Digital Transformation Scotland 2017

Welcome to

Theo PriestleyConference Chair

@tprstly#digiscot

Ray BuggDIGIT

@digitfyi#digiscot

www.digit.fyiNewsViews

OpinionInsight

Get [email protected]

Ann Longley Disasters Emergency Committee

@AnnMargaret#digiscot

Secrets to successful organisational

change:

confessions of a change agent

Ann Longley, 23 February 2017

Topics for today

Why we need to

change

Change gone

wrongSmart change

Technological change is inevitable and unstoppable

Disintermediation

is wide spread

Disintermediation

is wide spread

Millennials have

high expectations

Disintermediation

is wide spread

The robots are

coming

Millennials have

high expectations

The pressure is

on to get it right

Topics for today

Why change Wrong change Smart change

Failure is common: the estimated cost of global tech failure is $3T USD

“By 2018, 70 percent of silo’ed digital transformation

initiatives will ultimately fail because of insufficient

collaboration, integration, sourcing,

or project management.”

IDC FutureScape: Worldwide CIO

Agenda 2016 Predictions

The pecking order is changing - ignore digital disruption at your peril!

The number of jobs to be lost to robots by 2021 will be 6%.

We will get it wrong if we ignore it.

The cost of failure: It’s expensive. It’s embarrassing. It’s career destroying.

Topics for today

Why we need to

change

Change gone

wrongSmart change

What kind of change is your organisationpursuing?

Catching up DisruptingKeeping up

How does this change impact onyour people?

New projectsNew skills, new

behavioursNew colleagues

How does this change impact onyour people?

New projectsNew skills, new

behavioursNew colleagues

Is it going to increase or decreaseworkloads?

Is it going to make people redundant?

All those factors impact

our ability to function

What happens to us when

we are anxious?

✤ we close down

✤ run away

✤ resist

We need to create the right

conditions for change

5 secrets to success

1. Your change programme needs a strong story

2. Engage your people - do it with them not for them

To get the outcomes

you want,

put smart triggers in

front of motivated

people

3. Strong leaders are needed to unite everyone

around shared goals and purpose

4. New ways of working help accelerate change

and break down silos

5. Manifest your culture in your working environment

and though your company’s values and behaviours

The reward?

You will be nimble enough to embrace

new digital opportunities

Your employees will become your ambassadors

and you will be prepared for anything

including the robots!

Thank you! [email protected]

mailto:[email protected]

Stuart McMillanSchuh

@mcmillanstu#digiscot

• Introduction

• What we measure

• Metrics that matter

• What should you

do with it?

• Applying Pareto

and Pragmatism

@mcmillanstu #digiscot

Stuart McMillan,

Deputy Head of Ecommerce

Insight & Action

Introduction

• Established in 1981

• 128 Stores in 3 countries

• High quality of execution

• Multichannel

• Website launched 1998

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


What we measure

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


What we measure

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


YOY % DIFF

Clicks Spend Orders Revenue Conversion Rate

PPC 22.30% 0.91% -4.51% 2.31% -21.9%

Email 6.16% 35.65% -25.34% -15.89% -29.67%

Affiliates 3.60% 72.89% 4.18% 13.49% 0.6%

Struq 238.55% 162.70% 232.61% 280.68% -1.76%

Paid 25.47% 2.32% 0.16% 8.30% -20.18%

SEO 9.95% 0.96% 6.89% -8.18%

Schuh

Cycle -7.74% -26.02% -19.93% -19.81%

Direct 7.08% 40.64% 60.06% 31.34%

"Free" 8.86% 10.84% 20.99% 1.82%

Totals 16.63% 4.95% 14.06% -10.02%

What we measure

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


• Sale vs. full price

• Sell-through

• Checkout abandonment %

• % of customers entering checkout

• Site speed

• Errors

• Session duration

• NPS

• NES

• User Generated Content

• Competitor activity (inc. traffic)

• Blog views

• Social Media interaction

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


Revenue

TrafficRevenuePer Visit

ConversionRate

Average order value

AverageSellingPrice

Items per

Basket

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


Cost ofSale

Time on site?

Interactions?Pages viewed?

Useful?

Interesting?

