Digital Transformation Cap Gemini

8/9/2019 Digital Transformation Cap Gemini

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Transform to the power of digital

Digital Transformation in ManufacturingSeminar

27 August 2014


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Transform the power of digital

AGENDA

About Capgemini Consulting

Digital Transformation

Digital Transformation in manufacturing

Manufacturing case examples

Breakout discussions and present back

Summary and conclusions

Copyright 2014 Capgemini Consulting. All rights reserved.

3


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Capgemini Consulting is the management advisory part of the Capgemini Group

Canada

United States

Mexico

Brazil

Argentina

All over Europe

Morocco

Australia

Peoples Republicof China

India

Chile

Guatemala

Singapore

Philippines

Taiwan

Vietnam

UnitedArab Emirates

Malaysia

Outsourcing ConsultingTechnology

One of the worlds foremost providers of Consulting, Technology

and Outsourcing services

We enable our clients to transform and perform through

technologies

Group Workforce: 130,000

Revenue: 10,092 million

Global footprint

Strong performance, stock +50% since Jan 2012

Part of Capgemini Group: global leader inconsulting, technology, outsourcing

Global consulting firm with strong local presence

- Largest consultancy of European origins

- Some 4,000 mgmt consultants worldwide

Full service consultancy

- Capabilities across sectors

- Global competency and operating model

ConsumerProducts,

Retail&Distribution

Manufacturing&

Automotive

Telecom,

Media&

Entertainment

FinancialServices

PublicSector

Energy,

Utilities&

Chemicals

Etc...

CAPABILITYUNITS

Business Model Transformation

Customer Experience

Operational Excellence

SECTORS


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Digital Transformation is at the heart of Capgemini Consultings value proposition

Since 4 years, Capgemini Consulting and the MIT Sloan School run

a joint research program to identify how digital leaders manage

or have managed successful digital journeys

Driven by the work of its Digital Transformation Research Institute

and consultancy team, Capgemini Consulting was ranked in the top 5best consultancies in the world for thought leadership in the second

half of 2013; a rise of 10 places from the second half of 2012.

Capgemini Consultings first significant Digital Transformation study -

Digital Transformation: A road-map for billion-dollar organizations -

conducted in collaboration with the MIT Center for Digital Business

in 2011, as part of a three year industry research program, was

ranked in the top 5 thought leadership publications of the last

decade by Source.

Source: Source, a leading market analyst firm for the consulting industry

Top rated thought leadershipLeader in Digital Strategy & Transformation

Leader in digital transformation research,joint research programme with the MIT

Capgemini Consulting

in a segment of one

digital specialist

Partnershipswith technology companies

Top rated capabilities within digital strategy
http://www.capgemini-consulting.com/digital-transformation-review-4http://www.capgemini-consulting.com/ebook/digital-transformation-review-2/index.htmlhttp://www.capgemini-consulting.com/ebook/Digital-Transformation-Review-3/index.htmlhttp://ebooks.capgemini-consulting.com/CC-MIT-SMR-Research-Embracing-Digital-Technology/http://www.capgemini-consulting.com/ebook/Transform-Power-Digital/publication-interactive/index-global.htmlhttp://www.capgemini-consulting.com/ebook/digital-transformation-review-1/index.htmlhttp://www.capgemini-consulting.com/ebook/The-Digital-Advantage/index.htmlhttp://www.capgemini-consulting.com/ebook/Wiring-Enterprise/publication-interactive/index-global.htmlhttp://www.capgemini-consulting.com/transform-to-the-power-of-digitalhttp://www.capgemini-consulting.com/ebook/How-Digital-are-You/index.html


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Do you know the legend of Sissa? ... and Moores law?

The real effect of doubling phenomenon is not noticed before you reached the second half

of the chessboard

7

We are at the second half of the chessboard (Prof. Andy McAfee, MIT)

The data capacity doubles

every 18 months. We have

now gone through 32

doublings!
http://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svghttp://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svghttp://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svghttp://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svghttp://localhost/var/www/apps/conversion/tmp/scratch_6//upload.wikimedia.org/wikipedia/commons/0/00/Transistor_Count_and_Moore's_Law_-_2011.svg


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... Will lead to

the Singularity

Accelerating processing powerwe are approaching the Singularity


8

A study of different AI expert predictions found a wide range of

Singularity dates, with a median value of 2040

Accelerating pace of change ...1

Exponential growth in computing power ...

