The Data Driven Enterprise Considerations for changing your business by utilizing data Frankfurt, November 27 th , 2017 Gerhard Otterbach, Sales Manager, Teradata Germany
Data is The New Oil.. Semiconductor Technology Scaling Source: Intel “Data and analytics are changing the basis of Vacuum Tube Vacuum Tube competition. Leading Transistor companies are using their Speed: Delay (Sec) Transistor capabilities not only to Costs ($) NMOS NMOS improve their core CMOS CMOS operations but to launch entirely new business models…” The Age of Analytics: Competing in a data- driven world” – McKinsey Global Institute, December 2016
Digitization Changes Data “These sensors have the “These sensors have the capability to take continuous capability to take continuous data about the heat of an data about the heat of an engine, fuel consumption, the engine, fuel consumption, the wear of the blades, the wear of the blades, the environment it’s taking off in - a environment it’s taking off in - a series of things. And one flight series of things. And one flight between New York City and between New York City and Chicago produces a terabyte Chicago produces a terabyte of data…” of data …” Jeff Immelt, GE CEO - “GE’s Jeff Immelt on digitizing in the Jeff Immelt, GE CEO - “GE’s Jeff Immelt on digitizing in the industrial space”, McKinsey Quarterly, October 2015 industrial space”, McKinsey Quarterly, October 2015 “Analog” “Electronic” “Digital”
Data Changes Business Management “What Gets Customer Product Finance Innovation Experience Transformation Measured, Gets Managed” Assets Risk Operational Excellence Optimization Mitigation Peter Drucker, Management Consultant (1909-2005)
Data Changes Business Management “Physical products and goods continue to be quite physical “ Physical products and goods continue to be quite physical Longer-term disruptive impacts: EFFICIENCY • Outcome economy: Pay-per-outcome, but are coming wrapped in data. Think about your but are coming wrapped in data. Think about your connected ecosystems, platform-enabled “Are we doing things right?” marketplace, etc. container on a ship that’s tagged, and it turns out that container on a ship that’s tagged, and it turns out that • Autonomous, pull economy: Continuous “System thinking” demand-sensing, end-to-end automation, even the actuarial models for how the tracking of that is even the actuarial models for how the tracking of that is resource optimization and waste reduction, etc. valued and insurance contracts are constructed is different valued and insurance contracts are constructed is different OPTIMISATION Near-term incremental impacts: • Increased operational efficiency and safety: whether the thing is tagged and tracked versus not..” whether the thing is tagged and tracked versus not..” “Are we doing the right things self-monitoring machines, improved asset utilization, condition-based maintenance, etc. right now?” • New products and services : pay-per-use James Manyika, Director McKinsey Global Institute James Manyika, Director McKinsey Global Institute models, data monetization, software-based “System -of- Systems thinking” “Why every leader should care about digitization and disruptive innovation” “Why every leader should care about digitization and disruptive innovation” services, etc. McKInsey Insights, January 2014 McKInsey Insights, January 2014
Data Changes Business Management 1 New “Industry” Market Places Consumables 2 Energy New Focus Guarantee led Selling Maintenance/SLA 3 New Competitors UBER Power Generation Wear & Fuel Mix 4 New Capabilities Integrated Mobility Production Capacity bottleneck removal
Data Changes a Business System “Physical products and goods continue to be quite physical “ Physical products and goods continue to be quite physical Longer-term disruptive impacts: Product System System of Systems WEATHER WEATHER FORECASTS MAPS Consumables • Outcome economy: Pay-per-outcome, WEATHER but are coming wrapped in data. Think about your but are coming wrapped in data. Think about your RAIN, HUMIDITY, WEATHER DATA connected ecosystems, platform-enabled DATA TEMPERATURE SENSORS APPLICATION SYSTEM marketplace, etc. PLANTERS container on a ship that’s tagged, and it turns out that container on a ship that’s tagged, and it turns out that FARM Energy • Autonomous, pull economy: Continuous PERFORMANCE demand-sensing, end-to-end automation, DATABASE even the actuarial models for how the tracking