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


Drowning in a sea

of information

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


Case study 1

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


Case study 2

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


ROI

&

MVI

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


Knowledgeis nothing without

Understanding

Spend time and money on

people, not tools.• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism

@mcmillanstu #digiscothttps://www.kaushik.net/avinash/the-10-90-rule-for-magnificient-web-analytics-success/

• Introduction

• What we measure


• What should you

do with it?

• Applying Pareto

and Pragmatism


Stuart McMillan,

Deputy Head of Ecommerce

Thank You

Bill GemmellLeidos

@simplifywithus#digiscot

Harnessing Technological

Opportunity for Real Business

TransformationBill Gemmell, Head of Professional Services, PS&E

23/02/2017

• Translating Opportunity into Tangible Value

• Human Focused Change

• Impactful Analysis

• Digital Leadership

58 ©2017 LEIDOS. ALL RIGHTS RESERVED.

Creating Tangible Value

Meet Clive…..Digital Transformer

Haven’t checked my messages for at least two minutes……..

https://www.leidos.com/feature/intelligent-airports

Increased revenues

Happy Travellers

On-time departures


Human Focused Change

Meet Carole…..Digital Transformer

Meet Harry….

Meet Alexa, Harry’s new Companion

“It has afforded me something that I have lost. Memory. I can ask Alexa anything and I get the answer instantly. And I can ask it what day it is twenty times a day and I will still get the same polite answer.”

Spirits Raised

Care in the community outcomes

Latent Information


Impactful Analysis

Meet Phil…..Digital Transformer

Asset Management(Tech Forge)

GISManagement

(Map Info)

Document and ContentManagement

(Excel)

WorkScheduling(WebAspx)

Case Management(Siebel CRM)

Information Management

(Xpress)

Project and RiskManagement

(Project Vision)

Contact CRM(Siebel CRM)

Work Order Management(Civica Flare)

Work Order Management(Siebel CRM)

Work Order Management(Symology)

SpecialistControl Systems

(ASLAN)

Case Management

(Ocella)

SpecialistControl Systems(Traffic Lights)

GIS Management

(Cartology)

WorkScheduling

(Total Mobile)

Contact CRM(Tunstall)


(Verto)

Work Order Management(TechForge)

Work Order Management(Total Mobile)


(Covalent)

WorkScheduling(EGenda)

WorkScheduling

(Care Manager)

Contact CRM(FirmStep)

Contact CRM(Lotus Notes)

Case Management

(Axia)

Case Management(Foster Care)

Case Management

(ICS)

Case Management

(Raise)

Case Management

(Si-Dem)

Asset Management(Caspar)

Document and Content

Management(Goss ICM)


Management(Northgate EDMS)


Management(File Shares)

Council Property

Community Safety & Emergencies

Environmental Protection

Consumer Affairs

Transport and Infrastructure

Planning and Building Control

Information Technology

Adult Social Care

HRManagement

(Carval)

InformationManagement(Capita One)

InformationManagement(Capita eStart)


(Core IMS)

Information Management(CAF - Excel)


(Homelessness d/b)

InformationManagement

(Registrar)

Asset Management (Axiell)

Asset Management (Symology)

Asset Management (Civica APP/Flame)

Asset Management (Siebel CRM)

Asset Management (Centenial)


(EDMS)

InformationManagement(Land Terrier)


(Gower)


(Erimus)

HRPensions

HR SAP Payroll

Booking and Ticketing(TLMS)

Booking and Ticketing

(Blackbaud)

Finance and Procurement

(Caspar)

Finance and Procurement(Northgate

iWorld)

Finance and Procurement(Northgate eBenefits)


(Esker Deliveryware)


(Intech - Fraud)


(Credita)

Finance and Procurement(Capita Axis)


(SAP FI)

Case Management

(IAS)

Child Social Care

Education Services

Lower CostsNew Tech

and engaged employees

Connected services

From….. …..To


Digital Leadership


We need Digital Leaders who are:

• Bimodal

• Team Players

• Pioneers

• Humble

• Driven


Forget your job description. Turn everything you do into a transformation project. A project with a beginning, middle and end. A transformation project has an outcome you’re striving for. A job description has no end in sight, it’s a never-ending Mobius strip - you can’t escape its confines.

Digital Leaders understand this. Are you one?Can we help you be one?


