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Competing for the Future: Iteration vs. Innovation by Brian Solis

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Competing for the future starts with a shift in perspective. Without that shift, you will be confined to cycles of iteration—rather than innovation. Leading digital analyst, author and keynote speaker Brian Solis partnered with Oracle for a new paper, "Enterprise as a Service."

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Competing for the Future: Iteration vs. Innovation by Brian Solis

  1. 1 Towards a new digital paradigm. Enterprise as a Service: Towards a new digital paradigm.
  2. 1 Towards a new digital paradigm. Introduction 2 Iteration vs. Innovation 3 Overview: Understanding the EaaS Model 8 The EaaS Wheel 12 EaaS: The New Paradigms Smart Home 16 Assisted Living 20 Pattern of Life 23 Logistics as a Service 26 Usage-Based Insurance 31 Embedded Banking 36 Connectivity as a Service 40 Transportation and Car Infotainment 42 Carsharing 45 Energy as a Service 47 Demand Forecasting 53 Predictive Maintenance 57 Conclusion 61 Table of Contents
  3. 2 Towards a new digital paradigm. We are living in a unique time that offers enormous business opportunities. The rapid emergence of digital technologies, combined with the maturity of cloud services, is revolutionizing the way organizations work and do business, and opening up a universe of possibilities. Indeed, companies in every industry are focusing on game-changing digital services. With that in mind, I am pleased to share this report on the evolution of today’s technology-enabled business models. Oracle conducts research into a variety of topics, and this report was developed by Account-Based Marketing EMEA in close collaboration with the Spanish digital agency Evoca. The report explores some of the new paradigms being made possible by technology and, especially, the cloud. It was not that long ago that cloud computing was just coming onto the scene, and companies were taking advantage of it to make storage and server capabilities available over the network. But today, cloud usage has moved far beyond that. It is a proven, robust, and cost-effective technology that is enabling “as-a-service” models for a wide range of applications and infrastructure— and organizations are now using the cloud to drive innovation and increase agility in their businesses. Today, that evolution is giving rise to the concept of “enterprise as a service” (EaaS)—that is, delivering the full range of enterprise IT through a single, cloud- based service. That in turn provides a foundation for new business models and, increasingly, the ability to shift from providing products to services. Businesses adopting an enterprise-as-a-service mentality are ready to pivot quickly—much like a football player nimbly changing direction to disorient an opponent and score. Companies are in position to adopt a “fail fast” approach to new ideas. For example, a company using EaaS can take advantage of pre-existing toolsets to build and test a new application. If it’s successful, the company can easily deploy and scale up the system, either by buying more capacity from cloud providers or by moving the application to its on-premises or private cloud resources, if that is its preference. With that kind of ability, organizations can adopt new, more agile mindsets focused on innovating quickly and frequently. They can constantly test new approaches to drive ongoing cycles of innovation— not just in IT but also in the business as a whole. They can reshape themselves, building new business models based on repeatable, flexible, and personalized technology capabilities. Finally, they can extend their reach, and rethink their traditional value chain in the context of a larger, more open ecosystem of partners—and keep finding ways to disrupt markets and exploit new opportunities. I hope that you find this report to be inspiring and helpful, whether you are working to strengthen your current approaches to business or designing completely new services that will recast your relationships with customers and provide a solid foundation for your business in the future. Neil Sholay Vice President of Digital, EMEA Pivoting to Cloud: Enterprise as a Service
  4. 3 Towards a new digital paradigm. Iteration vs Innovation 3 Towards a new digital paradigm.
  5. 4 Towards a new digital paradigm. Competing for the future starts with a shift in perspective. Without that shift, you will be confined to cycles of iteration—rather than innovation. We live in a time of digital Darwinism, an era when technology’s impact on business and society involves both evolution and revolution. Digital Darwinism is real, and it’s driven by changes in people (your customers, employees, and partners). How they think, learn, and make decisions is constantly changing—as are what they expect, prefer, and value, and how they influence each other. This is important because research shows that for many businesses, the centers from which companies and those people operate are growing farther apart. Digital Darwinism is at work. The question is, how well are you coping with it? New technology is important, but it’s only one ingredient in the overall recipe for successfully competing in an era of digital Darwinism. Many businesses are investing in technology to accelerate digital transformation. To thrive, however, you also need a roadmap based on new perspectives and thinking. You have to see the world differently. You have to see people, and how they’re changing, differently. You also have to understand the gap between where you are and where you need to go to meet the evolving needs of your markets. I get that it’s not easy. There’s an old saying that symbolizes the challenge we all face: “We don’t see the world as it is, we see the world as we are.” Indeed, when we see the world through filters formed through our personal experience and a legacy perspective, we allow cognitive bias and/ or validation bias to get in the way of objectively recognizing change, identifying problems, and discovering new opportunities. But when we pause to consider what business and engagement even mean nowadays, and how people are changing, we can see things we couldn’t see before. And we put ourselves in position to harness new technology by drawing on new philosophies and processes to change how we do...everything. This isn’t just a time of digital Darwinism, it’s also a time of great innovation! Brian Solis Analyst Altimeter Group. “We cannot solve our problems with the same thinking we used when we created them.” Albert Einstein
  6. 5 Towards a new digital paradigm. Oh the Humanities of It All! “But this is the way it’s always been done!” said no successful entrepreneur ever. The future of business relies on the foundation of innovative and disruptive technologies, but it is shaped by the dynamics of psychology, philosophy, sociology, and other social sciences. We are only human, of course. So to change, to innovate, we have to operate from a different center. We need to recognize the ways in which we are and are not similar to people we are trying to engage. We need to get better at empathy if we are to have any hope of keeping up with the way people are changing. With a new perspective, we get closer to letting go of legacy assumptions, processes, metrics, and so forth. We are free to understand how technology can unlock new value—and, especially, how it can foster meaningful customer and employee experiences. But forming a new perspective is one of those things that sounds easy. Sure, we can all see how the world is changing. But how does that change specifically affect our markets, our business, our way of working? Seeking these answers is where the road to innovation begins. The truth is, everyone is given the same opportunity to consider the current and future states of their business and markets, and to decide what they need to do. The optimist in me believes that we have a chance to foster new approaches to existing circumstances, and to invent solutions that stimulate and develop new possibilities. It’s clear that business as usual isn’t the answer. Without a vision that either aligns with or surpasses the pace of digital Darwinism, businesses will be susceptible to “the gale of creative destruction.” Creative destruction is an economic theory introduced by Joseph Schumpeter in the 1950s. It describes “the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Ignorance + Arrogance = Irrelevance Digital Darwinism occurs because of the impact that disruptive technology has on pretty much everything. But whether businesses flourish—or end up being disrupted—depends to a great extent on how executives react in moments of truth. For some, doing nothing is the answer. For others, reacting to trends once they become mature is the favored way to move ahead. Only a relative few will relentlessly pursue market relevance and leadership, and make innovation part of the corporate DNA and culture. The reluctance to embrace disruption has resulted in a trail of shattered brands: • Kodak invested in film over digital early on even though the company was behind some of the first digital imaging patents and capabilities • Blockbuster rebuffed an acquisition offered by Netflix and thus missed the streaming revolution • The taxi industry at large chose volume over experience and innovation allowing for Uber, Lyft and others to offer more attractive and relevant alternatives • Borders ended its marketing alliance with Amazon and instead decided to compete against it online With every new technology, we witness the disruption of vulnerable businesses and even entire industries. Vulnerability, however, is self- induced. Successful digital Darwinist strategies require action, risk, and experimentation focused on innovation. But all too often, businesses default to risk aversion and wind up confusing iteration with innovation—making small changes instead of taking great leaps. While both approaches are valuable, they are not the same. In fact, iteration can at times hinder innovation, which ultimately limits the extent to which a company can grapple with digital Darwinism. So what’s the difference? Iteration is doing the same things better. Innovation is doing new things that introduce new value. Disruption is doing new things that make the old ones obsolete. When thinking about technology today, it’s useful to look back at the traditional television remote control. For starters, do you know anyone who actually enjoys the remote control experience? Neither do I. I often say that we have a reluctant relationship with our remotes. So, if no one loves the remote, why is it that we all have them? The answer lies in iteration versus innovation.
