World Wide Digital Transformation (DX) Strategies From Understanding to Outstanding Neli Vacheva Oct. 2018 Š IDC
Agenda Digital Transformation (DX) Defined DX Strategic Roadmap How Digitally Determined Organization are Succeeding Worldwide DX Market Snapshot Key Takeaways
Š IDC
2
Digital Transformation Defined
https://www.youtube.com/watch?v=VIS667TE6yw © IDC
3
Digital Transformation (DX) Defined The application of 3rd Platform and related technologies to fundamentally improve all aspects of society. For business this means:
TRANSFORM… New New sources sources of of innovation innovation and and creativity creativity to to enhance enhance experiences experiences and and improve improve financial financial performance. performance. Simply Simply modernizing modernizing the the technology technology underpinning underpinning existing existing systems systems isis not not transformation. transformation.
…DECISION MAKING… Using Using information information to to create create an an evidence evidence based based culture. culture. Companies Companies should should plan plan on on doubling doubling the the productivity productivity of of their their knowledge knowledge workers workers by by using using information information more more effectively. effectively.
…WITH TECHNOLOGY Digital Digital transformation transformation isis not not to to be be confused confused with with digital digital technologies, technologies, however, however, itit does does use use 33rdrd Platform Platform technologies technologies such such as as Cloud, Cloud, mobility, mobility, Big Big Data, Data, and and social social as as well well as as Innovation Innovation Accelerators Accelerators including including IoT, IoT, robotics, robotics, and and 3D 3D printing. printing.
$1.1T in 2018
$1.3T in 2019
$1.6T in 2020
$1.9T in 2021
$5.9T Direct DX Investment © IDC
4
“My goal is no longer to be a maker of home appliances, but to be an agent of interaction and networking among people who might be anywhere.” Zhang Ruimin CEO, Haier
“If we do this correctly, we can have a very different-looking company 10 years from now. If we don’t do it correctly, we will be at best a low-margin assembler of other people’s technologies and that’s not where we want to be.”
William Ford, Jr. Exec. Chmn., Ford
Jeff Bezos CEO, Amazon
“In today’s era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility. That’s it. Because nothing else is sustainable, everything else you create, somebody else will replicate”
© IDC
5
3rd Platform Technologies & Innovation Accelerators
Š IDC
6
Digital Transformation Maturity Across All Stages
Resister Business is a laggard, providing weak customer experiences and using digital technology only to counter threats.
Explorer
[Digital Player (Stage 3)
Digital Transformer (Stage 4)
Digital Disruptor (Stage 5)
Digitally enabled customer experiences and products are inconsistent and poorly integrated.
Business provides consistent but not truly innovative products, services, and experiences.
Business is a leader in its markets, providing world-class digital products, services, and experiences.
Business remakes existing markets and creates new ones to its own advantage and is a fast moving target for the competition.
