Welcome to Life in the Digital Vortex

1 © 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Digital Vortex

April 6, 2015

Leah Lewis, Director Digitization Strategist

How to stay ahead of the dizzying pace of change ushered in by IoE/IoT


The Digital Vortex is a Relentless and Chaotic Force

© 2015 Global Center for Digital Business Transformation. All rights reserved.

•  Exponentially accelerating Digital Disruption

•  It pulls all industries toward the center

•  Industries are breaking apart and recombining

•  The center is the “new digital normal”


To Understand the State of Digital Disruption, We Conducted a Study

Assess how industries are adapting to this chaotic force:

Interviewed with 941 business leaders across 12 industries and 13 countries

Analysed market data, looking at investment, timing, means, and impact

Ranked industries according to their proximity to center of the “Digital Vortex”

© 2015 Global Center for Digital Business Transformation. All rights reserved.

Global Center for Digital Business Transformation


Digital Disruption has Created an Urgent Need for Transformation

1 In the “Digital Vortex,” 40% of top ten incumbents will

be displaced.

It could happen in 3 years, yet nearly half of

companies are not taking action.

3

2 Companies must chart their own

course to digital transformation

This requires challenging assumptions, changing

organization, culture, and business models

In the Digital Vortex, whatever can be digitized

will be digitized

Disruptors are splitting and recombining industries to create “combinatorial

disruption”


The Study Ranked the Industries Most Likely to be Disrupted

Source: Global Center for Digital Business Transformation, 2015

Telecommunications

3.7average

In your industry, howmany companies will losetheir place in the top 10due to digital disruption(over next five years)?

Oil & Gas

Pharmaceuticals

Financial ServicesEducation

Healthcare

Technology Products & Services

CPG & Manufacturing

Hospitality / TravelRetail

Utilities

Media & Entertainment

Fewer companies at risk

More companies at risk

4.3

surveyquest ion

2.5

In your industry, how many companies will lose their place in the top 10 due to digital disruption over next five years?

What will your company be?

Disruptor or Disrupted

43%

37% Average

25%


Definitions

Source: Global Center for Digital Business Transformation, 2015

Digital Enterprise

An ideal end-state whereby an enterprise is fully technology-enabled and optimized.

Digital Transformation (Digitizing)

The process by which an organization becomes digital.

Digital Disrutption is a force that amplifies competition: which can come from any anyone, at any time and from any industry


Digital Disruption: Top 3 Impacts

2.  Industries will split and recombine – aka “Combinatorial Disruption”

1.  Every company will be a “Tech”

3.  Real Time is too late


Digital disruption threatens

all types of organizations

Digital Disruption Is a Constant Force

Digital disruption

creates new value

What is fueling the Vortex? •  The Internet of Everything/Things •  The Modern Consumer •  The Modern Employee


Delivering the right information to the right person (or machine) at the right time

Process

Physical devices and objects connected to the Internet and each other for intelligent decision-making; often called Internet of Things (IoT)

Things

Connecting people in more relevant,

valuable ways

People

Leveraging data into more useful

information for decision-making

Data

The Internet of Everything Is Fueling the Digital Vortex


The modern consumer is fueling the Digital Vortex


Born with cell phones in hand, they account for more than 1/3 of the US labor pool and represent tremendous spending power

The Modern Consumer: How Millennials are Fueling Disruption

1.  Millennials expect technology to work 2.  If it doesn’t work on mobile, it doesn’t work

3.  They are the first social generation and they socialize while consuming or deciding to consume your products

4.  They demand self-service options, and crave a personalized experience

5.  They are passionate about values, including the values of the companies they do business with


…so is the modern employee


The anytime, anywhere workplace

The Modern Employee: How Millennials are Changing the Workplace

1.  Mobile & flexible workspaces are a must 2.  Performance is measured in results not time behind the desk

3.  Globalization, the increase in freelance workers and competition are driving anytime – anywhere workspaces

4.  This talent pool picks companies that match their values, so your brand is important


Examples of Digital Disruption


Industry Boundaries Are Dissolving

Oil & Gas Transportation Technology Electric Utilities

Industries Being Unbundled

Automotive


Digital Disruption in Sports

•  Fantasy Sports or Betting?