... By powers of 10

.... Now progressing more each hour than

it did in its entire first 90 years

2

3


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The world is in the middle of the Digital Revolution


9

Steam Power led toindustrialization

Electrificationled toinnovationsuch as assembly line

Digitization leads to the re-modeling of products,

capabilities, and businessmodels

1stIndustrial Revolution

2ndIndustrial Revolution

3rdIndustrial Revolution

Machines replacing

muscle power

Machines replacing

brain power


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Bandwidth, devices, content in place for mobile internet usage

Digital technologies are part of peoples lives

10

Usage increasing No of users increasing

13

23

6,5

20

2011 2016

Consume

Communicate

Forecasted minutes per day spent on mobile device:

time spent doubling, shift towards consumption

1,2

4,5

2012 2018

Number of smartphone users

expected to reach 4.5 billion by 2018.

CAGR 25%

Smartphone users spend

128 min/day of which 22

min on talking and SMS

167 min / day desktop, 274 min on TV, 26 min /day newspapers

Consumerization of

technology

Bandwidth

3G / HSPA / LTE

Devices

Smartphone

penetration

Content &

services

The web, applications

and mobile sites

Usage


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Technology is changing the business landscape and leaders views

2,4

3,7

4,8

5,65,9

Managers in the United States and in Great Britain ranks the business

value of technology and telecom investments. The scale is 1 to 7,

where 7 is extremely important

1970s

1980s

1990s

2000s

2010

Max 7

% of

TechnologyCompanies 2

1956 20111982

3.3% 3.3% 27%

100% 80%

33.3%

No major change in

the composition of

the DJIA between

1956-1982 High proportion of

traditional

companies in both

1956 and 1982

Significant change in DJIA

composition as several

traditional companies lost

dominance

% of tech companies

increased tremendously

Source: Capgemini Consulting-MIT Analysis; Historical Down Jones Industrial Average Composition1 DJIA stands for Dow Jones Industrial Average2 TME , IT, and Semiconductor companies

More and more leaders agree that technology

is crucial for businesses% of Companies Surviving in the DJIA 1956-2011


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A few industries have already felt the power of the digital wave

0

50

100

150

200

250

300

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

FUJIFILM

KODAK

Napster

(P2P)

iPod launched

IPRED law

Spotify launched

... Music

... Photo... In Media

Share prices

REVENUE FROM RECORDED MUSIC (bn)

... Telecom

BLOCKBUSTER

NETFLIX

Blockbuster declined offers to

acquire Netflix in 2000 for 50

MUSD...

2004-2005 Motorola

reaches its peak with

a 22% market share

2006 Q4 Sony

Ericssonreaches itspeak with a 9%

market share

12

A ll thi t t d b i d l lik l t hift t d d t t ti d


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50 Bn devices

500 Bn devices/sensors

People

Things and people

Things and things

Approx. 23 Bn devices

Business model:

Data

Eye balls

Business model:

Data

Computations

Priority

Time20202014

Connections

2050

Digitization of society & business

Why Google et al are investing billions in networks and smart services

As all things get connected, business models likely to shift towards data, computations and

priority


13

Digitization continues ... and data will only grow in importance

Combination of central and decentralized compute and data storage

For us Digital Transformation is about utilizing new technologies to radically change


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For us, Digital Transformation is about utilizing new technologies to radically change,

improve and future-proof an organization and its business

DIGITAL MATURITY MATTERS

THEDIGITALWAVEAFFECTALLTYPESOFINDUSTRIESANDCOMPANIES- NOTJUST

HIGH-TECHPLAYERSALSOMORETRADITIONALINDUSTRIES

COMPANIESTHATSUCCESSFULLYMANAGETHETRANSFORMATIONARETHEFUTURE

LEADERS

IN

THE

MARKET

COMPANIESTHATWANTTORIDEON- ANDNOTBEWASHEDAWAYBY- THEDIGITAL

WAVEHAVE TO ACT NOW

14

To truly understand the new challenges and opportunities in a digital world we entered


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To truly understand the new challenges and opportunities in a digital world, we entered

into a research partnership with the MIT some 4 years ago

Capgemini Consultings partnership with the MIT


15

MIT CDB studies the challenges of leading global organisations in

their digital transformations and the importance of the new

digital economy, founded in 1999

Prof. Eric Brynjolfsson

Director of MIT CDB

Digital productivity

Prof. Andy McAfee

Principal investigator Enterprise 2.0/Management

implications of Digital

Prof. George Westerman

Project lead

Technology & Organisation

Capgemini Consulting and MIT are partners in thestudy of digital transformation

The objective is to understand how the digital winners

are managing(or have managed) their digital

transformation, starting from brick and mortarand

moving to a digital company, and to identify some

guidingprinciples and best practices.

