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Plugging into bandwidth
How businesses can harness the power of the NBN Jason Juma-Ross National Leader PwC Digital Intelligence @ideasoc
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PwC Source: http://www.nbnco.com.au/get-an-nbn-connection/wholesale-speeds.html
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512/128 kbps
25/10 mbps
50/20 mbps
100/40 mbps
12/1 mbps
25/5 mbps
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PwC
Off the charts or ‘normal’ growth?
0
1
2
3
4
5
6
7
8
9
10
1960 1970 1980 1990 2000 2010 2020 2030
Dom
estic
Ban
dwid
th A
vaila
bilit
y (L
og)
Source: PwC analysis 3
100 mbps
100 gbps
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PwC
Wireless Operators
Media
Impact on business varies by industry sector
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Full Service Telcos
Financial Services
ConsumeTech.
Health & Public
Retail & Consumer
Resources & Energy
Core Business Model Risk & Opportunity
Digital Operations Risk & Opportunity
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PwC
5 Opportunities presented by increased digitization
1. Market & geographical expansion
2. More efficient sales & service
3. New sources of talent
4. Better, more competitive processes
5. Faster innovation
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PwC
Erosion of market & geographical barriers to entry, improving access to alternates
• Access to new markets (e.g. extension into customer journey on basis of virtual supply chain)
• Access to new geographies (e.g. previously uneconomic to sell to or serve through traditional distribution channels)
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K1
Geography
Prod
uct/
Mar
ket K2
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PwC
Carrying capacity ultimately limits market growth causing shake out
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dN dt
= N K-N K
t
Carr
ying
Cap
acity
(K)
K1
K2
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PwC
This process happens faster in digital markets, which move quickly to ‘winner take all’ dynamics
32%
19%
12% 7%
30%
Share (%)
‘Traditional’ stable market structure
Others
Nichers
Challenger
Follower
Leader
Source: Strategic Planning Institute Profit Impact of Market Strategy (PIMS) database http://www.fool.com.au/2013/05/21/google-stock-buy-it-and-hold-it-for-life/ http://blog.bazaarvoice.com/2008/11/14/how-to-stop-losing-market-share-to-amazon/
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PwC
Market fragments into niches as feature displacement drives differentiation
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PwC
Digital channels reduce overall cost to serve allowing asset re-investment
Observations from ‘real life’ • 50% reduction in time to resolution • 30% reduction in call volume • 60% reduction in abandonment • 70% of answers from community • 50% reduction in call center staff • Content creation costs reduced by $
+1M
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Redistribution Opportunity
Cost
Per
‘Ans
wer
’
$5
$3 $2
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PwC
Efficiencies in talent acquisition & retention
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100,000 data scientists solving commercial and public sector problems
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PwC
Process efficiencies can feed back into high cost business functions, like marketing
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PwC
Process optimization through collaboration
http://www.societyone.com.au/how-does-it-work 14
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PwC 15 http://www.wired.com/design/2013/05/threadless-disney-t-shirts/
Sponsored design competitions for Thor, Monsters U, Iron Man, Muppets…
Faster innovation cycle time: Threadless
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PwC
Warning: the days of taking a BAU approach to digital are well and truly over
Now Digital BAU Growth
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Physical Only
Multi-Channel
Online Only
$100
Customer Value
$175
$45
Physical Only
Multi-Channel
Online Only
Churn
Loss in store & branch
sales
Growth
Channel growth in line with market
Physical Only
Multi-Channel
Online Only
Same # customers, lower value
Growth
Aggressive online
growth
Growth
Digital-driven store
sales
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PwC
Develop organizational structure from siloed to integrated
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Strategy Production Distribution Sales & Marketing Digital
Digital
Strategy Production Distribution Sales & Mrkt Advocacy
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PwC
5 Characteristics of digital organizations
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Strip out time & cost from innovation
Data is the lifeblood
Create networks not hierarchies
Experiment to reduce uncertainty
Digital is not an appendage