Every event, every fan, every sport

"As fans choose between the sofa and the stands, teams can’t just fix pain points in the stadium experience, they must create and extend moments of joy that can only be experienced at live events.” Brian Quinn, Principal, Doblin

•  Merchandise

•  Fan Experience / How do you watch?


Digital Disruption: A Competitive Edge for Elite Athletes

•  Competing / Training •  Connecting to the Event


Industry Transformation

Retail Financial Services Public Sector Oil & Gas Manufacturing


Digital Transformation’s Impact On The Global Economy

Healthcare $1.4T

Manufacturing $6.4T

Oil & Gas $1.1T

Financial Services $3.1T

Retail $2.8T

Top 10 industries for Digital Value at Stake, 2015-2024

Service Provider $2.0T

Transportation $845B

Administrative / Waste Management

$899B

Construction / EPCM $779B

Arts / Ent. / Recreation

$706B

Source: Cisco, 2015


Top Private Sector Opportunities by Industry

Manufacturing

1.  Predictive Maintenance (Analytics) 2.  Quality & Defect Controls

Automation 3.  Energy Management 4.  Connected Products Maintenance 5.  Remote Maintenance 6.  Visual Factory 7.  Assembly Line Changeovers

Financial Services

1.  Omnichannel Capabilities 2.  Mortgage Advisor / Video-based

Experts 3.  Wealth Management — Asset

Transfer 4.  Mobile Banking & Payments 5.  Self-serve Segment / Direct

Relationship 6.  Virtualized Delivery Model 7.  Claims Management

Retail

1.  In-store Analytics 2.  Remote Expert 3.  Theft / Physical Security 4.  Endless Aisles 5.  Checkout Optimizer 6.  Smart Lockers 7.  Out-of-stock Optimizer

1.  SP as an IOT Enabler 2.  Network Transformation 3.  Personalized Service (Analytics) 4.  Churn Control 5.  Intelligent Marketing 6.  Safety and Security 7.  Home Network Remote Access

Telecom SP

Healthcare

1.  Patient/Medication Safety 2.  Predictive Equipment

Maintenance 3.  Big Data Analytics 4.  Administrative Process

Automation 5.  Physician Performance Analytics 6.  Consumables Tracking 7.  Healthcare Claims Management

Oil & Gas

1.  Recovery Efficiency 2.  Lifting-Process Automation 3.  Remote Monitoring 4.  Drilling Optimization 5.  Project Planning 6.  Oil-spillage Control 7.  Spares / Inventory Management

Transportation

1.  Predictive Maintenance 2.  Analytics-driven Fuel

Efficiencies 3.  Driver Efficiency 4.  Connected Train 5.  Smart Stations 6.  Below-Wing Operations 7.  Connected Track & Trackside

“Horizontals”

1.  Mobile Collaboration 2.  Digital Advertising 3.  Cyber Security 4.  Smart Grid 5.  CoE for Support Functions 6.  Supply Chain 7.  Connected Workplace 8.  Telecommuting 9.  SME Virtualization 10. Payments

$23.8T Private Sector

Source: Cisco, 2015


Financial Services


* For $10 billion bank (U.S.) or $5 billion bank (all others)

Source: Cisco, 2014 (7294 global respondents)

Customers want high-value services anytime, anywhere

75% would move their money

for one or more digital concepts, including: 1.  Mobile Payments

2.  Virtual Financial Advice

3.  Virtual Mortgage Advice

4.  Automated Advice

5.  Branch Recognition

Banks can improve loyalty using digital transformation

Implementing digital concepts to improve advice and create convenient and contextual customer experiences can deliver profit increases of

*up to 15.2%

The Financial Services Industry is Experiencing an Erosion of Customer Loyalty…

Source: The Advice Advantage, Cisco 2014


Kenya’s Financial Transformation: Impacting Global Banking Safaricom’s M-PESA

Want to text money? Kenya's been doing it for years The future of money is already happening in Kenya where a mobile phone-based payment system was born out of necessity. CBS 60 Minutes November 19, 2015

How did a cellular provider become a bank? 1.  Born out of necessity

2.  Improved Safety

3.  “Bankless Banking”