Forget “Digital”, we just need leaders

Questions & Discussion

#digiscot

Refreshments & Networking

#digiscot

Our Next Event 23rd MAR

www.scot-secure.com

Welcome Back

Karl SmithParadigm Interactions Inc

@UserExperienceU#digiscot

Digital Transformation is About People

by Karl Smith @UserExperienceU

CEO Paradigm Interactions Inc.

Prioritise creating highly engaging

positive experiences

Focus on the simplification

of process

Avoid getting trapped in limiting

technology solutions

“As Technologies come and go, Customers are eternal”

Ensure transformation strategy

is evidence-led

Understand the relationship between culturepeople

& process

How you start will determine how you end

• Understanding the Issue (what is the problem being solved, don’t try and fix symptoms)

• Understanding the Context (how it is used, who uses it, does product or service meet the user requirements)

• Understanding the Market (competitor landscape, market imperatives, business risks and equality rights)

• Defining Knowledge Gap (the gap between what is provable knowledge and what is assumption)

• Define Baseline Metrics (core current metrics of situation)

• Define KPI's (core target metrics of future situation from Baseline Metrics, post deploy)

Only then Define the Methods and Processes

Digital Transformation is About People

by Karl Smith @UserExperienceU

Nathan FulwoodCreateFuture

@kidcamel#digiscot

Nathan FulwoodStrategy Director & FounderStrategic Creative Consultancy

The value of brand Engagement & experience How to get it right, quicker

B r a n d i s a r e l a t i o n s h i p

WHO YOU ARE WHO THEY AREYOUR STORY D THEIR STORY

YOUR ARTIFACTS N BELIEFS

YOUR INVITATIONS A ASPIRATIONS

CULTURE R BEHAVIOURS

BELIEFS B WANTS & NEEDS

PRODUCTS VALUES

PERSONALITY LOCATION

O R G A N I S AT I O N A U D I E N C E

Silicon Valley video

Percentage of spend on marketing & advertising that goes unnoticed or u n r e m e m b e r e d … ?

C R E A T E E X P E R I E N C E S

W i l l th i s engage my audience?Content, advertising, propositions,

services, products

T H E K E Y Q U E S T I O N

POINTOF

SALE

MARKETING

COMMUNICATION

CUSTOMER

SERVICES

MOBILE

AND

DEVICES

INFORMATION

GATHERING

WEBSITE&

E-COMMERCE

SERVICE

COMMUNICATION

SEARCH

DATA &

INSIGHTS

SOCIAL

MEDIA

FRIENDS &FAMILY

WORD OFMOUTH

AGENCIES&

SUPPLIERS

INTERNAL

STAKEHOLDERS

B R A N D

OUR CLIENTS PREVIOUS CLIENTS

D E S I G N S P R I N T S

‘Greatest hits’ - Google Ventures Sprint Process - http://www.gv.com/sprint

You can pack business strategy, innovation, creativity, behavior science and design thinking into one week.

http://www.gv.com/sprint

DAY O N E D AY T W O D AY T H R E E D AY F O U R D AY F I V E

A G R E E O N T H E M O S T I M P O R T A N T Q U E S T I O N


E X P L O R E P O T E N T I A L S O L U T I O N S


D E V E L O P A S T O R Y B O A R D


B U I L D A P R O T O T Y P E


T E S T W I T H F I V E C U S T O M E R S

Can Augmented Reality help customers understand complex topics?

Will customers want this new digital service offering?

What kind of video contentwill engage book readers?

How can we make companies aware of a pensions timebomb?

How can we engage hardcore gamers on social media?

T H I N K B I Gstart small

T H E C O S T O F D E L A Y

Prioritise the most important project questions and gain immediate feedback.

Value stream map - http://blackswanfarming.com/cost-of-delay/

£150,000 per week lost in delay.

http://blackswanfarming.com/cost-of-delay/

Take your staff with you

R E L A T I O N S H I P S N E E D W O R K

A S T R O N G BRAND:

Aligns your organisation with the needs of your

customer and gives focus and consistency

Gives you plenty of hypotheses to test and learn from

Translates your business purpose into something your

audience can engagewith

T h a n k y ou

I n p u tInternal leadership, management and employee insight

External client and stakeholder insight Communications ecosystem audit

Competitive/comparative set analysis

PurposeWhy you do what you do

Ambit ionWhat you aim to achieve

Proposition, brand story & themesWhat you will be known for (clients, stakeholders and talent)

OutputCreative platform/brief

Engagement principles and tacticsIdentity and design framework, education and guidance

Content, storytelling andmessaging

ValuesWhat you believe in

Brand character (visual & verbal)How you express yourself. What if feels like to work with you.

