The four steps of Digital Transformation
Transcript of The four steps of Digital Transformation
The four steps of Digital Transformation
Andrew SmithSenior Director, Strategy & Operations
IoT Device Partners, Microsoft
Here’s what we’re covering
Four steps of digital
transformation
Differences between
PaaS & SaaS
P&L opportunities
by partner type
How to partner
with Microsoft
Digital Disruption and the 4th Industrial Revolution
1780s
Mechanized production Mass production Automated production Digitized production
1870s 1970s 2015+
Digital Transformation
Business Insights Operational Efficiencies
New Business Models
Features and Rev Streams
Sensor proliferation
Data collection, transfer, storage and processing
New insights - understanding product and service more deeply
Process engineering and product engineering improvements
Cost reduction
Time to market reduction
Predictive maintenance
Provision of services alongside devices and hardware.
Devices / hardware / machines delivered “as a service”.
Enablement of ancillary businesses, new businesses and transformed businesses
Digital Transformation
Business Insights Operational Efficiencies
New Business Models
Features and Rev Streams
Sensor proliferation
Data collection, transfer, storage and processing
New insights - understanding product and service more deeply
Process engineering and product engineering improvements
Cost reduction
Time to market reduction
Predictive maintenance
Provision of services alongside devices and hardware.
Devices / hardware / machines delivered “as a service”.
Enablement of ancillary businesses, new businesses and transformed businesses
Digital Transformation
Business Insights Operational Efficiencies
New Business Models
Features and Rev Streams
Sensor proliferation
Data collection, transfer, storage and processing
New insights - understanding product and service more deeply
Process engineering and product engineering improvements
Cost reduction
Time to market reduction
Predictive maintenance
Provision of services alongside devices and hardware.
Devices / hardware / machines delivered “as a service”.
Enablement of ancillary businesses, new businesses and transformed businesses
Digital Transformation
Business Insights Operational Efficiencies
New Business Models
Features and Rev Streams
Sensor proliferation
Data collection, transfer, storage and processing
New insights - understanding product and service more deeply
Process engineering and product engineering improvements
Cost reduction
Time to market reduction
Predictive maintenance
Provision of services alongside devices and hardware.
Devices / hardware / machines delivered “as a service”.
Enablement of ancillary businesses, new businesses and transformed businesses
Digital Transformation
Business Insights Operational Efficiencies
New Business Models
Features and Rev Streams
Sensor proliferation
Data collection, transfer, storage and processing
New insights - understanding product and service more deeply
Process engineering and product engineering improvements
Cost reduction
Time to market reduction
Predictive maintenance
Provision of services alongside devices and hardware.
Devices / hardware / machines delivered “as a service”.
Enablement of ancillary businesses, new businesses and transformed businesses
Market offering
• From “MRI Scanner” to “Remote
diagnostics subscription”
• From “Industrial Machine” to
“Machine uptime subscription”
• From “Thermometer” to
“Temperature Control Service”
Profitability
• From hardware margin to
subscription margin
• From capex to capex+opex
Customer relationships
• From transaction relationship to
annuity relationship
• From procurement relationship to
business owner relationship
Transformation in your…
End Points Security Connectivity Business Consultants
Distributors Developers
IoT Partner Value Chain
Services Regulators
Suitable for more complex solutions requiring high
controllability, high customization, with low endpoint
volume
IoT … “as a service” models
Suitable for less complex solutions and common use
cases requiring low degree of customization, with high
endpoint volume
IoT … “as a service” models… in Microsoft
SaaS
Azure IoT CentralFully managed IoT SaaSNo cloud solution expertise required
Built on the same Azure IoT Platform Services
Azure IoT Solution AcceleratorsSolution accelerators for customers with cloud solution expertise and the need to fully customize
PaaS
Opportunities for P&L transformation by business type
Opportunities for P&L transformation by business type
New Insight
opportunities
Enhance customer
experience by
understanding how
product features are
used.
Operational
efficiencies
Increase speed to
market and reduce cost
through process
automation.
Business Model
changes
Subscription-based
services.
New Revenue
opportunities
Consumer apps
represent a new channel
for future services.
ISV
Opportunities for P&L transformation by business type
New Insight
opportunities
Remote monitoring of
systems and processes.
Operational
efficiencies
Remote troubleshoot
and problem resolution.
Service engineer arrives
with right parts to fix
physical infrastructure.
Business Model
changes
Selling repeatable
solutions and retaining
IP.
New Revenue
opportunities
New services offerings
such as business
consulting, data science
and device lifecycle
management.
