Deloitte: Hogyan éli meg a digitalizációt a magyar ipar és kereskedelem?

The impact of

digitalisation on

the economy

Akos DEMETER

5th May 2016

Sustaining or

disruptive

innovation?

© 2016 Deloitte Hungary

The collective impact of these trends will fundamentally

change human behavior and organizational structures

From

ownership to

usage

• Usage of products and services becomes more

important than ownership (e.g. ‘collaborative

consumption’ via social networking)

Shortened

product and

company

lifecycles

• Computers with ‘human’ capabilities (e.g. via

sensoring) automate knowledge work

• Exponential growth of technologies shortens the

lifecycle of products and services and that of

companies

Freedom and

empowerment

• Shift from traditional ‘push’ command-and-control

to more ‘pull’ creating platforms that enable

people to mobilize resources as needed

Dynamic

networks and

communities

• Increase in self-assembling dynamic networks and

communities through digital channels (e.g.

knowledge sharing, learning, crowdsourcing and

funding and alternative currencies, like Bitcoin)

Security and

trust

• Increased concern around privacy, trust, and

online identity resulting from increased usage of

social networking sites, cloud computing and

online transactions

Information

transparency

• Increased availability of information by big data

resulting in increased operating efficiency and

disintermediation

Supply chain

restructuring

• New sourcing models reduce cycle times and

increase flexibility

Collective impact on society

Source: Deloitte research, Gartner, Business Insider, and Forrester

Dynamic interaction and acceleration of trends

Text

Text Text

Text

TextText

Text

3D

Printing

Predictive

Analytics

Other

Social

NetworkingDigital

Currency

Big data

Personal

Data

Analytics

TextCrowdsourcing

& FundingInternet of

Things

Sensoring

Accelerating trends will dynamically interact

reinforcing their collective impact

Changes

in society

(4) Other(3) Social(1) Data (2) Mobile

© 2016 Deloitte Hungary 2

The impact of emerging trends varies by industries


Source: Deloitte research ‘IT Trends en Innovatie Survey 2014’

Direct impact on FSI

Dir

ec

t im

pa

ct

on

cli

en

ts

High

Low

HighLow

DNA

Sequencing

Internet of Things

Predictive

Analytics

Crowdsourcin

g & Funding

Augmente

d Reality

Nano, Neuro,

& Biotech

Mobile Robots

Sensoring

New Energy

Advanced

Materials

Personal

Data

Analytics

Advanced

analytics on

enterprise

data

Social

Networking

Big data

Social Analytics

Blockchain

SELECTED TRENDS

Technology

Standardizatio

n &

Consolidation

Mobile

Networks

3D Printing

NFCCloud

Artificial

Intelligence

Individual technologies can be

grouped into the following

megatrends:

(1) Data

(2) Mobile

(3) Social

(4) Cloud

(5) Bioscience, Energy and Materials

For example: Impacts on the banking industry

The impact of emerging trends varies by industries


Source: Deloitte research ‘IT Trends en Innovatie Survey 2014’

Direct impact on FSI

Dir

ec

t im

pa

ct

on

cli

en

ts

High

Low

HighLow

DNA

Sequencing

Internet of Things

Predictive

Analytics

Crowdsourcin

g & Funding

Augmente

d Reality

Nano, Neuro,

& Biotech

Mobile Robots

Sensoring

New Energy

Advanced

Materials

Personal

Data

Analytics

Advanced

analytics on

enterprise

data

Social

Networking

Big data

Social Analytics

Blockchain

SELECTED TRENDS

Technology

Standardizatio

n &

Consolidation

Mobile

Networks

3D Printing

NFCCloud

Artificial

Intelligence

Individual technologies can be

grouped into the following

megatrends:

(1) Data

(2) Mobile

(3) Social

(4) Cloud

(5) Bioscience, Energy and Materials

For example: Impacts on the insurance industry

Innovation is a must, technology (digital) is an enabler

that accelerates and broadens the perspective


Innovation is the creation of a new,

viable business offering

New… to our market or the world

Viable…

Creating value for our customers

and our enterprise

Innovation… is different from invention

The definition of innovation is to create viable new business offerings (both within

the core business, as well as adjacent to core operations!!!)

