Digital Strategy: Learning

from the Digital TitansProf. Bala Iyer

@BalaIyer

April 22, 2017

Changing of the Guard

• Most theories and concepts taught today

come from studying companies in the

auto industry

• Entering the age of digital titans

Software is eating the world

• .. we are in the middle of a dramatic and broad

technological and economic shift in which software

companies are poised to take over large swathes of the

economy [Andreessen]

• Every company is a software company - ecosystem

• Software + Sensors + Connectivity Transformation

Data Explosion!

• Every day, we create 2.5 quintillion bytes of

data — so much that 90% of the data in

the world today has been created in the last

two years alone.

• Trapped treasure trove

Digital Strategy

• Is an action plan that uses ecosystems, technology and information to

augment organizational/individual performance to achieve business goals.

• Delivering smart, adaptable and personalized products and services using

digital technologies

• Create novel, personalized digital experiences

Here come the Digital Titans

• Multi-billion dollar companies operating as platform-based business models

• Have mastered the art and science of managing the digital technologies

• Mastered the data asset and taken it into different domains

• Multi-purpose platforms with wide applicability

Incumbents in every industry feel the threat

Digital Titans are Commoditizing the

incumbents

Hardware

Software

Services

User

Conversational Commerce

What have the Digital Titans taught us?

1. Embrace the Digital Customer

2. Create digital replicas

3. Track consumption ecosystem

4. Learn from Agile experiments with APIs

5. Use digital engines

6. Implement dynamic decision architectures

7. Orchestrate an ecosystem

1. Who is a digital customer?

• A digital customer is one who consumes smart products, or products that

have in-built sensors, information processing and connectivity capabilities. In

doing so, the digital customer generates information upon product use, and

enables third party access to that information [HBR, 2014].

• When effectively served, these digital customers add to novel informational

assets with regard to how products are consumed or used.

2. What is a digital replica?

• Digital representation of physical assets owned by a company along with its

current state. The current state and environmental information is provided

by sensors that are embedded on the physical assets.

• Digital replicas allow companies to provide real-time monitoring, predictive

maintenance and other outcome based services.

• The digital thread provides the connection logic between the conceptual

design, production scheme and the actual usage of a product or service.

3. Pay attention to the Consumption Ecosystem

• When using a product, consumers

connect a product with other products

and services to deliver unique value that

meets their needs. Such inter-connectivity

is referred to as consumption ecosystem

• User-driven innovation and APIs facilitate

such connections

4. Learn from agile experiments (APIs)

• Innovation requires two things: the ability to try a lot of experiments, and

not having to live with the collateral damage of failed experiments.

5. Use digital engines

• Cloud computing (AWS)

• AI-as-a-service

• Core assets-as-a-service

• Explainability

• Smart digital assistants

• Learning objects

6. Implement dynamic decision architectures

Where do you place decision rights?

• When do you service a car?

• Determine best route?

• Where to stop for gas?

Centralized, decentralized or distributed

Products that learn and adapt while in-use

7. Be Part of an Ecosystem

From resource control to resource orchestration

• Platform

• Integrator

• Component provider

• Orchestrator

Interlocking EcosystemsAmazon in healthcare, entertainment, retail and infrastructure

Major considerations

• Data Privacy

• Ethics of data use

• Security

• Bias in algorithms

What can you do?

• Learn from the titans

• Create own list of lessons

• Learn how to learn

• Create a digital identity

• Become a digital innovator

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Become Digital Innovators