  7. 6 Towards a new digital paradigm. Over the last 60 or so years, each generation of remote was essentially built on previous versions. Each generation tended to be better and more capable than the last. But newer remotes were never designed to challenge convention, consider the user experience, or truly mirror how behaviors, gestures, and preferences/ expectations were changing over time. The result is a collection of bolted-on technologies stuffed into dated housing that continues to deliver an awkward, frustrating experience. Did you know that, on average, remote controls have 70 buttons? Also, the first smartphone apps designed to replace remotes looked and operated much like the traditional remote. They did not take advantage of the “pinch, zoom, tap, swipe right” kind of world we live in these days. That is iteration. At the same time, remotes had to control an increasing array of innovative breakthroughs in TVs and set-top boxes—the results of significant, ongoing R&D and innovation. If you think about it, TV screens today are ultrathin with resolutions that rival the real world. Yet, the organizations that design next-generation TVs are not collaborating with the people cobbling together the next iteration of remotes. Thus, any product innovation in the television is immediately compromised by the need to work with the still-cumbersome remote control. Executives tend to think about new technology and possibilities in much the same way that developers have dealt with remotes. They take the latest technology and build another layer on top of the previous layers of technology, often overlooking the possibility of doing new things and creating new value. They are iterating, not innovating. This is a time for innovation.
  8. 7 Towards a new digital paradigm. Digital Transformation Takes Innovation and Iteration Make no mistake. Change is either going to happen to you or because of you. The point is that it’s a choice. But if you’re waiting for someone to tell you what to do, you’re on the wrong side of innovation. To compete in an era of digital Darwinism takes a balance of innovation and iteration. You have to improve things through incremental change. At the same time, however, you must do new things that generate new value. Having a plan that encompasses both approaches sets the stage for disruption—something you want to give to your industry rather than receive. And that starts with the ability to see what others don’t, and doing what others can’t—or won’t. The way I see it, digital Darwinism isn’t a threat— it’s an opportunity. It’s an invitation to innovate, to challenge convention, to write new rules, and to build a new infrastructure for business that makes the old models obsolete. Your approach to digital Darwinism is yours to define. But you can’t adapt if you won’t change. And your organization can’t move in a new direction if you don’t lead the way. This is your time to pave the way for others to follow. It really is. © Brian Solis
  9. 8 Towards a new digital paradigm. Overview: Understanding the EaaS Model 8 Towards a new digital paradigm.
  10. 9 Towards a new digital paradigm. The Shift from Products to Services In a world that is increasingly globalized in terms of both production and distribution, consumers have an almost-infinite variety of products to choose from—which ultimately reduces the importance and relative value of a given product. As a result, the role of products in the on-demand and sharing global economy has been declining, while the importance of services has grown—a trend that has been accelerated with the increasing digitalization of business. In this environment, a growing number of companies understands that their growth depends on transforming their product-based businesses into businesses that focus more on services. Today, we are seeing the emergence of new digital accelerators—technologies such as artificial intelligence, machine learning, and blockchain— as well as a growing range of channels for communicating and collaboration. At the same time, cloud computing has brought increased accessibility and flexibility, and as that technology has matured, its use has extended far beyond its initial applications. Together, these evolving technologies are enabling companies to offer more of their products on an as-a-service basis. As that happens, we are witnessing a phenomenon that will gradually spread, change, and disrupt all businesses— the shift toward more customized, flexible, and dynamic models known as enterprise as a service (EaaS). Over the past few years, we have seen the use of cloud computing to enable the delivery of infrastructure and services— infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). Now, with EaaS— which incorporates cloud-based infrastructure, software, and platforms—that type of approach is extended to the company as a whole. This offers a range of benefits, including the ability to optimize processes and resources, increased cost savings and agility, reduced time to value, and, especially, an increased focus on innovation. Most industries have begun to explore and move to the EaaS model. This is especially true of those that are taking advantage of the Internet of Things, such as the utilities, telecom, insurance, transportation, logistics, automotive, and healthcare businesses. Their offerings are increasingly supplied as a service. The Two Axes of EaaS: New Customer Interactions and On-Demand Operational Models Technology has enabled companies to improve their knowledge of users, personalize customer offers and services, and find new ways to drive customer loyalty. This has given rise to a new type of ROI—return on interactions. Companies can take a more data-driven approach to customers, and use data-driven insights to create disruptive services that generate new avenues of income and growth. Today’s growing range of EaaS models is also enabling another source of innovation—new alliances that reach across boundaries in ways that were not possible just a few years ago. Cooperation and partnerships involving players from various industries can open the door to new, innovative offerings. These partnerships can draw on the strengths of different value-chain players to combine physical products and new approaches to distribution and services—and, ultimately, drive the shift to a services-focused world. The EaaS model can be used not only to enable new approaches to customers, but also to rethink the organization and internal processes. Indeed, with the rising expectations of customers and the growth of competition, such transformational change is critical. Companies can draw on EaaS models to increase internal efficiency and responsiveness to changes in the market. (Later in this report, we examine two fundamental approaches, or new paradigms, that focus on this type of internal change: predictive maintenance and demand forecasting.)
  11. 10 Towards a new digital paradigm. GROW Services that supplement tra- ditional business. This requires an evolution towards new services related to traditional ones, but embracing the digi- tal work and a new orientation towards the customer. Development of services in mar- kets other than the traditional one, where the company previ- ously had no presence. New services by radically in- novating classic business. This requires a disruptive vision of the value chain. COLONISE INVENT The three main different areas for business expansion
  12. 11 Towards a new digital paradigm. EaaS Technologies The EaaS model draws on a number of cloud-based digital technologies, from sensors and mobility to big data. These can be brought together in various combinations to create new capabilities and break down barriers between stakeholders—suppliers, customers, cross-industry partners, and so on—and enable innovative services. These digital technologies and capabilities include: • Pay per use, which enables variable costs as companies pay for services instead of physical products that they acquire • New devices, such as wearables, thermostats, and smart batteries • Mobile payments, which simplify and automate the payment process • Customization, which often uses big data techniques to understand customer behavior and support tailored offerings • Real time, with timely information enabling near-instantaneous responses to changing conditions • Machine learning, where artificial intelligence enables solutions and systems to learn from their own “experience,” increasing their ability to adapt, support customization, and operate efficiently Designing the EaaS Architecture Of course, not all of these technologies will be used in every EaaS service—the appropriate mix will depend on the specific purpose of the service. However, there are three EaaS fundamental principles that should guide the design of the digital architectures supporting EaaS: • End-to-end intelligence: With EaaS, intelligence is no longer centralized. Instead, it is distributed along the entire value chain, encouraging the emergence of new players that can contribute new applications and create local solutions. Data plays a key role in this: It is a core ingredient of effective EaaS thanks to the use of data-as-a-service ecosystems that are channel- independent and able to generate intelligent responses and actions adapted to the ecosystem. The traditional aggregation of separate, disperse, and underused data gives way to a “smart data” approach, and the integration of different databases for business purposes. • Online-offline integration: EaaS essentially enables the integration of the physical offline world with the digital online world. This integration is particularly important to customers, who are increasingly interested in using consolidated, comprehensive online services in their daily lives. Online-offline integration can have a significant impact on a company’s commercial and logistics operations, as well as on the nature of competition itself. • Frictionless experience: Characteristics such as convenience and simplicity of use should not be forgotten. Customers should be able to interact easily across channels, and intelligent devices should be used to support a streamlined, positive customer experience. PROCESS REDEFINITION NEW RELATIONSHIP MODEL NEW SERVICE MODEL
  13. 12 Towards a new digital paradigm. EaaS Wheel 12 Towards a new digital paradigm.