Personal insights provide the substance,authenticity and inspiration for a compelling and

sustainablebrand.

Informs decision-making throughout process.

Early engagement/consultation helps create

ambassadors for process and outcomes.

Gives your brand energy and drive that all

stakeholders can connect with.

Ensures communications aredriven by

audience benefit.

Structures content generation,storytelling

and messaging.

Defines the human side of your business.

Who you are and what’s important to you.

Differentiates you and helps all audiences

connect rationally and emotionally with

the experience and service you offer. The

brief to influence and inspire all creative

and communicationdecisions.

Motivates employees, builds personal

connection with clients and creates a

platform for profile inyour

marketplace.

Esther StringerBorder Crossing Media

@estherbcm#digiscot

@EstherBCM

Transform your thinking

+44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978

I My Job!


Imagine a better world and create it.

+44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978 1

4


4

?

1. Think about problems not solutions


4

Ask real people about their problems


4

What?

How?

Why?

When??

?

?

?

???? ???

???

?

??

?


Generative Product Research Generative Market Research

Questions

How can we solve the problem?

What form should this take?

How important is the design?

What’s the quickest solution?

What is the minimum feature set?

How should we prioritise?

Methods

Solution interview

Contextual inquiry/ethnography

Demo pitch

Consulting

Competitor analysis and usability

testing

Questions

Who is our customer?

What are their pains?

What job needs to be done?

Is our customer segment too broad?

How do we find them?

Methods

Customer discovery interviews

Contextual inquiry/ethnography

Data mining

Focus groups*

Surveys* (open ended)

* Not recommended


5

2. Phrase your customer problems in their

words


5

I need new

functionality


5

I worry about

my daughter at

night


5

Problems?

?

?

?

???? ???

???

?

??

?

Needs


> 95 % of companies Marketing

and Development managers don’t

agree on what a Customer need is

Source: Stratgyn.com


5

3. Define your customer needs


5

Customer need:

Bill needs to

have peace of

mind that his

daughter is safe

when she

travels alone at

night.


5

Problems?

?

?

?

???? ???

???

?

??

?

Needs

Prototypes


5

How might we?

Sharing travel info

from app

GPS tracker in neck

Auto text message

every five minutes

Push notifications

Don’t let girls out after

dark

Long piece of

thread

Follow herBreadcrumbs

Learn how to relax

and ignore it

Monitor her vital signs

Panic button


Evaluative Product/Market ResearchEvaluative Product Research Evaluative Market Research

Questions

Is this solution working?

Are people using it?

Which solution is better?

How should we optimise this?

What do people like / dislike?

Why do they do that?

Methods

Paper/Clickable prototypes

Usability

Hallway

Live

Remote

Functioning products

Analytics

Questions

Are they really willing to pay?

How much will they pay?

How do we convince them to buy?

How much will it cost to sell?

Can we scale marketing?

Methods

5 second tests

Comprehension

Conjoint Analysis

Data mining/market research

Surveys* (closed)

* Not recommended


Problems

1

6

?

?

?

?

???? ?

?

?????

?

??

?

Needs

Prototypes

Build


6

?1. Think about problems

not solutions

2. Phrase your customer

problems in their words

3. Define your customer

needs


6


0131 561 7300

[email protected]

mailto:[email protected]


#digiscot

Lunch & Networking

#digiscot

Michael Murphy Ryanair

@Ryanair#digiscot

© Ryanair 2014

2017

© Ryanair 2014

171

Always Getting Better: the engine of change in Ryanair

– Where we came from

– Why we changed

– How we are getting there

– What we have achieved

– What still puzzles us

Transformation in f l ight

© Ryanair 2014

Europe’s No 1 Coverage

172

Europe’s Lowest Fare

No. 1, Traffic – 119m p.a (+12%)

– grow to 200M by 2024

No. 1, Cover – 200 airports

No. 1 on service – on time/low cancellations

33 countries

1,800+ routes

340 x B737-800’s

330 x B737s on order

© Ryanair 2014

The Good Guys Of European A i r Travel

The Good Guys Of European Air Travel

© Ryanair 2014

Useful

Future

Today

Likeable

Become As Liked As We Are Useful

Become as Liked as we are Useful

© Ryanair 2014

Ryanair in Transition – From this...

