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Jason Juma-Ross, National Leader: Digital Intelligence, PWC presented "Plugging in to bandwidth: How businesses can harness the power of the NBN" at Connected Australia 2013. This conference is designed to help organisiations harness the opportunities that super-fast broadband will create, and explores the future impact of the NBN through the healthcare, education and consumer industries. For more information, please visit the conference website: http://www.connectedaustralia.com.au/2013
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Plugging into bandwidth
How businesses can harness the power of the NBN Jason Juma-Ross National Leader PwC Digital Intelligence @ideasoc
PwC Source: http://www.nbnco.com.au/get-an-nbn-connection/wholesale-speeds.html
2
512/128 kbps
25/10 mbps
50/20 mbps
100/40 mbps
12/1 mbps
25/5 mbps
PwC
Off the charts or ‘normal’ growth?
0
1
2
3
4
5
6
7
8
9
10
1960 1970 1980 1990 2000 2010 2020 2030
Dom
estic
Ban
dwid
th A
vaila
bilit
y (L
og)
Source: PwC analysis 3
100 mbps
100 gbps
PwC
Wireless Operators
Media
Impact on business varies by industry sector
4
Full Service Telcos
Financial Services
ConsumeTech.
Health & Public
Retail & Consumer
Resources & Energy
Core Business Model Risk & Opportunity
Digital Operations Risk & Opportunity
PwC
5 Opportunities presented by increased digitization
1. Market & geographical expansion
2. More efficient sales & service
3. New sources of talent
4. Better, more competitive processes
5. Faster innovation
5
PwC
Erosion of market & geographical barriers to entry, improving access to alternates
• Access to new markets (e.g. extension into customer journey on basis of virtual supply chain)
• Access to new geographies (e.g. previously uneconomic to sell to or serve through traditional distribution channels)
6
K1
Geography
Prod
uct/
Mar
ket K2
PwC
Carrying capacity ultimately limits market growth causing shake out
8
dN dt
= N K-N K
t
Carr
ying
Cap
acity
(K)
K1
K2
PwC
This process happens faster in digital markets, which move quickly to ‘winner take all’ dynamics
32%
19%
12% 7%
30%
Share (%)
‘Traditional’ stable market structure
Others
Nichers
Challenger
Follower
Leader
Source: Strategic Planning Institute Profit Impact of Market Strategy (PIMS) database http://www.fool.com.au/2013/05/21/google-stock-buy-it-and-hold-it-for-life/ http://blog.bazaarvoice.com/2008/11/14/how-to-stop-losing-market-share-to-amazon/
9
PwC
Market fragments into niches as feature displacement drives differentiation
10
PwC
Digital channels reduce overall cost to serve allowing asset re-investment
Observations from ‘real life’ • 50% reduction in time to resolution • 30% reduction in call volume • 60% reduction in abandonment • 70% of answers from community • 50% reduction in call center staff • Content creation costs reduced by $
+1M
11
Redistribution Opportunity
Cost
Per
‘Ans
wer
’
$5
$3 $2
PwC
Efficiencies in talent acquisition & retention
12
100,000 data scientists solving commercial and public sector problems
PwC
Process efficiencies can feed back into high cost business functions, like marketing
13
PwC
Process optimization through collaboration
http://www.societyone.com.au/how-does-it-work 14
PwC 15 http://www.wired.com/design/2013/05/threadless-disney-t-shirts/
Sponsored design competitions for Thor, Monsters U, Iron Man, Muppets…
Faster innovation cycle time: Threadless
PwC
Warning: the days of taking a BAU approach to digital are well and truly over
Now Digital BAU Growth
16
Physical Only
Multi-Channel
Online Only
$100
Customer Value
$175
$45
Physical Only
Multi-Channel
Online Only
Churn
Loss in store & branch
sales
Growth
Channel growth in line with market
Physical Only
Multi-Channel
Online Only
Same # customers, lower value
Growth
Aggressive online
growth
Growth
Digital-driven store
sales
PwC
Develop organizational structure from siloed to integrated
17
Strategy Production Distribution Sales & Marketing Digital
Digital
Strategy Production Distribution Sales & Mrkt Advocacy
PwC
5 Characteristics of digital organizations
18
Strip out time & cost from innovation
Data is the lifeblood
Create networks not hierarchies
Experiment to reduce uncertainty
Digital is not an appendage