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Jorge Lopez

Digital Business Industry Visions: A New Way to Compete

Gartner Local Briefing 15 June 2017 / Montreal, QC

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The Emerging Face of Digital Business Industry Visions

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By 2020, your company will either lead a digital business industry vision you have created or be part of one created by someone else … if you are still in business …

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Warren Buffett Dumps 90% of His Walmart Shares

…he said of Amazon, "It is a big, big force and it has already disrupted plenty of people and it will disrupt more," adding that many

companies "have not figured the way to either participate in it, or to counter it."

"I wish we had moved faster. We've proven ourselves to be successful in many areas, and I

simply wonder why we didn't move more quickly...”

Mike Duke, Former CEO of Walmart, in 2012

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Ford Replaces CEO with Head of Driverless Division: 2021 Not Fast Enough

The automaker has had a long-time “obsession with hierarchy,” he said, calling the new CEO “a cultural change agent.” Former Ford

CEO Alan Mulally "really captured the hearts and minds of our employees ... and I think that’s something you will see with Jim.”

“The challenge is not moving fast enough,” said Hackett, who added the “future is not fantasy, and

we’re really curious about it”.

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“I’ve never seen the speed of change as it is today.. If I could go back 10 years, I might have done some things earlier.”

Millard “Mickey” Drexler, the fashion genius whose ability to spot trends reshaped how Americans dress, has a humbling admission. He missed what might be the biggest trend of all—how quickly technology would change the retail industry.

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What is a digital business industry vision and why is it

important now? What is our best play in a world of industry visions?

How do we assess the health and risks of an

industry vision? What should be our actions

in the next 90 days?

The Roadmap: How Do I Build a Digital Business in a World of Industry Visions?

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What Does It Mean to Have a Digital Business Industry Vision?

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First, It Is About Digital Business

A vision that captures an enormous opportunity ahead by the blurring of the digital and physical worlds. It integrates people, business and things.

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We exist in a growing world of connected things

13 billion

2016

People 56% Things 44%

2030

108 billion

People 8% Things 92%

2050

1 trillion

People 1% Things 99%

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Second, It Builds New Sources of Wealth

Redefine an existing industry Redefine

Capture an entirely different industry Capture

Create a new industry Create

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Honda Safe Swarm Technology

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Honda Safe Swarm Technology

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Burberry: Redefining Retail, Blurring Physical and Digital

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Ten Ways to Disrupt a Value Chain

Supplier Interface Could a change in interface create new business model or disruption?

Disintermediation Could steps in process be eliminated or shifted?

Displacement Could customer go directly to source suppliers and create own product?

Leverage Could assets be leveraged to create new business opportunities?

Data Monetization Could data be mined to create new business opportunities?

Internet of Things Could embedding sensors in the product create value?

Product-to-Service Might the customer want additional services or features?

Financing Is there value in digitizing cash flow?

Business Process Can digitalization improve business processes and drive value?

Algorithms Could the use of algorithms create new business value?

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Amazon rules digital commerce through physical networks of distribution

NEW YORK (AP) — The holidays are coming and Amazon plans to add 120,000 seasonal workers in an effort to meet an expected spike in demand as more and more people trade bricks for clicks. The seasonal positions will be created at fulfillment centers, sorting centers and customer service sites in 27 states. The move marks a 20 percent boost from the 100,000 seasonal hires a year ago.

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GE rules the physical world by mastering the digital side of machines GE aims to connect 200,000 machines through digitizing

engineering, installed base, commercial, sourcing, and service functions. It also aims to grow its Predix platform to serve 20,000 developers and 50 partners.

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Apple: Redefining Healthcare Through the Power of Constant Intelligent Monitoring

The Doctor on Your Wrist

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The Uber Factor

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What Do Digital Business Industry Visions Mean to IT?

Business Impact Business Implications IT Impact New Wealth and Growth Attracts Competition Increased Competitive

Intelligence

New Business Models Baffles Existing Competitors Increased Drive of Bimodal

Challenge Existing Industry Structure

Continued Build Out of Model Accelerated Innovation

Define New Ecosystems Integration Becomes Paramount

Integration Becomes a New Risk

Create New Operating and Technology Standards for Business

Greater Efficiencies More Rapid Deployment

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The Roadmap: How Do I Build a Digital Business in a World of Industry Visions?

What is a digital business industry vision and why is it

important now? What is our best play in a world of industry visions?

How do we assess the health and risks of an

industry vision? What should be our actions

in the next 90 days?

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Identify Vision

Assess Opportunity

Target Market Role

Move to New Market Role

What Is Your Best Play in a World of Digital Business Industry Visions?

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Identify Vision

Boeing, Burberry, GE, Shell, Ford, Caterpillar, Apple, BHP Billiton, Amazon Industry Leaders

Apple, SpaceX, Blue Origin, swarming strategies, Uber Emerging Visions

Google External Invasions

GE Capital Abandonments

Compound industries Wild Card Visions

Industrie 4.0 Government/Commercial Collaborations

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If You Think of a Jetliner as a Flying Computer, You'll Know Why Boeing Digital Aviation Is Growing Fast

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Shell Smart Fields Produce More Energy From Greater Depths With Lower Risk and Greater Safety

Digital Integration and Real-Time Optimization of Performance

Drilling Rigs Controlled by Algorithm

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SpaceX vs. Blue Origin: When Visions Collide, Payload Prices Drop

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The German Industrie 4.0 Vision

Digital Systems and

Services Platform

Smart Industry

and Ecosystems

Social Web and

E-Commerce

Smart Infrastructure

and Environment

Source: Gartner, aligned with German Federal Ministry for Economic Affairs and Energy (BMWi)

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Assess Opportunity: What Is the Big Problem They Are Trying to Solve?