n=1,841 Source: IDC’s Digital Transformation Benchmark Survey,
Š IDC
7
Digital Transformation Maturity Across All Stages
Determined = 302 (34%)
Distraught = 582 (66%)
Resister Disrupter
Explorer
Player
n=1,841 Source: IDC’s Digital Transformation Benchmark Survey, May 2017
Transformer
Š IDC
8
Build a Long Term Digital Roadmap Use Cas e Use Cas e
3
STEP
2
IDENTIFY AND VET THE SUPPLIERS PRIORITIZE USE CASES
STEP
1
BUILD ROADMAP BY HORIZON
STEP
STEP
ENVISION THE FUTURE
Use Cas e
4
© IDC
9
IDC’s Comprehensive Coverage
© IDC
10
Investing Intelligently in DX for Superior Business Outcomes Digital Supply Strategic Chain Priority Optimization
PROGRAMS
Digitally Optimized Fulfillment Operations
Digital Supply Chain & Logistics Automation
USE CASES Autonomic Operations Predictive Network Inventory Orchestration
Autonomic Supply Network Optimization Drone Inventory Management Traceability
Š IDC
11
Tenets of a DX Strategic Roadmap Modular
Scalable
Extendable
Break the effort into chunks (use cases)
Think through how the roadmap will evolve
Accommodate changes as they develop
Š IDC
12
How Digitally Determined Organization are Succeeding
Š IDC
13
The Digitally Distraught v. Digitally Determined
54%
The Digitally Distraught
46%
The Digitally Determined
8% 26% 20% 29% 17% Impromptu DX DX initiatives are tactical and disconnected from enterprise strategy
LOB DX DX initiatives are initiated at the function or LOB level
Short Term DX DX initiatives are tied to enterprise strategy but with short-term focus
Integrated Strategy Integrated, continuous enterprise wide DX innovation is in place
IDC Global DX Leaders Survey. Worldwide sample, n = 1987. June, 2018
DX is the Strategy The enterprise strategy is to use DX to transform markets with new business models and services Š IDC
14
Develop a Single Roadmap Tied to Digital Strategy Coordinated Loosely Connected
32% None
2%
Loosely connected but independent project roadmaps across individual business units
46% Single Coordinated roadmaps led by individual business units
No Digital Roadmap
Source: IDC IT Executive Study on DX, March. 2018. n= 250
20% A single digital roadmap for the enterprise, centrally led with a clear mission and formal accountability
Š IDC
15
Funding Tied to Long Term Investments DIGITALLY DISTRAUGHT
Cost Cutting Efforts
DIGITALLY DETERMINED
Capital Budget
52% 73% IDC Global DX Leaders Survey. Worldwide sample, n = 1987. May, 2018
© IDC
16
Connecting the Numbers 37 %
Have a single business strategy built around digitally transforming
24 %
Have a single digital roadmap for the enterprise
33 %
Have a fully integrated enterprise-wide technology architecture
36%
Source: IDC, Worldwide Digital Transformation Maturity Model Benchmark, n=1841. Doc #US4322011. Dec 2017. IDC Global DX Leaders Survey. Worldwide, Digitally Determined sample. n = 838. June, 2018
Š IDC
17
The Key Elements of a Digital Platform
L PROCESS ES
EI EN NN TS GA ER IGH GE PR T M ISE S EN TS
People
INTELLIGENT CORE DEVELOPER SERVICES
D AT A EXTERNA L PROCESS ACT ES
TEM SYS ENTS ECO GEM GA EN
DA TA INTERNA
BOT
INTEGRATIO N& ORCHESTRAT ION SERVICES
ION S
IoT
AR/VR
Mobile
Assets
Connected Processes API
1
Cloud-based API strategies that orchestrate exchange of data across your ecosystem
2
Agile application architectures on PaaS using microservices and containers
3
New customer experience technologies that fully support customer and ecosystem-facing business models
4
An intelligent core based on data management, cognitive, artificial intelligence, and machine learning
© IDC
1 8
Digitally Determined KPIs versus‌.. Innovation Rate
Customer Advocacy
R&D investments, efficiencies in cycles and innovation returns.
Determined 40% Vs. Distressed 37% 8 percent better engaging product and service innovation
Customer advocacy (e.g. net promoter score or NPS)
Determined 43% Vs. Distressed 35% 23 percent more likely to ensure positive customer experience
Data Capitalizatio n Organization's return on datarelated investments
Determined 43% Vs. Distressed 36% 19 percent better at monetizing data and business returns
‌Digitally Distressed
Digital Operations
Traditional Metrics
Business' ability to transform and automate business processes
Standard metrics orders, revenue, profit, efficiency, productivity rate, etc.