4.  Sparking development in rural areas

5.  85,000 Kiosks


“Neo-Banks” Specialize in mobile or online banking, without a bank charter

Technology Companies

Payment Companies

Automated Investment Services

Digital-Only Banks Fully chartered

Retailers Provide branded financial services

Moving into traditional banking space

… And New Comers Are Ready To Capture This Market

Source: The Advice Advantage, Cisco 2014


Retail


Social

Apps

Mobile

Big Data

Evolving Consumer Expectations Are Disrupting the Retail Landscape

U.S. omnichannel retailers with Facebook pages

(Q1 2014)1

1: The E-tailing Group, 2014; 2: ComScore, 2014

94%

U.S. shoppers that use mobile retail apps at least

weekly while shopping

64% retailers that foresee significant growth in

amount of data captured by their networks

88%

year-over-year growth of mobile commerce

(Q2 2014)2

47%

Retail Disruption

Same customer, different shopper

The customer’s needs change with each interaction

Technology Customer Expectations


Digital Retail Concepts Delivers an Integrated, Hyper-Relevant Shopping Experience

Hyper-Relevance enables consumers to receive what they want, when and how they want it Source: The Hyper-Relevant Retailer, Cisco 2014


Public Sector


The Public Sector Will Have a Huge Impact on the Economy

Cities $817B

Digital Value at Stake, 2015-2024

Healthcare $709B

Education $101B

Infrastructure $538B

Transport $282B

Defense $1.7T

Employee $1.8T

Public Sector $5.9T

Source: Cisco, 2015


How many people are moving into cities around the globe…per hour?


A 10 ppl/hr B 100 ppl/hr C 1,000 ppl/hr D 10,000 ppl/hr


Cities worldwide are urbanizing at the rate of… 10,000 people per hour!

Equivalent to one new LONDON every month!


Rapid Urbanization Requires Digital Transformation

Traffic Congestion Mass Transit

Parking

Affordable Housing Attracting Skilled Workers

and Talent

Social and Environmental Sustainability

Public Safety, Preparedness, and

Resiliency

Safer Greener Faster

More Responsive Accessible Sustainable

Livable


Pervasive connectivity


…is creating a fully connected, unsurpassed citizen experience

P


Top Public Sector by Category $5.9T Public Sector

City

1.  HH Gas Management 2.  Smart Lighting 3.  HH Electricity Management 4.  Video Surveillance 5.  HH Water Management 6.  Smart Buildings 7.  City WiFi 8.  Tourism 9.  Smart Lotteries 10. Water Management 11. Disaster Response 12. Waste Management 13. Fleet Management 14. Wildfire Suppression 15. Pedestrian Analytics 16. Building Water Management 17. Correction Visits 18. Snow Plows 19. Offender Transport 20. Emergency Text/Voice

Education

1.  Connected Learning 2.  Higher Education 3.  Campus Wi-Fi 4.  Campus Student Services

Transport

1.  Expressway Management 2.  Congestion Charging 3.  Local Metro 4.  Parking 5.  Railway passengers (PS) 6.  Traffic control 7.  Connected Bus 8.  Connected Fleets

Infrastructure 1.  Patient Benefits 2.  Hospitals 3.  Particulate Monitoring 4.  Noise Monitoring 5.  Allergen Monitoring

Healthcare

1.  Smart Transmission Grid (PS) 2.  Open Data 3.  Cybersecurity (PS) 4.  Fast IT 5.  Next-Generation Broadband 6.  Bridge Monitoring 7.  Connected Stadium .

Employee

1.  Mobile Collaboration BYOD (PS) 2.  Collaborative Connected Workplace 3.  Telecommuting (PS) 4.  SME Virtualization 5.  Remote Kiosks 6.  Business Travel Avoidance (PS) 7.  CoE for Support Functions 8.  Virtual Attendants 9.  Virtual Trainer 10. Virtual Desktop Saving (PS)

Source: Cisco, 2015


Even with the Risk of Market Turbulence, Most See Digital Vortex as a Force for Good

…is a form of progress

…improves value for

customers

Digital disruption…

(75%)

(72%) …empowers individuals

(66%)

…is good for society

(63%) …improves quality of life

(63%)

Respondents who “somewhat” or “strongly” agree with each of these statements Source: Global Center for Digital Business Transformation, 2015


…But Most Companies Are Not Responding

Does not recognize or is not

responding appropriately

Taking “follower” approach

Actively responding

43%

32% 25%

Responses to Digital Disruption

In general, what is the attitude of your company’s leadership toward digital disruption?


