Presentation at the PwC Midwest Deals Summit by Dr. Anand Rao, John Sviokla and Andrea Fishman. The presentation looks at impact of digitization, data and analytics and the disruption they cause in retail, healthcare, agribusiness, and financial services. We look at how this is leading to more deals across the spectrum from large M&A's to private equity to venture capital

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Digital, Data, Disruption
in Deals
John Sviokla, PwC
Andrea Fishman, PwC
Anand Rao, PwC

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Deals! Deals! Deals!
Warming Economy will Boost 2015
M&A – Wall Street Journal, Jan 16, 2015

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Polling Question: With new technologies providing organizations access to significant amounts of data, this has created a
new era of disruption and is impacting organizations in all industries. In which way has this impacted your organization the
most?
Volume, Variety, Velocity, and Veracity of Data is driving the ‘Big Data’ Revolution
10%
10%
15%
18%
23%
5%
15%
3%
A. Aqui-hire - (buy companies to gain skills)
B. Organizational change - - new roles , remapping of accountability
C. New techniques (e.g., machine learning), new technologies (e.g.
Data), and new skills (e.g., Data Scientist)
D. New focus on data security and risk management / mitigation
E. Improved insights from data and analytics into customer
F. Needs / expectations
G. New partnerships or ways to interact with customers
H. I don’t know.

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Deals were larger and also spanned all sectors globally
2014 was a huge year for M&A and private equity - Fortune Magazine

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Deal activity was strong across all areas
of capital raising
M&A
$3.5 Trillion in M&A activity
globally – 47% increase from
2013
Private Equity
$562 billion in global
private equity – 43%
increase from 2013
Venture Capital
$48.3 billion in VC funding –
61% increase from 2013
Crowdfunding
$16.2 billion in
crowdsourced funding –
167% increase from 2013

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Race to dominate Personalized
Content Delivery Anywhere,
Anytime on Any Device
Media
AT&T + Direct TV

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Race to dominate Precision
Agriculture & increase
productivity significantly
Agribusiness
Monsanto + The Climate Corporation

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Race to dominate Personalized
Medicine & Commoditization of
Drugs
Healthcare
GSK + Novartis

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Race to dominate Robo-Advice
and guide advisors, investors,
and institutions towards a
secure future
Financial
Services
Northwestern Mutual + Learnvest

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Disruption
Disruption across all industries is
driving the deals activity

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Common drivers across all disruptions – Digital, Data & Analytics

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The world is in beta.
Technologies, trends, markets and economies are in a constant state of flux.
Acquiring or having access to
new technologies, techniques is
essential
Acquiring and motivating your
talent becomes your greatest
asset
Competitive advantage is
transient
Speed & Scale are critical for
a sustainable business model
Right Now

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79%
Of smartphone users are
using devices to shop at
least once a month
10%
Higher revenue growth
forecast for companies
who prioritize
innovation to a greater
extent than their peers
50 Billion
Predicted number of
connected devices by the
year 2020
79%
Of enterprise IT spend is
outside of the CIO’s
budget
Disrupt or be disrupted?

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Disruption in Advice
Digitization is transforming how people discover,
engage and transact with business
in VC funding for
Robo-advisors in 2014
$290M
of Adults have Mobile
Devices within Arm’s Reach
24/7
91%
Mobile Internet Users by
2020
3.8 Billion
Internet Users by 2020
5 Billion

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Disruption in Healthcare
Genomics, wearables, ingestibles, and nanotechnology
are making Personalized Medicine a reality
per year in Personalized
Medicine revenues
$286 Billion
in smart wearables
global market by 2020
$22.9 Billion
Unit sales of wearable
devices by 2020
200M
for genome sequencing in 15
years
$100M-$1K

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Data & Analytics
Digitization is leading to increased
volume, velocity and variety of data
requiring advanced analytics to draw
insights

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Insights driven by - Big Data, Analytics,
Technology and Mindset

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Big Data - New sources of data…
…structured, unstructured, audio, image, video, sensors, and social
Volume, Variety, Velocity, and Veracity of Data is driving the ‘Big Data’ Revolution

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Big Data Analytics - New Analytic Techniques…
…backward & forward looking, statistical & computational, art & science
Descriptive, Diagnostic, Predictive, and Prescriptive Analytics are enhancing the value of Data
Graph Networks
System Dynamics

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Big Data Technologies - New emerging technologies
…distributed stream processing, GPU’s, NoSQL databases
Cloud computing, open-source software, multi-core processors, hybrid architectures are
fuelling big data technologies

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Precision
Agriculture
• Sensor, satellite, weather station, and visual data
• Bayesian learning, monte-carlo simulation
• Cloud infrastructure, agile (3 wk) research &
analytics
• Crop insurance to yield management
• Elimination of claims process & real-time
exposures