  14. 13 Towards a new digital paradigm. The new approaches being made possible by EaaS can be represented in a diagram, The EaaS Wheel. At the center of the wheel is the technology foundation of EaaS—the combinations of SaaS, PaaS, and IaaS. That foundation enables 12 new paradigms—embedded banking, demand forecasting, and so on—shown in the adjacent ring of the wheel. The next ring, in red, represents technology-based capabilities that can be used in those new paradigms, such as mobile payments and smart appliances. Finally, the outer ring shows various industries, with each industry color-coded to indicate the new paradigms that are most relevant to that industry. This report offers a number of case studies that illustrate the evolution and advantages of the EaaS model. As these profiles show, companies are combining new technologies with new ideas in a variety of ways—and changing the way they, and their industries, work.
  15. 14 Towards a new digital paradigm. FINTECH AND INSURTECHS SPORT TROPSNART EVIT O M OTUA ERACHTLAEH RE LTAI LOGISTIC ANDPOSTAL SERVICES BAN KING DEVICE INDUSTRY EQUIPM ENT Pattern of Life Logistics as a Service Usage Based Insurance Embedded Banking Connectivity as a Service Transport and Car Infotainment Carsharing Energy as a Service Predictive Maintenance Demand Forecasting Smart Home Assisted Living CLOUD “ “Enterprise-as-a-Service is changing everything and you need a strong partner to leverage it to your advantage Oracle enables any company to excel in the EaaS model
  16. 15 Towards a new digital paradigm. The new paradigms enabled by EaaS often combine more than one technology and reach across industry boundaries. The following pages explore these new paradigms and the ways that companies are putting them to work. EaaS: The New Paradigms Pattern of Life Logistics as a Service Usage Based Insurance Embedded Banking Connectivity as a Service Transport and Car Infotainment Carsharing Energy as a Service Predictive Maintenance Demand Forecasting Smart Home Assisted Living CLOUD 15 Towards a new digital paradigm.
  17. 16 Towards a new digital paradigm. INSURANCE G.A.F.A. MEDIA TELCO DEVICE MANUFACTURING UTILITY Smart Home Automated, connected homes take advantage of devices (such as smart thermostats with learning algorithms) and services (such as alarms with machine-to-machine connectivity). These smart homes aim to increase convenience, efficiency, security, and comfort in the home. Involving companies ranging from manufacturers to security companies, the smart-home paradigm provides a clear example of the digital economy’s possibilities. Paradigm 1 Smart Home 16 Towards a new digital paradigm.
  18. 17 Towards a new digital paradigm. Nest Labs was set up by two former Apple engineers in 2010 and acquired four years later by Google. Its star product is the Nest Learning Thermostat, which controls home heating and cooling systems to increase efficiency. Using Digital to “Learn” Drawing on a combination of sensors, learning algorithms, and cloud computing, the Nest product is capable of learning the behavior and preferences of its users. Over a short amount of time in use, it can gather enough information to operate autonomously, without any human interaction, to keep the temperature of the home at the optimal level. The thermostat also suggests the most energy-efficient temperature settings. The product’s success stems from its simple design and ease of use for consumers, and it typically pays for itself through energy savings. An Expanded Lineup Nest also sells other home products, including a smoke detector (Nest Protect), which goes beyond detection by offering information that helps ensure that the home is secure; and a surveillance camera (Nest Cam) that makes it possible for homeowners to obtain visual information from home while they are away. With all of these products, Nest offers new services aimed at saving energy in the home, while at the same time exploring new business opportunities in partnership with other organizations, such as insurance companies. Company: Nest Labs Country: US Connected Thermostats in the Home Nest Labs
  19. 18 Towards a new digital paradigm. The Spanish company Securitas Direct is well known in the home and business alarm sector, with operations in European and Latin American countries. The company has developed an integrated monitoring platform that enables it to manage an increasing amount of data and communications coming from its security teams’ devices. With its platform, Securitas Direct is able to provide cutting-edge systems with voice and image verification, connected 24 hours a day to its alarm reception center. The center is capable of managing up to 100 million signals per day from a range of different security devices in homes and facilities. Keeping Customers in Touch The platform combines machine-to-machine networking technology with a web-based app and control panel, which customers can use to stay in touch with their home or business, regardless of their location. For Securitas Direct, the benefits of the platform include: • A reduction in the system’s latency by several seconds, enabling alerts to be managed more efficiently, and a reduction in response times when a security alert is received • Improvements to the customer experience in services already provided to users, because users are able to remotely configure security through mobile apps • A decrease in time-to-market of products and services This security-management innovation has transformed the company’s customer relationships and given customers greater control of the security of their homes. Company: Securitas Direct Country: Spain Enabling Services with an Integrated Platform Securitas Direct
  20. 19 Towards a new digital paradigm. Hive is a spin-off of British Gas that focuses on the connected home business. One of its best-known products is the Hive Active Heating thermostat, which is already in more than 250,000 homes in the United Kingdom. The company has also launched other products to enable users to control their homes, regardless of the user’s location. These products include: • Hive Active Plug, which enables domestic appliances to be turned off and on manually, automatically, or using an app • Hive Motion Sensors, which use passive wireless infrared sensors to provide remote warnings when movement is detected in the house • Window or Door Sensor, which provides alerts to users when those openings are moved All of these devices are connected through a platform hub, which users acquire first. Hive intends to open this hub up to third parties so that it can work with other well-known brands and other partners. Expanding Uses Other services are being added to the app to provide, for example, greater flexibility for planning the thermostat’s operating times, more preset operating modes, and the ability to control different areas of the house in different ways. Other additions include Hive Active Lights—light bulbs that can be controlled by the app. With these innovations, Hive’s strategy is to offer users new ways of controlling and monitoring their homes—activities that usually involve a significant amount of time and concern for people. Company: British Gas Country: UK Connecting Smart Sensors in the Home British Gas
  21. 20 Towards a new digital paradigm. Assisted living services help improve living conditions for older people and people with special needs. These services are especially critical in the more developed countries, where they can provide help and care for aging populations. Paradigm 2 Assited Living INSURANCE HEALTH-CARE HOME SECURITY UTILITY DEVICE MANUFACTURING Assisted Living 20 Towards a new digital paradigm.