© Ryanair 2014

Ryanai r in Trans i t ion – To th is…

Ryanair in Transit ion – To this. . .

© Ryanair 2014

177

2000 – Launched its first website.

– Built by two 17 year old school students

Ryanair IT – Where we came from

© Ryanair 2014

Europe ’s Favour i te A i r l ine

178

– Within 3 months it was taking 50,000 bookings a week.

© Ryanair 2014

Ryanair IT – 2000-2014

© Ryanair 2014

The Problems We Faced

© Ryanair 2014

Negative Feedback Faced

© Ryanair 2014182

2014 - Change in Ryanair – Always getting better.

– Improve the flying experience.

– Broaden the appeal.

– Improve our product.

– Keep the focus.

– Embrace Digital.

Vision

© Ryanair 2014

Ryanair Labs – Head Off ice

© Ryanair 2014184

Ryanair Labs –AGB program powered by IT.

Open Nov 2014

State of-the-art digital & IT innovation hub

New focus on customer first

What we do?

– External customer facing channels – website, booking engine, mobile apps.

– Internal systems.

– Bring innovation and technology to the travel industry.

– Leveraging machine learning & Big Data

Currently > 200+ staff

Ryanair Labs – core strategy

© Ryanair 2014

Europe’s Leading Travel Experience for customers

Improving the customer experience

© Ryanair 2014186

New mobile app

New website

Personalisation

Increase ancillary sales

Create new products

Become the Amazon of Travel

The chal lenge

© Ryanair 2014

• New Website & App• Reduced Fees• GDS & Corporates• Business Plus• Family Extra• Free 2nd Bag• Allocated Seating

• Car Hire• Native App• Social & Blog• Reduced Sports Fees• Customer Charter• 3rd GDS Partner• US Website• New interiors - Dec• New Uniforms - Dec• Defibrillators - Nov• Hold A fare - Oct• New Web & App - Oct• More Primary Apts• Insurance - Oct

Year 1 Year 2 Year 3

• Rate my Flight • Auto Check in• My Ryanair Club• One Flick Purchase• Bag fees• Event discounts• New - Leisure Plus• Improved – Bus. Plus• Digital Vouchers

Always Get t i ng Be t te r T rans fo rms Ryana i r

© Ryanair 2014

The Solution

• Customer First

• Cross-functional teams

• Bias towards actions

• Don’t hate - iterate

© Ryanair 2014189

Ability to react rapidly

Early delivery of features

Frequent delivery of features

Faster feedback on products

Faster feedback on processes

Why Agile

© Ryanair 2014190

Agile in Ryanair : Single product owner

© Ryanair 2014

Embrace new technologies

© Ryanair 2014192

Agile in Ryanair : Communication

© Ryanair 2014

DevOps & the 4th

Industrial Revolution :• Speed of delivery to production has evolved from a single delivery/week

to multiples in a day.• Information radiators, build screens & dashboards now in prominent

areas of development floor, moved from infrastructure to web monitoring.

• Traditional Infrastructure engineers are being reborn as Operations engineers – higher up in the Systems stack.

• We are now comfortable with trending towards a cloud-first strategy for any new app deployments.

Agile in Ryanair : Frequent releases

© Ryanair 2014

MOBILITY SECURITY BIG DATACREATIVE

LABS

DATA VISUALIZATION

PersonalizationAirline

Technology

RESEARCH & DEVELOPMENT

Agile in Ryanair : Embrace new ideas

© Ryanair 2014

Responsive Website:

– 10M visits on Smartphone

– 6M visits on Tablet

– 1.5M visitors daily

Native App launched in March 15

– 18.5M downloads on iOS and Android

– 4.8M active users monthly

– The number of bookings per day on the app has increased 700%• Now responsible for 15% of overall bookings

