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Digital Transformation and the Internet of Things

December 3, 2019

IoT Thought Leadership WG

Sebastien Lafon Michelle Mindala-Freeman

3WELCOME!

This recent WG white paper offers some

pathways for business leaders as they

explore digital transformation & the

Internet of Things (IoT)

Our Goal Today

• Introducing CDAIT’s White Paper

• Create common understanding of critical IoT and

Digital Business Transformation (DBT) aspects

• Share CDAIT Member’s view of the “do” and

“think” differently for IoT and DBT

• Spur your thinking, get you engaged

https://www.dropbox.com/s/6pky6nicmlud586/Georgia_Tech_CDAIT_Digital_

Transformation_IoT_White_Paper_Final_November_2019.pdf?dl=0

4The paper “Digital Transformation & IoT”, was a shared priority among CDAIT Members*

Note: The views expressed here and the related whitepaper, grounded in research and real-life experience are solely the authors’ collective own and do not necessarily

represent those of Georgia Tech, the CDAIT company members, the individual members of the IoT Thought Leadership Working Group, the University System of Georgia or the

State of Georgia

92%Of the CDAIT Members defined DBT as critical

for their company growth

**

* Past and Current CDAIT members ** CDAIT survey 10/28/2019

5Contributors

Note: The views expressed here and the related whitepaper, grounded in research and real-life experience are solely the authors’ collective own and do

not necessarily represent those of Georgia Tech, the CDAIT company members, the individual members of the IoT Thought Leadership Working Group,

the University System of Georgia or the State of Georgia

6Refresher:

The Three stages of the Internet of Things

Monitoring & Control

• Remotely Connecting, Measuring, Tracking and Tracing (telemetry; telematics; M2M; LBS; RTLS; and ICS) [*]

Data Optimization

• Data captured at the edge transformed into actionable and valuable ($) information (modeling & simulation; descriptive, predictive, and prescriptive analytics)

Interconnection of Intelligent Things

• “The grand vision of the Internet of Things (IoT) is a world of networked intelligent objects.” (Harvard Berkman Center); see also the emerging concepts of “Massive IoT” and “Critical IoT” in the telecom industry, and “Intelligent Connectivity” at GSMA.

STAGE I STAGE II STAGE III

[*] Telemetry is the automatic measurement and wireless transmission of data from remote sources; [Vehicle] telematics refers to the gathering, storing, and

transmitting of data about a vehicle(s) for monitoring purposes; M2M = Machine-to-Machine communications; LBS = Location-Based Service; RTLS = Real-time

Locating System; ICS = Industrial Control Systems [including supervisory control and data acquisition (SCADA) systems, distributed control systems (DCS), and

other control system configurations such as Programmable Logic Controllers (PLC)].

7What we'll cover today

● Setting the Stage

● Digital Business Transformation Focus

● IoT Focus

● A few final thoughts

● Q&A

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DBT refers to a company reinventing itself

through pervasive digital change (across

people, process, technology & environment),

which can include reducing costs,

growing revenues, introducing new

business models and improving customer

and employee experiences

Setting the Stage:Digital Business Transformation

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Setting the Stage: Why IoT and Digital Business Transformation?

▪ IoT has a central role in and is a key platform for

delivery of digital business transformation benefits

..and…

▪ IoT projects are, in effect, digital business

transformation projects, impacting people, process &

technology

…so…

▪ Both have to be managed in Both have similar

challenges, risks, opportunities

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Focusing in on Digital Business Transformation

11What about you?

GO TO SLIDO.COM / Enter code #CDAIT123

Where is your company on your digital business

transformation journey?

a. Thinking about it / developing strategy;

b. Just starting

c. Underway; but with challenges

d. Underway and going well for Core Business

e. Underway and going well with new Business Models

12

Worldwide digital transformation spending =

$2.3 Trillion by 2023 (17% CAGR)*.

85% of enterprise decision-makers say they have two years to make inroads in digital

transformation or they will fall behind

Successful digital transformation, often enabled by IoT, is an imperative for survival

73% of consumers use more than one channel during their shopping journey

60%+ of Americans prefer solving

basic customer service issues via self-service

Omni-channel customers spend

4% more in store and

10% more online

76% of companies are investing

in emerging technology

*source: https://techwireasia.com/2019/10/why-worldwide-spending-on-digital-transformation-is-growing-at-17-1-pc/https://www.forbes.com/sites/blakemorgan/2019/05/13/40-stats-on-digital-transformation-and-customer-experience/#46b331726475

13Digital Business Transformation:Yet, Massive Investment…Massive Failure

14What do you think?