…So How Do We Get Started?

1.  Boardroom Mindset 2.  IT’s New Roles

3.  Fast IT – An Operating Model

4.  Assess Your Digital Maturity

5.  Focus on the Network as the Platform

6.  Turn Data Into Insights


Digital Transformation is a Boardroom Mindset Changing Culture, Technology and Business Models

UPS My Choice Delivery Control

Personalized Service

Customer Experience Physical and Virtual

RFID Content

Workforce Efficiency WIP Inventory and

Part Tracking

American Express Personalized Service

Through Mobile


Starbucks Apps Order Ahead Skip the Line

3 Attributes for Success: Hyper Aware, Predictive, Agile


Optimizer Optimize business processes

Machine 2 Machine / Augmented Decisions / Analytics

Efficiencies – digitize everything and everywhere

41

IT’s New Roles

Accelerator Take ideas and move them to production quickly

2.0

Accelerate time from innovation to exectuion

Distributed Connectivity and Intelligence

Enabler Provide the platform for Innovation

Reduced Costs (Opex and Capex)

Faster Response Times to Customer Needs


Digital Transformation Requires “FAST IT” An IT Operating Model

Reduce Complexity

Enable Open/programmable infrastructure

Automate Everything

Simplify

Capitalize on Data Improve Visibility

Process contextual data: in motion and at the edge

Think Smart

IT should create the platform for others to innovate on

Before: discover, harden, enforce

During: detect, block, defend After: scope, contain, remediate

Drive Security


Customer Experience

Assess Your Digital Maturity

Fundamentals for collaborative experiences

Collaboration Imperative

Workforce Experience

Business Imperative How invested are your leaders? Are they investing?

Create Omni-Channel

Experience

Predict Customer Behavior Using

Analytics and Insight

Enhance Point of Sale and Service

Experience

Enable Digital Workforce

Transform the Workplace

Deliver Effective Meetings and Training

Virtual Expertise

Mobile Experience

Digital Branch Platform

Workspace Management Tools

Mobile Workspace

Tech-Enabled Workspace

Business Process To what level are you digitizing your processes?

Provide remote expertise to any

location or device

Differentiate shoppers based on their

shopping patterns

Recognize Branch customers upon entry for

personalized service

Locate and reserve meeting rooms via

mobile device

Allow secure remote access

via mobile device

Enable employees to join meetings from any device


Success Requires Connectivity

App Experience (Akamai)

Network as a Sensor/ enforcer

Virtualized WAN

Services

LAN/WAN

Policy, Orchestration, Ecosystem Partners, Security

Cisco UCS

Cisco Nexus ACI

Programmable Fabric Programmable Network

Policy-Based, Open

Integrated Infrastructure

Cisco and Partner Intercloud Services

Cisco ONE Enterprise Cloud Suite

Cisco OpenStack Private

Cloud

Cisco Connected Analytics

Unified Access

IoT System

Cloud-Managed

Mobility Express

Make sure you have a Digital Ready Network Simplify, Modernize, Optimize


Your Platform For Innovation Is Your Network


Turn Data into Insights

Analytics will drive nearly

To progress from data to insight requires analytics across:

People

Process

Things

Analytics at the “edge” [at or near the location where

the data is generated]

can be particularly valuable where there are latency or

bandwidth constraints

of IoE Value 40%

Source: Cisco Consulting Services, 2014


Lead from the Top Down Digital transformation must involve the executive leadership team and the board

Create the Workforce of the Future Transformation requires workers that are tech savvy, creative, and accustomed to constant change

Digitize Everything Knock down silos and drive new culture of digitizing all of your processes, products and buildings

Thriving in the Digital Vortex

Ideate and Innovate Fast Endow employees with the tools, data, processes, and information to excel

Simplify and Modernize your IT Reduce the complexity of your systems. Ensure you have a foundation that supports the rapidly growing demand for connectivity

Connect Everything ….modernize your network so you can provide the platform for innovation


At the blistering speed of Digital: How will the Digital Vortex change your life?

Welcome to Life in the Digital Vortex

Technology

Transcript of Welcome to Life in the Digital Vortex