Business Transformation by considerig Megatrends

1. Using Megatrends to transform businesses
leveraging on IoT and Data Analytics
Dr Tan Guan Hong
Worked @ GovTech, A*STAR, Tritech Group, SysEng, Philips Electronics
(Experiences from TRL 3 to TRL 9)
Vice President @ Singapore Industrial Automation Association
Consultant @ Singapore Technology Land System & Electronics
Technology Partner @ RekaNext Capital
Technology Partner @ Pestech Holding (S) Pte Ltd
RekaNext‘s Director @ XjeraLabs Pte Ltd
A*STAR’s Director @ Sentient.io
Business Advisor @ ACKCIO
Business Advisor @ WisQo

2. Internet of
Things (IoT)
Global
Trends
2

3. https://en.wikipedia.org/wiki/Moore%27s_law
Moore’s Law
Number
of transistors
in a dense
integrated
circuit
doubles
about every
two years
Technology
Trends

4. Moore’s Second Law or Rock’s Law
Cost of
electronics and
computer power
to the
consumer will
keep falling !
Technology
Trends

5. Telephone Camera Computer Smart phone
Mechanical Car & Combustion Engine Electric Car & Autonomous Vehicles
Cathode Ray Tubes TVs LCD TVs
Metering & Data Logger Arduino Boards
These
will
follow
Moore’s
Law
Moore’s Law moves Mechanical to Electronic Products
Technology
Trends

6. 6
Toyota Model Product Creation Process (PCP)

7. 7
Product Creation Process (PCP)

8. 8
Past Future

10. Grows up using Eyes and Fingers to interact
Human to Human Network supported
by IoT Network to interact with the
Physical world via Sensors
Global
Trends

11. https://www.bloomberg.com/news/articles/2018-08-20/gen-z-to-outnumber-millennials-within-a-year-demographic-trends
Gen Z (Born after 2001) comprises 32% of the global
population of 7.7B in 2019, ahead of 31.5% Millennials (born
1980-2000)
Self-Awareness vs Self-Centeredness," “Rise of Gen Z: New
Challenge for Retailers”
Millennials were more focused on what was in it for them,
looked to others, such as the companies for solutions. The “i”
Generation !
Gen Z are younger people, sought to create their own
solutions, only know Digital World (IoT), Expose to “War on
Terror“, “Cyber Security” and “Global Recession"
https://www.huffingtonpost.com/george-beall/8-key-differences-between_b_12814200.html
Global
Trends

12. The population grew up from the computer generation using eyes and
fingers to interact
This is the “i” Generation of iWatch, iPhone and iPad
The self centric world of “i” or me, me, me …
Everything revolves round “i” , that individual
Knowing this, how do we grow business in future ?
Gen Z &
iGeneration
i i
i

13. IoT demand will accelerate as the kids become more IT savvy, Individualistic and Social
connected. Next when they enter the work force with increasing spending power, they
will use technologies which are familiar and read in the Internet for knowledge.
IoT will reach a
Tipping Point
Once it tips over, the IoT applications, services and devices
will grow exponentially. Data is the Key Driver
Young ICT
educated
Citizens
entering
work force
IoT
Demand
Gen Z &
iGeneration

14. Smartphones are forcing Businesses to
come up with new Biz models
Global
Trends
Smartphone
Apps

15. Major Megatrends for 2015
i and
Global
Trends

16. https://www.cnbc.com/2017/08/17/when-youll-earn-the-most-in-your-career.html https://www.statista.com/statistics/824464/mean-disposable-income-per-household-by-age-uk/
Global
Trends
Earning power & Disposal Income
by age groups
Targeting 30 - 50 age groups

17. Working
Population
supporting
Elderly !
4 Homes &
Cars / Family
Need only 1 Home & 1 Car / Family
What to do with the extra 3
Homes & Cars ?
Empty ? Sell ? Value drop ?
Who holds Asset ?
Aging
Population

18. 18
Singapore
Trends
Aging Population
will change
spending patterns
By % can skew
statistical thinking.
5% of 10,000 is
different from 5% of
1,000,000