Capgemini Consultings 'Digital Transformation: A Road-Map for Billion-Dollar Organizations' developed

with the MIT was just ranked in the top 5 publications of thought leadership of the last decade


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Question 1


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Digital Transformation is on top of CXOs agendas


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We want P&G to be the most digitally-enabled company in the world

Bob McDonald, P&G, CEO

Digitalisation will become part of our DNAJoe Gross, Allianz Group, Head of market

management

Europe is facing a digital transformation.

Data is the new oil for the digital age. So we

are planning to shake up how public

authorities share data.

Neelie Kroes, VP European CommissionDigital has been a catalyst for

everything in the company

Angela Ahrendts, Burberry, CEOBoeing believes the future of the aviation

industry lies in "the digital airline. Materials,componentry, construction methods,

manufacturing methods, the whole digital

revolution We are embedding all that

thinking into the product.

We have defined digital maturity along two different dimensions: Digital Intensity and
http://www.google.com/url?url=http://europa.eu/about-eu/basic-information/symbols/flag/index_en.htm&rct=j&frm=1&q=&esrc=s&sa=U&ei=Wlf8U9v2G8Xf4QSxlIH4Cw&ved=0CBYQ9QEwAA&usg=AFQjCNHBsmBuiY8E_jPUVT5umpXiOvvEBQ


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We have defined digital maturity along two different dimensions: Digital Intensity and

Transformation Management Intensity

Digital Intensity is investment intechnology-enabled initiatives to change how

the company operatesits customer

engagements, internal operations, and even

business models.

Transformation Management

Intensity consists in creating the leadershipcapabilities necessary to drive digital

transformation in the organization.

Location-based marketing

Digital Design

Connected Products

Mobile sales

Customer Service in Social Media

SMAC

Digital Vision

Cross-silos coordination and governance

New skillsCultural change


DigitalIntensity

l l d f h


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Digital leaders outperform their peers

Strong overarching digital vision

Good governance

Many digital initiativesgenerating business value inmeasurable ways

Strong digital culture

Overarching digital vision exists,but may be underdeveloped

Few advanced digital capabilitiesin place

Strong governance cross silos

Taking active steps to builddigital skills and culture

Management skeptical of thebusiness value of advanceddigital technologies

May be carrying out someexperiments

Immature digital culture

Many advanced digital features(e.g. social, mobile) ...

... but in silos

No overarching vision

Underdeveloped coordination

Digital culture may exist in silos

Digitalintensity

Transformation management intensity

Fashionistas

Beginners

Digirati

Conservatives65%

6%

14%

15%

Whatis theorganization doing

with Digital

Technologies?

--- hard stuff ---

Howis the organizationmanaging this

transformation?

--- soft stuff ---

Source: Capgemini Consulting & MIT

FashionistasBeginners DigiratiConservatives

Revenue

Profitability

Market valuation

-4%

6%

-10%

9%

-24%

-11%

9%

26%

-7%

-12%

7%

12%

Digital leaders outperform their peers

Four levels of digital maturity based on a

combination of hard and soft factors

Most companies now recognize that digital is critical ... But the pace is too slow


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Most companies now recognize that digital is critical ... But the pace is too slow

(unless youre the CEO)

5%

13%

33%

18%

27%That time has passedit is already

a matter of survival

This Year

Within the next

2 years

3 years or more

Its never going to become

important across the entireorganisation

78%

47%

57%64%

67%

38%

32%25%

22%

15% 11% 11%

StaffManagersC-Levelexecutives

CEO

Fast or Very Fast

About Right

Slow or Very Slow

10%

20

The pace of implementation of digital

transformation in the organization

When will it become critical to implement DT

across the organization?

A l k f f i th bi t b i t Di it l T f ti


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A lack of sense of urgency is the biggest barrier to Digital Transformation

The vast majority of employees

support the digital vision when

senior leaders share it

... But few CXOs actually do

share their digital vision ...

Agree

20%

Strongly Agree

73%

Other 7%

Did not share their

vision: 64%

Shared their

Digital Vision:

36%

...or a clear /

aligned road map

>40%


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Question 2


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Most digital initiatives focus on improving the customer experience


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Most digital initiatives focus on improving the customer experience


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Customer Experience Operational Improvements Business model change

Improve

internalcomms

Enhance the

productivity

of workers

Automate

operational

processes

1,880

1,260

1,090Transition physical

products / services to

digital ones

Develop new

business models

Launch new

businesses

Expand our reach to

new customers and

markets

Ensure x-

channel

consistency

Enhance our

existing

products

services

Launch new

products and

services

Improve the

customer

experience

Most digital initiatives focus on CX

Our digital initiatives are

helping us to: ...

