Melchers Senior Management Retreat Keynote – Introduction to the Digital Revolution

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Information about Melchers Senior Management Retreat Keynote – Introduction to the Digital...

Published on November 30, 2017

Author: PhilippKristianGDiek

Source: slideshare.net

1. Introduction to the Digital Revolution Introduction to the digital revolution 16 November 2014

2. Table of contents – a play in three acts 1. The Digital Shift • Prelude – three thought starters • Digital myths debunked • Digital business ideation 2. Digital for Business • Co-creation • Service digitalisation and automation • 3D printing • C2C business models • Internet of things 3. Global Megatrends • Mobile first • Digital culture • The cloud • Big data, analytics and programmatic Introduction to the digital revolution 16 November 2014

3. 1. The Digital Shift Introduction to the digital revolution 16 November 2014 'The future is not something we enter, The future is something we create.' – Leonard I. Sweet

4. Who of you does not have a smartphone? • The digital shift is rapidly re-shaping the world – it's changing your life, too. • 79% of Americans check their smartphone within 15 mins of waking up – daily • Reliance on smartphones looming in all dimensions of modern life • Mobile emerges the center of our digital universe Introduction to the digital revolution 16 November 2014

5. Mobile is key. • Smartphones – the small but potent digital brain always within our reach • The business value of anytime, anywhere, always on is substantial • Amazon Kindle and AT&T data partnership proves economic value of being connected exceeds cost, even in a global context • Major side-effect of mobile phone preeminence is an unhealthy dependence – e.g. people checking their phones > 150 times a day • Mobile is becoming second nature - 80% of us have imagined a phone vibrating in our pockets Introduction to the digital revolution 16 November 2014

6. Where's my robot butler? • Digital revolution meets human evolution – it's changing our planet, but is it influencing our nature? • Why do we see resurgence of relationship-driven commerce even though technology is making leap after leap to replace man with machine? • Warmth and competence – why the future will be more personal than the present • Relationship renaissance – human factor as a potent differentiator Introduction to the digital revolution 16 November 2014

7. It's 'back to the future'. • 'New economy' has a lot to learn from 'old economy' – and vice versa • While business ethos is honoring pre-industrialist conventions once again, infrastructure is radically changing, with adaptation key to remain relevant • Innovation paradox of the 21st century – the future as a better version of today, rather than futurist utopia Introduction to the digital revolution 16 November 2014

8. Who's in charge of our future? • Self-publishing a book, building your own online storefront, creating a professional website, printing collateral, ordering cargo, designing own apparel, sending faxes and printed letters, renting a stranger's house, knowing your ancestry and genetic health profile, finding a life partner, speaking with celebrities or applying for a job; all at our fingertips • We live in an age of incredible empowerment – what happens to the service industry, if people can (and want to) do it all themselves? Introduction to the digital revolution 16 November 2014

9. Platforms are the new products. • Yesterday's most valuable companies made products; today's most valuable companies make platforms that connect people for the purposes of exchanging and creating value and social capital • Digital companies compete on technology and data, using platforms as a substitute for industry experience and physical market presence • Similarities between e.g. The Melchers Group and LinkedIn – both create a trusted professional bridge, albeit in very different ways Introduction to the digital revolution 16 November 2014

10. Digital Myths Debunked Introduction to the digital revolution 16 November 2014

11. Digital is all about technology. • The so-called ‘digital shift’ is first and foremost a shift in mindset – technology is but a means to a 'job-to-be-done' • Take a basic human desire and facilitate its attainment through technology (Evan Williams, Twitter founder) Introduction to the digital revolution 16 November 2014

12. Example: GoPro - a 'digital native' company Introduction to the digital revolution 16 November 2014

13. Digital is only important to Gen Y • We live in an age where anyone’s life is infiltrated by digital, from toddlers and grandparents using tablets to royalty and CEOs tweeting about their public – and private – experiences. • Mindset of millenial generation, transparency, is becoming status quo; people are increasingly willing to give their data so long as they receive a reasonable value-add in return • Forbes – best way to access boardrooms is mobile, executives use nearly 4 web enabled (portable) devices on average Introduction to the digital revolution 16 November 2014

14. Asia leading in everyday smartphone usage Introduction to the digital revolution 16 November 2014

15. We operate in offline markets. Digital will make us look silly! • You operate in a digital world. • Digital isn’t about ticking boxes or just ‘doing something’ • A good digital strategy adds value to your bottom line, and customers Introduction to the digital revolution 16 November 2014