19. WORLD Elderly
• 2014: 605 M
• 2050: 2,000 M
• AGEING IS NOT A PROBLEM, ITS OPPORTUNITY!
0
2
4
6
8
10
12
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
ELDERLY
PERCENRAGE
YEAR
SOURCE: DEPARTMENT OF STATISTICS SINGAPORE
SINGAPORE
• YEAR 2015: 430,000 Elderly
• YEAR 2030: 900,000 Elderly
Elderly Person > 60 years old
Aging
Population

20. The total fertility rate was 1.2 in 2014, compared to 1.3 in
2013, the Dragon Year. This is below the replacement rate of
2.1 . Replacement rate is 2.1 !
Manpower Shortage

21. Only Singapore, Hong Kong and Moldova have a fertility rate (the number of children per woman)
as low as South Korea's. All are on 1.2, while the replacement rate - the number needed for a
population to remain level - is 2.1. https://www.bbc.com/news/stories-45201725

22. Copyright of GovTech © Not to be reproduced unless with explicit consent by GovTech.
https://www.statista.com/statistics/804307/gross-domestic-product-gdp-per-capita-in-the-asean-countries/ https://asia.nikkei.com/Economy/Southeast-Asia-trying-to-improve-birthrates
US$
https://www.channelnewsasia.com/news/singapore/singapore-total-fertility-rate-new-low-1-16-10002558a

23. 23
eCommerce is growing very fast
Global
Trends

24. Reducing overhead
costs is a
Win-Win-Win
for Consumers,
Retailers and
Manufacturers
High Cost to Consumer v.s.
Total Manufacturing Cost Threat is NOT
the next
Shopping Mall
but Global
eCommerce
Global Trends
Materials & Finishing $3.69 65.1%
Freight/Insurance/Duties $1.03 18.2%
Factory Margin $0.58 10.2%
Agent $0.18 3.2%
Labour $0.12 2.1%
Factory Overhead $0.07 1.2%
Cost to Retailer $5.67 40.5%
Retailer Margin $8.33 59.5%
Consumer Buying Price $14.00
http://www.macleans.ca/economy/business/what-does-that-14-shirt-really-cost/
http://reinventingprosperity.blogspot.sg/2015/10/the-truth-behind-your-14-shirt.html

25. Cost Breakdown Physical Store eCommerce
Materials & Finishing $3.69 65%
Freight/Insurance/Duties $1.03 18%
Factory Margin $0.58 10%
Agent $0.18 3%
Labour $0.12 2%
Factory Overhead $0.07 1%
Cost to Retail $5.67 41% $5.67 68%
Retail Labour $3.00 21%
Retail Rental $2.66 19%
Retail/Seller Margin $2.67 19% $2.67 32%
Consumer Buying Price $14.00 $8.34
eCommerce/Physical Ratio 60%
Less expensive to consumer
Seller makes better % margin for same outlay
Consumer pays less for same product
Rental will drop & replace by services, which cannot do through Internet
Retail property prices will drop as service depends on no. of people & tourists

26. Singapore Biz Cost Structure
Retail Costs in Labour is 36% & Rental 32%
Retail Margin $8.33
Retail Labour $3.00 36.0%
Retail Rental $2.66 32.0%
Actual Margin $2.67 32.0%
Actual Margin for Retailer: Sell Price
is $2.67 / $14 = 19 %
Singapore
Trends
$14 shirt

27. • Growing IoT devices
• Data Insights from Mobile Apps
• i-Generation citizens
• Aging population / Demographics
• Shortage of younger citizen and raising salaries
• Increasing Rental space
• SMEs employ 70% of residents, translating to voting power
Business Challenges

28. Source : http://www.singstat.gov.sg/statistics/visualising_data/Singapore-Economy20052014.pdf
SMEs
Make up 99% of enterprises
Employ 7 in 10 employees
Singapore
Trends
28

29. Consumer IoT
IIoT or Industrie 4.0
Structured Work Process with
SOPs
Paid to provide Service
Unstructured Process as dealing with
individuals
Pays for Service
Focus on Efficient and Outcomes
Conflicting individual goals for self interest
& benefit
Highly fragmented, flexible and
change over time fast
Inflexible and Large
Organisations, no single
individual ownership
IoT
Influence by stake holders and KPIs Influenced by individuals, social
behaviour and friends
Consumer facing
Process Driven
B2B IoT , Enterprise IIoT or
Industrie 4.0 (Reliable Focus)
B2C IoT , Consumer IoT (Cost Focus)
Business Challenges

