Thoughts on digitalization

© Marko Luhtala 2016

Click to edit Master title style

Thoughts on digitalizationWHAT I HAVE LEARNED IN 17 YEARS

August 2016

MARKO LUHTALA


Personal journey in digitalization

2

Early adopter eBusiness director at Nokia, 1999–2002Solution provider Sales director/Enterprise solutions at Nokia, 2002–2005User of digital technology widely in commerce Director/ VP of Retail at Nokia, 2006–2010Solution provider, SaaS-entrepreneur CEO at NearMe Services, 2010–2016

MARKO LUHTALA



Discussion topics

What digitalization means in my view

How I saw a hype turn into industry transformation

Customer is sitting on the driver’s seat

Don’t let technology take over the customer!

Five points to consider for a CEO



Digitalization means applying digital technology to improve your business. At the dawn of eBusiness we talked about “doing business with e”.Digitalization can be used in communicating, interacting and transacting with your customers, suppliers and employees.Media can be smartphone, tablet, computer, digital display and kiosk, or other similar devices. The purpose is not to digitize everything but to use it where it makes sense, which is quite often.All industries will be impacted and many disrupted.While digitalization is by default about technology, it has big impact in processes, organization, skills, KPIs, leadership and many other areas of the business.

5


How I saw a hype turn into

industry transformation

© Marko Luhtala 2016 7

First digital faceoff was almost 20 years ago

DOT-COMS versus

BRICK’n’MORTARS



Ever since, it has been a rocky road…

8

…causing headache and opportunities to many – including me

Dot-Com hype

Early adopters burn their fingers

Explosion of digital

devices & use of Internet

Businesses underinvest

in digital

Digital tsunami hits

many industries

1996 2006 2016

Radical change in customer behaviour


eCommerceOnline paymentSaaSReal-time24/7GlobalOn-demandMarket places

NEW BUSINESS MODELS

Digitalization offers wide and deep opportunities

9

Examples of how I have used digitalization in business:

Online sales & marketingPersonalizing and customizingTargeted advertisingMarketing automationOnline support & self-helpOnline communicationSocial networksInteractive engagement

CUSTOMER INTERFACE

Internal communicationRecruitmentSupplier managementAutomated and fail-safe processesOnline KPIs and reportingRemote teamsField force managementIncreasing management clock speed

INTERNAL EFFICIENCY


Half-a-dozen reasons why digital services are attractive

10

>90% of potential customers can access your services at home, at work, on the move or anywhere

Reachable

Like a dream employee – lightning fast, same output every time

Fast and consistent

You can offer digital service relatively easily to millions or even billions of people

Scalable

24/7 is not a problem – bits never sleep Available

You can track all events with a great detail

Measurable

Often 10x or 100x efficiency gains are reported comparing digital to current processes

Effective


World is already a different place

11

Finland’s biggest corporate tax payer is a 200-people mobile games company

Supercell

Alibaba, a Chinese ecommerce company,

features close to 1 billion products and has a sales record of 14BUSD in one day

90 million people follow Katy Perry, a pop singer,

in social media

And by the way, you don’t need to

get lost again, ever

100 million people chase cartoons on

the streets in summer 2016


Customer is sitting on the driver’s seat


Customers are already digital and mobile

99% of Finns under 55 and 76% of Finns over 55 use

Internet for personal purposes.

Source: Consumer barometer with Google

Internet use is pervasive across all age groups

60% of Finns use smartphone equally or more

often than computer to access Internet.

Source: Consumer barometer with Google

For most people, Internet

access is smartphone-

centric


I believe there is more to come in online commerce

14

Where do customers shop?

YESTERDAY

Brick’n’mortar store

TODAY

Online store


Mobile commerce turns any physical surrounding to a point-

of-sales

TOMORROW

Online store


Bus stop Display window

Product catalogue


Because expectations have radically changed

”People should go from wanting to buying in 30 seconds”


It is not online or offline, but omnichannel

16

eCommerce is growing fast but 90% of retail sales still takes place in physical

stores

Every fourth shopper searches products on mobile, visits store to see the product

and ends up buying online

Customers mix the use of mobile,

computer and stores in their

path to purchase

Over 50% of Google searches are done on mobile devices

Over 80% of shoppers consult their phones on purchases they're about to

make in a store.

At the same time the role of mobile is rapidly increasing


Not everything is going digital

17

Role of human touch and physical retail stays e.g. in:

Large client account managementRetail sectors with high-touch sales or non-standard productsPremium customer serviceShopping malls that are turning into leisure centers


Don’t let technology take over the customer!


A million has become a thousand

2000 2016

Technology has become faster, easier and cheaper

Responsivedesign Open

sourceCloud

SaaS

EXAMPLE: Setting up an online store.

COST

TIME TO MARKET

YEAR

1M USD10 months

1000 USD10 days


Leading to an explosion of offering

As a result, consumers and businesses are suffering from technology overdose

Millions of consumer

apps

Thousands of business

software

Tens of thousands of technology providers

2012 2016YEAR

350 1950Number of companies listed in annual Marketing Technology

Landscape


However, customer experience is more important than features

iPhone vs. Symbian Google vs. Yahoo

Winners make user experience intuitive and simple regardless of the underlying complex technology


Best digital business cases

Best digital business cases globally are from innovations in:

Not latest technology

customer-centric services and processes


Five points to consider for a CEO


SOURCE McKinsey study

1. Digitalization is about business not IT

75% of CEOs consider growth as the main intent

behind digital programs


SOURCE CMO Council survey

On average, 60% of a marketer’s time is devoted to

digital marketing activities

2. Digital is already impacting the organization


3. Digitalization challenges the company culture

Typical hurdles in digital transformation:

Lack of understanding of digital business models and business casesLack of digital talentsInflexible organization and processesData is too fragmented and of poor quality for decision makingCulture does not support “experimental or start-up mindset”


4. The speed of innovation is increasing

Current and emerging trends:

Big Data Predictive Marketing

Personalized Customer

Experience Artificial Intelligence

Internet of Things

Waiting does not pay off!

…in digital technology, processes and business models


3-5 years to make digital business-as-usual

from the customer interface but cuts across the organization and processes

a senior leader to see through the transformation, typically a Chief Digital Officer is appointed

5. Digitalization is a transformation process

TAKES

STARTS

NEEDS


The magnitude of impact of digitalization should not be underestimated

Market positions will be redistributed in the coming years

Industry leaders may fall, challengers rise and new entrants become leaders.


SEASONED DIGITAL [email protected]+358-50-3879903

MARKO LUHTALA

NEED HELP IN DIGITAL STRATEGIES AND EXECUTION?

Thoughts on digitalization

Internet

Transcript of Thoughts on digitalization