The customer is the first priority Top-line focused programmes

Easier to get funding

... Or lipstick on the pig?

In our experience companies have not followed optimal path to increase digital maturity


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Common A combination of hard and soft factors required

Priorities and initiatives to address both Digital

Intensity and Transformation Mgmt dimensions

What signifies the Digital Leaders we have

studied, do they exhibit common characteristics?

In our experience, companies have not followed optimal path to increase digital maturity

How to become a Digital Leader? What steps?Fashionistas

Beginners

Digirati

Conservatives

Commonly chosen path in the Digital Journey

Start with customer facing / tangible activities Early and costly failures due to silo structures, lacking strategy and no

transformation agenda

How to find the management courage to increase investments after initial failures

Holistic perspective required

Optimal


DigitalIntensity

Question 3


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Question 3


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Companies are digitally transforming across three key dimensions


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Companies are digitally transforming across three key dimensions

Digital Leaders have a common DNA 1(3)

Digirati distinguish themselves by excelling in one or more areas of digital intensity

Digirati are far better than other types of firms at changing their business models


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Digirati are far better than other types of firms at changing their business models

Digirati are able to link their implementation

capabilities and leadership capabilities to

fundamentally transform how the company

operates. Companies in other quadrants are

less able to do so.

The business model changes include:

Adding value to products and services

Reaching new customers

Linking operational and customer-facing

processes in new ways

Launching new businesses

Customizing products and services

Operating as a more unified enterprise

27

Though every companys journey is unique, certain combinations of

b l


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Digital Leaders put focus on Analytics and Data Integrationfundamental to

radically improve both customer experience and operational excellence

investments appear to be complementary

28

Analytics- Target marketing more

effectively- Personalize marketing

communications- Optimize pricing

- Better qualify sales prospects

ProcessDigitization

- Automating processes

- Monitoring operations inreal-time

- Adaptability to externalchanges

InternalCollaboration

- Active knowledge sharing

- Use of internal socialnetworks and video conf.

- Working anywhere, anytime,any device

Social Media- Monitor reputation- Promote & sell products &

services

- Provide customer service- Build customer /ecosystem

communities

CustomerExperience

- Cross-channels consistency

- Personalize the customerexperience

- Offer self-service

Mobile Channel- Promote products & services- Sell products and services

- Provide customer service

Data Integration- Customer Data

- Other data (finance, supply-chain, operations)

Engage customers Internal operations

Investments in digitaltechnologiesthe SMAC stack

- Social

- Mobile

- Analytics

- Cloud

Data integration

- Usually with cloud as achange agent

- Fundamental to get leverageon other capabilities

Analytics capabilities tooperationalize the data

Digital leaders realize that data is a critical asset to harness

Digirati invest 100% in transformation management


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g % g

Vision

IT

Business

GovernanceEngagement

Four key transformation management practices enable companies to align their digital efforts under a

common vision and coordination structure, and engage the company in making that vision a reality

Digital Leaders have crafted a compelling digital vision that

incorporates the companys strategic assets

Digital leaders get Business & IT to work together

even if it means substituting people and processesas well as the technology

Effective investment rules and

coordination mechanisms improveefficiency and ensure digital efforts

are moving in the right direction

When employeesare engaged in a

shared vision they help to make it areality, offer less resistance to

change and often identify new

opportunities

Digital Transformation needs to be shaped, driven and sustained from the top of the organizationFocus on the How more than the What



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AGENDA








30

In our research we concluded that the typical manufacturing company remains a digital

beginner in the context of Digital Transformation


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beginner in the context of Digital Transformation

Digital maturity by industry


31

Some industries are more mature than others... ... but there are digital leaders in every industry