System Integrator
Opportunities for P&L transformation by business type
New Insight
opportunities
Remote monitoring of
systems and processes.
Operational
efficiencies
Single relationship and
billing for customer
including applications,
infrastructure and cloud.
Business Model
changes
Aggregation of
hardware and software-
based connected device
solutions for specific
verticals.
New Revenue
opportunities
Subscription-based
revenue.
Higher margin for
higher value services
than pure hardware
distribution.
Solution Aggregator
Opportunities for P&L transformation by business type
New Insight
opportunities
Insight on how product
is used in the field.
Operational
efficiencies
Decrease manufacturing
downtime by predicting
and resolving issues
before they happen.
Business Model
changes
Product as a service.
New Revenue
opportunities
Attach and monetize
new services.
Device Builder / OEM
Case studies
Connected Buses
• Wi-Fi access point
• Trip information
• Traffic information to non-passengers
• Multi-lingual
• Ticketing, subscription
Commuter mobility app
• Passenger experience
• Connect cameras
• Address GPS 'canyon-effect’
• Driver connectivity
• Fleet management
Wi-Fi hardware & infrastructure
Image needed
Kontron’s Digital transformation
• Application ready I-IoT framework
• Consulting & development services
• SLAs to operate IoT network
End-to-end
4.0
Value for
Kontron
• Extended offer and services
• New business models (pay per use, SLA…)
• Operation efficiency in our manufacturing
Value for
customers
• Enable our customers in their digital journey!
• Easier, simpler, faster, cheaper digital transformation
Start with the business model
Outcomes from a Business Model Workshop
Define value
proposition
Understand
organizational
impact
Assess
organizational
capability
Secure
business
stakeholder
buy-in
Input to
Architectural
Design
© Strategyzer
Business Model Canvass
Revenue StreamCost Structure
Partnerships Value Proposition Customer
Relationships
Customer
Segments
Resources
Key Activities
Channels
Revenue StreamCost Structure
Partnerships Customer
Relationships
Customer
Segments
Resources
Key Activities
Channels
Business Model Canvass
Value Proposition
Business Value
© Strategyzer
Business Model Canvass
Revenue StreamCost Structure
Partnerships Value Proposition Customer
Relationships
Customer
Segments
Resources
Key Activities
Channels
© Strategyzer
The Customer
Business Model Canvass
Revenue StreamCost Structure
Partnerships Value Proposition Customer
Relationships
Customer
Segments
Resources
Key Activities
Channels
© Strategyzer
Organizational Capability
Organizational Capability
Partnerships
Resources
Key Activities
Organizational Capability
© Strategyzer
Revenue StreamCost Structure
Partnerships Value Proposition Customer
Relationships
Customer
Segments
Resources
Key Activities
Channels
Costs
Business Model Canvass
1. Solution Architecture
tells us what services will be used
2. Business Volumetrics
determines scale of messaging & services
To estimate costs we need 2 things:
What’s the cost of an IoT Solution?
Cost Structure
Costs
Azure Pricing Calculator
Cost Model
Revenue Stream
Business Model Canvass
Cost Structure
Partnerships Value Proposition Customer
Relationships
Customer
Segments
Resources
Key Activities
Channels
Revenue and Pricing
© Strategyzer
© Strategyzer
Business Model: Predictive Maintenance
Revenue StreamCost Structure
Partnerships Value Proposition Customer
Relationships
Customer
Segments
Resources
Key Activities
Channels
• Hardware (Machine engineering,
Sensors etc.)
• Connectivity
• Software Dev
• Data Science
• E2E Integration
• Security
• Engineering
• Operations (Process, Data)
• Project Management
• Business Analysis
• S/W development
• H/W device partner
• Cloud
• Security / auditing
Brand
• Association with innovation
New Revenue Opportunities
• Improved SLA
• Product utilisation insights
Customer experience / Insights
• Process insights / remote
monitoring
Efficiency / Cost Reduction
• Reduced downtime
• Improved service planning
• Increased machine utilisation
Product improvement / reliability
• R&D insights (common faults,
machine utilisation)
• Direct sales force
• Distributors
• Resellers
• Aerospace
• Automotive
• Medical
• Oil & Gas
• Medical
• Concept Development & POC
with 5 “friendly” customers
• Potential move to subscription-based “as a service” model
• Revenue model – ensure revenue scales at least as fast as costs do and ensure we
are incentivised only on factors under our control
• Cloud costs depend on approach (e.g. predictive maintenance cost greater than
remote monitoring due to compute load)
• Costs can be estimated once architecture and business volumetrics confirmed. How
costs scale also confirmed in POC
Technical Architecture
An Architectural Design Session is a one to multi-day engagement driven by
technical sales that maps technical solutions to customer opportunities.