8

Has it worked? – The Data

© Ryanair 2014

Continuous Struggle

Rapid Delivery v UX/UI

Reaching for the perfect productLong term viewDaily releases

MVPSimple Designs

© Ryanair 2014205

Home to hotel bedroom and how we can make it better

Location aware communications

Better digital integration with airports

Inflight entertainment & Wi-Fi onboard

Support for wearables

Digital Wallets

Amazon of Travel

Where next

© Ryanair 2014

Leave you with 3 simple messages :

Personalization is the force behind the

change in Ryanair

Open platforms power innovation and

facilitate customer satisfaction

Get it going, lots of frequent change

required - do not be afraid

I f you remember 3 things

Martyn WallaceScottish Local Authorities

Digital Office

@Digital_MW#digiscot

Business Creation/Expansion/

Employment

Big Dataand KPIs

Council Facility Usage

Transport

Care of People

Community SafetyBuilding Stock

Tourism

Energy Consumption

Education

Improve workforce

effectiveness, with

secure digital networks,

devices and tools that

transform ways of

working

Get closer to

customers and

communities through

innovative use of digital

technology

Cut out wasteful

processes, with

technology like

Internet Of Things or

Big Data & Artificial

Intelligence

It's not just about online transactions , we need to look at the steps of every frontline process and search for unlockable data to drive efficiencies and change

212

The Digital Layer Cake

Transform

DIGITAL

LEADERSHIP

Deliver – DIGITAL SERVICES

Disrupt – Culture, Business Rules, Customer Interactions, Data,

Discover – FOUNDATIONS :The Technical Platform

Digital Council Digital Places

Dr Jim HamilStrathclyde University

CONFIDENCE

I understand my business needs

•Cost Reduction

•Improve service

•Streamline process

I understand Digital

•The terms

•Methods

•The technology

•The impact

•Innovation

I have the necessary skills

•In house

•Personally

•I can and have authority to innovate

Technology is easy to use

•For Citizen

•For staff

•For me

Its Secure

•But not business prohibitive

Digital will Support & deliver

•Outcomes

•citizen

•staff

•council

Ambition

How else can I used Digital to ..

•Reduce Cost

•Improve service

•Streamline process

Digital underpins

•Redesigning process

•Break Tradition

•Creating new opportunities

•New business models

•New Revenues

How can I hone skills to create

•New Careers

•New culture

•Authority and environment to innovate

Technology adapts & evolves to support

•Citizen

•Staff

•Council Services

•me

Security at the heart

•Understanding

•Mitigated steps to protect assets

Digital Evolution Support & deliver

•Outcomes

•citizen

•staff

•council

delivering better outcomesDigital can deliver savings at the same time as improving quality of life

Quality

Of

Life

Public Services Economy

Increased

Economic

Activity

• Increased

Participation

• Community

Empowerment

Inward

Investment

• Reduced Failure Demand

• Proactive rather than

Reactive Services

• Better Partnerships

• Improved Efficiency and

Cost Savings

• Improved Decision-Making

• Improved Market

Insight

• New Markets

• Innovation

Opportunities

• Business Growth

• Improved Achievement and

Lifelong Learning

• Better Health and

Independence

• Reduced risk of crisis

• Reduced inequality

Improved

Resiliency

and

Sustainability

Digital Place

Sara Green BrodersonDeemly

@SaraBroderson#digiscot


#digiscot

Andrew DobbieMadeBrave

@dobbieandrew#digiscot

ANDREW DOBBIEFOUNDER

/DOBBIEANDREW

BENEFITS OF BEING BRAVE

/MADEBRAVE

@DOBBIEANDREW @MADEBRAVE

TwoWeekoldbaby

Crappy office

£1kpersonal cash

EST

2012in a recession

BRAND-LED DIGITAL CREATIVEAGENCY

DESIGN | BRANDING | DIGITAL |SOCIAL

ANDREW DOBBIE FOUNDER/CD/MD

JILL MOFFATHEAD OF DIGITALPROJECTS

EMMA STRAIN ACCOUNT DIRECTOR

JADE MACFARLANE SENIOR DESIGNER

PETER PELOSI SENIOR DESIGNER

EMMA FAULKNER GRAPHIC DESIGNER

ASA RODGER GRAPHIC DESIGNER

DAN SIMMON GRAPHIC DESIGNER

JOHN HYLAND ARTWORKER

HANNAH DAVIDSON PA / OFFICE MANAGER

STEPHEN WEIR OPERATIONS DIRECTOR

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George Elliott – Driving Collaboration & Seizing OpportunityDigital Transformation Conference, Our Dynamic Earth, Edinburgh, 23 February 2017