30. Confidential
Cloud Platform IoT (B–C)
Milk
- To C
- RFID
SuperMart
Milk
- To C
- RFID
IIoT (B-B)
Milking
Milk
- To C
- Volume
- RFID
Milk Processing
Milk
- To C
- RFID
MILK
Cold Chain Households
Security
Trade Secrets
Confidentiality Individual Privacy
Grass
- Moisture
- pH Levels
Farm A
Grazing Consumers
Cheese
Fly
Milk
Structured
Data
Unstructured
Data
IIoT works with Structured Data to forecast
and manufacture for consumers
IoT organises the Unstructured Data into Structured
information for IIoT system to work
IIoT and IoT Food Chain for Food Traceability and Security
Milk
- To C
- RFID
Milk
- To C
- RFID
Business Challenges

31. 31
Today
Ideal
Situation
Time
Opportunities
Identify Top
Constraints
hindering
Stake Holders
agreed Mid-Goal
Process of Innovations

32. 32
Business Environment is changing very fast
with Digitization & Mobility
• Step by step, competition
is taking your “Cheese”
away
• Options: Transform,
Compete head on, Get
out, Do Nothing & Wait
until obsolete

33. 33
Tech#
1
Tech#
2
Tec
h#3
Tec
h#4
System Level for Heart to Function
?
?
?
?
We need to Design a Functional Heart
There are Tech#1 to Tech#4
Who will cover the ????
Design must cover all the missing
gaps in between
Sometimes the Tech#3 wants to
cover Technologies outside the Heart
for its own interest

34. First Mover Advantage
Gold Ingots
behind the hill !!
Do I want to
Tell Them ?
Where is
the $$?
Some People Make Things Happen
Some People Watch Things Happen
Some People Wonder What Happen
Business Innovation

35. 90%
80%
95%
Maturity
Maturity
Maturity Time`
Time
Time
Technology#1
Technology#2
Technology#3
X
X
X
✔
✔
✔
New Business Innovation
New
Development
Evolution of New Business
80% Matured
When Technologies matures to 80% and above, there is no more technology competitive edge but
rather a cost reduction strategy which is doing more of the same to increase operational efficiencies
Now we leverage on these matured cost effective technologies by adding new innovations to create
new market segments by integrating stable technologies to solve new challenges
20% New
Business Innovation

36. Do the same ,
Don’t expect
different results
Business Innovation

37. Thank you for your attention
Have a great Day ahead

38. 38
Elements of MaaS
Business model
Coordination between different
Mobility Service Providers (MSPs) to provide
value to users and MSPs themselves
Mobility
as a Service Infrastructure
Telco networks, Payment systems,
Physical infrastructure to link up
different modes of tpt, physical gates
for identification of users
Active mobility
Shared bikes and
scooters, lower cost
of transport and
lower carbon
emission
Public transportation
Lower cost of transport and
lower carbon emission
Shared vehicles
Ride hailing, carpooling, on-
demand vehicles, AV, EV fleets
Local transport authorities
As a provider, or non-commercial
interference in policy objectives.
Should be convinced of MaaS’ benefits
Real-time data & Traffic prediction
Rerouting on the go with user
information and traffic conditions
Mobility
Service
Providers
Internal
Considerations
Briefing

39. 39
MaaS Opportunities for ST-Comfort JV
• Developing JV opportunities by
leveraging on both businesses eco-
system
• Identify the suitable elements of MaaS
already working/in progress within both
companies
• Identify the Missing components for
MaaS and explore partnering with other
third partners to strengthen and shorten
time to market
• Prioritises the component development
due to resource/investment constraints
• Identify internal champions at each
component
Briefing