38%

35%

33%

31%

30%

26%

24%

20%

12%

7%

High Tech

Bank & Finans

Frskring

Resor & service

Telekom

Detaljhandel

Konsumentvaror

Energi

Tillverkning

Lkemedel

Share of Digirati per industry

Banking

Insurance

Travel & hospitality

Telecom

Retail

FMCG

Utilities

Manufacturing

Pharmaceuticals

High Tech

Banking

FMCG

Insurance

Manufacturing

Pharmaceuticals

Retail

High Tech

Telecom

Travel & hospitality

Utilities

Strong in social and mobile

Need to focus on cross-

channel consistency, worker

enablement and analytics

See less opportunity / threat

in digital transformation

Need a transformative digital

vision and the leadership

drive

Fast to launch digital

initiatives

Need to integrate and

align initiatives across silos

Strong digital

governance

capabilities, but

cautious to investing

Regulatory worries and

a risk-averse culture

Digitalin

tensity


Only 12% of the manufacturing companies can be associated to the Digirati

Digital manufacturing leaders are outperforming their peers, especially on the How

dimension


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dimension


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Consistent with other industries, compared to their

industry peers, digital leaders stand out on the HOW

... The horizontal axis in our digital maturity matrix

Generally, Manufacturing is behind other industries inbusiness model and customer experience

- Move from product to service, but taking time

- In a B2B context, Dealer structures inhibiting

end-user / customer relationships

How are the digital manufacturing leaders different?

For manufacturing companies DT is blue skies ... but still have a limited view of what

they should do and how to do it


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they should do and how to do it


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... But no aligned plan in placePositive about DT opportunities ...

83%of the manufacturing Digiratihave a comprehensive

visionand a

roadmaptowards

digital

We fear that most manufacturers are not yet realizing the potentially disruptive shift about to come

12%

21%

74%

14%

12%

12%

74%

67%

14%

Digital transformation is a

competitive opportunity for our

company

Our competitive position will suffer

if we do not e ngage in digital

transformation

Digital transformation is a threat to

our company's status in the industry

Disagree Neutral Agree

43%

55%

51%

23%

17%

26%

34%

28%

23%

There is a high-level roadmap for

digital transformation

Senior executives and middle

managers share a common vision of

digital transformation

Senior executives have a digital

transformation vision that involves

radical changes


Question 4


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34

Many manufacturing companies need to scale up capabilities on both the customer side

and the operations side and above all become more data driven


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and the operations side and above all, become more data driven


35

83% of the Digital Leaders in manufacturing monitortheir operations in real-time, and 100%have

automatedtheir core processes

67% of the digital leaders use analytics totarget markets and customers

Digital Leaders are much more data driven than their peers

19%

42%

51%

30%

20%

23%

51%

38%

26%

Our core processes are automated

We monitor our operations in real

time

Our operational processes can adapt

quickly to external changes


53%

60%

70%

18%

17%

15%

29%

23%

15%

We use analytics to target

marketing more effectively

We use digital tec hnologies to

enable self-service

We improve our knowledge ofmarkets and customers through

devices embedded in products


Internal operationsCustomer engagement


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Manufacturing leaders focus on cloud enabled common platforms for their operations


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75%have a common platformfor differentbusiness units

67%state they have anintegrated view ofproduct

& serviceperformance

67%believe to have anintegrated view on

customer data

100%state they have an integratedview on supply chain status

Top-performers(Digirati)

Manufacturingaverage

48%

43%

38%

56%

We are only at the beginning of the

digitization of the manufacturing industry The digital leaders are taking steps to

enable a shift in business model from

physical hardware to digital software

Over time, the vehicle and manufacturing industry to move into more advanced servicesrequiring more capable infrastructures and platforms


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q g p p


38

Fleet mgmt andpredictive asset

maintenance

Capability examples:

Connected machines

data collection

Over the air PAM

Remote diagnostics can

ensure proper

functioning, minimum

down time and lower

fuel consumption

Dynamic machine &vehicle customization


More capable platforms

with the ability to push

updates and new

services simultaneously

across entire fleets

Security, e.g.

authentication services

Enable collaboration

across ecosystem

Autonomousmachines & V2Vcommunications


Infrastructure with

elastic networking,

supporting vehicle to

vehicle and close to the

edge compute &

communication

Advanced security e.g.

signature services, to

manage end to end

SLAs

Compliance to

regulations / policies

Standardization and

interoperability

Maturity &complexity

Time

Now

2 yrs -

5 yrs - Vehicle and manufacturing players will need to develop their

software offering and operation

Increasing need for a common platform

Move from data collection to remote management (updates &

upgrades) of the software

Risks, examples

- There may be a push for separation of hardware and

software, which is likely detrimental for current business

- Risk that current leaders get disrupted by new entrants with

less vested interest

Opportunities, examples

- New revenue possibilities primarily on the software side

- Need to leverage e.g. installed base

- Need to build an ecosystem

Microsoft model or Apple model

- Open or closed

- Software-led or hardware-led

Vehicle and manufacturing leaders to develop

capabilities required for future digitization

Digital Leaders are years ahead of their peers

Question 5


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39

Strong overarching digitalvision

Good governance

Many digital initiativesgenerating business value inmeasurable ways

Strong digital culture

Overarching digital visionexists, but may beunderdeveloped

Few advanced digitalcapabilities in place

Strong governance cross silos

Taking active steps to builddigital skills and culture

Management skeptical of thebusiness value of advanceddigital technologies

May be carrying out someexperiments

Immature digital culture

Many advanced digital features(e.g. social, mobile) ...