  22. 21 Towards a new digital paradigm. Fuenfría Hospital, part of the Community of Madrid’s public hospital network, is a medium- and long- term stay facility that has earned a good reputation for healthcare and rehabilitation. Along with three partner organizations, it is part of a consortium that has developed an “Aging in Balance” R&D project that aims to design and develop an app to reduce the risk of falls and augment quality of life among the elderly. The project is part of the European Commission’s Ambient Assisted Living program, which supports R&D projects focused on improving the quality of life of elderly people. Assessment and Prevention “Aging in Balance” proposes a solution that addresses two areas: assessments and fall prevention. Risk-assessment tools take the form of self-assessments or assessments administered by healthcare personnel. Prevention tools consist of physical and intellectual activities designed to help stop a person’s deterioration, as well as recommendations about the person’s environment. The end result is a fully interactive and easy-to-use app, designed to be used by elderly people. Company: Fuenfría Hospital Country: Spain Improving Quality of Life for the Elderly Fuenfría Hospital 21 Towards a new digital paradigm.
  23. 22 Towards a new digital paradigm. Multinational company Philips has developed the digital HealthSuite platform, designed to help people and their healthcare providers obtain a complete vision of the state of their health, and to take the steps necessary to remain healthy. The product is an open platform for services, assistance, and tools, based on cloud computing. It is capable of working with other cloud-based technologies and professional health solutions, personal coaching apps, and Philips’ consumer devices, as well as with other open platform devices. Information for Better Health The platform can also perform analytics on population health data, making it possible to give doctors useful information about, for example, whether children are meeting key development milestones, or for use in managing patients with chronic diseases such as diabetes. For the elderly, the platform includes solutions for patients recovering from acute health problems, with the goal of helping people maintain their independence and stay in their homes. Other company solutions enable doctors to monitor their patients remotely, or let people use a tablet- based app to ask questions, input information, and connect with their doctors. Philips has also developed predictive analytics engines that draw on historical information and data from wearables, helping doctors detect problems early on and keep patients healthy. Company: Philips Country: The Netherlands A Cloud-Based Digital Platform for Health Services Philips
  24. 23 Towards a new digital paradigm. Today’s healthy-lifestyle services industry includes companies developing devices, apps, and platforms that can be used to monitor fitness activities, track health indicators, and obtain valuable information through big data analytics and tools. Paradigm 3 Pattern of Life G.A.F.A. SPORT TELCO DEVICE MANUFACTURING Pattern of Life Towards a new digital paradigm. 2323 Towards a new digital paradigm.
  25. 24 Towards a new digital paradigm. Technology manufacturer Samsung has implemented a broad ehealth initiative supported by the modular SimBand bracelet device and the SAMI (Samsung Architecture Multimodal Interactions) big data cloud platform. Both the hardware and software are open source, meaning that third parties can use them. The SAMI platform facilitates the collection and storage of information about the user’s vital signs from different devices. The combined information offers a more complete perspective of such data. SimBand is a starting point for the development of wearables and other health-related devices. Open for Innovation The aim of the initiative is to ensure that innovation in health-related devices is not limited to a single manufacturer. The effort makes it easier for different companies and software developers to create new applications and hardware modules using the SAMI platform, and even enables all data to be synchronized with the Samsung cloud. The SimBand device is modular and can handle various hardware components, from heart sensors to blood pressure, CO2, or blood sugar monitors. That means that various manufacturers using the device can add their own sensors. Company: Samsung Country: Korea Using Big Data to Support Ehealth Initiative Samsung
  26. 25 Towards a new digital paradigm. Runkeeper is an app that enables a smartphone to act as a pocket personal trainer and a tool for tracking training efforts. The app has multiple functions that cover a wide range of runner profiles, from those getting started to more advanced runners. Runkeeper uses the smartphone’s GPS to track a user’s position, log run distances, and facilitate the calculation of various indicators. Runkeeper enables users to monitor activities and generate statistics, share photos taken during training, measure progress and performance, convert any travel into a route to be used later, share training sessions and runs with friends, gain a broader vision of health issues, and donate to charities. Millions of Users With an API open to developers, the app can integrate data with many different third-party apps, platforms, and services. There is also a website that lets users monitor activities completed in the past, and access a social network to share their running information with friends. Runkeeper is available in a basic format that is free, with various payment plans available for additional services. It is currently one of the most widely used personal fitness apps, with a community of 45 million users. Company: Runkeeper Country: US The Personal-Trainer Smartphone Runkeeper
  27. 26 Towards a new digital paradigm. Postal, parcel, and e-commerce service operators are using digital technology to improve processes and facilitate delivery in real time. New solutions aimed at forecasting demand for products, adjusting production processes, planning distribution, and monitoring operations are made possible through the integration of data analytics, geolocation, and predictive intelligence. Paradigm 4 Logistics as a Service TRANSPORT AUTOMOTIVE RETAIL LOGISTIC &POSTAL SERVICES Logistics as a Service 26 Towards a new digital paradigm.
  28. 27 Towards a new digital paradigm. Uber, the renowned “collaborative economy” company that connects passengers with drivers, has implemented a logistics solution (UberRUSH). In cities such as Chicago, New York, and San Francisco, it is used for the delivery of purchases made through ecommerce platforms and websites, with the aim of saving time and providing convenience for customers. Many companies have automated operations or complex logistics networks, or need customized and flexible tools. As a result, Uber has added an API to the UberRUSH solution that enables companies to incorporate it into their systems and apps. Delivering the Goods A wide variety of companies already use this logistics-as-a-service solution. It is used for same- day delivery of clothes and accessories, flowers and plants, and groceries and meals—deliveries where time is critical. It is also designed for use by companies with complex logistics systems, allowing them to integrate the solution into the value chain of their business. The cost of UberRUSH depends on the distance traveled. There are plans to extend the solution to other cities. Company: Uber Country: US Logistics as a Service for Ecommerce Companies Uber 27 Towards a new digital paradigm.
  29. 28 Towards a new digital paradigm. UPS, one of the largest delivery companies in the world, uses big data algorithms and tools to find the quickest and most efficient routes, weighing numerous variables such as traffic volume, number of traffic lights, speed limits, and physical distance. The company has developed a system known as ORION (On-Road Integrated Optimization and Navigation), based on an algorithm that performs a real-time analysis of about 200,000 possibilities for each route. The system makes it possible to compare the performance of routes and identify the one with the best delivery efficiency. Insights for Efficiency One result of using the system is that the company has determined that it “should minimize left turns and follow circular routes with right turns, enabling it to deliver more packages in less time and with lower emissions, even if the driver has to driver farther.” In addition to big data, UPS is using technologies such as mobile devices (which collect information and give a direct connection to drivers), sensors and GPS in vehicles, and cloud computing. For UPS, the technology is not only tracking what has happened, it is also helping to determine what should happen in its operations. Company: UPS Country: US Using Analytics to Increase Distribution Efficiency UPS 28 Towards a new digital paradigm.