40. 40
Chart#1 (Strength) and Chart#2(Weakness)
• Everyone identifies the Strength of their own organisation. Writes one Strength per sticker and
paste it on the Strength Chart#1
• Each person identifies at least 3 Strengths and indicate a Strength number (1 High, 2 Medium,
3 Low)
• Repeat for Weakness. Everyone identifies the Weakness of their own organisation. Then
writes one Weakness per sticker and paste it on the Weakness Chart#2
• Each person identifies at least 3 Weakness and indicate a Weakness number (1 High, 2
Medium, 3 Low) …. Note: High Weakness means vulnerable !
Chart#3 (Opportunities) and Chart#4(Threats)
• Everyone identifies the Opportunities for their own organisation. Writes one Opportunity per
sticker and paste it on the Opportunity Chart#3
• Each person identifies at least 3 Opportunities and indicate a Opportunity number (1 High, 2
Medium, 3 Low)
• Repeat for Threats. Everyone identifies the Threats to their own organisation. Then writes one
Threat per sticker and paste it on the Threat Chart#4
• Each person identifies at least 3 Threats and indicate a Threat number (1 High, 2 Medium, 3
Low)
Part#1SWOT

41. 41
• Next the Group discuss to prioritise within each quadrant each point and re-prioritise again to
1 (High) , 2 (Mid) and 3 (Low) as the previous Priority order can change after debating. This
output will be used in the next group discussion for Action Plans
• Group nominates a presenter and another for taking notes during Q&A
Part#1SWOT

42. 42
• Based upon the SWOT analysis and applying to the MaaS framework, identify the Action Plans to
implement the MaaS Business model V 1.0 based upon the List of Topics/Questions
• In the Action Plans, indicate short term ( 6 months) and long term (12 months)
• Both parties must see the same opportunities by using each others strengths leveraging their
strengths.
• With Chart#5 for MaaS Business Model V 1.0, position the Strengths stickers on Left column and
Opportunities stickers on Right column. Identify and develop action plans based upon these
Strengths and Opportunities.
• Weakness and Threats to the JV need to address, later as these need time to mitigate by working
with external partners
• With Chart#6 on Weakness on Left column and Threats on Right column. Then to proposal steps
to mitigate them.
Part#2 Action Plan
• Next discuss to prioritise the Action Plans to 1 (High) , 2 (Mid) and 3 (Low)
• Group nominates a presenter and another for taking notes during Q&A

43. Rolls Royce
“Power by the Hour”
Business Model started
in 1962 !
Only the Manufacturer
knows the Engine best.
They don’t sell you only
Engine Hardware but
Engine Usage based
business
http://www.rolls-royce.com/media/press-releases/yr-2012/121030-the-hour.aspx
Disruptive Business Model
43
Business Innovation

44. IoT Business Model of shifting CAPEX
and OPEX to reduce risks for various
stake holders in the Eco-system
44
Business Innovation

45. Value for Customer
• Don’t Work, Don’t Pay
• Customer is King as he $pays for Quality Data Only & Service
Value to Service Provider
• Customer Centric Business Model
• Supports Innovation Projects for longer contract
• Customer pays only by $ Z x (Days Working/Days in that
month) by making failure expensive for Service Provider
• Failure surfaces every month for Improvements
Move Customer’s Budget from CAPEX to OPEX
45
Business Innovation

46. "A Customer is the most important visitor on our
premises. He is not dependent on us. We are
dependent on him. He is not an interruption in our
work - he is the purpose of it. We are not doing him
a favour by serving him. He is doing us a favour by
giving us the opportunity to serve him.”
Mahatma
Gandhi
46
Business Advice

47. “You cannot Manage
What you cannot Measure”
Edwards
Deming
47
Business Advice

48. Construction
IoT Approach
Data Generation to Digital Formats: Sensors
Horizontal
Technologies
•Mobile
•Internet
•Cloud
Data Collection, Analysis, Management & Alert
Environmental
Supply
Chain
Management
Facility
Management
Retail
Food
&
Beverage
Security

49. IoT Value-Chain Growth
Sensors/Input
Devices/data
loggers
Wired
&
Wireless
Networks
Application
Developers
Telcos
Data
Centers/
SANS
Providers
System
Integrators
Automation
Consultants
Business
Intelligence
Standards & Data Security
Awareness & Skills Training
Productivity Improvements
Every chain link have many companies servicing that link in Value-Chain
+ + + +
+

50. IoT also means A lot of Things
The Business Disruption is the Better Customer Experience rather than
Technology Advantage
The Software/Internet Connectivity/User Interface inside the Devices makes them
into Social Objects to link other people as a Tool
IoT Needs Volume Adoption and standard Process to be Efficient so that prices will drop for
higher volume. Cost reduction driven
IoT will starts from B2B as B2B is usually Cost Reduction driven. It has clearer
added value and smaller market to grow
B2C is Sales Growth Driven, hence the end product added value so not so clear
Service Business is not scalable Localized Business difficult to export
See what Big Company don’t do. If they do it, you are already too late. Invest Early before
others see opportunity
Brand, Size matters to negotiate for Discounts Bulk Buying, Rental. Young staff joins Big
Brands and Company. Common training of staff for economy of scale