Designing the technical architecture
Architectural Design Session Outcomes
✓ project scope
✓ solution requirements
✓ technical implementation approach
✓ risk assessment
✓ resources needed
✓ cost and timeline
ADS Types
Solution-focused
Envisioning
Proof of Value (PoV) scoping
Architectural Review
Target Audience
Business sponsors to articulate needs
Technology executive team to understand impact
Lead architects, developers, DBAs, operations, etc.
What is an Architectural Design Session (ADS)?
Key Deliverables
Vision/Scope document
Architecture Assessment document
Proof of Value (PoV) project plan
Proof of value
Common Proof of Concept Blockers
Avoiding the Proof of Concept Trap
Lack of executive
buy-inLack of resources
Prohibitive cost to
scale
Business value is
unclear
Difficult to justify short-term
impact of pilot
Is this a qualified opportunity? Use BANT (Budget, Authority, Need, Timing) criteria.
Proof of Value Checklist
Complete the Business Case with the customer stakeholders
Get commitment ahead of time that if a PoV proves the desired business outcome,
steps to progress towards full production.
Examples
Machine X is currently serviced reactively (as it breaks) resulting in production halts whenever it goes offline
Manual-based production scheduling and sequencing generating problems in quality (rework, scrap) that are difficult to trace
Examples
7% increase in production line uptime
12% reduction in rework/scrap
Examples
Instrument Machine X with basic remote monitoring to trigger when certain thresholds are exceeded
Add sensors to detect anomalies in production materials
Identify customer stakeholders
Microsoft IoT solution support
Business Model Workshop
Architectural Design Session
IoT Accelerate
Reference Architecture
Tune-up
Case Studies
Broad Partner Enablement
Amplification
Partner-ready BOM
Seller quota
retirement
One Commercial
Partner Catalog
Microsoft IoT Solution Support
Build-with Go To Market Co-Sell
IoT Accelerate co-funding
Concept development
Proof of Value (POV)
Pilot/Proof of Business (POB)
1
2
3
Energy
Retail
Factory/Industrial
Security & Surveillance
Healthcare
Buildings
Target verticals
Events
Webinars
Evidence
Tune up
Go To Market Build Ready
GTM: Microsoft tools to help scale your solution
Tune-up examples
Foundational
document providing
guidance for how to
message the partner
solution to
customers.
Customer-ready
slides with a strong
solution story,
intended to start the
conversation with
customers, help
drive interest in the
solution, highlight
differentiators, and
communicate
business value.
Customer-facing
one-pager
summarizing key
points about the
solution and
communicating
solution value—
great for e-mailing
to customers.
Helps sales teams
quickly understand
the partner
solution. It includes: ▪ Elevator pitch
▪ Understanding the
scenario
▪ Types of accounts to
target
▪ Next steps
▪ Partner sales
contacts
Co-selling with Microsoft
Why Co-sell?
Microsoft’s platform
grows as a result
Enterprise sellers get to
introduce new innovation to
their customers
Partners get introduced
to new customers in
new geographies
WIN WINWIN
Co-Sell RequirementsArea Requirement
Repeatable
Solution
OCP
Catalog
Co-Sell
Ready Status
Seller Incentives
Eligible
MSXEngagement ID with “Repeatable” in Notes, Engagement in Completed Status, reviewed and approved
by CSA team. ✓ ✓ ✓ ✓
Backgrounder
Partner has Microsoft Partner Number (MPN) ✓ ✓ ✓
Partner Sales Contact for each solution and geo
(one contact can cover multiple) ✓ ✓ ✓
Completed Company Profile
(Company Logo, Company Description) ✓ ✓
Azure Platform Solution Information (Azure Business Model -Unbundled and/or Bundled, Avg 12-month
deal ACR and Avg 12-month Partner Revenue) ✓ ✓
End Customer Segment (Enterprise, Corporate, SMB) ✓ ✓
BOM
Signed PR and Co-Sell Release Form* ✓ ✓ ✓
Solution Pitch Deck (10-slide limit)* ✓ ✓ ✓
50-word Solution Description* ✓ ✓ ✓
Reference Architecture* ✓ ✓ ✓
Customer 1-Pager* ✓ ✓
Systems
Partner is onboarded to Partner Sales Connect and trained to register Deals ✓
Approval by the cross-org Solution Map committee
* Tune Up can be used, but is not required Field gets credit and quota attainment for selling your solution
CDS gets scorecard credit for co-sell
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