of that is even the actuarial models for how the tracking of that is FARM resource optimization and waste reduction, etc. FARM SEED SEED COMBINE FARM EQUIPMENT EQUIPMENT OPTIMIZATION DATABASE MANAGEMENT HARVESTERS Maintenance/SLA SYSTEM SYSTEM SYSTEM SYSTEM valued and insurance contracts are constructed is different valued and insurance contracts are constructed is different Near-term incremental impacts: TRACTORS SEED OPTIMIZATION • Increased operational efficiency and safety: whether the thing is tagged and tracked versus not..” whether the thing is tagged and tracked versus not..” APPLICATION Power Generation TILLERS self-monitoring machines, improved asset Wear & Fuel Mix IRRIGATION utilization, condition-based maintenance, etc. SYSTEM FIELD SENSORS • New products and services : pay-per-use Production Capacity IRRIGATION NODES IRRIGATION APPLICATION James Manyika, Director McKinsey Global Institute James Manyika, Director McKinsey Global Institute models, data monetization, software-based bottleneck removal “Why every leader should care about digitization and disruptive innovation” “Why every leader should care about digitization and disruptive innovation” services, etc. McKInsey Insights, January 2014 McKInsey Insights, January 2014 How Smart, Connected Products Are Transforming Competition, Michael E. Porter & James E. Heppelmann, Harvard Business Review
Data Drives Strategy, Strategy is Enabled By Data OLD MODEL: Leaders Act Inside Out: “There is a significant degree to which strategy is actually Strong believers in data and exploit Data is the result of based on technology and it as a source for new value and innovation - data as new oil! running the business therefore changes in technology are actually Followers Act Outside In: NEW MODEL: changing the nature of business strategy itself.” Exploit data because others are. Business is the result of Vague understanding of possible P Phil Evans, Managing Partner BCG leveraging data CIO Forum Amsterdam Dec 2013 benefits - data as “exhaust”.
Characteristics Of A Data Driven Leader … 1 Data At The Core.. 2 Design For Data.. 3 Invest In Data 4 Experiment With Data 5 Focus On The Customer 6 Innovate With Data
1 Data At The Core “The information about the package is as important as the package itself…” Fred Smith, Founder of Federal Express
1 Data At The Core
2 Design For Data... “People think we got big by putting big stores in small towns. Really we got big by replacing inventory with information.” Sam Walton (1918-1992),Founder of Wal-Mart Stores
3 Invest In Data “In the worksite setting, 60% of the potential value requires the ability to integrate and analyse data .” The Internet of Things: Mapping The Value Beyond The Hype McKinsey Global Institute, June 2015
3 Invest In Data
4 Experiment With Data “It’s not a coincidence that Netflix performs over 1,000 experiments per year. It’s also not a coincidence that the most successful tech companies in the world, such as Amazon, Facebook, Google, and Intuit, also do the same …” House Of Creativity: Netflix Casts Big Data In Transformation Role, CMO.com 21 st March 2017
4 Experiment With Data 3 Releases Over 2 years IT Leading Classic Paradigm $5m ”IT captures only Release 3 • High quality and integrated • Highly Planned & Controlled ”Business gets $5m • Slow Release Schedule data the data that is Release 2 • Pre-defined analytics • Low Risk / High Success- answers to any • Projects must succeed • Some “drill” flexibility $5m needed to • High performance • Business gives requirements (known) Release 1 • IT drives the schedule / • “Answer most common answer known projects questions” 3 5 question” 7 9 11 13 15 17 19 21 23 questions” MAR MAY JUL SEP NOV JAN MAR MAY JUL SEP NOV New Paradigm 40+ Projects over 2 years • Many Small Iterative Projects • Anyone can start experiment ”Business gets ”IT Captures all • Low cost (<50K$) pr project • Data not prepared answers to any • Failure is accepted as part of • Performance unknown the data in the process - Leads to new • Access to all data across question (if we case its needed innovations enterprise • Business drives the projects have data)” • Data integration and data Business in the future” • IT enables infrastructure and preparation “on the fly” 3 5 7 9 11 13 15 17 19 21 23 technology resources • “Answer any question" Leading MAR MAY JUL SEP NOV JAN MAR MAY JUL SEP NOV
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