recipes for a successful digital transformation · integration, devops, mobile apps • analytics:...

May 09th, 2017 | Günter Sube thyssenkrupp Steel Europe

Recipes for a successful

digital transformation

thyssenkrupp Steel Europe 2 | 2017-05-09 | Recipes for a successful digital transformation | Günter Sube

thyssenkrupp –

a diversified industrial group


Fiscal year 2014/15

Leading engineering expertise from one source High degree of internationalization

Group companies and representative offices in 80 countries

Over 60% of employees work outside Germany

Over 70% of Group sales are generated outside Germany


Components Technology

Elevator Technology

Industrial Solutions

Materials Services

Steel Americas

Steel Europe

Sales [€ mn]1

6,807 7,468 5,744 11,886 1,489 7,633 Adjusted EBIT [€ mn]2

335 860 355 128 -33 315 Employees

30,751 51,426 19,602 19,754 3,847 27,559 1. before consolidation | 2. before consolidation/corporate

thyssenkrupp Group – the business areas Key indicators – fiscal 2015/16


engineering. tomorrow. together. Three words that describe who we are, what we do and how we do it.


tomorrow. Digitalization is changing our world

We are thinking today how we want to be tomorrow. And we know today what the world of tomorrow and our customers need. We develop sustainable solutions that are also capable of meeting future challenges.


Innovative products and solutions for sustainable progress Drivers are trends in society

Globalization More resource and energy use

Urbanization More infrastructure and buildings

More consumer and capital goods Demography

Digitalization More digital value creation

“More”

Reduced CO2 emissions,

renewable energies Climate change

Efficient infrastructure and processes

Finite resources

Compliant products and services

Regulation & politics

Smart data, integration, and

holistic solutions Increasing

connectivity

“Better”

Leading engineering

expertise


Source: Global Center for Digital Business Transformation, eine IMD (Lausanne, Schweiz) und Cisco Initiative mit Accenture (https://www.accenture.com/de-de/insight-digital-oil-and-gas)

Digitalization is moving Step by Step through all Businesses – Steel Industry is already in Focus

Technology Media &

Entertainment (i.e., Youtube)

Retail (i.e., Amazon)

Telecommuni-cations

(i.e., Smart-phone)

Finance sector

(i.e., Digital currency)

CPG/ Manu-facturing

(i.e., 3D-printing)

Health-care (i.e. E-Health)

Basic Materials

Oil & Gas

Auto- mobile (i.e.,

autonomous driving)

time line


Digitalization is driving several Perceptible Trends in our Economic and Social Development

Disruption of business models and value-add architectures

is increasing

Data as the new raw material becomes increasingly a competitive advantage

Technology is developing

exponentially and without limits

Speed and range continue to grow

Digital interaction and differentiation is changing social and political models

New realities and artificial intelligence relieve and replace people


Digitalization of the Value Chain

Raw Materials

Steel Hot Rolled

Cold Rolled

Coating Intermed-iaries

Tier n OEM

Customer

Services Hot Metal

Digitalization of the value chain in steel production Digitalization through integration of the value chain to the customer


engineering. It characterizes the way we think. It means developing solutions for our customers – big and small. We supply reliable products and services – on time, in premium quality and with outstanding value for money. We know our customers and their markets. We are a reliable partner – that is our pledge.

Digital platforms and transformation management


Basic Projects enable successful Value-Add Focusing on Disruptive Projects

Size = # (internal)

resources

basic project

„digital“ projects

Pot

entia

l Ben

efit

Cas

e (l

ong-

term

impa

ct)

disruptive incremental

low

hi

gh

Big Data project Customer

integration

Digital Innovation

VALUE

BASIC

Analytics project

Digitalization

logistic

Customer integration

Assessment by DAO on Jan 5th 2017

Logistic project


Digitalization is a Challenge to IT Solutions and Processes

• High integration of the systems • Higher priority on consistent

transactions • Durability, high stability, long-term use

of systems • Strict data governance (principle of

least privilege) • Good predictability • High investment • Clear focus on total cost of ownership

Traditional enterprise IT Experimental IT

• High degree of independence and scalability

• Dynamic, agile working • More flexibility, easier improvisation • Shorter life cycle • Approaches like “Fail fast” and

“Minimum viable Product” • Reduced policies on data governance

We don’t want a strict separation, but the best out of both worlds. Only together with Experimental IT we can implement Digitalization at thyssenkrupp Steel

successfully.