... but in silos

No overarching vision

Underdeveloped coordination

Digital culture may exist in silos

Digitalinte

nsity


Fashionista

Beginner

Digirati

Conservative


40/62


AGENDA








40


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41

(Modular, Flexible, Boundless)

What do we see manufacturers focusing on?

Lets look at some cases

A trailer manufacturer delivers networked and integrated transport solutions


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Smart Products | Use Case

Solution

Telematic tools deployed in the trucks

track maintenance-status, weight-

load, cargo-temperature and the

location

Two-way communication between the

truck and both customer and

manufacturer as a continuous datalink

Background

Real-time sharing of operational data

to customer and manufacturer is not

sufficiently provided

Operated trucks, especially with the

refrigeration unit, are not centrally

integrated from the customers point

of view


42

Benefits

Better integration of connected

support services such as efficient

truck maintenance based on pro-

active servicing

Enhanced item demand forecasting

to further improve supply chain

efficiency Improved product development

based on detailed insights on truck

performance and actual usage

patterns

A smart two-way communicationwith the refrigeration unit canprotectagainst damagewhen transporting

temperature-controlled freight

A leading building automation company designed a digital service management platformto enable the delivery of innovative remote service offerings


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Smart Services | Use Case

Benefits

Business structure and IT perfectly

respond to business needs

Deliver innovative service offerings

through highly automated and

efficient processes

Solution

Definition of function, role and

process requirements for operating

the remote service portfolio

Design of a target IT architecture for

digital service management

Implementation of an advanced digital

service management platform

Background

Intention to offer innovative remote

services

Renew and expand the IT platform to

offer / extend value added services

Create a better customer experience


43

Service digitization increases theefficiencyof service delivery andensures the delivery of high-quality

servicesat low costs

Easy-to use tools are available through cloud-based platforms, from solutions for ideageneration and crowdsourcing up to complex engineering activities


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Extended Innovation | Use Case

Benefits

Enables Extended Innovation in

variable intensity, as needed

Integrates a multitude of possible

channels

No heavy up-front investments

required

Solution

Cloud-based, enterprise-grade

innovation and collaboration

platforms are now easily available

They provide functions such as

SharePoint integration, CAD

capabilities, social media analytics,

content sharing Examples: Local Motors, AutoDesk

360, SpigitEngage, IdeaScale

Background

When benefits are difficult to

quantify, decision-makers are

reluctant to invest into new

platforms or tools

But integrating the surrounding

network of customers, suppliers or

partners into the idea generationand product development process

requires structured tools


44

If collective intelligence is such apowerful wayfor organizations toget things done [...] why dont more

businesses use it? The answer, we think, is

they dont know how.Founders of the MIT Center for Collective Intelligence

A collaboration platform enabled a world-class aircraft and rocket engine manufacturer toengineering collaboration across the extended-enterprise


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Background

Need to globally collaborate all along

product life cycle with more

suppliers and partners

Real time collaboration of internal

and external users around digital

mock up must be improved

Communication must be facilitated Partners and suppliers dont have a

direct access to product

configuration


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Agile Collaboration Network | Use Case

Benefits

Global transparency about demand

and resource availability through

consolidation across all levels of the

network

Validation of plans by checking sales

plans against network planning

quantities Reservation of agreed quantities to

ensure delivery reliability

Triggering the investment process at

an early stage

Solution

Implementation of collaborative

solutions based on TeamCenter

Unified Architecture (TCUA) to share

configurations and digital mock up

with external partners and suppliers

Definition of product data model

Reengineering of modificationprocesses in order to find the right

balance about the rhythm of

evolution into digital mock up and

PLM corresponding configurations

ThroughAgile CollaborationNetworks, manufacturing companies cantruly leverage the opportunities arisingfromthe globalized marketplace for

know-how.