GO TO SLIDO.COM / Enter code #CDAIT123

The biggest cause(s) of Digital Business Transformation

Program Failure are:

a) Unclear Digital Vision/Strategy

b) Poor Org Alignment on Priorities

c) Technology issues

d) Lack of Digital Talent

e) Business Case issues

f) No buy-in / resistance to change / culture issues

Bar r ie rs to D ig i ta l Trans fo rmat ion Success

15What the data says and what we can learn*

Top Hurdles / Concerns

• Culture Issues : 62%

• Archaic IT Systems/Applications: 48%

• Lack of Digital Skills/Talent: 43%

Lacking Foundational Capabilities

• IT/Business Relationships: 65%

• Employee Engagement : 66%

• Digital Governance: 64%

• Digital Vision: 65%

Enterprise Alignment

People & Culture

Digital Operations

*Source: https://www.capgemini.com/wp-content/uploads/2019/01/Report-Digital-%E2%80%93-Understanding-Digital-Mastery-Today.pdf

16The DIGIT Framework: How and Where to Address these Challenges

• Comprehensive view of the process

• Guide and organize activities

• Front-end: Strategic enterprise alignment

• Govern: “essential ingredient”, People and Culture

• Back-end: Digital operations

17Front-end: Create Momentum though Enterprise Alignment

Create the right business context, bringing IoT into the main line of enterprise’s transformation agenda, not just as experiments or PoCs

▪ Why is it strategic?

▪ What value do you bring to the customer?

▪ What pain points do you address?

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Walmart: +10 years of digital transformation

• 2007 Walmart.com (Bentonville)

• 2011 Creation of @walmartlabs

(Silicon Valley)

• 2011 CTO of Walmart.com from eBay

• 12 techno acquisitions inc. Kosmix

2011 and before

“Walmart’s 27 worldwide subsidiaries used incompatible

technologies; the sites did not connect seamlessly with the stores

or with Walmart’s legendary supply chain.” G. Thomas, 2011

• 2014 D. McMillon

• Strategy on Digital

• 2016 jet.com ($3.3B)

2014 and beyond

“We stepped back as a team and

started from scratch". Starting with how

the customers wanted to be served...

We did not understand how much of

a digital transformation was needed”

McMillon Nov. 2019

19Govern:Preempt issues of Culture and Change

•Establish a strong digital culture: vision, communication, change management, measures and modeling behaviors

•Engage employees in the process: defining solutions, creating new ways or working

•Clear strategy for talent management: acquisition, reskilling and ongoing knowledge management

People/culture challenges can be found throughout DIGIT stages / processes; but governance provides a method to focus on, preempt and/or mitigate such issues:

How to mitigate?

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Leaders are often seen as decision-makers and workers as

being along for the ride; but…

● 56% of participating workers and leaders saw themselves as

decision-makers at some level

● Fully 98% of the workers who participated believed that they

had some influence over adoption and implementation

Intel Research*: Co-Evolution of Workers &

Manufacturing Operations

• 133 manufacturing organizations• Mixed levels of “digital intensity”• 68% support discrete processes, 76% 18-40

• Able to imagine Industry 4.0 future state• Strong appetite for change• Recognize benefits to self & enterprise

* Source: https://newsroom.intel.com/news/intel-study-discovers-why-many-factories-stuck-last-century/#gs.ka3bei

21Michelin: A better way forward for digital change

• Strong digital leadership & governance, “digitalsymmetry” concept

• Digital solutions to improve ways of working designedwith employees & customers

• Staggeringly high - 85% adoption - in year 1

• Digital competency & upskilling initiatives

“95 % Change Management, 5% Technology”

Eric Chaniot, CDO Michelin

22Back-end

Create a sustainable operating model

Leaders must establish a new digital

operating model. DBT is never “done”;

rather, it is a journey.

▪ Agility and responsiveness to changing needs

▪ Digital governance and policy, cross-functional (Legal, IT, Data, Sales, Finance)

▪ Revised processes and operations (CDO, 2 speed IT, Digital Factories, new ways of working….)

▪ New performance measurement and incentives framework (Learn fast, Knowledge organization)

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Merial: Animal Health Journey

• Started with robust data and analytics culture

and competencies

• Drove significant productivity leveraging GPS

and predictive modeling

• Failed at first attempt to launch a new IOT

connected health business model

24Presentation Title | Author | Date

Focusing in on IoT

25What do you think?

GO TO SLIDO.COM / Enter code #CDAIT123

The biggest issues related to IoT project success and scaling

are:

1) Technology Performance

2) Device Interoperability

3) Security / Privacy Concerns

4) Business Case Issues

5) Adoption Issues 6) Analytics / Big Data Issues

Hurd les to IoT Success & Sca le

26What the data says and what we can learn

Top Hurdles / Concerns

• Analytics/Data Mgmt Issues: 57-63%

• Cybersecurity & Privacy concerns: 62%

• Uncertain Standards/Regulations: 53%

• Technology Readiness: 52%

• Lack of Clear Business Case: 49%

But digital masters are leaning in

• To understand usage patterns: 54%

• To provide preemptive service: 61%

• In internal operations: 57%

Creating

“Connective

Tissue”

