Information Systems

Digital transformation
Key ingredients for digital transformation
COMMUNICATIONS,
EMERGING TECNOLOGIES AND HUGE AMOUNTS OF DATA
 By 2020, information will be used to reinvent,
digitalize or eliminate 80% of business
processes and products from a decade earlier.

Gartner Inc., 12/Feb/2015

http://www.forbes.com/sites/gartnergroup/2015/02/12/gartner-predicts-three-big-data-trends-for-business-intelligence/
Internet

2015: industry 4.0, IoT,

Big Data, Smart, artificial
intelligence, Analytics, ….
2007: Mobile
(Iphone & Android)
2005: Web 2.0

2001: Dotcom meltdown

2000: Y2K

1989: WWW (T. Berners-Lee)

1977: Internet (Cerf & Khan TCP/IP)
1958: ARPA
ICT & capability

Whitepaper:
Digital
Transformation
Initiative
Jan-2017

https://www.weforum.org/whitepapers/digital-transformation-initiative
 Emerging Technology Trends. Gartner-2018

https://www.gartner.com/smarterwithgartner/5-trends-emerge-in-gartner-hype-cycle-for-emerging-technologies-2018/
WEB 2.0
Web 2.0: Lessons learnt

▪ Tim O’Reilly (2005) Blogs

- To reach the “long tail” it is necessary to put the focus not only on its head.
- Web 2.0 transitioned from the personal website (static) to the blog (dynamic)
Wikis
- Software shifts from being a product to being a sevice. Mashups
- Software has to be multi-platform.
Social
- It has to incorporate user contributions
- Data is of te highest importance
Networks

▪ And more
- Participation (from monologue to dialog)
- Content creation does not depend only on the distribution companies (e-
businesses) or large content creators. End users gain importance.
- Do-It-Yourself website. Any person can generate contents without technical
knowledge (WordPress, …)
- Huge availability of data. (Open data)
The long Tail

▪ Chris Anderson, oct-2004, Wired Magazine

▪ Based in Pareto distribution (80/20)
▪ Traditional mass markets: Reaching large amounts of people with a
limited number of products.
▪ Long Tail: Niche markets, based on a large amount of products with
low sale volums.
Short ▪ Total niche market volumes can be larger than traditional markets.
Head ▪ Before ecommerce, it was ureacheable due to high transaction costs.

Long Tail
The long Tail

https://vimeo.com/66409578
DIGITAL DISRUPTION
Something interesting is happening

Uber • the world’s largest taxi company, owns no vehicles.

Facebook • the world’s most popular media owner, creates no content.

Alibaba • the most valuable retailer, has no inventory.

Airbnb • the world’s largest accommodation provider, owns no real estate.

Netflix • One of the largest movie houses, owns no cinemas

iTunes • One of the largest music companies, owns no music

Skype • One of the largest phone companies, owns no infrastructure

….

http://techcrunch.com/2015/03/03/in-the-age-of-disintermediation-the-battle-is-all-for-the-customer-
interface/
Digital Disruption

When companies adopt

Digital Disruptors…
technology they do the old
1. Better products
things in new ways. When 2. Stronger customer
companies internalize relationships
technology then they become 3. Bringed to market
digital disruptors faster
James McQuivey (Forrester)
http://youtu.be/AotSKkw5FrE
http://thenextweb.com/insider/2015/05/12/watc
h-now-where-digital-disruption-will-lead-us/

Di s ruptive innova tion es un término acuñado por Cl ayton

Chri s tensen en 1997 en “The Innovator's Dilemma: When New
Technologies Ca use Great Firms to Fail” ISBN: 0-87584-585-1
No sector is safe…..
MOOC: Massive Open Online Course

MIT + Harvard + Berkeley + Texas + Australia + TUDelft +

Laussane + Georgetown + McGill + Rice + Toronto + …

CalTec + Columbia + Duke + Stanford + Tec. Monterrey +

UCSD + Laussane + London +Technion (Israel Inst. Tec.) +
Yale + Princeton + TUMünchen + Tokyo + Rice + Peking +
…+ UAB + IESE + IE

Sebastian Thurn: Carnegie Mellon, Standford, Google Fellow .

