1.
Mastering the Digital Transformation
How companies develop
successful products faster.

2.
Contents
● Digital Transformation: Hype or real?
● Elements of the Digital Transformation
● Digital Transformation &
How to develop successful products faster

3.
In Germany, exports have reached record levels, economy has seen substantial growth and
so has employment. This is what makes Germans skeptical in terms of digital revolution.
At the same time, digitization has changed our life circumstances and that is where we
experience a big awakening.
“
”
Germany is not yet ready for the Digital Revolution

4.
Hannover: Chancellor Angela Merkel has criticized Germany’s resources in digitizing.
"We just need to go up a gear in Europe, just as we need to set a goal in Germany", the
CDU - Politician said on Sunday at the opening of national industrial exhibition Hannover Messe.
“
”
Europe and Germany Need to Catch Up with Digitalisation

5.
Search Trends Germany
Search for „Digitale Transformation“ Search for „Internet of Things “

6.
Search Trends Germany

7.
Hype Cycle for Emerging Technologies, 2014

8.
Why is so little happening?

9.
Speed of Innovation Increases

10.
Faster speed of innovation
= shortened lifespan for companies

11.
It is not the strongest of the species that survives,
nor the most intelligent that survives.
It is the one that is most adaptable to change.
Charles Darwin
“
”

12.
Lower Barriers to Entry
than Ever Before

13.
Innovation Comes out of Nowhere
„I looked at the numbers and was speechless “
A programmer’s experiment
Duration of actual development: 6h
Result: 2 Mio. App-Downloads, $72.000 Dollar Revenue + Exit- Revenue
Gründerszene, 07.04.15
App name: 7 Minute Workout

14.
2003 - the company was founded
2008 - they released their first car, Tesla Roadster; 2.400
Roadsters produced so far
2012 - they released Model S
2013 - Car of the Year (German Automagazin Motor
Trend); 50.000 Model S produced so far
2014 - the company reached 6.000 employees
2015 - they announced the production start for Model X
Competitors Come out of Nowhere
Tesla Motors
Roadster
Model S

15.
0
10000
20000
30000
40000
50000
60000
Audi
A7
Audi
A8
Porsche
Panamera
Phateon
BMW
7er
Tesla
Model
S
Car
ProducAon
worldwide
luxury
class
2013
2014
Competitors Come out of Nowhere
Tesla Motors
Tesla’s advantages over traditional
automobile manufacturers:
• Does not have to develop engines,
transmissions;
• Not obliged to observe emission values;
• The software is their core value, besides
the batteries; it scales better on all
models and is cheaper to produce.
* Not shown: Mercedes S-Class

16.
● High-End-Technologies easily available
● Software allows for fast productisation
● Internet allows for global distribution
Lower Barriers to
Entry than Ever Before

17.
Digitalisation Germany vs World

18.
Why is so little happening?

19.
Innovator’s Dilemma

20.
Innovator's Dilemma Example:

21.
Aftenposten‘s Strategy: Set up a separate entity to go after a market that was undesirable and low margin from
the perspective of its newspaper business. The new brand was allowed and even encouraged to cannibalise the
older, higher margin parent company, Aftenposten.

22.
Escaping the Innovator’s Dilemma
by Excubation
• Telekom: hub:raum
• ProSiebenSat.1-Accelerator
• Axel Springer: Plug’n’Play
• Rocket Internet: ProjectA
• Scout24-Gruppe: You Is Now
• SAP Startup.Focus.
• Burda-Media: dldventures
• REWE
• Coca-Cola
• Bayer Health Care
• Allianz
• Siemens Technology Accelerator

23.
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
60.0%
2008
2009
2010
2011
2012
2013
2014
Germany
UK
USA
Missing Fault-Tolerance
Share of 18 to 64 year old people
who do not establish a company due to the fear to fail.

24.
Product
InformaAon
Info
only
=
Pure
Player
Physical
Product
/
Service,
+InformaAon

25.
Software is eating the world.
Marc Andreesen
“ ”

26.
The size of the screen in an average
car today shows the importance of
software to the manufacturer.
The big screen shows the importance Tesla
Places on software. Just like the big screen
of the iPhone shows the importance of
its Operating System.

27.
In addition to traditional engineers, we are mainly looking for IT specialists and software
developers. It is important for us to develop software ourselves.“
”
BMW Hires 8000 New Employees in 2015

28.
Misconception:
New Product Development is Costly

29.
Agile Development

30.
Agile Development

31.
60%-90% of ideas do not improve the
metrics they were intended to improve.
Ronny Kohavi
Microsoft’s General Manager Experimentation Platform
(before: Amazon's Data Mining and Personalization group)
What Improves a Software Product?
“
”
Research results presented by Ronny Kohavi:

32.
Why Lean and Agile Product Development?
80% of startups are successful with another product
than the one they initially started with.

33.
The Lean Startup Cycle
Slide
40
refa
grafic

34.
Minimum Viable Product
(MVP)
The Lean Startup Cycle

35.
Lean and Agile Product Development
Check your idea with a Minimum Viable Product (MVP)
Refa
graphic
slide
42

36.
analog
digital Agile Software
Development
Lean
Enterprise
Levels of Digital Transformation
Lean & Agile Product
Development

37.
Elements of the Digital Transformation
Digital Strategy
• Digital targets
• Digital ways to reach the targets
• Methods to implement the strategy.
Lean Leadership
• Leading and enabling instead of giving orders
• Decisions are oftentimes made in teams.
Digital Products
• For digital markets and customers
• Digital business models
• The user is the king – again!
Agile Operations
• Fastest time to market
• Fast response to market requirements.
Digital Culture
• Sharing knowledge instead of hoarding
• Cooperation instead of demarcation
• Two-way communication with customers.
Digital Employees
• Love to learn
• Able to work independently
• Flexible in time, location and know-how.
Digital Governance
• New targets for the company and employees
• Digital, business-relevant KPIs
• Open and continuous monitoring of all KPIs.
Digital Technologies
• E.g. cloud instead of own hardware racks
• Responsive and mobile-enabled products.

38.
Talent & the Digital Transformation
“An employer without sufficient Digital Competitiveness
is not the right employer for me.”
https://www.prophet.com/about/news/552-wie-gut-meistert-ihr-arbeitgeber-den-technologischen-wandel
14%
42%
33%
11%
strongly agree
tend to agree
disagree
strongly disagree

39.
In an industrial company, avoid software at your own peril . . .
A software company could disintermediate GE someday,
and we're better off being paranoid about that.
Jeff Immelt
“
”

40.
Product
InformaAon
Info
only
=
Pure
Player
Physical
Product
/
Service,
+
InformaAon

41.
Sony tried to sell hardware
Amazon sells info and
provides the right hardware.

42.
Google looks for more possibilities to
sell ads and to understand the user.
VW builds cars.

43.
Do you see the analogy?

44.
Culture eats Strategy for Lunch
Peter Drucker
“
”

45.
The autocratic behavior of Piech represented a crisis at Volkswagen.
Global corporations that want to be successful in the 21st century
must perform differently.
Piech has recently resigned.

46.
The End

47.
gero.lueben@ingasol.com