Enabling

Value

Creation

*Source: https://www.capgemini.com/wp-content/uploads/2019/01/Report-Digital-%E2%80%93-Understanding-Digital-Mastery-Today.pdf

27Addressing the End-to-End Value Chain: IMAGE

These issues make clear

that IoT is much more than

technology “DNA”:

● Enabling environments & capabilities

● Data extraction, analytics and management

● Platforms and processes needed to create value from connected things

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Realizing a commercially viable solution at scale requires

attention and investment over time:

● In additional Technology Capabilities beyond DNA: E.g.,

Integration, Security, Power Management, Privacy & Platforms

● To engage the Industry ecosystem: E.g., Standards,

Regulations, Partnerships

● To enable the Enterprise: E.g., Business Model, Operational

readiness, Training, Change Management

Glue: What “ties” the IoT value chain together

29Landis+Gyr: Managing Energy Better and

Building a Smarter Grid

• Designing and managing integrated networks of

control nodes and devices

• Enabling value propositions that engage consumers &

markets

• Using a breadth of IT capabilities for new services &

business models

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• Mission driven industry- and nation-wide collaboration

• World’s largest smart meter project ~30M meters for

45M residents in Tokyo & environs

• Already 1B+ Data Packets daily

• Nearly a dozen certified device providers aligned with

a national communications standard and interoperable

with IT/OT systems

31SEPA: Building on the Foundation:

The Future of Energy Management

• Growth of connected “distributed generation - EV,

solar, etc. - in public and private sector

• Next Generation “Transactive Energy” - dynamic,

independent, “peer to peer” energy trading to

managing supply (and related economics) efficiently

• Pilots underway testing viability, security options,

algorithms, etc

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IoT and Power Management Connectivity technology, protocol and payload are important factors in managing power and battery life; but this may not be enough

It will be impractical, inconvenient or too expensive over time to have either perpetual power sources or to regularly re-charge or replace power sources

New methods of power management will evolve and emerge in importance

● Energy harvesting● Supercapacitors● Wake-Up Receivers

● On-Chip Batteries● Nano-Generators

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Securing value from your IoT investment requires a clear and

robust strategy to extract, manage and leverage data created

● Data Foundations - Data Sets, Data Model, Infrastructure &

Scalability

● Data Management - Ingestion, Storage, Privacy & Security

● Data Analysis - Reporting, Analytics / Modeling, AI/ML

● Data Operations - New Solutions, Services & Business

Models

Extraction: Value Creation through Data

34Airbus: Taking a Quantum leap with Digital Data

“[This] strategy is not about giving up our traditional hardware

platforms. These hardware platforms are generating the data that

are uniquely used for all data-driven services. Data-driven services

are complementary businesses, and they are creating new jobs.”

Dirk Hoke, CEO Airbus Defense and Space

What new problems can be solved?

•Create smarter products

•Enhance existing standard services

•Develop new digital services

35Skywise: Extracting and creating real value at

scale

● Secure, global and highly scalable platform

● Unified data model

● Results/capabilities enriched as clients

onboard

● Free and Premium access

● Predictive monitoring, modeling & diagnostics

● Additional “advanced offers” in the works

36Presentation Title | Author | Date

A couple more topics

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IoT and Enabling a New Kind of ROIAlong with increasing levels of connectivity and integration from IoT, we see:

● Greater attention to CSR factors,environmental & societal impacts

● Shift away from transactionalrelationships, both buyer and supplierdriven

● Evolution in the definition of enterprisevalue and stakeholders

We believe companies’ long-term value will be determined, in part by how they harness this New ROI

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IoT & Digital Societal Transformation

Metamorphosis of the entire societal fabric into a tightly knit network of links and relationships through digital engagement and dissemination

● Application of a wide range of digital and connected technologies

● Used to transform life and working environments: government, environment, health, safety, economy

● Bringing people together to enhance the innovation and knowledge that they offer.

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3.1x with a clear and

consistently communicated change

story

2.1x with leadership and

cross functional alignment

1.9xwith upskilling &

employee engagement

2.0xwith clear digital KPIs, targets and measures

● Aligned Vision

● Culture matters

● Comprehensive approach

● Clear and inclusive governance

● Holistic IoT value chain (IMAGE)

Critical Success Factors

Increase chances of success by*:

*source: https://www.mckinsey.com/business-functions/organization/our-insights/unlocking-success-in-digital-transformations

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Thank you!

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Q&A

42

Sebastien Lafon

Former VP Global Head of Digital and Marketing

services, Boehringer Ingelheim; Georgia Tech

Visiting Scholar, CDAIT; Vice-Chair of the CDAIT

Standards and Management Working Group

E: sebastien@adapt1st.com

M: 678-733-0403

Thank you

Michelle Mindala-Freeman

Former VP Telecom, Media and Technology

Practice, Capgemini; Georgia Tech Visiting

Scholar, CDAIT; Chair of the CDAIT Thought

Leadership Working Group

E: michellemindala@gmail.com

M: 404-414-0400