Determined 47% Vs. Distressed 35%
Determined 33% Vs. Distressed 37%
34 percent more focus on creating sustainable digital processes
12 percent more focused on legacy measures
IDC Global DX Leaders Survey. Worldwide, Digitally Determined sample. n = 838. Digitally Distressed sample, n = 1149, June, 2018
Š IDC
19
How Digitally Determined use these new KPIs…
30% more often
50% > likelihoo d
19% better
27% > frequency
12% more often
16% less likely
…versus the Digitally Distraught
IDC Global DX Leaders Survey. Worldwide, Digitally Determined sample. n = 838. Digitally Distressed sample, n = 1149, June, 2018
© IDC
20
Key Takeaways
Visit us at IDC.com and follow us on Twitter: @IDC - © © IDC
21
CEOs See $18.5T of Economic Value Add 60% of energy generated is never used
Discrete Manufacturing Sector
60% of food never eaten
© IDC
22
Worldwide Digital Transformation Opportunity = $1.1T in 2018, Reaching $1.8T by 2021 20% CAGR 31% of Market
24% CAGR 1% of Market
17% CAGR 19% of Market
CANAD CANAD A A
WE
USA
19% CAGR
2% of Market
17% CAGR 42% of Market
23% of Market
36% of Market 19% CAGR 2% of Market
AMERICA AMERICA S S
7% of Market
CEE 17.0% CAGR
20% CAGR
17% CAGR
JAPAN
APAC EMEA
ME A
25% CAGR 3% of Market
LAT AM
Source: IDC's Worldwide Semiannual Digital Transformation Spending Guide, H1201 For sales contact csimpson@idc.com or visit www.idc.com/customerinsights © IDC
23
Key Takeaways
1 2 3 4
Build your long term digital roadmap by envisioning your strategy, build your roadmap by horizon and identify and prioritize use cases
Break your DX strategic initiatives into bite size chunks (use cases) when developing your DX roadmap
Cloud, Big Data Analytics, Cognitive Computing, IoT and AR/VR are at the heart of truly digitally transformative efforts
Manufacturing, Retail and Utilities industries are the biggest DX markets. Strong growth opportunities include Healthcare, Banking and Government industries.
Š IDC
24
For More Information
Neli Vacheva www.idc.com
Country manager IDC Bulgaria Seniour analyst DX CEE
IDC World Wide Digital Transformation Strategies: http://www.idc.com/getdoc.jsp?containerId=IDC_P32 Twitter 570 https://twitter.com/@IDC
LinkedIn https://www.linkedin.com/company/id c © IDC
25
Worldwide DX Investment Opportunity: Industry Size of Box Represents Size of Opportunity for 2018
Source: IDC's Worldwide Semiannual Digital Transformation Spending Guide, H12017 For sales contact csimpson@idc.com or visit www.idc.com/customerinsights Š IDC
26
Worldwide DX Investment Opportunity: Use Case Size of Box Represents Size of Opportunity for 2018
Source: IDC's Worldwide Semiannual Digital Transformation Spending Guide, H12017 For sales contact csimpson@idc.com or visit www.idc.com/customerinsights Š IDC
27
Worldwide DX Investment Opportunity: Strategic Priority Top 10 Strategic Priority Opportunities
Smart Manufacturing Top Use Cases:
Size of Circle Represents Size of Opportunity for 2018
1. Robotic Manufacturing 2. Asset Instrumentation 3. Autonomic Operations 4. Root Cause 5. Self-healing Assets & Augmented Maintenance
Digital Supply Chain Optimization Top Use Cases: 1. Supplier Network Management 2. Smart Warehousing 3. Autonomic Operations 4. Autonomic Supply Network Optimization 5. Transportation Optimization Source: IDC's Worldwide Semiannual Digital Transformation Spending Guide, H12017 For sales contact csimpson@idc.com or visit www.idc.com/customerinsights Š IDC
28
Worldwide DX Opportunity by Sector
Source: IDC's Worldwide Semiannual Digital Transformation Spending Guide, H12017 For sales contact csimpson@idc.com or visit www.idc.com/customerinsights Š IDC
29