  30. 29 Towards a new digital paradigm. Car company Audi, in partnership with Amazon and DHL, has performed tests in Germany of a new logistics service dubbed “Audi Connect Easy Delivery.” The service involves delivering online purchases to customers’ Audi vehicles. Deliveries are made by DHL, which uses keyless access technology to open the cars. DHL is given the GPS coordinates of the recipient car, and the delivery person has a temporary access code to enable him or her to open the trunk. The code is valid for a limited amount of time, which expires as soon as the trunk is closed. The Car as Service Platform This innovative service has the potential to save time and give customers more convenient and flexible delivery options. It also contributes to the trend of turning the automobile into a service platform, integrating it even more deeply into the daily lives of consumers. In addition to using the car as a delivery address, the partner companies plan to explore the option of letting consumers send mail and packages from the car as well, and even combining the service with package deliveries done by drone. Company: Audi, Amazon, and DHL Country: Germany, US Delivering Purchases to Customers’ Cars Audi, Amazon, and DHL
  31. 30 Towards a new digital paradigm. Shipbeat has developed an API that aggregates the services of leading parcel delivery companies such as UPS, FedEx, Royal Mail, Deutsche Post, and DHL. The goal: Address the delivery challenges of small to midsize ecommerce businesses and enable them to give customers a range of delivery options. Today, it’s not enough to offer only delivery; customers demand flexibility and high levels of service, such as next-day delivery, when receiving and returning goods they’ve purchased. These smaller businesses often need to integrate multiple shipping carriers’ systems into their e-commerce platforms to improve operations (labels, booking of pickup, and so on). That can be very time-consuming and complicated. Shipbeat is replacing that approach with its logistics-as-a-service API. Flexible and fast delivery is a critical point for converting and retaining customers. According to some studies, 20 to 70 percent of prospective online customers drop their shopping carts due to a lack of shipping options. So, in addition to making it easier for smaller companies to link up with logistics providers, Shipbeat is also helping those companies offer an online customer experience that helps them stay competitive. Company: Shipbeat Country: Denmark Logistics as a Service Helps Smaller Ecommerce Companies Compete with the Big Players Shipbeat
  32. 31 Towards a new digital paradigm. For the insurance industry, digitalization provides a key for driving growth through new services. Using technology, insurance companies can offer various products and operate with business models based on the behavior of users. With automobile insurers, for example, this could involve pricing based on “pay-as-you-drive” and “usage” insurance. Sensors, the Internet of Things, connected cars, and, in the near future, driverless cars offer the possibility of learning much more about customers, and using that understanding to provide flexible, personalized services, adapted to each user, each moment, and each situation. Paradigm 5 Usage Based Insurance INSURANCE FINTECH & INSURTECHS BANKING Usage Based Insurance Towards a new digital paradigm. 3131 Towards a new digital paradigm.
  33. 32 Towards a new digital paradigm. Mapfre is one of the largest insurance companies in the world, with a presence in 49 countries. The company is embarking on a transformation process revolving around the digitalization of customer processes and operations, with the aim of selling trust and tranquility, as opposed to home and car insurance. Mapfre positioned itself in the pay-as-you-drive insurance market a few years ago, with its YCAR product aimed at young people, through which drivers pay premiums based on how they drive. Using Analytics, Smart Data, and Omnichannel to Understand Drivers This product (available in the US as Drive Advisor) involves the use of telematic devices that transmit data about acceleration, braking, vehicle speed, distance traveled, and so forth. Then, data analytics can be used to determine a customer’s driving style, which determines the level of payment. At the same time, customers can receive online information about their driving behavior and advice about safe driving. Company: Mapfre Country: Spain “Pay-as-You-Drive” Insurance Models Based on Driver Behavior Mapfre 32 Towards a new digital paradigm.
  34. 33 Towards a new digital paradigm. Generali and Telefónica have launched pay-as-you- drive car insurance that incorporates technology capable of detecting and analyzing the driving habits of each driver and adjusting their monthly premium accordingly—automatically. Not everybody behaves the same way when behind the wheel, so the Generali premium price is determined by factors such as driving style, distance traveled, and other driving conditions. To track driving habits, Generali installs a Telefónica M2M device in the customer’s vehicle. Data provided by the system includes distances traveled, whether driving is done during the day or at night, freeway versus city driving, adherence to speed limits, and so forth. Customers are also able to access all information about their driving data through a mobile app and website, along with advice on how to improve their habits at the wheel. Personalized Insurance—with Extra Features In addition, the solution provides customers with features such as a system that locates the vehicle in the event of theft or loss, an assistance service in case of car problems, and an emergency button that helps speed up responses in the event of an accident. With this approach, the insurance product is highly personalized, and the price calculation applies from the first monthly bill onward, without having to wait for the policy’s annual renewal. Company: Generali Country: Italy Keeping Track of Driving Habits with M2M Technology Generali
  35. 34 Towards a new digital paradigm. Multinational consultancy Deloitte has developed its D-rive platform, designed to enable insurance companies to learn more about driver behavior and, as a result, improve risk assessments, increase income, reduce costs, and put new and innovative products on the market. The platform takes data from drivers’ smartphones rather than relying on sensors fitted to vehicles, which helps keep costs down. It is also based on cloud computing technologies, with drivers participating through a mobile app and a website. Arming Insurers with Information The platform provides insurance companies with data analysis tools and solutions. With it, even smaller insurance companies can have access to information that they can use to give driving-based discounts and offer value-added services, and ultimately participate in the usage-based insurance market. Although the platform was initially designed for individual insurance, it can also be used with commercial fleets. Millennials are one of D-rive’s main target groups, largely because of their digital skills. Company: Deloitte Country: US A Cloud-Based Platform for Usage-Based Insurance Deloitte
  36. 35 Towards a new digital paradigm. The possibility of automating insurance management through the use of smart contracts based on blockchain technology promises to reduce management costs and fraud levels and increase customer satisfaction. For example, InsurETH implemented an insurance product covering flight delays and cancelations. The product is based on a smart contract that uses public information about flights, and whose blockchain holds the policy conditions. If delays or cancelations occur, the contract is automatically executed immediately while eliminating processing costs for the insurance company. Company: Insurtech Country: UK Blockchain Comes to Insurance InsurETH 35Towards a new digital paradigm.
  37. 36 Towards a new digital paradigm. In banking, digital transformation is driving the move to EaaS. In particular, the emergence of the so-called fintechs—startups offering digital banking and financial services—is accelerating the process of change in the sector as a whole. Financial services organizations are becoming more fluid and aspire to have an almost-invisible presence in every transaction. Multidevice models are coming into use, such as “car banking” that enables payments to be made from cars. There are also a number of solutions for integrating financing with home appliances and smart refrigerators. Paradigm 6 Embedded Banking G.A.F.A. FINTECH & INSURTECHS AUTOMOTIVE TELCO RETAIL BANKING DEVICE MANUFACTURING Embedded Banking 36 Towards a new digital paradigm.
  38. 37 Towards a new digital paradigm. Fidor is a digital bank with no physical branches that offers banking as a service. Established in Germany in 2009, it differs from traditional banks in two fundamental ways. One is its concept of community, which includes encouraging customers to request services and offer advice to other customers. Two, it is designed more like an app store than a conventional bank. A Growing Banking Marketplace Fidor offers APIs and web tools that can be used by developers and ecommerce platforms to create payment interfaces. The bank’s managers define it as a marketplace that holds a banking license. Fidor has about 100,000 customers in Germany and has already reached the break-even point. It has also started to expand internationally. In addition to offering bank-based services, Fidor has been a pioneer in working with virtual currencies. It has also worked with other companies to offer person-to-person loans, currency transfers, and precious-metal purchases. Company: Fidor Country: Germany Moving to Banking as a Service Fidor 37 Towards a new digital paradigm.