16. Maersk Introduction to the digital revolution 16 November 2014

17. Digital is only relevant for B2C business • B2B markets embrace digital innovations and markets • Examples: tablet and smartphone POS, payment solutions, tracking technology (YFind), SAP Hybris B2B commerce, etc. • B2B e-commerce to grow from 226bn to >2trn$ • Significance of apps and mobile websites in vendor selection – nearly everything is soon to be sold online (e.g. via SAP Hybris platform) • Huyett.com – selling machine parts online as an extension of the core physical business for scale and revenue, including technical drawings and dimensional illustrations required for informed purchasing; pickup highly encouraging despite traditionally 'offline' industry • M-commerce logistics used e.g. for cargo tracking, mobile inventory management, vehicle positioning and M2M Introduction to the digital revolution 16 November 2014

18. Example: Square . Introduction to the digital revolution 16 November 2014

19. We don’t need digital, we better focus on our core business. • Digital is engrained in our world nowadays and will soon be paramount support function for anyone's core business, regardless of industry • Remember the days when people refused to switch to computers? – they did eventually • Moving in the right direction early pays off Introduction to the digital revolution 16 November 2014

20. Why digital should be integrated in your core business • Forbes/Google survey of 500 executives; mobile is key to B2B, digital soon will become part of your core business • 90% of executives use mobile devices for business purposes while on business trips, including researching and making B2B purchases • Execs use mobile ads, apps & tweets, over half of senior executives notice and click on mobile ads, search most on mobile since 2010 • Within 3 years, 44% of execs expect a smartphone or a tablet to be their primary device for business • Other B2B trends: content strategy, business apps, internet of things Introduction to the digital revolution 16 November 2014

21. Digital requires capabilities we don’t have. • Build your digital toolbox! • Procurement of necessary, quality resources has never been easier • Investment/training resources required are smaller than one might assume, thanks to a host of intuitive digital solutions in the market • Learnings from 'The Lean Startup' apply to established companies - embrace a digital MVP, iterate, refine Introduction to the digital revolution 16 November 2014

22. Example: Zendesk – expert customer service reimagined Introduction to the digital revolution 16 November 2014

23. Example: Webflow – build custom coded websites in days Introduction to the digital revolution 16 November 2014

24. Traditional ways of doing business aren't relevant in the digital space • As aforementioned, digital shift is associated with a return to traditional preferences and business conduct – which is great news for players in the old economy that continue to practice them • Also, as offline is turning to develop digital competencies, digital is building offline capabilities (example: REDFIN) Introduction to the digital revolution 16 November 2014

25. Example: Google – technology in the driver's seat Introduction to the digital revolution 16 November 2014

26. Digital is another overhead. We're already paying enough for IT! • Digital-savvy companies extract more value from technology, plus they build valuable digital IP – the world’s hottest new companies today rely on digital assets that make for multibillion-dollar valuations. • Opportunity for extracting value from technology, realising substantial savings, improving efficiency and reaching new customers – from cost center to a proactive revenue generation and optimisation asset Introduction to the digital revolution 16 November 2014

27. We’ve been doing this for decades, digital cannot threaten our business. • Yes it can, and it will, sooner or later – digital is the primary reason for industry disruption nowadays • Clay Christensen, 'The Innovators Dilemma – when new technologies cause great firms to fail', companies stay comfortable until it's too late • Using digital to enable the hitherto impossible changes industry game and disrupts the status quo, with potentially dire consequences • Industries oblivious to new entrants are most endangered – within few years inexperienced players emerge and attain billion $ valuations Introduction to the digital revolution 16 November 2014

28. Example: Kodak – integrating photography and information technology Introduction to the digital revolution 16 November 2014 digitalisation of key component

29. Example: UBER – making a luxury service mass affordable Introduction to the digital revolution 16 November 2014 building an entrepreneurial network leveraging underutilised resources

30. Example: Amazon – making e-commerce user-centric and trustworthy Introduction to the digital revolution 16 November 2014 revitalising a saturated market with an online sales platform

31. Example: Nest – reimagining the thermostat with sense and aesthetics Introduction to the digital revolution 16 November 2014 adding a digital experience in an offline industry

32. Example: Airbnb – helping guests feel at home anywhere on earth Introduction to the digital revolution 16 November 2014 creating a customer-to-customer (C2C) business

33. Example: 23andme – empowering anyone to access their genetic data Introduction to the digital revolution 16 November 2014 making cutting-edge science mass affordable

34. Example: Google – searching the world for everyone, everyday Introduction to the digital revolution 16 November 2014 increasing relevance, reach and ease of finding information

35. Example: Flyeralarm – affordable professional printing at your doorstep Introduction to the digital revolution 16 November 2014 online mass customisation of an offline product

