NASSCOM ILF 2016: Attacking the Digital Disruptor

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Attacking the Digital DisruptorsMohan SawhneyMcCormick Foundation Professor of TechnologyKellogg School of Management

What?So What?Now What?3 Questions

I believe every presentation should answer three basic questions: What is happening? What does it mean for us? And most importantly, what should we do about it? I will also discuss these three questions. I will begin by defining hyperconnectivity and trends that are driving connectivity. I will then look at the implications in terms of industry dirsuptions. Finally, I will give you advice on strategies to deal with digital disruption. 2/10/20162

Causes of Digital DisruptionDisruptor Strategies and Business ModelsDealing with Digital DisruptionOutline

We are entering a world where people, information, things and infrastructure will be connected via a broadband network, transforming work, life and business.Connectivity Causes Disruption

This is a simple definition. Everything will be connected, and every aspect of our lives and work will be affected. 2/10/20164

The Evolution of Hyperconnectivity

The Internet of Things is Already Here

Connected Fitness

The seamless connection of equipment, sensors, applications and devices to provide an interactive and personalized experience for consumers and improved efficiency and profitability for facility operators. Connected Fitness

Wearables in clothing

Muscle Effort SensorsBio Sensing Bra

Connected Fitness and Self-Quantification

The world of logging apps and sensor-enabled devices is entering the mainstream, enabling the quantification and the pursuit of well-being for everyone.

The integration of mobile technology, computing devices, and emerging delivery system capabilities into a patient-centered model of care.Patient-centered personal health management.Typically includes a device or smartphone application.PHR and EHR integration is possible.Particularly beneficial for conditions where continual tracking is warranted, such as Diabetes, Asthma/COPD, Aging in Place, Medication Adherence.Connected Health

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Link glucose meter readings to patient records electronically.This link ensures that readings are recorded correctly and allows for physicians to passively monitor a patients blood glucose. Pilot studies show that this kind of application is correlated to a reduction of 5 points in blood glucose readings and a 1% reduction in HbA1c readings over a three-month period.Example: Diabetes Monitoring

But this is just the beginning.

WearablesSmart CarsSmart HomesSmart CitiesVertical Applications

Causes of Digital DisruptionDisruptor Strategies and Business ModelsDealing with Digital DisruptionOutline

Types of Value in Digital Disruption

Economic ValuePrice transparencyUsage-based pricingReverse auctionsDemand aggregationPlatform ValueMarketplacesCrowdsourcingSharing economyPeer-to-PeerExperience ValuePersonalizationConvenienceAutomationImmediacy

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Digital Disruptor Value Proposition

Digital Disruption Strategies

Assessing Vulnerability: The Digital Vortex

Source: Global Center for Digital Business Transformation, IMD

Types of Digital DisruptorsDisruptive Digital StartupsProducts as SoftwareInnovative IncumbentsChannel Disintermediators

Disruptive entrants are startup companies that are challenging incumbents with a mobile and cloud-based service marketplaces.Products as software are disruptive industry competitors who are redefining products as software-enabled productsInnovative competitors are players who are leveraging cloud, mobile and social technologies to create new experiences.Channel disintermediators are e-commerce companies that are taking the middleman out.2/10/201619

1. Disruptive Entrants: Uber

Questions Uber addressed:Wheres the nearest cab?How long do I have to wait?Who is the driver?What kind of car is it?How much will it cost?Do they take credit cards?How much should I tip?Can I split the cab fare?Can I contact the driver?

2. Products as Software: Tesla

Car as connected applianceApp to control the carOver the Air software updatesFuture-proof Hardware

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3. Innovative Incumbents

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4. Channel Disintermediators

Causes of Digital DisruptionDisruptor Strategies and Business ModelsDealing with Digital DisruptionOutline

4 Strategies to Deal with Digital Disruption

Attack digital disruptors by creating a digital disruptor of your ownLeverage your assets and brand to create a model disruptors cannot copyCompete asymmetrically using a Judo strategy1. Attack - Disrupt your own business

Attack: HBO Fights Back!

HBO Streaming Service

2. Acquire: Keep Cannibals in the Family

+

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Steps in Organizational Integration

Create a consistent web, mobile and social media experienceLeverage social media for in-store sales promotionsLink online commerce with retail storesDesign digitally enhanced physical brand experiences3. Absorb: Integrate Digital with Physical

Designing Hybrid Experiences: Burberry

Brings digital world to life in a physical spaceCustomers experience the brand through immersive multimedia content like they do onlineRFID technology provides audio-visual content on selected items carrying microchips.Sales assistants use iPads to keep a log of purchase history and customer preferences.

Leveraging Social Media in the Store

Consistent Digital Experience: Nasty Gal

Digital customer strategies Provide customers with an omnichannel customer experience, where they can choose how to engage at any time on any device. The channels must be integrated and contextual, with the ability to proactively engage on behalf of the consumer.Digital enterprise strategies Evolve the business processes to become a digital customer-first enterprise, with digital customer-facing processes, digital collaboration tools and a digital culture.Digital operational strategies Embrace technology that supports digital transformation. This includes an open architecture that allows the enterprise to integrate with third parties that may have different architectures running differently.Becoming Digital

Question assumptionsEmbrace agile processes Build marketing into your productsLeverage privileged assetsThink big, start small, scale fast4. Adapt: Learn from Digital Disruptors

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The Agile Enterprise

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Adapt or DieIt is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.- Charles Darwin

Thank you!