Leadership: Is the focus of management on leadership?

If so, is the focus on tomorrow's business or on

yesterday's business?

Ambition: What does this vision mean? Extend existing

industry, redefine existing industry, create a new industry or

capture an adjacent industry.

Scope: Where does the vision lead?

Geographic: Local, regional, national or global.

Offering: Product/Service, local ecosystem, industry vision.

Competition: Who is likely to contest leadership?

Broad, narrow or niche?

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Target Role: Which Role Do You Want to Play?

Industry leader (means you will compete with others "head to head") Solution or product partner (seize a layer of value) Business services or technology provider Digital business infrastructure provider (provide the capabilities

for digital business: E.g., bitcoin/blockchain ecosystems or other services) Niche leader

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Move to the New Role

Build an ecosystem Lead through disruptions Leader

Focus on distinct market role Deliver value throughout Partner

Deliver infrastructure services Provider

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The Roadmap: How Do I Build a Digital Business in a World of Industry Visions?

What is a digital business industry vision and why is it

important now? What is our best play in a world of industry visions?

How do we assess the health and risks of an

industry vision? What should be our actions

in the next 90 days?

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How Do We Measure the Health and Risk of a Digital Business Industry Vision?

Awareness Rising Sustainable Dominant

Connectedness Custom

connections in the enterprise

Standard connections

across ecosystem

Highly functional connections

across ecosystem

Highly functional connections across entire

network

Distributed Intelligence Connect

Connect, communicate,

inquire

Negotiation and management Autonomy

Integration Complexity High High Medium Low

Resource Commitment IT mobilized Sponsoring

executive selected Teams within

enterprise Teams across

ecosystem

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Driving to Transform an Industry: The Fully Autonomous Mine

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The Roadmap: How Do I Build a Digital Business in a World of Industry Visions?

What is a digital business industry vision and why is it

important now? What is our best play in a world of industry visions?

How do we assess the health and risks of an

industry vision? What should be our actions

in the next 90 days?

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Make sure you align with the appetite of your board of directors to pursue digital business.

Once you know the intent, do your homework to pick the right ecosystem or vision.

Ensure security and risk management are an integral part of your strategy.

Recommendations

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Action Plan for the CIO

Monday Morning: Brief your executive team on the digital business and industry visions Assign tasks to study the landscape of digital business industry visions for yours and

related industries

Next 90 Days: Narrow down your choices to a shortlist that can be presented to the

board of directors Examine your ability to execute, including an assessment of bimodal capabilities

Next 12 Months: Gain executive sponsorship to move to the digital business industry vision Set up milestones with strict accountability to execute the vision

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Recommended Gartner Research

Gartner Survey Shows Digital Business Leaders Breaking From the Pack Jorge Lopez, Patrick Meehan and Others (G00290103)

Building and Expanding a Digital Business Primer for 2017 Jorge Lopez (G00318296)

Creating Net-New Industries for the World in 2030 Hung LeHong and Jackie Fenn (G00274980)

Market Guide for Digital Business Consulting Services Julie Short, Jim Tully and Others (G00294418)

For more information, stop by Gartner Research Zone.

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Oui, mais qu’est ce que ça veut dire pour nous?

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L’optimisation des coûts à l'âge des affaires numérique

Affaires numérique

Optimisation des coûts TI

Optimisation des coûts d’affaires

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Les 10 principales approches d’optimisation des coûts TI

Create a shared-service organization for some or all IT services. 1 1

Centralize, consolidate, modernize, integrate and standardize technologies. 2 2

Leverage cloud services. 3 3

Increase IT financial transparency to better manage both supply and demand. 4 4

Utilize zero-based budgeting on the right cost categories. 5 5

Rationalize and standardize applications. 6 6

Optimize software licensing management and ITAM capabilities. 7 7

Improve procurement and sourcing capabilities. 8 8

Invest in Mode 2 capabilities such as agile and DevOps. 9 9

Re-examine how end-user computing is delivered. 10 10

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Les 10 principales approches d’optimisation des coûts d’affaires

Digitalization of business processes 1 1

Lean six sigma culture 2 2

Customer self-service 3 3

Business process outsourcing 4 4

Optimizing data management 5 5

Supply chain optimization 6 6

Job automation (robotics) 7 7

Improving business efficiency through analytics 8 8

Asset optimization 9 9

Inventory optimization 10 10

Il n’y a pas de projets TI… il n’y a que des projets d’affaires avec des composantes technologiques.

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Notes de recherche Gartner recommandées

Cost Optimization in the Age of Digital Business Barbara Gomolski and Rich McAvey (G00302499)

Run IT as a Business Using Six Pillars of Effective IT Financial Transparency Jim McGittigan (G00238696)

Ten Ideas for Business Cost Optimization in the Age of Digital Business John P. Roberts (G00309148)

The Gartner Top 10 Recommended IT Cost Optimization Ideas, 2016 Jim McGittigan and Sanil Solanki (G00301094)

What Does It Mean to Digitalize Work? Bruce Robertson (G00272544)

Toolkit: Use Gartner's 2016 IT Key Metrics Data to Optimize IT Costs Jim McGittigan (G00300092)

For more information, stop by Gartner Research Zone.