36. Example: Xero – efficient, collaborative cloud accounting Introduction to the digital revolution 16 November 2014 outsourcing non-specialised tasks to users

37. Example: Alibaba – empowering anyone to import/trade Chinese goods Introduction to the digital revolution 16 November 2014 creating a lean intermediary

38. Example: The Coolest – rethinking the drinks cooler for the 21st century Introduction to the digital revolution 16 November 2014 making analog products digital-ready

39. Example: Emotiv insight – a powerful low-cost domestic brain scanner Introduction to the digital revolution 16 November 2014 simplifying complex science in an intuitive user interface

40. Example: Arduino – enabling anyone to build electronic prototypes Introduction to the digital revolution 16 November 2014 accelerating complex learning curves through open-source and modularity

41. Example: Tesco – using smartphones to shop in a subway supermarket Introduction to the digital revolution 16 November 2014 merging digital and physical worlds

42. Example: Spotify – the world's music at your fingertips Introduction to the digital revolution 16 November 2014 transitioning from a product sales to a subscription model

43. Example: Cycloramic – high-definition panorama shots from your iPhone Introduction to the digital revolution 16 November 2014 using existing infrastructure to eliminate specialised hardware

44. Let's apply what we learned – a process for ideating digital solutions 1. Analyse user pain points with the status quo 2. Use 'digital thinking' to address opportunities and solve problems (simplify, add features, cut costs, create an engaging experience, improve efficiency, eliminate drawbacks, etc.) 3. Build an MVP with existing technology/software 4. Test with new/existing customers, build a commercial case 5. Develop a custom build and create digital IP 6. Launch, continuously improve Introduction to the digital revolution 16 November 2014

45. Example: Home air-conditioning Introduction to the digital revolution 16 November 2014

46. Example: Home air-conditioning 1. Analyse user pain points • Requires remote • Too many control buttons • Are accidentally left running when not at home • Expel water • Noise pollution • Servicing every 3 months • Use lots of energy, but unknown how much • No incentive to save resources Introduction to the digital revolution 16 November 2014 2. Use 'digital thinking' to address opportunities • SIMPLIFY Take online via WiFi, build an app to eliminate remote • ADD FEATURES Use AI data in app to show energy usage, noise levels, etc. and use data to Download weather information via wi-fi to regulate compressor and dehumidifier • IMPROVE EFFICIENCY Build algorithm learning usage patterns • ELIMINATE DRAWBACKS Warn user of leaks and pace service intervals when required • CREATE AN ENGAGING EXPERIENCE Launch online platform that automatically displays nearby air-conditioners and their current and daily/monthly energy usage on a map, and allows users to compare their consumption

47. Case study: Pre-paid card distribution Introduction to the digital revolution 16 November 2014

48. Case study: Pre-paid card distribution • Prepaid cards paradox – exchanging highly liquid for a restrictive and illiquid currency, requiring strong rationale/incentive • Modes – dollar-for-dollar versus 'extra' stored value incentives • Psychology of e.g. MRT prepaid cards – few load high amounts • Brand salience theory – degree to which a brand is thought about or noticed in a buying situation – essential for understanding appeal • TOM/POS influence, quantity/quality of memory versus ad-hoc stimuli • Potential for responsive promotions suited to local tastes, as done in financial services (e.g. woman's credit card) • Increase of liquidity through new merchant onboarding, value-added retail model (retailer to benefit from card beyond just margins) • Digital avenues to improve – create liquid currency to be exchanged for anything but cash in gift situation • Future trends – fusing loyalty rewards and gift cards, usage of NFC or low-freqency bluetooth plus web interface for contextual promotions • Example: phone reminder when walking past retail where gift card may be redeemed; optional one-off, timestamped incentive Introduction to the digital revolution 16 November 2014

49. Case study: Pre-paid distribution 1. Analyse user pain points • Expiry date, forget to redeem • Space consumption in wallet, easily left at home • Redemption process • Restrictions • Transferability • Currency dependence • No cash redemption • Value of desired purchase unqeual to value of gift card • Unaware of redemption locations Introduction to the digital revolution 16 November 2014 2. Use 'digital thinking' to address opportunities • Offer reminders (e.g. push notifications, calendar events, etc.) • Create virtual equivalent (e.g. tie in with existing digital wallets used by customers, or within their reach) • Use customers' virtual record/ID to process • Proactively push T&C to user • Allow access to easy online transfer process (where necessary) • Synchronise with real-time or daily exchange rate • Help user find matching product(s) for voucher value via online catalogue and algorithm • Use NFC and low-frequency bluetooth to situationally alert user and e.g. provide variable, time-dependent incentives