Creador de Google X Lab (Glass, Dirverless car, Loon)

Pearson, McGraw Hill, Wiley, ….

In all sectors

Life.Church
considered the
largest church in
the US

https://www.youversion.com/
https://www.bible.com/es-ES
https://www.life.church/
Anywhere

https://www.forbes.com/sites/oppenheimerfunds/2016/0
9/26/the-startup-that-uses-mobile-payments-to-improve-
life-in-africa/#584cbb876d68

http://edition.cnn.com/2017/02/21/africa/mpesa-10th-
anniversary/index.html
From “old things, new ways” towards “new things, new ways”

TRANSFORMATION
Enterprise 2.0 and beyond

Web 2.0 Analytics

E-Commerce
Mobile
IoT

Smart Robotics Knowledge

Management
AI / Cognitive C.
/ Deep Learning
Big
Cloud Data Industry 4.0

ERP + CRM + SCM + BI + BPM + KM + ....

Business models in the digital era

B2C & ECOMMERCE

Definitions

eCommerce To perform business transactions (such as selling, buying or exchanging) through an

electronic medium (such as the Internet)
It includes products, services and information and anything alike.

Variants: mCommerce (Mobile commerce) f-Commerce (facebook Commerce)

eBusiness Broader concept that includes eCommerce, but also other aspects related with
conducting business processes over the Internet. Examples: provide customer support,
collect customer opinions and suggestions, …

eGovernment Electronic transactions between citizens and government: healthcare, taxes, permits, ….
New actor relationships in digital business.

B2B G2B G:Government G2G

B: Business
B2G
C2G
G2C
C2B
B2E
E2G B2C
C:Consumer
E:Employee
C2C
eCommerce revenue models:

eTailing: Retailer of products or services over the Internet

Traditional model, the client pays for the product

Service-based To turn the product into a service, giving the product por free or at a very
transaction low cost.

Bait and hook Offering a basic product and service at a vary low price (bait) and
business model profitting on recurrent sales or refills: Nespresso, video-game consoles,
printers.

Subscription A periodic fee gives access to the content or service. The fee may be fixed
or variable, dependig on usage. Spotify, Netflix, software on demand
(SaaS).

Freemium An important part of the service is free, additions are payed. Ex. Dropbox,
linkedin, online games, …
eTailing:

Brick & Mortar

• Purchasing is done in the physical shop. The Internet is used to exchange
information about the product or service.

Click & Mortar:

• Mixed model, physical and online shops coexist.
• May simplify delivery logistics (supermarket)
• May offer higher level of confidence due to the existence of a physical shop.
• Decision making can be done online and purchase in physical shop and vice-versa.

Pure Play:
• Sales channel only online.
• Highly effective with digital goods
• Added value for non digital goods (price, more options, ...)
Internet of Things

SMART WORLD
Smart Cities

http://smartcity.bcn.cat/

http://ec.europa.eu/eip/smartcities/files/eip-ifc-infographic.pdf
Smart Cities

http://smartcity.bcn.cat/

http://ec.europa.eu/eip/smartcities/files/eip-ifc-infographic.pdf
Digital transformation in manufacturing

INDUSTRY 4.0
Industrialization phases

4 201x
3 • IoT
197x-198x
• Connectivity
• Electronics
2 • Big data
190x and IS
• Cloud
• Numeric
• Electricity control • Smart
• Production • Pre-ERP • Analytics
1
178x chains • Quality,
• Steam JIT - Lean
machine
Industry 4.0

Industry Complete transformation of design,

4.0 manufacturing, operations and service
management in both products and productive
systems.
Connectivity between parts, will bring systems
that will be 30% faster and 25% more efficient
(Boston Consulting Group)

Marcus Lorenz It will enable product customization keeping the

BCG
at TED
scale economies assciated with mass production.
4/set/2015
http://smartamerica.org/teams/smart-manufacturing/
Ciber-physical systems

Digital networks that communicate intelligent objects.

