#1 DIGITAL BUSINESS [DISRUPTION VS.

COLLISION]

- The transformations are profound, with serious

implications for how companies design their business
models (that is, how they create and capture value), how
they execute their operating models (how they deliver
value), and the competitive dynamics and market
structures of their industries.
- Collision, unlike disruption, involves more than
introducing a technological innovation or revamping the
business model or customer value proposition — it’s
about the emergence of an entirely different kind of
company. As a result, defending oneself against collision
can’t be achieved by simply spinning off an online
business, setting up a laboratory in Silicon Valley, or
creating a digital business unit. It calls for re- building the
core of the business and changing how the organization
works, gathers and uses data, reacts to information,
makes operating decisions, and exe- cutes operating
tasks.
- Yet as they succeed by leveraging their scale, scope,
and learning advantages, the digital operating models
introduce a number of new problems. Among them: the
preservation of privacy, algorithmic bias, cybersecurity,
and increased market concentration.

#2 DIGITAL DISRUPTION & DIGITAL TRANSFORMATION

§ Determine whether the technology is disruptive HOW TO RESPOND?

or sustaining.
§ Define the strategic significance of the
disruptive technology.
§ Locate the initial market for the disruptive
technology.
§ Place responsibility for building a disruptive
technology
business in an independent organization.
§ Keep the disruptive organization independent.
3 STAGES OF SUCCESSFUL DT
1. Modernization
- Simplifying/digitizing existing
processes/functions
§ App development for customers, automating HR
process, etc.
2. Enterprise-wide transformation
- Cross-Value-chain change effort
§ Integrated Omni-channel Customer exp., Agile
work practice..
3. New business creation
- Creating new revenue sources, increasing
revenue size
§ (ex)selling model to subscription model § (예)linear
supply chain to ecosystem
è Step 1 & 2: focus on existing Biz improvement
è Step 3: creating new Biz & new revenue source
(value)
§ Evaluate the disruptiveness, the strategic
significance of target digital technology
§ Participate
– in the early stage (even in a small scale)
§ Build an independent organization separate
from existing company culture, if necessary
§ Build an effective plan on current businesses –
Minimize the damage
– Revitalize/Reuse
– Exit strategy
7 QUESTIONS BEFORE DIGITAL TRANS.
1. Is this a digital upgrade or a digital
transformation? 2. Are you (or your team) really
bought in?
- Are you really passionate about it?
3. Are you prepared to share value creation with
your customers?
4. Have you put walls around your digital team?
– Company-wide(cross-functional) strong support
and mandate?
5. Do you know how to measure the value you
intend to create?
6. Are you ready to make tough calls about your
team? - New talent
7. Will you be ready to spin off your digital
business?

#3 PIPELINES AND PLATFORMS

The move from pipeline to platform involves Platform Advantages:-

three key shifts: - Strength of network effect
1. From resource control to resource - Network clustering
orchestration. - Risk of disintermediation
2. From internal optimization to external - Vulnerability to multi-homing (the practice of
interaction. connecting a host or a computer network to more
3. From a focus on customer value to a focus on than one network.)
ecosystem value. - Network bridging Eg: Amazon from retail to OTT

#4 Internet Of Things BIZ / Smart, connect products

- The third wave of IT-driven transformation thus
has the potential to be the biggest yet, triggering
even more innovation, productivity gains, and eco-
nomic growth than the previous two.
- Core elements: Smart components amplify the
capabilities and value of the physical components,
while connectivity amplifies the capabilities and
value of the smart components and enables some
of them to exist outside the physical product
itself. The result is a virtuous cycle of value
improvement.
- Physical components comprise the product’s
mechanical and electrical parts.
- Smart components comprise the sensors, mi-
croprocessors, data storage, controls, software,
and, typically, an embedded operating system and
enhanced user interface.
- Connectivity components comprise the ports,
antennae, and protocols enabling wired or
wireless connections with the product.
Product —> Product + Product Cloud
Product —> Product + Product Data
“Greatest impact on manufacturing industries”
Capabilities of smart, connected products
- Monitoring: mSensors and external
data sources enable the comprehensive
monitoring of:
• the product’s condition
• the external environment
• the product’s operation and usage
Monitoring also enables alerts and notifications of
changes
- Control: Software embedded in the product or in
the product cloud enables:
• Control of product functions
• Personalization of the user experience
- Optimization: Monitoring and control capabilities
enable algorithms that optimise product operation
and use in order to:
• Enhance product performance
• Allow predictive diagnostics, service, and repair
- Autonomy: Combining monitoring, control, and
optimization allows:
• Autonomous product operation
• Self-coordination of operation with other
products and systems
• Autonomous product enhancement and
personalization
• Self-diagnosis and service
New Strategic Choice
§ What value/how to create and capture?
§ How to utilise the great amount of new data?
§ How to redefine relationships with existing biz
partners?
§ What roles to play as industry boundaries are
expanded?
Why now?
An array of innovations across the technology
– Miniaturisation
– Energy efficiency in sensors and batteries
– Highly compact, low-cost computer processing
power – Cheap connectivity ports
– Big data analytics
– IPv6 internet registration system
Guideline: How to survive in IoT era
1. Apply the digital lens to existing products and
services.
2. Connect your existing assets across
companies.
3. Examine new models of value creation.
4. Consider new value-capture models. (Revenue
Models)
5. Use SW to extend the boundaries of what u do