  39. 38 Towards a new digital paradigm. The French telecommunications operator Orange is preparing to break into the banking market by cre- ating Orange Bank. To do so, it plans to work with French insurance company Groupama, combining Groupama Banque’s position as a multichannel bank and Orange’s knowledge of telephone ser- vices to develop completely mobile banking. This move reflects the new ways in which consumers use technology, and accelerates the development of innovative banking offers, including services such as insurance, loans, and savings instruments, as well as other traditional banking products, accessed via mobile devices. Furthermore, the participation of the two companies provides additional value to consumers, such as security and reliability. The launch of Orange Bank, which describes its offer as Banking 4.0, is planned for early 2017 in France. That will be followed by other launches in other European markets, such as Spain and Belgium. Company: Orange Country: France Crossing Industry Boundaries Orange
  40. 39 Towards a new digital paradigm. Chinese e-commerce company Alibaba has set up a new bank, MYbank, an online credit company for small- and midsize enterprises and rural customers. The organization is partially owned by Ant Financial, Alibaba’s financial services group, as well as partners from the investment and automotive industries. Confidence in Credit MYbank’s creation enables Alibaba, which was already taking preliminary steps into electronic banking, to offer banking-deposit and loan services to customers. To support those steps, Alibaba has entered into partnerships with 25 banks and financial entities to provide credit services especially to companies with innovative projects related to cross-border trade. These partnerships will also provide information on Chinese companies that are requesting credit to overseas players purchasing through Alibaba.com, the B2B ecommerce website run by the Chinese conglomerate. This credit- information service will help overseas buyers identify trustworthy trading partners in China, while offering Chinese suppliers access to innovative financing options. Company: Alibaba Country: China Electronic Banking for Smaller Businesses and Rural Customers Alibaba
  41. 40 Towards a new digital paradigm. Connectivity has become a flexible service that meets the structural and short-term needs of different users. New demand-based models enable consumers (individuals and companies) to use and pay for only the network service that they require at any given time. Paradigm 7 Connectivity as a Service TRANSPORT AUTOMOTIVE TELCO Connectivity as a Service 40 Towards a new digital paradigm.
  42. 41 Towards a new digital paradigm. Working in conjunction with telecommunication equipment manufacturer Ericsson, the Polish football team Legia Warszawa has implemented a “small cell- as-a-service” solution at its Warsaw stadium. Ericsson provides a managed services solution including Wi-Fi technology and planning, design, implementation, integration, optimization, and maintenance services. About 7,500 devices can con- nect to the network simultaneously at high speed, at any time during matches. Convenience During the Game For its part, the team has developed a mobile app that enables spectators to access news and videos, order food, and purchase team products. For example, spectators can scan a QR code on their seats, then select the food and drinks that they want and have the order delivered to them, eliminating the need to line up at a food stand and miss part of the game. All of this means that visitors to the stadium enjoy high-speed connectivity and value-added services. Other services that are being tested include delivering purchased gifts to a customer’s seat, and replays of interesting actions on the field. Overall, the system provides a good customer experience and increases the use of the team’s services. Companies: Legia Warszawa Country: Poland Using “as a Service” to Improve the Football Fan Experience Legia Warszawa
  43. 42 Towards a new digital paradigm. Transportation, particularly automobiles, ranks third in terms of consumption of digital services, behind homes and offices. A variety of companies participate in this field, where industries such as automotive, telecom, entertainment, and tourism come together. Exponential growth of the EaaS model is expected in this area. Paradigm 8 Transport and Car Infotainment G.A.F.A. AUTOMOTIVE MEDIA TELCO BANKING Transport and Car Infotainment 42 Towards a new digital paradigm.
  44. 43 Towards a new digital paradigm. Company: Immfly Country: Spain Bring-Your-Own-Device in-Flight Entertainment Immfly Immfly is a startup founded in Barcelona in 2013, with partners such as Atresmedia Televisión, BBC Worldwide, Unidad Editorial, Sky News, and TripAdvisor, among others. The company focuses on the creation of multimedia entertainment systems for aircraft, using a bring-your-own-device approach. This allows passengers to view content on any of their electronic devices (mobile phone, tablet, or laptop) that can access a web browser. Focused Content for Passengers The systems enable passengers to choose from a range of multimedia content, which is tailored based on destination, personal preferences, and age profiles. Content can include newspapers, magazines, travel guides, television programs, and offers for services at the destination (car rental, tickets, hotel and restaurant recommendations, and so on). There is also content related to the journey itself, such as details about connections at the desti- nation airport, distance traveled, altitude, and so forth. The platform is available in German, English, and Spanish, and most content is free. Passengers can also use the Immfly app to take content down- loaded during the flight with them when they land.
  45. 44 Towards a new digital paradigm. In the connected-car ecosystem, different platforms have emerged to facilitate connectivity between the vehicle’s multimedia system and smartphones. Today, these platforms include: • Android Auto, Google’s in-car solution launched in 2014 and operational in several countries. With Android Auto, the mobile device is connected to the car by USB, and the terminal takes over control of the vehicle’s multimedia system, facilitating the use of apps such as Google Maps, Google Now (search assistant and guide), and various music and messaging solutions. • CarPlay, which is Apple’s platform. Simply connecting an iPhone terminal to the vehicle activates the CarPlay system. This platform’s strengths include the Siri voice assistant (answers questions, gives instructions, controls functions, and so on), as well as a navigation system with maps and different apps designed for the car, primarily related to music. • Mirror Link, which was launched in 2011, enables both Android and iOS apps to be used, and is compatible with many smartphones, eliminating the need to pick one type of phone. This compatibility makes it possible to use whatever apps the user likes. When the mobile device is connected, the app takes control of the car’s system and can send information to the screen. Furthermore, Mirror Link is strongly committed to a two-level app certification system, in the interest of safety: The first level enables the app to be used when the car is parked and the second, more restrictive level enables the app to be used while driving. Company: Android Auto, Carplay and Mirror Link Country: US Integrating the Smartphone and the Car Android Auto, CarPlay, and Mirror Link
  46. 45 Towards a new digital paradigm. When it comes to automobiles, research shows a growing trend of younger people preferring shared-ownership, subscription, and usage models, as opposed to car ownership. This carsharing can take advantage of EaaS. Paradigm 9 Carsharing AUTOMOTIVE TELCO Carsharing Towards a new digital paradigm. 4545 Towards a new digital paradigm.
  47. 46 Towards a new digital paradigm. Car2go, a subsidiary of Daimler AG, offers carsharing services in more than 30 European and North American cities, with some 13,000 cars and about 1 million customers. Car2go represents a new and environmentally friendly alternative for mobility in cities. The company charges a rate per minute of car use, with automatic discounts if it is used for longer periods (hours or days). In general, these charges cover all associated costs—rental, fuel/energy, insurance, parking, and maintenance. Accessing Cars Online The vehicle fleet includes two versions of two- seater cars: gasoline-powered cars and electric cars. Customers register on the company’s website or via a mobile app, which they also use to locate vehicles. The customer’s driving license is validated electronically at one of a number of locations car2go has established in cities. Both the website and the app indicate the fuel or battery-charge level of the vehicles, in case the customer needs to make a long journey. Customers can choose to fill the tank or recharge the battery before returning the vehicle, in exchange for free minutes of use. Company: car2go Country: Germany Carsharing in Europe and North America car2go 46 Towards a new digital paradigm.