Business offering… ideally

going beyond products to

platforms, business models,

and customer experiences

Radical innovation creates new business models and

enables bigger market share gain


Radical Innovation

• Google car

• Spotify

• 23andme

• Indiegogo

• Blockchain

Incremental Innovation

• Nike+

• Gilette Venus

• Mobile only banks

• Using Big Data for personalized advise

Improvements to keep existing business

• Segmentation & pricing initiatives

• Omni-channel

• Process optimization projects

No Innovation

3 types of innovation each with their own characteristics and approaches

Disruptive

innovation

Sustaining

innovation

International innovation examples by megatrends

from multiple industries I.:

By analysing customer behaviour and transactions, the company can generate

forecasts. Predictive analytics enables them to price more accurately, reduce

the level of inventory, and thus improve both the revenue and cost sides

Netflix identified the most popular director, actor and TV show theme based on

customers’ viewership. This big-data generated information enabled Netflix to

create one of the most successful series of our time. (i.e. House of Cards) This

means that Netflix has entered the film making industry and took away market

share from incumbent studios such as HBO or 21st Century Fox.

As 3D printing spreads and the technology becomes cheaper, it is going to be

more economical to produce plastic products in developed countries.

Consequently, corporates will start to relocate their production to developed

countries that will reduce the need for ocean freight transportation.

The newest watches come with sleep cycle monitoring, pacer and other

functions built on sensors. The owner can review and analyse his/her

behavioural habits on phone. With these incremental improvements, Frederique

Constant is now able to appeal to today’s tech-savvy people as well.

Moley’s portable robotarms can mimic a masterchef’s movements. The

programmed moves can prepare best quality meals with perfect accuracy. This

application of robotics can substitute chefs and disrupt the traditional dining

industry.

The Office 365 products are now sold online that customers use through the

cloud. Information stored in the cloud creates value-added for the customer

with new collaboration tools, synchronisation options and other functions that

are not available in traditional offline versions.

Sustaining

Trend DescriptionCompany /

industry

Sustaining /

disruptor

DATA

MOBILE

CLOUD

Sustaining

Disruptor

Disruptor Ocean freight

transportation

Sustaining

Disruptor

7

International innovation examples by megatrends

from multiple industries II.:

Customers can design new toys on Lego’s website. Best ideas with the most

votes are implemented in serial production. This crowdsourcing solution

enables Lego to enhance customer experience and satisfaction, while it reduces

the need for designers too.

Start-up companies provide a description of their products on Kickstarter’s

website. Potential customers can pay the purchase price of these products 1-2

years in advance in order to reduce start-up companies’ cash-flow problems. This

means that crowdfunding diminishes venture capital firms’ role in the value-

chain, and start-uppers can retain bigger share of their equities.

This social network platform gathers members with similar problems into

groups. Platform operators negotiate better insurance policy terms for these rare

problems. (E.g. travel insurance for people with heart disease) This enhanced

bargaining position of users eliminates the need for traditional insurance brokers

Voice-recognition is used at this Polish bank’s mobile application for

authentication. Using biometric information can increase safety and enhance

customer experience at the same tim

Tesla pioneered such batteries that can extend its cars’ range to 400+ kilometres.

As a result, Tesla cars are now more economical, environment friendly and in

some cases more powerful with this new energy source than traditional cars.

Modern prostheses equipped with nanotechnology reduces the risk of

extrusion. This increases the number of successful implants and thus increases

productivity too.

Sustaining

SOCIAL

BIOSCIENCE,

ENERGY AND

MATERIALS

Trend DescriptionCompany /

industry

Sustaining /

disruptor

Sustaining Healthcare

Disruptor

Disruptor

Sustaining

Disruptor


Sustaining business requires an innovation portfolio

across time


Create viable options, to ensure company’s longer term future.

Portfolio of embryonic businesses opportunities, that will in time move to wave 2 or be cropped

Wave 3

Pro

fit

Time

Build emerging businesses, drive medium term profit growth.

May not generate much profit currently, but has high growth potential, and could in future be core source of profits.