50. Case: LifX – reinventing the light bulb Introduction to the digital revolution 16 November 2014

51. 2. Digital for Business Introduction to the digital revolution 16 November 2014

52. Co-creation Introduction to the digital revolution 16 November 2014

53. Co-creation • Abundance of freely accessible information call for a change in the relationship between a business and its customers, from static and rigid monologue to dynamic, ongoing dialogue • Nowadays, we need not make many assumptions about customers – we have access to them, data about them and the possibility to easily involve them in our value creation process – we must trust them • Co-creation builds and/or deepens relationships between businesses and their clients, a mutual value-add • Co-creation at the strategic level dramatically increases the odds of new initiatives to succeed thanks to buy-in and iteration • Co-creation at the product/service realisation level is a key disruptor, enabling 'more for less' value propositions through increased efficiency – both offline (IKEA) and online (XERO) • Lean start-up methodology relies on co-creation with customers and offers valuable insight for any size business Introduction to the digital revolution 16 November 2014

54. Co-creation Introduction to the digital revolution 16 November 2014

55. Internet of Things • The fourth industrial revolution: IPv6 protocol opened the floodgates • Of tweeting turbines and empowered printer cartridges – welcome to the rise of 'intelligent objects'! • From inaminate objects to a sea of satellites making decisions based on data received, merging digital with physical worlds • Approximately 25bn connected devices by 2015, 50bn by 2020, and several hundred bns of IoT based revenue • Self-driving cars potentially the future of private and commercial traffic, Google piloting self-navigating cars as an offline investment • Factory-floor conversations between inputs and plant/equipment will allow for last-minute alteration of mass customised products, or real time customisation during the production process • Great opportunity yields greater risk and exposure to cyberterrorism • Opportunity for manufacturers – and intermediaries – to provide value added services using customers' connected devices Introduction to the digital revolution 16 November 2014

56. Service Digitalisation and Automation Introduction to the digital revolution 16 November 2014

57. Service Digitalisation and Automation • Proactive software – push notifications create positive reinforcement • Infinite possibilities to engage anytime – Hooked Cycle • Increasingly sophisticated algorithms accurately predict network actions and respond accordingly – e.g. Amazon, Grabtaxi • IFTTT – using simple logic to automate digital communication • Glocalisation of business by separation of tasks requiring physical presence from components that don't, and focusing on those that are easily digitalised – e.g. telemedicine • B2B use of twitter (instead of email/call) for critical updates for the purposes of reaching and updating decision-makers on mobile • Leverage of digital to enhance offline services, such as Coin • Ecosystem approach – building digital experiences by seamlessly connecting and associating offline and online information • RFID and other enabling technologies relying on software interface to wirelessly synchronise physical and information flows Introduction to the digital revolution 16 November 2014

58. 3D Printing Introduction to the digital revolution 16 November 2014

59. 3D Printing • Design thinking - rapid prototyping helps ideate and save resources • Decentralisation of certain (spare) parts manufacturing, with a global online interface updating designs simultaneously around the world • Dramatic cost reduction has seen versions retailing at a few hundred $(well suited for rough modeling) whilst more expensive models are still the weapon of choice for more sophisticated planning purposes • Fast technology cycles should soon see introduction of materials apart from plastic, and increase in variety/complexity of 3D printed objects • 3D Printing of simple everyday technology about to revolutionise many industries' production runs, with great possibilities to mass customise at very little cost (from credit cards to container seals) Introduction to the digital revolution 16 November 2014

60. C2C Business Models Introduction to the digital revolution 16 November 2014

61. C2C Business Models • From consumers to 'sellsumers' and 'prosumers', a shift of power and responsibilty, and increase in collaboration • Sectors relying on an intermediary business model (e.g. recruitment, trading, real estate, etc.) are seeing the rise of lean alternatives that offer only what customers really are willing to pay for • Primary value-creation of (lean) platforms lies in community regulation and establishing trust with all involved parties • Opportunity for connecting customers to collaborate with one another may add new value beyond the core service(s) offered • Enterprise Europe Network as an institutional, 'offline' C2C service Introduction to the digital revolution 16 November 2014

62. 3. Global Megatrends Introduction to the digital revolution 16 November 2014 The impacts of digital disruption are now so pervasive that no business in any sector – from the smallest family business to largest multinational – is immune from them. – PWC Global Annual Review 2014