Situational adaption of product lines enables just-in-time production, minimized batchsizes and optimal capacity utilization


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Decentralized Production Control | Use Case

Benefits

Plug & Produce capability of

production modules allows for

dynamic integration in production

cycle

Under-utilization and resulting

excess capacity may be transferred

to business partners

Solution

Formulation of systematic production

processes to be run on modularized

production lines

Automated reconfiguration of

production modules in response to

market demand

Production lines are connected in across-company network

Background

Hitherto, production planning and

control processes are rigid,

centralized and decoupled even from

the intra-company ERP system

The layout of production facilities is

equally obtained through rigid,

hierarchically structured planningprocesses


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Self-adjustingelements and productionstations enable dynamic transformationof production lines in regard to order,

function and amount of used modules

DevelopmentServices

(Product/

ProductionSystem)

ProductionServices

AssemblyServices

PurchasingServices

MaintenanceServices

Erection &Installation

Services

DeliveryServices

ProductionSystems

Productdefinition

QualityMgmt.

Services

Chip manufacturer Intel designed and implemented a data-driven chip testing processresulting in significant operational cost savings


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Data-driven Operational Excellence | Case Study

Added value

The model results were leveraged to

significantly cut down the number

of conducted tests

This led to cost savings of

USD 3 million within the first year

By rolling out this solution to all

production lines, annual savings ofUSD 30 million are expected

Solution

Intel initially launched several pilot

projects to discover the potential

arising from data

By this, a business analytics solution

was designed that optimizes test

procedures of a specific production

line Previously, all produced chips were

run through an extensive series of

tests

Background

Highly automated production

facilities generate about 5 TB of data

every hour

In the past, the potential arising from

this data was not leveraged to drive

its core competency of high volume,

precision manufacturing


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Techniques ofbig data analysisapplied on core value processescanlead to annual savingsof several

millionUSD

Question 6


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48

The future manufacturing business model will focus on customized, smart products,supplemented by highly targeted services, delivered in open ecosystems


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The Future Manufacturing Business Model


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The Future Manufacturing Business Model will be based on customized, connectedproducts, data-driven services and increasingly service-based operating models

The virtual product model will be a major output or resource

Value creation organized through open ecosystems: We will see a specialization even of big players in very specific fields , in which

they will provide leading, modularized products & services

Those will be used in plug & play style for the interconnected value propositions

In the future, manufacturers should therefore focus their business model on:

The best possible integration into the relevant ecosystems Providing specific services with high value-add


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AGENDA








50

Breakout: instructions


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Purpose

To have a joint discussion and understanding of the importance of DT to Volvo and its implications

2 perspectives: external and internal

What

Split into 4 breakout groups (3 groups locally, 1 virtual/phone)

2 groups to discuss external perspectives of DT and relevance for Volvo Group

2 groups to discuss internal perspectives of DT and relevance for Volvo Group Each group has an assigned leader, who will also present back to the large group on behalf of the

breakout group

Time

30 min parallel discussions within each breakout group

4 x 5 min present back from each breakout group

2 x 5 min joint reflections and discussion (per perspective)


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Digital flipchartGroup 1


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Ambitions

(strategy)

External change

(CuEx)

To what extent is DT important to Volvo Group?

It is important (considering the digital

transformation all around the world)

What is Volvos current digital maturity

Incosistant, case by case, not clearly imbedded.

What are the key objectives?

Defining the unified brand

experience/Platform.

Define the ownership of the data. (Product,

Customer, Market)

Combine this data with customer needs for

sustainable business models.

Time to market/ Agile development

Platforms for involving customer collaboration

in product development and also inoperations/services.

What should Volvo do within the next 3 yrs in terms of:

Customers

Offering new solution .

Develop the knowledge about total offfer.

Markets

Getting insights for new markets.

Extending the established digital platforms tonew markets/use existing information for new

Competition

Collaborating with information

Benchmarking

Products & services

Digital services, solutions.

Channels

Digital flipchartGroup 2

Ambitions E t l h


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Ambitions

(strategy)

External change

(CuEx)

The presentation only manufacturing, not the whole

company (development, AM etc).

E.g. AM has a suggestion, but is getting a noeven though

there is a business case. Because product cost goes up.

Society goes towards a DT so Volvo cannot stand outside.

Will new competitors show up quickly?EX: An AM company

that only sells services for automation.

Other competitors are not too good either, so not critical to

work on this -> low prio.

Digital maturityhistorically quite high at Volvo, but today

we are not unified e.g teamplace, we are not really using the

potential. Why?no training. Technical mature but not sogood to capitalize on it. Ex: CareTrack no service connected to

this.