Wave 2

Wave 1

Extend and defend core businesses

Currently generates less and less profit (if any), long term future declining.

New technologies are emerging technologies, thus

companies need to constantly monitor and assess

them

10© 2016 Deloitte Hungary

Eight typical patterns observed in organizations

however pattern 8 is the one serving the long term

sustainability of the business only


Under siege Running out of steam Inventing a new future

Ideas but not building businesses

Healthy Unhealthy

Positioning well for the future

Failing to seed for the future

Losing the right to grow

1 2 3 4

5 6 7 8

Hungary is less innovative than its peers in the

region


„Lager”

„Moderate innovator”

„Follower”

„Leading innovator”

Germany and Scandinavian countries

are the leading innovators.

The region is significantly behind them,

but we are closing the gap.

The lack of innovation and digital solutions is

apparent in multiple areas I.


For example: Channels of customer acquisition

0 10 20 30 40 50

Egyéb

Nem szoktunk hirdetni, rendezvényeketszervezni vagy szponzorálni és

weboldalunk sincs

Ingyenes PR cikkek, hírek

TV reklám, rádió reklám

Fizetett PR hirdetések, PR cikkek

Események, konferenciák szponzorálása

Hirdetés közösségi médiában

(pl. Facebook, LinkedIn)

Ügyfeleknek szervezett rendezvények

Online hirdetések (pl. banner)

Sajtóhirdetés

Vállalati weboldal az ügyfelek számára

29%

11%

11%

15%

17%

20%

26%

31%

25%

44%

2%

Highlights:

• 56% of SMEs do not have a

corporate website

• Only 20% uses some form of

social media advertising

• Mobile apps or more

advanced targeting solutions

are negligible in Hungary

Corporate website for customers

Press advertisement

Online advertisement (e.g. banner)

Events organised for customers

Social media ads

(e.g. Facebook, LinedIn)

Sponsoring events, conferences

Paid PR ads, news

TV and radio advertisements

Free PR ads, news

Ads not used, conferences not

sponsored, no website either

Other

12%

14%

18%

24%

24%

39%

51%

59%

59%

88%

2%

0 20 40 60 80 100

Egyéb

Kriptográfiai titkosítási technológiahasználata

Megfelelő információbiztonságiszabályzat

Vállalati mobil készülékeket (telefon, tablet)felügyelő eszközök alkalmazása

Alkalmi (törvényi kötelezés hiányában)külső és belső informatikai vizsgálatok

Információbiztonsággal kapcsolatostudatosság rendszeres felmérése

Informatikai hozzáférési pontokfeltérképezése

Informatikai eszközök szigorúleltározása

Riasztórendszer alkalmazása azadatszivárgások ellen

Szigorú jelszóbeállítások és rendszeresidőközönkénti kötelező jelszócsere

Vírusvédelem, vírusirtószoftverek használata

0 20 40 60 80 100

Egyéb

Kriptográfiai titkosítási technológiahasználata

Megfelelő információbiztonságiszabályzat

Vállalati mobil készülékeket (telefon, tablet)felügyelő eszközök alkalmazása

Alkalmi (törvényi kötelezés hiányában)külső és belső informatikai vizsgálatok

Információbiztonsággal kapcsolatostudatosság rendszeres felmérése

Informatikai hozzáférési pontokfeltérképezése

Informatikai eszközök szigorúleltározása

Riasztórendszer alkalmazása azadatszivárgások ellen

Szigorú jelszóbeállítások és rendszeresidőközönkénti kötelező jelszócsere

Vírusvédelem, vírusirtószoftverek használata

The lack of innovation and digital solutions is

apparent in multiple areas II.


For example: Protecting information

Highlights:

• 76% of SMEs do not conduct

any IT audits

• Only 12% use encryption

technologies

Use of antivirus softwares

Strict password requirements,

frequent password changes

Use of alarms to prevent

information leaks

Administering strict IT asset

inventory

Mapping out IT access points

Assessing information security

consciousness within organisation

Ad-hoc internal and external IT audit

(if there is no regulatory requirement)

Installing security tools that monitor

mobile devices (phones and tablets)

Use of information security policies

Use of cryptographic encryption

technologies

Other

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