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Precision
Medicine
• Sensor, electronic health data, genomic, proteomic
data
• Cognitive computing, NLP, deep learning, bio-
informatics
• Digital DNA sequencers, mobile diagnostics,
ingestible devices
• Outcome based care, personalized medicine
• Preventative (well-being) vs Curative (disease)

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Robo-Advice
• Event data, aggregation, sensor, unstructured,
video
• Data enrichment, agent-based simulation,
behavioral economics
• Cloud infrastructure, digital, social, and mobile
devices
• Cost-effective, sophisticated, personalized advice
• Cost-effective, sophisticated, personalized advice

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Digital
Experience
Talent
Management

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Digital Experience
Digital is transforming customer
experience, operations, and back-end
processes

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Today’s most successful organizations are known for more than just great products.
They create amazing customer experiences.

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People don’t see the world in silos
For them it’s all one connected experience
Connected Experiences Are Driving Transformations in How Companies Evaluate Deals and
Growth Strategies

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New Deals Driven to Heighten
Customer
Experience

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They bought a bunch of
companies that “help us grow
our expertise to build best-in-
class eCommerce technologies
and talent”
Retail
Walmart + Small Society, One Riot, Kosmix, etc..

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Enables in car connectivity
for mobile devices and app
developers
Automotive
Ford + Livio

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Personal shopper to hand select
clothing/accessories
(web based)
Personalization
Nordstrom + Trunk Club

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Third Era of
Digital
Disruption
Merging physical and digital Entering the Digital
Business Era

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Made for 1.
78% of consumers express a desire
for some kind of content
personalization
Here. Now.
People buy online because
it’s 24/7, quick and doesn’t
require a trip.
Omni-Everything
By 2025 over 80% of
retailersare “seamless”
in go-to-market,
fullyintegratedand 360
omni-channel
Customer Experience is being
Transformed by Three Central Themes

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Tomorrow
Today
Made for 1
Personalized Mobile Stores Habit Trackers Retailer App integration
Artificial Intelligence Personal Fabricators Printed Food Facial Recognition Shopping

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Tomorrow
Today
Here. Now.
Evolving Retail Formats One-Click Ordering On-Demand Delivery
Drone Delivery On-Demand Personalized
Manufacturing
Auto Restock Magic Text Concierge Auto Password Reads

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Tomorrow
Today
Omni-Everything
Image Recognition PwC Total Retail Study Beacon Enabled Auto-Checkin
Wearables Snap to Buy Omni-Currency
vv
33% of shoppers research online
before buying in store . .44% of
shoppers compared prices on
their mobiles while in store

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How do you create
that add value beyond the
product itself?
Experiences

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This changing journey
impacts organizations
Transition from
• Siloed functional teams
• Tactical execution
• Command and control
• Clear escalation, empowerment
and communications protocol
• Centers of excellence
Executive
management
Middle
management and
support staff
Front-line
staff

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From hierarchical to
customer centered
Transition to
• Customer-centric organization
• Agile & collaborative by design
• Empowered and engaged
employee base
• Operationally optimized
• Responsive
• Communities of practitioners
Executive
management
Middle
management
Front-line
staff
Support staff

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Why is digital transformation happening in the marketplace?
Customer behavior is changing…
• “B2C-like” experiences expected
• Non linear decision process and online influencers
playing large role
• Look for digital self service tools for 24x7
convenience
…and new market entrants are disruptive
• Small nimble competitors coming to market with a
“digital-first” mindset
• Competitors do business online with minimal direct
sales force costs
• Increasingly flexible payment, billing and fulfillment
methods for digital goods

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Technological advances fueling changing customer behavior
of CEO’s say ‘Technological advances’
will be the top driver transforming their
business in the next five years.
28
39
58
69
86
Technological advances
Demographic shifts
Shift in global economic power
Resource scarcity and climate change
Urbanization
Source: PwC CEO Survey, 2014
Trends that will transform
business next five years (%)
Where companies are
investing to grow
6
11
15
15
20
25
39
39
41
44
0 10 20 30 40 50
Wearable computing
3-D printing
Battery and power technologies
Robotics
Sensors
On-demand business and technolog
services
Cybersecurity
Mobile customer engagement
Socially enabled business process
Business analytics
%
86% Digital IQ

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What does the Internet of Things really do?
Under
the age
of 16
The Internet of Things provides the data and services that creates an ecosystem that provides information and
intelligence that drives contextual awareness about yourself and/or your surroundings.