Steering Digital Transformation @ thyssenkrupp Steel 4 Dimensions of Development

DAO = Digital Acceleration Office

tk Steel Steering Committee Digital Transformation CFO (chair), CTO, CIO, Head of Strategy

Digital Mentors

Digital Technical Abilities

DAO

Digital Cultural Skills

A

B C

D

Business dialog creating transparency and prioritizing digital projects and topics

Conducting digital labs & experiments for digital Projects

steel digital platform

Digital VALUE Projects Digital Dialog

Improvement of digital skills, implementation of new working methods, active enablement of cultural change

Ventures

Apps

Labs

Unicorns

Experiments

Creating digital technical environment through basic projects


Sponsoring Digital VALUE-Projects 5 Step Digital Acceleration Process

• „Let‘s try this“

• „Fail fast, learn fast“

• Start working with a given budget and human resources

Idea Pilot

• „We‘re going to use it“

• Try and adapt (short feedback cycles)

• Additional budget & personal

Experiment Rollout

• Implement a system

• Creative brainstorming / collecting ideas

Proof-of-Concept

• „Now it‘s becoming serious“

• Additional budget & personal

• EBITDA and potential is being calculated

• Benefit Case clear

Skill to kill Do or Die Dare to Do Award All

3 2 1 4 0


Reducing Complexity of numerous potential solutions by using suitable cloud solutions

Standardized Cloud-Solution Available solutions

Platforms & Enablement (Horizontals)

Industrial Internet Connected Home Industries Applications

reducing complexity


tk Steel Cloud Connects Digital Technology, Enterprise IT and Shop Floor

• Big data: Data & system management, event hubs, NoSQL

• Application development: Java, continuous integration, DevOps, mobile apps

• Analytics: Data visualization, big data- & streaming analytics

• Integration: API-platforms, back-ends

• Security & identity management: encryption, devices, compliance

• Internet of things: Integration of sensors

Performance spectrum of tk Steel Cloud


Business Continuity & Security Requirements of the Shop Floor Environment

Data source and drawing of conclusions locally within the factory Knowledge gain in the cloud

Flexible deployment of solutions: in cloud + in factory

Integrated monitoring of die whole environment necessary

Usage of cloud technology on premise


tk Steel Digital Platform – Investment in our Digital Ability

Quick start of verticals

Full focus on business issues

Seamless integration into the big five basic IT projects

Portability between different clouds

The computer power is growing with the idea

Availability of qualified personnel on the market

Support through all phases of the stage gate process, including rollout

No further initial investment required in technology

Ecosystem for new forms of cooperation - e.g., with start-ups


We share our knowledge, combine it and use it to create something new – across companies, industries, and countries. We trust and are trustworthy. We are a team with our customers. We work together. We learn from each other and advance ourselves together.

together. Digital leadership and change management


Becoming a digital company Develop digital skills and drive cultural change

Source: Roland Berger

Digital Steel InnoSprint, Initiative Digital@Steel

Labs, Hackathons

1% 10%

100% Digital

Experience Literacy

Transmission

Awareness

Digital Digital

Digital

Digital Learning

• Create awareness of Digitalization

• Know chances and risks of technology und disruption of tk Steel business model

• Learn from digital companies and startups and make “live” experience

• Try individual digital working methods and attitudes (e.g., "fail fast")

• Train digital skills and use them appropriately

• Conduct digital showcases at tk Steel

• Use agile Structures, Processes and working methods in daily Work next to established Processes


Digitalization is driven by technological developments and cultural change

IT is enabling new technologies and supporting digital, agile cooperation models

Technology push Culture change


Today's Fundament + Digital Culture and Organization of Tomorrow

tk Steel today

Customer relation / Customer knowledge

Material understanding / Production knowledge

Financial resources

Future hybrid requirement

Customer relation / Customer knowledge

Material understanding / Production knowledge

Financial resources

Agility and dynamic change

Willingness to take risks

Entre-

preneur

Digital start ups

Agility and dynamic change

Willingness to take risks

Entre-

preneur

SUMMARY

1. Digital Business = CEO Agenda

2. Build a Powerful Cross functional Coalition

3. Digital Architecture & Orchestration = CIO Agenda

4. Cloud First but not Cloud Only

5. Digitalization = Technology & Business & Culture

Thank you for your attention Günter Sube IT Management thyssenkrupp Steel Europe Head of Production Solutions [email protected]

recipes for a successful digital transformation · integration, devops, mobile apps • analytics:...

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