George Elliott - snapshot

▪ Grant Thornton - 15 years (7 as a partner)

▪ Over 25 years working in the tech sector:

▪ Listed companies - Main Market (3) AIM (6)

▪ 3 IPOs – Wolfson, Craneware, Cupid

▪ Latterly focused on early stage and fast growing companies

▪ Board level/executive responsibility for:

▪ Business development

▪ Sales & marketing

▪ Production

▪ Finance

▪ Since 2007 non-executive chairman/director of 18 companies

Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 280

George Elliott - currently non-executive chairman/director of

▪ Craneware plc Software Non-executive chairman

▪ Calnex Solutions Ltd Hardware Non-executive chairman

▪ Cooper Software Ltd ERP consultancy Non-executive chairman

▪ Optoscribe Ltd Component manufacturer Non-executive chairman

▪ Visionware Ltd Software Non-executive chairman

▪ Par Equity Holdings Ltd Venture capital Non-executive director


Presentation is based on

▪ My personal observations and experiences over the last 25 years working with tech companies that transformed themselves

▪ Why tech is important to Scotland

▪ The culture within Scottish tech companies and why it needs to change

▪ What Scottish tech companies can do to compete and win on the global stage


George Elliott - innovative tech companies that I have worked with

▪ Services “Claim to fame” Current Status

▪ McQueen First multi-lingual, multi-currency call centre in Europe Acquired by Sykes

▪ Hardware

▪ Calluna Invented the 1.8 inch hard disk drive Dissolved

▪ MicroEmissive Displays Invented the world’s smallest OLED micro display Dissolved

▪ Wolfson Audio chip designed into Apple’s iPod and iPhone Acquired by Cirrus

▪ Calnex First 100G tester for Ethernet synchronisation Private company

▪ Optoscribe Manufacture high performance waveguides Private company

▪ Software

▪ Craneware Software and support services for US hospitals Public company

▪ Two Big Ears 3D audio for VR and AR applications Acquired by Facebook


Why tech is important to Scotland

▪ Scotland has the raw materials:

▪ Deep and long history of innovation and invention

▪ 14 campus based universities - 3 ranked in world top 100

▪ Cost structure and flexible working practices

▪ Ecosystem is growing - incubators, angel syndicates, private equity companies, network organisations, government agencies, etc.

▪ It’s IP based therefore more flexible and less capital intensive than traditional sectors

▪ One of the fastest growing sectors:

▪ Electronics sector in Scotland’s Top 500 companies grew by 63% to >£2b in 2016 (compared with 7% decrease overall) (Source: Business Insider Jan/Feb 2017)


Why tech is important to Scotland - but!

▪ <50 public companies in Scotland (excluding financial institutions)

▪ Only 4 listed tech companies in Scotland (150 UK):

▪ Craneware, FreeAgent, Indigovision, Iomart

▪ Fast growing companies in Scotland tend to sell-out rather than reach their potential

▪ Building global tech companies is not in our DNA – yet!

▪ We should be punching above our weight:

▪ Skyscanner and FanDuel should be the norm


Scotland’s ecosystem is not yet configured to reach its potential

▪ Universities

▪ Research rather than commercially focussed

▪ Stakes in spin-outs much higher than in the US

▪ Government and other agencies

▪ “There is a dire need for Scotland to draw up a 30-year blueprint to achieve its immense economic potential.” (Source: Sunday Times 5 February 2017)

▪ Lots of initiatives but not coordinated

▪ Business community

▪ Needs to become more entrepreneurial and commercially focussed


Seizing the opportunity – “The State of European Tech 2016”, report by Atomico, November 2016

▪ The future is being invented in Europe

▪ Europe has acquired real traction in what is termed “deep tech”

▪ Artificial intelligence - machine learning, data mining, big data, speech recognition

▪ Frontier hardware - robotics, drones, radar, 3D printing, nanosatellites

▪ Virtual and augmented reality

▪ The internet of things - wearables, smart home, smart city

▪ Why Europe?

