESSEESInstead of rigid processes we have a set of guiding principles to help teams align, move fast, and deliver at speedCommon CSSCommon terminologySet of interaction patternsLinking (components and teams)
Community: Amplifying digital
Creating and participating in ecosystems is how value gets shared and amplified
Your product and service will be a part of a community or an ecosystem --\open to others, of your choosing
New Reality: Digital value chain
B2C
B2E
B2BUserAppDeveloperAPIAPI TeamBackend
customers
partners
employees
NEED TO ENABLE THE ENTIRE DIGITAL VALUE CHAIN.
DIGITAL NATIVES DONT HAVE TO THINK ABOUT THIS IT IS SECOND NATURE PART OF THE DIGITAL CULTURE
B2B B2C and B2E
AND YOU HAVE TO CONSIDER EVERYTHING ACROSS THE DVC HOW DATA FLOWS, HOW COMMUNICATION HAPPENS, HOW SECURIY HAPPENS
What to do?Roles small x-functional teams / end-2-end responsibilityProcesses- guiding principles / interaction patternsCommunication transparent and open & pull vs. push
From an army of workers to a network of makers
customers activatedusers as product managersCUSTOMERS ecosystem innovationextend and complementPARTNERS on boarding & analyticsx-company innovationINTERNAL DEVELOPERSenterprise data at coreunlock core valueSYSTEM OF RECORD
Facebooks valuation is because of the content created by its users.Uber is better because your Spotify music can play when you get into an Uber car.Walgreens photo printing was successful because 43 apps sent traffic through it.
Your imagination is not as strong as the collective imagination of your colleagues, partners and customers.
Become a platform. Let others innovate. They will be better, and you will be better.It is the tide that raises all boats. It is 2 Speed IT. It is the contract that binds independent innovations together.
Core - Your value is data and customers in your SoR (You must ensure that all assets are getting unlocked)
Within an enterprise, it enables independent innovation. The old idea of org structures is dead. It doesnt matter what he boxes and lines and organizational structure of who owns whom. The organization just needs to be able to deploy those resources to get the right set of priorities acted on quickly.(products and services can no longer be built only in the IT dept., - data and analytics no longer locked in silos)
With partners and developers, it enables new consumption models.
With partners, it creates eco-system models.
Users, customers are activated: app store reviews, social and business networks (e.g. , flavorprint, Nike women network
From the POV of data and analytics - some analytics that will be done locally, and there will be some that will be done centrally probably by IT. But the analytics and the data sets needs to be accessible to the larger organization in order to spur innovation and to change the way the company thinks and operates.
All of the culture changes described earlier are critical for this model to work
Chet Kapoor (CK) - Need a few bullet pts to show up
Here are a few. need to make em better
system of record unlock core value
internal developers innovation across company
partners ecosystems- extend and complement
userscustomers activatedapp store reviews
Helen (H) - will send bullets for her in a few minutes
Code: Delivering digital
22
New Reality: Digital scalefrom millions of users to billions
from limited data to massive data capture and usage
From connecting humans to programs to programs to programs
Digital scale is about there are billions of them going to be accessing your systems not tens of millions. limited data to massive amounts of data (even between 2014 and 2014 the total terabytes of mobile internet data increased 10 fold to almost 25 billion terabytes*) is about connecting programs to other programs. This is a fundamental shift from humans connecting to programs. In the past you had the luxury of assuming think times of several seconds when designing systems for concurrency and scale to handle tens of millions of humans. Programs dont have think times.
Availability @ scaleEfficiency @ scaleIntelligence @ scale
You need a fundamentally new approach to engineering systems that can handle digital scale.
-*http://www.cisco.com/web/solutions/sp/vni/vni_forecast_highlights/index.html
Globally, mobile data traffic will grow 10-fold from 2014 to 2019, a compound annual growth rate of 57%.Globally, mobile data traffic will reach 24.3 Exabytes per month in 2019, up from 2.5 Exabytes per month in 2014.Global mobile data traffic will grow 3 times faster than Global fixed IP traffic from 2014 to 2019.Global Mobile was 4% of total IP traffic in 2014, and will be 14% of total IP traffic in 2019.Global mobile data traffic grew 69% in 2014.Globally, mobile data traffic in 2019 will be equivalent to 12x the volume of the entire Global Internet in 2005.Globally, the average mobile connection will generate 2,807 megabytes of mobile data traffic per month in 2019, up from 359 megabytes in 2014.
Chet Kapoor (CK) - Need to work on this..more data..
Every Interaction Matters
ENGINEER FOR PARTITION TOLERANCE AND AVAILABILITY
When network failure happens, customer experience suffers
The system must continue to function when network partitions occur
REACT WITH SPEED AND AGILITY
Impossible to produce the diversity of digital-world things in the lab
Focus on deployment over testing; build redundant paths and retries
Fault tolerancePrograms must function even when errors occur
Continuous deliveryBite-size innovation
Monitor Monitor across all programs
We live in a world where every customer interaction matters. Customer interactions depend on networks of programs. one failed or slow program ends up bringing down the entire network and creates a poor customer experience. You cannot afford to have API calls fail. You cannot afford to have API calls take too long.