  48. 47 Towards a new digital paradigm. Thanks to digitalization and the convergence of hardware installed in users’ homes and software in the cloud, the energy industry is evolving toward personalized, dynamic, and flexible services. More than many industries, energy companies are in position to take advantage of the Internet of Things, sensors, and connected devices to customize service for specific users, based on an analysis of their demands and needs. Paradigm 10 Energy as a Service TELCO DEVICE MANUFACTURING UTILITY Energy as a Service Towards a new digital paradigm. 4747 Towards a new digital paradigm.
  49. 48 Towards a new digital paradigm. Energy for the Home Tesla Energy is putting two types of batteries onto the market: Powerwall, focusing on domestic use, and Powerpack, focusing on business use. The Powerwall type, for example, stores energy supplied by solar panels or other renewable sources in the home. All units are connected to the internet and monitored by Tesla Energy. With this initiative, Tesla plans to change the energy consumption service model through an infrastructure revolution. For Tesla, the new battery could play an equivalent role to that of mobile telephones in telecom, which largely replaced landline communications. According to Tesla, the installation of 2 billion batteries in the world would be sufficient to generate all of the energy consumed by the planet. Installation costs, as well as the cost of solar panels or alternative renewable energy sources, would have to be added to the price of the battery itself (US$3,000-US$3,500). Approximate calculations for use of the batteries in Spain show average savings of 50 percent on bills for annual home energy consumption. The battery is currently available in the US and Australia. Auto manufacturer Tesla has put a line of batteries on the market under the Tesla Energy brand. With Tesla Energy, the company focuses on renewable energy sources, some of which are not available 24 hours a day. The batteries are designed to store the energy accumulated from renewables for later use—at night, for example, during power outages, or at times of maximum consumption, when electricity prices are at their highest. Company: Tesla Country: US Battery Infrastructure for Renewable Energy Tesla
  50. 49 Towards a new digital paradigm. Since 2010, electricity company Iberdrola has been developing its Grid Remote Management and Automation System, with the aim of modernizing its electric meter assets. In Spain, the initiative involves the replacement of more than 10.5 mil- lion meters and the modification of about 80,000 transformation stations. Through digitalization, the company gains better knowledge of user consump- tion habits and the smart electricity grid. Drawing on Big Data By using big data tools, Iberdrola wants to efficiently manage information transmitted by smart meters (around 100 billion records per year) and other electronic equipment at all levels of its grid (consumption, distribution, transport, generation, and so on). Analysis of this data can help Iberdrola plan, assess, and control electricity consumption, as well as improve supply quality, meet the electrical energy needs of the future, and optimize energy distribution. Furthermore, big data enables new and more customized services for consumers, based on analyses of customer consumption patterns and the launch of segmented tariffs. Company: Iberdrola Country: Spain Digitally Driven Personalized Services for Electricity Customers Iberdrola 49 Towards a new digital paradigm.
  51. 50 Towards a new digital paradigm. Lyse Energi is a small energy supply company that has embarked on an extensive program to improve its system for reading meters and managing meter data. Traditionally, analog readers were read manually once a month. By replacing those devices with smart meters, the company can obtain far more data, with an automatic reading every 15 minutes. Value from Data Lyse Energi is able to use all of this data on home energy consumption, and the information generated by its analysis, to create value. For example, the company uses it to adjust internal processes to improve the customer experience and optimize the allocation of time to different tasks. It also uses the data to create new services and income sources, such as those enabled by the automation of domestic climate control, ventilation, and lighting systems. Lyse Energi is also taking advantage of the Internet of Things in its wind turbines to collect data about the wind in various locations. This enables the company to gain greater knowledge of airflows and increase stability when providing wind energy to homes. Company: Lyse Energi Country: Norway New Services Enabled by Smart Meters Lyse Energi
  52. 51 Towards a new digital paradigm. Verizon, the American telecommunications operator, has created a Grid Wide Utility Solutions platform to offer smart cloud computing and machine-to-machine network connectivity solutions to utility companies that supply electrical energy. This approach helps those companies modernize their infrastructure without having to design their own solutions. Integrated Tools The platform offers integrated services in an as-a-service model. These include remote meter reading, changes in energy demand, meter data management, distribution control, and monitoring of energy quality. Meter data is transmitted via network and stored in Verizon’s cloud environment. The platform also offers data-analytics apps and tools that provide up-to-date information about, for example, power cuts or abnormal usage patterns. The company has plans to expand the service to work with gas and water meters. Company: Verizon Country: US Grid-Management Tools as a Service Verizon
  53. 52 Towards a new digital paradigm. Trilliant is a California-based company that provides solutions to help utility and energy companies around the world overcome the challenges of modernization. To do this, it offers a dedicated communications platform, the Trilliant Smart Grid Platform. This platform integrates and unifies information about utility company systems, making it possible for those companies to develop their own approaches to a smart grid. The platform enables utility companies to create a broad range of services to help increase energy efficiency, improve grid reliability, reduce operating costs, integrate renewable energy resources and electric vehicles, and provide consumers with tools for managing energy consumption. From Smart Grid to Smart City Trilliant works with an ecosystem of partners—such as integrators, distributors, automation companies, and manufacturers of metering systems and in-home devices—to integrate a variety of technologies and services in its platform. Overall, the purpose of the platform is not only to offer solutions and applications for today’s smart grids but also to leverage the Internet of Things and enable “smart city” models. Company: Trilliant Country: US A Dedicated Platform for Unified Smart Grid Information Trilliant
  54. 53 Towards a new digital paradigm. Many EaaS models are designed to provide services to external customers. But EaaS is also revolutionizing internal operations at companies. These approaches deliver services to internal “customers,” and can be used in a variety of areas, such as process redesign and stock management. The technology is having a particular impact in one of these internal areas—demand forecasting. Paradigm 11 Demand Forecasting INFRASTRUCTURE RETAIL DEVICE MANUFACTURING INDUSTRY EQUIPMENT UTILITY Demand Forecasting Towards a new digital paradigm. 5353 Towards a new digital paradigm.