▪ Moving from the consumer internet to the industrial internet

▪ Europe has the technological, financial and human assets to flourish in the digital economy

▪ Cultural change – companies are now determined to shape their own destiny


How do we change our culture?

▪ Concentrate more on building companies rather than products

▪ Think bigger - global rather than local

▪ Focus more on the market than the technology

▪ Get “real” about planning

▪ Recruit experienced people early

▪ Develop your leadership and management skills

▪ Get out and talk to potential customers, influencers, competitors, etc.

▪ Learn from successful companies

▪ “Fail” fast


How to compete and win - simple questions

▪ What problems/issues does your company’s technology solve?

▪ Do you know your addressable market, the key drivers, competitors, trends, etc.?

▪ How should you position yourself?

▪ Is your business scalable?

▪ What are your channels to market?

▪ How do you protect your intellectual property?

▪ How do you recruit, retain and motivate the staff you need?

▪ How do you reverse into the future?

▪ Do you know what you are worth?


Craneware – case study

▪ Keith Neilson and Gordon Craig founded the company in 1999

▪ Identified an opportunity for automating billing requirements in US hospitals

▪ IPO in 2007 on AIM

▪ Software used by >25% of all registered US hospitals

▪ Chargemaster Toolkit® ranked No1 product for revenue cycle by KLAS since 2006

▪ Headquartered in Edinburgh with US offices in Georgia, Tennessee, Massachusetts and Arizona and employees over 200 staff

▪ Market capitalisation IPO £32m, currently £334m


Two Big Ears – case study

▪ Abesh Thakur and Varun Nair two Indian nationals founded the company in 2013

▪ Company founded to commercialise research work undertaken by the founders on 3D binaural audio technology and augmented reality systems at the University of Edinburgh

▪ May 2014 Neil Heywood and George Elliott put in seed capital and joined the board as non-executive directors

▪ Company used social media to bring its technology to games developers who were developing content for VR and AR applications.

▪ Main competitor Dolby

▪ Founders presented at seminars and trade shows in California to present technology and meet key players in the industry

▪ Company purchased by Facebook in 2016 for an undisclosed sum. Founders now work for Facebook


Conclusion

If you have a technology/product that:

▪ provides a solution to a real problem for

▪ a large addressable market which

▪ you have worked out how to access

then you should be able to

▪ build a team that will

▪ build a company

that will potentially become a global player


Thank You

Digital Transformation Conference, Our Dynamic Earth, Edinburgh, 23 February 2017

Appendices

Digital Transformation Conference, Our Dynamic Earth, Edinburgh, 23 February 2017

Hunting for growth – Technology sector’s enduring appeal

The Technology sector has delivered the highest median

earnings growth historically (2003-2012).

The sector is also expected to deliver the highest growth

median earnings growth in the period 2014-18

Structural drivers of growth with Technology pervasive in all

business sectors

Consistent earnings growth, particularly in Software and IT

services sub-sector.

Sector earnings growth, ex Oil & Gas, Mining and Financials Tech Sector earnings growth

Tech Sector earnings growth, ex-hardware

N+1 SINGER

295

Investing in the UK Technology sector

Highly attractive sector for growth

Relatively small investible universe, even

before ARM Plc’s sale to Softbank (de-listed

6/9/2016)

In the UK, the Tech sector (including

payment companies) represents c. 2% of the

market (Main List and AIM).

As a comparison, in the US, the Technologysector represents c.21% of the S&P 500

UK sector size vs. earnings growth profile

Distribution by market cap

17% of companies (26 companies) represent

83% of market value

Average market cap is £272M but the

median market cap is £41m

Limited investor choice

Gap in the market

No. of companies %Market Cap (£'000) %

Over £1bn mkt cap 7 5% 24,903 61%

£500m-£1bn 9 6% 5,770 14%

£250m- £500m 10 7% 3,192 8%

£100m-£250m 21 14% 3,283 8%

£50m-£100m 31 21% 2,153 5%

Under £50m 72 48% 1,386 3%

Total Tech Sector 150 100% 40,686 100%

N+1 SINGER

296


#digiscot

Drinks &

Networking#digiscot

Thank youSee you in 2018!

www.digit.fyi#digiscot

Digital Transformation Scotland 2017

Technology

Transcript of Digital Transformation Scotland 2017