digitalization leads into a socio-techno-economic transformation

0 Copyright 2014 FUJITSU

Human CentricInnovation

Fujitsu Forum2014

19th – 20th November


Digitalization Leads Into a Socio-techno-economic Transformation

Glen KoskelaCTO Nordic


Shape Of Technology, Shape Of Business

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… to become the

dominant idea of its time.

Every decade a new

technology system

emerges to transform

businesses and

industries…


Changed markets leave

a company irrelevant –

and obsolete.

Law of Diminishing Returns

All things operational - focus on

accounting, cost control, supply

chain optimization, account

management…

Constant improvements in “the

numbers” is necessary. But none

of this matters when markets shift.

When transaction costs plummet,

the market changes, and new

value chains step forward.

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Before Global Economy Was Reconfigured

Pre-1960s

Moving goods was

costly, complex

and uncertain.


Globalization of Physical Supply Chain

Complex cross-national supply networks

1st-wave disruption. Container.

Source: “A Scenario of Disruptive Change: Understanding the Emergence of the Next Business Platform” by Ian Thomas, Strategy Director, Fujitsu Enabling Software Technologies, 2013


Decomposition of Manufacturing

Time

Containers and container ships

Intermodal transport

Megaports (seaports)

Logistics providers

Component-based manufacturing

Large-scale automation

Minicomputers

Global logistics and supply chain platforms

World trade

MRP, MRP II, ERP, SCM, PLM…

PHYSICAL

Reduced costs of

supplier integration

and business software

drive formation of

supply chains and

physical value chains.

Complex cross-national supply networks

Tra

nsa

ction

co

sts

Components & products


Multiple Generations Of Applications

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Streamlining, just-in-time, lean,…

Fully integrated end-to-end systems:

MRP, MRP II, ERP, SCM, SFA, CRM,…How a business is

represented.

How it functions.

How it operates.


Service-led Personalized Products

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New approaches to operating supply chains

and addressing markets.

3D printing innovations

to be applied in goods.


Online information and

messaging drive

increasing divisibility of

knowledge activities

and formation of digital

value chains.

Separated Value Activities

Internet

Personal computers

Email

Web-pages

Intranet & Extranet

eCommerce

Offshoring

Certified professionals

Specialized regions

Web-shops

App & music stores

Streaming media

DIGITAL

Time

Tra

nsa

ction

co

sts

Fundamental shifts in accessibility and collaboration

Information & processes


Powerful, Fast-paced Processes And Data

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2nd-wave disruption. TCP/IP.

Ability to distribute information to the public & partners, cheaply & quickly.

Many businesses still are confused

about the composition and depth of

the modern digital value chain.


Big Data Collection at Business Model Level

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Extracting the knowledge of process parameters across the life cycle.

Real-time intelligence. Decision-making. Activity planning. Simulations.

Operation controlling. Predictive analytics. Faster ramp up.

Seamless conversion of the customer-specific

requirements and collective requirements into

a single and successful product opportunity.


Dynamic Participants Working in Organizations

Wikis & Blogs & Tweets

Social networks

Mobility & smartphones

Digital identity

Communities

Collaboration

Gamification

Crowdsourcing

Long-tail work

Knowledge

Social graphs

Co-creation

Ecosystems

Time

HUMAN

Network effect

technologies drive

fractal knowledge,

communities and

formation of social

value chains

Composable enterprises: fast, adaptable, innovative

Tra

nsa

ction

co

sts

People & insight


Contemporary Connections With Elite

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Ability to globally bid labor, leverage long tail

work, access scarce expert resources and

speed up distributed work cycles.

3rd-wave disruption. Identity. Impacts the

way people

conduct

their work.


Collaborative Supply Networks and Customers

Product

Geography

Brand

Function

Key account

…

Markets are conversations.

Engage and encourage involvement.

“The highest and best form of

efficiency is the spontaneous

cooperation of a free people.”

- Woodrow Wilson (1856-1924)


Changing Nature of Industrial Competition

Comprehensive renewal of

multiple industry sectors.

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External physical, digital

and social value chains

become de facto

expressions of an

organization’s

capabilities.


Products Become Delivery Mechanisms for Services

Source: How Smart, Connected Products Are Transforming Competition, Harward Business Review, by Michael E. Porter and James E. Heppelmann, November 2014

… increasingly it has become a

network of products and services…

…in which material products are

combined with digital services.

A business is no longer just

production of goods and services…

Value is created in the service system,

what the system can do, not in the

basic cost of the individual elements.


We No Longer Live in a Linear World

ValueA non-linear relationship between inputs

and outputs, near zero marginal costs.

Value is decoupled from the physical

resources needed to create it.

Using the digital world to scale the

services beyond their physical resources.

Traditional businesses exploit non-

linearity through digital ecosystems.

Digital ecosystems are coming to all

industries – to co-create value and get

closer to customers.

Resources

Source: “Non-linear business – a look into the future” by David Gentle, Director of Foresight, Fujitsu, 2014


Already Emerging. Societal Ecosystems.

Digitalization is deepening,

not accelerating.

4th-wave disruption.

Hyperconnected World.

SOCIETALM2M

Sensors

Wearables

Internet with Things

Big data analytics

Robotics

Augmented reality

Smart cities

Every industry is being transformed, out of

both opportunity and necessity.


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People – Process – Things – Context

Computable

algorithms can

express an ever-

greater range of

activities, and

consequently a

growing array of

service activities

are reorganized

and automated. Programmable world.

Change in the

role of technology.


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Growing Embeddedness in All Spheres of Society

Deployment Period.

Digitalization evolves

into a social and

economic platform, a

large scale disruptive

force with systemic

impacts.

Source: “Technological Revolutions and Financial Capital: The Dynamics of bubbles and Golden Ages” by Carlota Perez, 2002


Opportunity to Re-invent Just About Everything

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The economic impact will be huge.

The societal impact will be huge.

The corporate impact will be huge.

New ways of working. New ways of living. New ways of producing.

New ways of delivering social services. New ways of capturing value.

New ways of measuring growth and progress.


Becoming Economically and Socially Relevant

Rich capability to

deliver all sorts of

new experience

and value.

Remaining socially sustainable while still achieving global competitiveness.

Socio-techno-

economic

transformation


Dealing with Wicked Problems

Replacement of many old operational models

in public sector to achieve societal objectives.


Social-techno-economic Transformation

Business Innovation

Social Innovation

Connecting People,

Enabling Collaboration

Exploiting New

Computing Power

The Physical + Digital

Business Model

Intelligent

Social Infrastructure

Real-time Responses

World Connected

by Information

Human Centric

Innovation

Hyperconnected

World


The Shape of Innovation

What would you

attempt to do if you

knew you could not fail?


Q&A

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digitalization leads into a socio-techno-economic transformation

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operating supply chains

physical value chains

supply chain optimization

new value chains step

modern digital value