Managing the Digital Transformation. How companies develop successful products faster.

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  1. 1. Mastering the Digital Transformation How companies develop successful products faster.
  2. 2. Contents Digital Transformation: Hype or real? Elements of the Digital Transformation Digital Transformation & How to develop successful products faster
  3. 3. In Germany, exports have reached record levels, economy has seen substantial growth and so has employment. This is what makes Germans skeptical in terms of digital revolution. At the same time, digitization has changed our life circumstances and that is where we experience a big awakening. Germany is not yet ready for the Digital Revolution
  4. 4. Hannover: Chancellor Angela Merkel has criticized Germanys resources in digitizing. "We just need to go up a gear in Europe, just as we need to set a goal in Germany", the CDU - Politician said on Sunday at the opening of national industrial exhibition Hannover Messe. Europe and Germany Need to Catch Up with Digitalisation
  5. 5. Search TrendsGermany Search for Digitale Transformation Search for Internet of Things
  6. 6. Search TrendsGermany
  7. 7. Hype Cycle for Emerging Technologies, 2014
  8. 8. Why is so little happening?
  9. 9. Speed of Innovation Increases
  10. 10. Faster speed of innovation = shortened lifespan for companies
  11. 11. It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change. Charles Darwin
  12. 12. Lower Barriers to Entry than Ever Before
  13. 13. Innovation Comes out of Nowhere I looked at the numbers and was speechless A programmers experiment Duration of actual development: 6h Result: 2 Mio. App-Downloads, $72.000 Dollar Revenue + Exit- Revenue Grnderszene, 07.04.15 App name: 7 Minute Workout
  14. 14. 2003 - the company was founded 2008 - they released their rst car, Tesla Roadster; 2.400 Roadsters produced so far 2012 - they released Model S 2013 - Car of the Year (German Automagazin Motor Trend); 50.000 Model S produced so far 2014 - the company reached 6.000 employees 2015 - they announced the production start for Model X Competitors Come out of Nowhere Tesla Motors Roadster Model S
  15. 15. 0 10000 20000 30000 40000 50000 60000 AudiA7 AudiA8 Porsche Panamera Phateon BMW7er Tesla ModelS CarProducAonworldwideluxuryclass 2013 2014 Competitors Come out of Nowhere Tesla Motors Teslas advantages over traditional automobile manufacturers: Does not have to develop engines, transmissions; Not obliged to observe emission values; The software is their core value, besides the batteries; it scales better on all models and is cheaper to produce. * Not shown: Mercedes S-Class
  16. 16. High-End-Technologies easily available Software allows for fast productisation Internet allows for global distribution Lower Barriers to Entry than Ever Before
  17. 17. Digitalisation Germany vs World
  18. 18. Why is so little happening?
  19. 19. Innovators Dilemma
  20. 20. Innovator's Dilemma Example:
  21. 21. Aftenpostens Strategy: Set up a separate entity to go after a market that was undesirable and low margin from the perspective of its newspaper business. The new brand was allowed and even encouraged to cannibalise the older, higher margin parent company, Aftenposten.
  22. 22. Escaping the Innovators Dilemma by Excubation Telekom: hub:raum ProSiebenSat.1-Accelerator Axel Springer: PlugnPlay Rocket Internet: ProjectA Scout24-Gruppe: You Is Now SAP Startup.Focus. Burda-Media: dldventures REWE Coca-Cola Bayer Health Care Allianz Siemens Technology Accelerator
  23. 23. 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 2008 2009 2010 2011 2012 2013 2014 Germany UK USA Missing Fault-Tolerance Share of 18 to 64 year old people who do not establish a company due to the fear to fail.
  24. 24. Product InformaAon Infoonly= PurePlayerPhysical Product/Service, +InformaAon
  25. 25. Software is eating the world. Marc Andreesen
  26. 26. The size of the screen in an average car today shows the importance of software to the manufacturer. The big screen shows the importance Tesla Places on software. Just like the big screen of the iPhone shows the importance of its Operating System.
  27. 27. In addition to traditional engineers, we are mainly looking for IT specialists and software developers. It is important for us to develop software ourselves. BMW Hires 8000 New Employees in 2015
  28. 28. Misconception: New Product Development is Costly
  29. 29. Agile Development
  30. 30. Agile Development
  31. 31. 60%-90% of ideas do not improve the metrics they were intended to improve. Ronny Kohavi Microsofts General Manager Experimentation Platform (before: Amazon's Data Mining and Personalization group) What Improves a Software Product? Research results presented by Ronny Kohavi:
  32. 32. Why Lean and Agile Product Development? 80% of startups are successful with another product than the one they initially started with.
  33. 33. The Lean Startup Cycle Slide40refagrac
  34. 34. Minimum Viable Product (MVP) The Lean Startup Cycle
  35. 35. Lean and Agile Product Development Check your idea with a Minimum Viable Product (MVP) Refagraphicslide42
  36. 36. analog digital Agile Software Development Lean Enterprise Levels of Digital Transformation Lean & Agile Product Development
  37. 37. Elements of the Digital Transformation Digital Strategy Digital targets Digital ways to reach the targets Methods to implement the strategy. Lean Leadership Leading and enabling instead of giving orders Decisions are oftentimes made in teams. Digital Products For digital markets and customers Digital business models The user is the king again! Agile Operations Fastest time to market Fast response to market requirements. Digital Culture Sharing knowledge instead of hoarding Cooperation instead of demarcation Two-way communication with customers. Digital Employees Love to learn Able to work independently Flexible in time, location and know-how. Digital Governance New targets for the company and employees Digital, business-relevant KPIs Open and continuous monitoring of all KPIs. Digital Technologies E.g. cloud instead of own hardware racks Responsive and mobile-enabled products.
  38. 38. Talent & the Digital Transformation An employer without sucient Digital Competitiveness is not the right employer for me. 14% 42% 33% 11% strongly agree tend to agree disagree strongly disagree
  39. 39. In an industrial company, avoid software at your own peril . . . A software company could disintermediate GE someday, and we're better o being paranoid about that. Je Immelt
  40. 40. Product InformaAon Infoonly= PurePlayerPhysical Product/Service, +InformaAon
  41. 41. Sony tried to sell hardware Amazon sells info and provides the right hardware.
  42. 42. Google looks for more possibilities to sell ads and to understand the user. VW builds cars.
  43. 43. Do you see the analogy?
  44. 44. Culture eats Strategy for Lunch Peter Drucker
  45. 45. The autocratic behavior of Piech represented a crisis at Volkswagen. Global corporations that want to be successful in the 21st century must perform dierently. Piech has recently resigned.
  46. 46. The End
  47. 47. [email protected]