  55. 54 Towards a new digital paradigm. The Otto Group retail company has developed big data analytical tools to help it forecast demand for its catalog products. This effort stemmed from the fact that conventional forecasting was not adequate in an increasingly competitive environment, and would sometimes deliver inaccurate results. If demand were overestimated, it could lead to excess production. If it were underestimated, it could lead to product shortages and frustrated customers. Learning to Predict After assessing different approaches for generating forecasts, Otto Group developed an analytical tool/forecasting engine based on particle physics and neural network techniques, with self-learning capabilities. Using data about previous campaigns to “learn” about demand, the tool can draw on current, daily campaign data to generate forecasts that are significantly closer to actual demand than those of previous models. As a result, Otto Group is better prepared to meet consumer demand, avoid product shortages, reduce stocks, simplify logistics, and increase profitability. Company: Otto Group Country: Germany Better Forecasts with Big Data Otto Group
  56. 55 Towards a new digital paradigm. Textile manufacturer Inditex uses big data technologies to predict demand levels and peaks for its products, and to detect consumption patterns in its physical and online stores. Thanks to these tools, it can follow the pulse of the market and is in a position to fine-tune its production and logistics chain. This lets the company detect what is working well in the world of fashion, and manufacture it quickly to meet demand. Delivering the Right Products The big data approach helps ensure that the company’s stores have what the customer needs at the right time, based on predictions of the garments and sizes that will be sold at each store. Digitalization means that the company has greater control over the entire flow of information generated by stores (orders, sales, trends, and so on), enabling it to operate with a basic principle: Know what customers want so that it can be manufactured, distributed, and sold. This approach is further enabled by having RFID chips on products. This makes it easy to search for items in shops and reduces the time needed for inventory. Last but not least, big data is used for quality control and detection of possible health risks in garments. These innovations enable Inditex to achieve significant growth while continuing to maintain the original essence of its business, and quickly design, manufacture, and transport products that customers want. Company: Inditex Country: Spain Using Big Data to Anticipate Customer Needs Inditex
  57. 56 Towards a new digital paradigm. Ferrovial, a large infrastructure operator and service provider, uses big data tools to manage assets, such as airports and toll roads, and provide better service to the people who use those assets. These tools are used, for example, to identify traffic patterns on highways and to predict usage trends, factoring in real-time information provided by users through social media, navigation systems, smartphones, and so on. The aim is to monitor actual usage and forecast demand to manage services more efficiently. Ferrovial also provides drivers with information about traffic conditions, along with recommendations for alternate routes to avoid heavy traffic. All of this information is provided on an app. Data-Driven Improvement The company also uses the data it collects for future marketing initiatives aimed at attracting new users. Similarly, by tracking social networks, forums, and blogs, the company can gauge users’ perceptions of its toll highways, which can be analyzed to support strategic decisions. Overall, Ferrovial is developing a growing number of big data projects—an increasingly important tool for optimizing operations. Company: Ferrovial Country: Spain Big Data for Beating Traffic Ferrovial
  58. 57 Towards a new digital paradigm. EaaS can be used for systems that use predictive modeling and calculations to help organizations anticipate hazards, faults, or problems in operations. The goal: to optimize maintenance and logistics. Paradigm 12 Predictive Maintenance Predictive Maintenance TRANSPORT INFRASTRUCTURE RETAIL UTILITY TELCO 57 Towards a new digital paradigm.
  59. 58 Towards a new digital paradigm. Founded in 2012, Compology focuses on the development of waste management and logistics systems, taking advantage of the Internet of Things, big data, and machine learning. Compology bases its apps on hardware fitted with a camera and installed inside containers. The camera takes pictures of waste levels inside the container and sends them to the company’s servers. Smarter Collection Because Compology manages millions of photographs per month, decision-making needs to be automated. So the company uses a pretrained neural network, with machine- learning algorithms and a classification tree, to determine when containers will fill up. Armed with all of that information, the system can determine which containers need to be emptied or replaced, and the routes that the trucks should follow to do so. Overall, the system makes it possible for service operators to reduce the costs and time associated with collection. Company: Compology Country: US Streamlining Waste Management Compology 58 Towards a new digital paradigm.
  60. 59 Towards a new digital paradigm. Car manufacturer BMW uses big data technology and data analytics to optimize its products and maintenance. The use of predictive analytics helps the company detect and correct issues before launching new models, long before problems occur during production. Analyses are based on global product data and information about warranties, diagnostics, and repairs. The resulting insights are incorporated into vehicle design and production processes. Looking Ahead Similarly, these tools play a key role in predictive maintenance, enabling the discovery of patterns and anomalies to anticipate maintenance needs, which potentially helps to reduce repair times and visits to repair shops. Analytical tools also help BMW develop strategies to improve customer relationships by providing information about what customers like and what they expect from BMW in the future. Company: BMW Country: Gyrman. Improving Vehicles with Analytics BMW
  61. 60 Towards a new digital paradigm. The combination of big data and the Internet of Things is a fundamental tool for German elevator manufacturer ThyssenKrupp, especially in predictive maintenance for its products. A system based on these tools and developed by the company uses machine learning and data analytics to identify possible problems in real time, then offer appropriate solutions for addressing those problems. A More Proactive Approach The technology also lets the company estimate the lifecycle of elevator components, helping to reduce equipment downtime. The system connects elevator equipment to the cloud, compiles data generated by sensors and devices, and transforms that data into business intelligence. The aim is to significantly improve maintenance service and be able to schedule repairs proactively, before a problem occurs. Overall, the technology drives efficiency and reduces downtime while helping to control costs. Company: ThyssenKrupp Country: Germany Thinking Ahead for Maintenance ThyssenKrupp 60 Towards aa new digital paradigm.
  62. 61 Towards a new digital paradigm. Conclusion 61 Towards a new digital paradigm.
  63. 62 Towards a new digital paradigm. The EaaS model is a key force in the digital transformation of companies. It supports the shift from products to services—services that can be customized for users and configured quickly to meet changing requirements. It opens the door not only to transforming relationships with customers and partners, but also to improving internal operations for greater efficiency and effectiveness. In this changing environment, established companies can pursue any of three strategies for success: grow, colonize, or invent. Smaller companies and startups also have tremendous opportunities, with as-a-service capabilities enabling the type of radical innovation that can disrupt markets and industries. With EaaS, companies can become more fluid players with a presence in each stage of the value chain, often invisibly. For example, banks and their platforms aspire to participate in every transaction consumers make. We see automotive companies entering the electrical utilities market by producing batteries, companies that create weather services based on data from sensors fitted to wind turbines, and startups using smart contracts based on blockchain technology to do business in the insurance sector. In other words, the most disruptive companies have understood that services are key to creating value, and function is far more important than the product. EaaS is also having a disruptive impact on competition. Traditional boundaries and models become blurred. What was previously a customer- supplier relationship can quickly become competition, as the supplier becomes a new player in the market. Conversely, major competitors can become partners to adapt to new market requirement. Boundaries between industries break down as well, and companies providing a certain type of service can start to offer different solutions, previously unrelated to their mission—witness, for example, a telecommunications company that jumps with ease into the energy or financial services markets. Cloud technologies and the as-a-service model make this possible. Finally, companies can use digital transformation to become an enterprise as a service that takes advantage of intelligence embedded into products, networks, and activities, for the creation of new concepts and models. As we have seen in this report, EaaS is enabling 12 new paradigms that are reshaping business. What is also evident is that these paradigms are not just a distant possibility. As the case studies show, they are already being embraced by a number of companies—from the insurance firm using blockchain-enabled smart contracts to the company using the Internet of Things to streamline waste management. These new paradigms are themselves evolving, and we will no doubt see new ones emerge as the world gains more and more experience with EaaS. To succeed in the coming years, companies will need to determine where they fit in the as-a-service world—while keeping an eye on the horizon for new paradigms that they can exploit for competitive advantage.
  64. 63 Towards a new digital paradigm. Analysis Methodology All information concerning the aforementioned companies, analysed by Evoca’s researchers for the case study, is in the public domain on the Internet and has been selected from corporate websites, press releases and other communications made public by those companies. Oracle Digital isabel.fernandez.penuelas@oracle.com Account Based Marketing marieta.proenca@oracle.com

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