1>>But stuff happens, systems go down or go bad.The system must continue to function when errors occur you must engineer for tolerance. the system needs to continue to function in spite of external errors (shopping carts, etc.)
2>>It is impossible to engineer for precision at massive scale. Think about trying to get your SLAs absolutely precise across global scale. you have to build in a margin of error and be ok with that level of imprecision.
3>>BECAUSE YOU cannot produce the diversity of digital world things in the lab & Cannot test for all conditionsYOU MUST embrace failure - dontobsess over testing every scenario Focus on deployment over testing slow rollout in production (essentially test in production with low traffic ) Build redundant paths and retries - if this path fails take different paths; if something doesnt work, retry
Accelerating digital business . . .
Being Digital Culture
Code Delivering digital
Community Amplifying digital
SPEED MATTERS
Most importantly it is about speed.
Speed matters you can do the 3 Cs and do it in 18 months and it all becomes irrelevant, because you still get disrupted.
How can Apigee help?
Apigee EdgeSytem of Engagement
DIGITAL EXPERIENCE
SYSTEM OF ENGAGEMENT
CRM
ERP
Data Warehouse
Database
SYSTEM OF RECORDESB /Integration
Data Lake
Old technology will not get you there.
WHY? A MISMATCH IN THE SPEED OF SoRs AND THE INTERACTION LAYER THAT MOVES AT THE SPEED OF THE APP STORE
So What are companies doing in practice to unlock the digital opportunity?
Implement systems of engagement the two speed enterprise
However
HAVING A TWO SPEED ENTERPRISE IS NOT ENOUGH
Helen (H) - removed the data lakefixed ESB/integration
relabel with New Reality: Two speed enterise
put the whole backend in a box :-)
more icons for the connected experience Helen (H) - make gray bar (system of record) thinner
make blue bar thinner
red layer fatter
eliminate ESB/integration lauyer and make it one of the items/icons in the backend gray layer
Would be cool if when the red layer comes in theres some kind of cog or connection between the two speeeds??
changed CONNECTED EXPERIENCE TOCONNECTED DIGITAL EXPERIENCEApigee EdgeSupporting your Digital Value Chain
B2C
B2E
B2BUserAppDeveloperAPIAPI TeamBackend
customers
partners
employees
NEED TO ENABLE THE ENTIRE DIGITAL VALUE CHAIN.
DIGITAL NATIVES DONT HAVE TO THINK ABOUT THIS IT IS SECOND NATURE PART OF THE DIGITAL CULTURE
B2B B2C and B2E
AND YOU HAVE TO CONSIDER EVERYTHING ACROSS THE DVC HOW DATA FLOWS, HOW COMMUNICATION HAPPENS, HOW SECURIY HAPPENS
What to do?Roles small x-functional teams / end-2-end responsibilityProcesses- guiding principles / interaction patternsCommunication transparent and open & pull vs. push
Apigee EdgeEvery Interaction Matters
ENGINEER FOR PARTITION TOLERANCE AND AVAILABILITY
When network failure happens, customer experience suffers
The system must continue to function when network partitions occur
REACT WITH SPEED AND AGILITY
Impossible to produce the diversity of digital-world things in the lab
Focus on deployment over testing; build redundant paths and retries
Fault tolerancePrograms must function even when errors occur
Continuous deliveryBite-size innovation
Monitor Monitor across all programs
availability @scale
We live in a world where every customer interaction matters. Customer interactions depend on networks of programs. one failed or slow program ends up bringing down the entire network and creates a poor customer experience. You cannot afford to have API calls fail. You cannot afford to have API calls take too long.
1>>But stuff happens, systems go down or go bad.The system must continue to function when errors occur you must engineer for tolerance. the system needs to continue to function in spite of external errors (shopping carts, etc.)
2>>It is impossible to engineer for precision at massive scale. Think about trying to get your SLAs absolutely precise across global scale. you have to build in a margin of error and be ok with that level of imprecision.
3>>BECAUSE YOU cannot produce the diversity of digital world things in the lab & Cannot test for all conditionsYOU MUST embrace failure - dontobsess over testing every scenario Focus on deployment over testing slow rollout in production (essentially test in production with low traffic ) Build redundant paths and retries - if this path fails take different paths; if something doesnt work, retry
New reality
MusicBookConsultingRetailCPGCleaningServicesCarFoodMiningWeightlessIntermediateHeavyB2BB2B2CB2C2030s2020s2000sNature of ProductNature of MarketDigital will DISRUPT every industrySource: Gartner - CEOs and CIOs Must Assume That Every Industry Will Be Digitally Remastered, 2014, Raskino
CEOs and CIOs Must Assume That Every Industry Will Be Digitally RemasteredPublished: 20 August 2014 Analyst(s): Mark Raskino
if you're a music company today, no aspect of your business is not digital...
The pace of digital acceleration
Healthcare
Travel and Leisure
Retail
Media and Entertainment
Financial / brokerage
Telco / CommunicationsAPI Call Volume
HBR - Productivity Is Soaring at Top Firms and Sluggish Everywhere ElseEven within industries the pace varies. The Gap Between the Most Productive Firms and the Rest is Growing
Helen (H) - reordered the industries along the API call vuumenaxis on the bottom
that line should probably have an arrow to the right?
CodeCultureCommunity
Thank you