Key objectives? well there are no decisions, but what we

consider? Cost saving goal 2%, quite contra-productive. There

are different IT cost that should be steered differently, e.g.

admin systems, product IT, services etc.

Key objectives: to standardize and harmonize all applications.

All legacy systems. With fewer applications, fewer sources ->

easier to get info. Negotiate globally regarding applications. Ex: VCEyou buy

an own system if you cannot find exactly what you wantwe

need a stronger corporate. New org can give this?

To make customer value, capitalize

Take the services and soft products to the market, to sell in.

Must give customer value. Something that the customer will

save money on.

Our customers are not in the frontline of DT. To sell in

digitilization to these customers is a challenge. Cool features

are not the thing.

We must have a better dialogue with the customer to get

there needs.

Requires also training, ex: how to drive to save fuel, to create

effectivness in the customers processes.

Should we broaden our views for customers and services? ->goal 50% to be soft productsnot reached.

New ideas, the ideas that are today are quite futuristic.

Ex: fleet management, we do not earn much, more a

competitive thing.

We must look on the maturity and need for different

markets, NA or Africa does not have the same.

VCE: AM, engine is sold to the wrong market, cannot be

supported locally.

Breakout group 3 and 4


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Ambitions

(strategy)

Internal

change

(OpEx)

To what extent is DT important to Volvo Group?

What is Volvos current digital maturity

What are the key objectives?

What should Volvo do within the next 3 yrs in terms of:

Organization

Governance

Skills

Technology

Digital flipchartGroup 3 & 4


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Ambitions

(strategy)

Internal change

(OpEx)

Yes to a certain extent.

Great opportunity for developing services for

our sales operations.

Within manufacturing we are quite mature.

Key objectives:

Grow business from digital driven service

solutions

Stepwise improvement of our operations by

implementation of improved techinal

solutions (Lync etc)

Big data management for improvement

Technology:

Reduce the number of systems

Fit the systems to the service oriented

company

Skills:

Improve knowledge from data to learn about

our customers business/industry

Governance

Improve measurement cross organization (big

data)

Adherence to our process

Organization


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AGENDA








57

The 7 myths of Digital Transformation


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MYTH REALITY

DIGITALISFORMEDIA, TECHNOLOGYANDB2CCOMPANIES

DIGITALTRANSFORMATIONISABOTTOM-UPPHENOMENON

ONLYTHECUSTOMEREXPERIENCEMATTERSINDIGITAL

TRANSFORMATION

THEREISNORECIPEFORDIGITALTRANSFORMATION

DIGITALTRANSFORMATIONCANHAPPENDESPITEIT

I HAVEPLENTYOFTIME

IMSAFE, MYDIGITALTRANSFORMATIONISCOMPLETE

THEREAREDIGITALLEADERSOUTPERFORMINGTHEIRPEERSIN

EVERYINDUSTRY

DIGITALTRANSFORMATIONMUSTBELEDTOP-DOWN

DIGITALLEADERSCREATEPROFOUNDCHANGESINBUSINESS

MODELSANDOPERATIONSASWELL

DIGITALLEADERSEXHIBITCOMMONCHARACTERISTICS

ALLDIGITALLEADERSHAVEBUILTSOLIDIT-BUSINESS

RELATIONSHIPSANDTECHNOLOGYCAPABILITIES

DIGITALTRANSFORMATIONTAKESTIMEANDSOMEOFYOUR

COMPETITORSAREALREADYLEADINGTHERACE

TECHNOLOGIESNEVERSTOPCHANGINGANDNEWBUSINESS

MODELSARRIVEEVERYDAY

1

2

3

4

5

6

7

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Concluding discussion


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How was the seminar overall?

Good

Room for improvement

Did we meet your expectations?

YES

To some extent

NO

Discussion & qualitative feedback (no poll)

Benefits? What was good / interesting?

Concerns? What should we have done

differently?


59

Feedback

Concluding discussion


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How was the seminar overall?

Good

Room for improvement

Did we meet your expectations?

YES

To some extent

NO

Discussion & qualitative feedback (no poll)

Benefits? What was good / interesting?

Concerns? What should we have done

differently?


60

Feedback

Thank you very much for the opportunity to be here, and the interesting discussions!

Want to learn more about Digital Transformation?


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Go to capgemini-consulting.com ...

... for our main research & publications


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Ulf JanssonManufacturing & Automotive

+46 703 78 14 76

[email protected]

Karl BjurstrmDigital Strategy & Transformation

+46 706 80 46 23

[email protected]

Documents

Digital Transformation Cap Gemini