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Why does the Internet of
Things matter for Business?
IoT is the “extension of the Internet to the
physical world. The Internet has
transformed digital industries, while the
Internet of Things will transform physical
industries.”
• “In a manufacturing plant, assets are affixed with
wireless sensors. Using remote monitoring technology,
plant managers locate anxd track production inventory
on the plant floor and within the supply chain in real-
time.”
• An automobile’s systems and subsystems produce
information about a cars wear-and-tear, performance,
and rider driving patterns. The data can be used for
monitoring and maintaining the car remotely.

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What the “experts” are saying about the Internet of Things
“50 Billion Devices connected by 2020 – a $19 Trillion dollar industry.”
“If you look back a decade from today at the impact of the
Internet of Everything, I predict you will see it will be five to 10
times more impactful than the whole Internet has been today.”
John Chambers, Cisco CEO
“Growth opportunities are in the overlap of
Systems of engagement, Systems of record,
and systems of insight.”
David Gosen, Nielsen European Managing Director MWC 2014 Keynote
“2013 $1 Billion total investments into IoT companies and
$3.5 Billion in M&A activity in 2014.”
Carlos Morales Telefonica, Global Managing Director of M2M MWC 2014
“IoT is moving to higher value by
delivering actionable insights in the
physical world – cloud based big data
services and industry analytics will play a
key role”
Bob Fox, IBM Global Business Services - MWC 2014

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Potential Business Model Impacts: Best Practices
Under
the age
of 16
When we look to IoT innovators and first-movers we see a recurring common theme of best practices
observed across sectors
Automotive: Tesla
best practice: push data to the cloud to capitalize
on the level analysis, process optimization and
scale enabled by distributed intelligence.
Healthcare: AliveCor
best practice: build additional value for your
IoT platform by integrating with
complimentary platforms via open standards.

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Networked Business Model Canvas – Connected Personal Health
Monitor
Under
the age
of 16
Appendix
Key Partners
• Insurance companies
• Hospitals & Clinics
• Doctors
Cost Structure
• R & D for medical devices
• Software platform development
• Cloud-based services hosting infrastructure
Revenue Streams
• Sale of aggregate, non-personally identifiable health data
• Sale of devices
• Sale of varying service levels enabled by the interconnectivity of devices
to patients, doctors, hospitals and clinics
Key Activities
• Manage specialist
network
• R & D for connected
medical devices
• Develop new services
Value
Propositions
• Scaled Expertise –
healthcare specialists not
constrained to a physical
location for monitoring or
even examining a
particular ailment specific
to their specialization.
• Ongoing Monitoring –
continual monitoring of
patients’ vital signs allows
for more timely
identification of anomalies
and faster treatment if
identified.
• Hospital Prevention –
ongoing monitoring
minimizes unneeded and
expensive hospital visits.
Customer
Relationships
• Online
• Via physicians
Customer
Segments
• Insurance companies
• Hospitals & Clinics
• Doctors
Key Resources
• Specialist network
• Cloud platform
• Connected medical devices
Channels
• Primary Care Physicians
• Specialists
• Clinics
• Online

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Get ahead of
customer expectations
Consider new
partnerships
Transform your
human capital
Where do you go from here?
successful organizations

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Talent Management
Acquiring, nurturing, and retaining
talent is the biggest challenge to staying
ahead of the competition

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Organizations need to find and keep talent
ProducerPerformer
Organizations need
to find — and keep —
at least a few exceptional
Producers

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Mythic blue oceans..
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
%IndustryPopulation

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Evolution of a Billionaire
0% 20% 40% 60% 80% 100%
Years of Experience
1 - 3 4 - 6 7 - 10 11 - 15 16 - 20 20+
66%
previously worked for
large company
63%
of executives say retaining
top talent is a challenge

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Billionaire Dynamic Duos
Solo Dynamic
Duo 60%
self-made billionaires in our sample who
succeeded when paired with a performer
partner

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“Producers” think and act in distinctive ways that
enable them to create massive new value
Empathetic
Imagination
Patient
Urgency
Inventive
Execution
Rational Risk
Takers
Producer/
Performer

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How can organizations attract, cultivate and retain
their high potential talent
Recognize a
task that
requires a
producer
1
Hire, motivate,
retain and
inspire
producers
2

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Four Ways to Attract & Cultivate Producers
Organic
Development
Catalyst Hires
Mergers &
Acquisitions
Get Produced
1 2
3 4

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Identifying producers and performers
• What are the most important trends, and what opportunities will that create in your
industry?
• Have you ever creatively configured an idea to get it done faster, cheaper, differently?
• Have you ever experienced a real failure, and what did you learn?
• Describe an opportunity in your business that you are passionately interested in
pursuing.
• What is your track record of bringing ideas, people and resources together in a new way
to create new value?
• If you were given 20% of your time to work on an idea what would it be?
Sample Interview Questions:

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Draft
Thank You
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