63. Mobile First Introduction to the digital revolution 16 November 2014

64. Mobile First • 'Mobile will evolve the rules of engagement in your industry before this decade is out, qualitatively and quantitatively' • Mobile as the central intelligence unit of our digital existence • Da Vinci, simplicity is the ultimate sophistication – and paramount in a world of overflow, short attention spans and miniature screens • Rise of web-apps – welcome to your desktop of the future • If the value of connecting an individual 24/7 globally by far exceeds the cost – with future cost reductions not even accounted for – then everywhere internet access will become more proliferant than running water or electricity Introduction to the digital revolution 16 November 2014

65. Digital Culture Introduction to the digital revolution 16 November 2014

66. Digital Culture • The millennial – understanding mindset, behaviour and expectations of your future customers (and increasingly your workforce) • Value-add of personal (employee) and employer branding • Sharing and reviewing – behavioural patterns of endorsement and user generated content • Social capital networks –– from owned to embedded capital; ‘shared values that arises from (...) networks’; • Belonging, global village, and revival of local communities • #Hashtag – tagging and association culture and its simple business value (example: personal client hashtag) Introduction to the digital revolution 16 November 2014

67. Digital Culture • The power of online empathy and positive self-reinforcement – a tale of Clam Chowder and the superiority of the 'humane corporate' • Double entendre of digital 'ecosystems' – the global village and its self-regulating dynamics as a primeval protective mechanism • Brands need to curate/create 'content' – large shift for B2B business, laden with difficult questions (ex: electronics brand on social media) • Ecosystem response: why negative news travel faster on the internet • Self-regulation shortfall: decline of life quality through social media addiction, trolling, identity confusion and depressing content • Why digital democracy is bad news for some – exposure of IP, power balance between consumers and businesses, global competition and competitiveness (example: Lookfantastic.com vs corner drugstore) Introduction to the digital revolution 16 November 2014

68. The Cloud Introduction to the digital revolution 16 November 2014

69. The Cloud • SaaS – biggest trend in B2B, and predestined to create a win-win • Exponential increase in computing power and looming digital singularity – heavy investment in hardware is not smart anymore • From working on files to storing, sharing and collaborating on content • Empowered by radically improved AI, the digital brain of your organisation may soon become the 'content master' of your workforce • Cloud enables anytime, anywhere access, easy backups and flexibility, yet at the price of increased risk and compromised safety • New work cultures emerging suited to the younger generation and its different approach and work ethic • Exacting calibration of access rights and global control over systems • Risk of potential exposure – a problem with any web connected server Introduction to the digital revolution 16 November 2014

70. Big Data And Programmatic Introduction to the digital revolution 16 November 2014

71. Big Data And Programmatic • What if you knew which 50% of your marketing spend used to be lost? – from 'spray and pray' to buying audiences, interests and intent • Context – connecting offline and online user behaviour • Exposure – exacting control over the amount of times a user views an ad on the web, due to powerful (anonymised) tracking and predictive, anticipatory delviery of engaging and intuitive content for viewers • Big data is less about knowing the unknown – it is an efficient method for building and testing hypothesis – a mycel and a catalyst Biggest obstacle to proper use of a technology is the user itself – without the right inputs, there will be no quality output Introduction to the digital revolution 16 November 2014

72. Takeaways Introduction to the digital revolution 16 November 2014

73. Recommendations • Digitalise your business now and avoid the opportunity cost of leaving a global digital market for your goods and services untapped • Amplify your competiveness with technology instead of having another player leverage it to take over business from you • Find and claim your white space – good fit with current organisation x new or existing customers, served in fundamentally different ways Introduction to the digital revolution 16 November 2014

74. Your Building Blocks • Start-up tools – exploratory and iterative approaches, lean start-up methodology and intrapreneurship • Digital Ecosystems – building symbiotic relationships with customers and other businesses, using digital as a potent glue to enable new and mutually beneficial forms of collaboration and value exchange • Business Model Innovation – creating new opportunities in the white space, through fundamental new thinking Introduction to the digital revolution 16 November 2014

75. Your No.1 Mantra: Simplicity may be hard, but it's absolutely essential • People are inundated with information – attention is given to simple and engaging content, above all Introduction to the digital revolution 16 November 2014

76. The Melody of Digital Innovation • Innovation creates its own offspring – and a fertile ground for utilising newly gained digital expertise to keep improving and re-imagining • Companies transitioning to digital may be likened to a band such as The Beatles – from discovery, to evolving a style with each album, to success, fame and recognition, to incubation of new gems such as the Alan Parsons Project, evolving yet remaining true to legacy • Remember, the future is a better version of today. Introduction to the digital revolution 16 November 2014

77. Thank you! Introduction to the digital revolution 16 November 2014

78. Questions? Introduction to the digital revolution 16 November 2014

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