51. Globalization Effect
Big MNCs
Many SMEs
Global
Trends
Size matters now for Global Branding
Gen Y & Talent Recruitment
Business Continuity
Succession by Professionals
Negotiation for Economy of Scale
Purchasing Discounts
Rental Space
Marketing
SME working alone to protect their turf

52. The Business 3 domain blocks to be align
Cars Drivers Awareness
For business to work, all 3 blocks must work
Each block has 2 states, “0” Not-working Logic and
“1” Working Logic
This business has 2 x 2 x 2 possible combinations
(23) to work or fail
Opportunity
Business Innovation of aligning 3 available blocks

53. 53
The business has 3 Technology blocks
0 0 0
0 0 1
0 1 1
0 1 0
1 0 0
1 1 0
1 0 1
1 1 1
For business to work, the
probability is 1 / 23 = 1/8 = 12%
The possibility of unit not working
is 7/8=88% !
When getting it to work, can you
assume that the person has the
skills to troubleshoot any of the
7/8 ? Unlikely
If we already have 2 Blocks
proven to work already, our risk is
only in 1 Block risk which is ½ =
50% only

54. IC Component Level
• IC Layout & Software
• Need to understand
component
characteristics and
interconnect

55. Module Level
Module Design
• Module Embedded Software and need to understand component
characteristics
• Need to understand PCB Circuit layout beyond inter-connectivity
between ICs
• Shielded from the need to understand IC layout level

56. Having all working ICs
Module Design
• All ICs working according to its individual specifications
• When all the components are mounted, it cannot be assumed that the
Module can work according to Module level specifications
• There is an interaction between component ICs to make the module work
as a module… This is a System Integration Function

57. Module Application Level
Application Software
• Need to understand Application needs and Module
characteristics
• Need to understand Module interfacing protocol and timings
• Shield from the need to understand individual component level

58. System Level
System Application Software
• Understand Final Product Application
• Use off the shelf Modules and well documented
• Need to understand Individual Module
characteristics and their interactions
• Shield from the need to understand individual
component level

59. Innovation Strategy :- Chose your Battle ground to your advantage
300
100,000
100 Spartans Width & 3 Rows
Mountain
1,000 Rows of
100 Persians
System Thinking
The Narrowest
passage controls the
battle ground !
Critical Path
determines System
Performance
Sea

60. Know your targeted final system
Computing
Resources
Server Note Book Embedded Systems
Number
of
Codes

61. Rolls Royce
“Power by the Hour”
Business Model started in 1962 !
Only the Manufacturer knows the
Engine best. They don’t sell you
Engine Hardware but Engine
Usage based business
http://www.rolls-royce.com/media/press-releases/yr-2012/121030-the-hour.aspx

62. IoT Business Model of
shifting CAPEX and
OPEX to reduce risks for
various stake holders in
the Eco-system
IoT Business Model

63. Value for Customer
• Don’t Work, Don’t Pay
• Customer is King as he $pays for Quality Data
Only & Service
IoT Business Model
Value to Service Provider
• Customer Centric Business Model
• Supports Innovation Projects for longer contract
• Customer pays only by $ Z x (Days Working/Days
in that month) by making failure expensive for
Service Provider
• Failure surfaces every month for Improvements
Move Customer’s Budget
From CAPEX to OPEX

64. OPEX End User cost advantage
0
100
200
300
400
500
600
700
2005 2006 2007 2008 2009 2010 2011
Monthly
Fee
S$
Year
OPEX vs CAPEX Model
OPEX
CAPEX
Average Flood Monitoring Station per month
2014
Supply of Water Level Data
@ Waterways (Fourth
Contract in 2014)
Business Model
OPEX Service Provider Advantage
- End User gains confidence to
contract larger scale value tenders
- Service Provider build capabilities to
Design & Supply more robust system
before expanding overseas
- Minimize End User Risks while
Provides Service Provider with
continuous feedback about its
Innovation