Devices connected with all sub-systems, processes and objects both

internal and external, and to the providers and client networks.

Enables real-time control, increases flexibility and improves manufacturing

efficiency.

Means incorporating the Internet at manufacturing plant level, with connected

objects interacting autonomously. It is the Internet of Things (IoT)
Objetive: Productivity

▪ Less restrictions, more flexibility

- Products that provide information to other machines on how to be processed,
personalized, used, maintained, recycled, … SMART products.
- Products tailored to each customer’ needs at reasonable costs.
- Modularity to gain scalability: Lego-like factories that allow constant re-
configurations depending on each moment's requirements → SMART
Factories
▪ Improvements in mobility and logistics
▪ Improvements in energy efficiency.
▪ Improvements in working conditions and health and safety
▪ New smart services Ex: Predictive maintenance
Challenges

1. security

2. Skilled employees

3. Addapt the internal management procedured of the

enterprises.

4. Social issues: Privacy, Abuse of dominant position,

Information manipulation and control.
Digital transformation in finance

FINTECHS & INSURTECHS

Fintechs

Emerging industry that uses technology to

improve activities in finance (Wikipedia)

FINTECH In some occasions, it helps doing old things in new

= ways (Bizum). In other occasions, completely new
FINANCE things are done, that have disruptive potential
+ (Bitcoin)
TECHNOLOGY
Usually, fintechs are small size startups, with more
potential to innovation thatn larger financial
institutions.

http://www.centrodeinnovacionbbva.com/noticias/que-es-el-fintech-y-como-las-startups-
quieren-innovar-en-los-servicios-financieros
Commonly used technologies

Analytics Artificial intelligence, Deep learning, Cognitive

and Big Data computing, …
Cloud Ubiquitous Access to information and applications

IoT Using connected sensors and devices that

generate information (Big data)
Collective Cummunity-created knowledge to improve
intelligence processes and applications
Criptography Blockchain, digital currencies, digital signature,
authentication and security
Bitcoin / Blockchain

▪ Creted as an open source software Project in 2009

▪ The creator signs with the pseudonym Satoshi Nakamoto, real identity remains
unknown → https://en.wikipedia.org/wiki/Satoshi_Nakamoto

▪ Based in BlockChain a distributed database that does not require a central

entity to enure data integrity, which is ensured by using criptography
techniques.

▪ It does not require a central bank to ensure currency reliability, because the
data is distributed and secure.
http://www.businessinsider.com/fintech-ecosystem-financial-technology-explained-2016-3
Nuevos modelos de negocio

ROBOTICS
Driveless cars / Autonomous vehicles

https://youtu.be/P1tfOeChenQ
http://youtu.be/CqSDWoAhvL
U
https://plus.google.com/+G
oogleSelfDrivingCars/vide
os
https://www.wired.com/2016/10/ubers-self-
driving-truck-makes-first-delivery-50000-
beers/

https://youtu.be/thG8mNuk1Sg https://youtu.be/98BIu9dpwHU https://youtu.be/urWtlOVhg_4

http://moralmachine.mit.edu/
Human-care robots

http://w ww.toyota-global.com/innovation/partner_robot/family_2.html

http://asimo.honda.com/

https://youtu.be/uPI0-14kEZI

http://www.lavanguardia.com/tecnologia/20170129/413755404404/robots-tabletas-cuidar-abuelos.html
Robots not only in manufacturing

http://www.davincisurgery.com/

https://youtu.be/VJ_3GJNz4f
g
 The future of work

• 50% of the U.S. jobs lost in 2008 recession were middle-skilled jobs. Only 2% of the
jobs gained since the recession have been middle-skilled (The economist intelligence
unit)
- http://futurehrtrends.eiu.com/infographics/the-cratering-of-the-middle-class/

• About 35% of current jobs in the UK are at high risk of computerisation over the
following 20 years
- http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf
- http://www.bbc.com/news/technology-34066941

• 65% of children entering primary schools today will ultimately work in new job
types and functions that currently don’t yet exist
(WEF, Jan-2016)