helsinki: speed of change

Nordic City Tour Helsinki Speed of change – Successful business in the digital age

#nordicspeed

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Celebrating 15 Years of Customer Success

4TH YEAR IN A ROW! 2011 • 2012 • 2013 • 2014

#1 most admired

in software

#8 best company

to work for

Lari Hämäläinen, McKinsey

McKinsey Digital

Winning in Digital

Salesforce.com Nordic conference

Presentation | April 23, 2015

11

1. What is causing the digital disruption?

2. How is the disruption playing out?

3. What challenges will businesses face?

4. How to address the strategic challenges?

5. How to address the leadership challenges?

Discussion today

2

SET OF HARD TO REVERSE CHOICES YOU

MAKE IN THE FACE OF UNCERTAINTY TO

GENERATE PROFIT BY CAPTURING

CUSTOMERS AND BEATING COMPETITORS

IT’S NOT ABOUT DIGITAL STRATEGY, IT’S

ABOUT STRATEGY IN THE DIGITAL AGE

3

SUSTAINING PROFIT

4

SUSTAINING PROFIT

A. POSITIONAL ADVANTAGE

5

SUSTAINING PROFIT

A. POSITIONAL ADVANTAGE

B. PROPRIETARY ADVANTAGE

6

“THE MORE WE COMPETE, THE LESS

WE GAIN.” – Peter Thiel

7

CONTROL POINT DISRUPTION

8

WHAT‘S CAUSING THE DIGITAL DISRUPTION?THE SECOND MACHINE AGE

1.

9

1. WHAT‘S CAUSING THE DIGITAL DISRUPTION?

UBIQUITOUS CONNECTIVITY

10

TRANSPARENT ACCESS TO DATA ON A

MASSIVE SCALE


11

DECREASING COST OF COMPUTER

PROCESSING POWER


12

HOW THE DISRUPTION IS PLAYING OUT?

2.

13

2. HOW IS DISRUPTION PLAYING OUT?

CUSTOMER POWER IS PARAMOUNT

14

…this year more unique information will be generated than during the

PAST 5,000 YEARS

…each month,

4 million man years

is spent online

…by 2016,

200,000 HRSof video will be

STREAMED EVERY SEC

…approximately

17 BILLION

devices are connected to the internet

…a smartphone is

1,000,000x cheaper

100,000x smaller

and 10,000x more

powerful than the MIT computer

in 1965

…average 21-year-olds exchanged

250,000

10,000 HRSon a mobile phone

messages and spent

…the world's data centers consume

~1.5% OF ALL POWER

or little more than 2x the power

consumption of Sweden

2,378Number of websites worldwide in 1994

1,110,000,000

@

A NEW GENERATION EXPECTING DIGITAL BY DEFAULT…


15

"Any screen will do" In store experiences

polarising

Rise of the hyper-informed

customer

Always on

Your world in your pocket You can own the

customer experience …

not the customer

Merging digital and physical


…AND BEHAVIOUR CHANGING RAPIDLY

16


CONVENTIONAL TRADEOFFS MAY BECOME OBSOLETE

17

MONEY MOVES UNEVENLY


18

NEW CAPABILITIES ARE NEEDED


19


CHANGE HAPPENS FASTER

20

CUSTOMER POWER IS PARAMOUNT

CONVENTIONAL TRADEOFFS MAY BECOME OBSOLETE

MONEY MOVES UNEVENLY

NEW CAPABILITIES ARE NEEDED

CHANGE HAPPENS FASTER

ECOSYSTEMS ARE REDRAWN


21


MONEY MOVES UNEVENLY "Your margin is

my opportunity"

Jeff Bezos

22


A TRACTOR

23

WHAT CHALLENGES WILL BUSINESSES FACE?

3.

24

Rethinking your

overarching strategy

in light of industry

fundamentals, trade-

offs, and sources of

advantage altered by

digital disruption

Designing and

implementing

operational

digital initiatives,

e.g., big data

enabled supply

chain, mobile/

online stores, etc.

60%+ of CXOs don’t have

a digital strategy or it

does not link to the

broader corporate strategy

60%+ of CXOs are

directly engaged in digital

business initiatives

Digital

Transformation

Strategy in

digital age

How to win

3. WHAT CHALLENGES WILL BUSINESSES FACE?

25

IT and the business don’t talk

Leadership are not digital natives

Resource re-allocation is tough

Legacy ways can seem like immovable barriers

You don’t have the talent you need


26

The leadership

challenge

Embody the habit of

successful digital

executives

The strategic

challenge

Uncover the magic, be

focused on where the real

business value are, and be

granular with what you go after

The technology

challenge

Set up your organization

and capabilities to enable

fast changes


27

HOW TO ADDRESS THE STRATEGIC CHALLENGES?

4.

28


4. HOW TO ADDRESS THE STRATEGIC CHALLENGES?

Product/service dev

Marketing & sales

Operations

IT

Finance & MIS

Risk mgmt

HR & org

Connectivity with

customers,

colleagues,

suppliers and other

stakeholders 1

Digital reputation

management

Virtual co-making

Real-time supply chain

Social network risk

analysis

‘Golden source’ MIS

On-demand processing

power

Social network recruiting

Decision-

making based

on ‘big data’ and

advanced

analytics2

Next product to buy

Personalised product

and service offerings

Dynamic workflow

Real-time automated

decision making

Real-time financials

Dynamic hardware

provisioning

Predictive resource

management

Automation of

manual activity,

replacing labour

with technology3

Mobile channel

Virtual product testing

Straight-through

processing

Automated testing

Paperless MIS

Sensor-driven

maintenance scheduling

Self-service training

Behavioral pricing

Digitally augmented

products

Crowd-sourced support

Cloud computing

Crowd-funding

Risk socialization

Virtual workforce

Innovation of

products,

business models

and operating

models4

29


4. HOW TO ADDRESS THE STRATEGIC CHALLENGES?

Product/service dev

Marketing & sales

Operations

IT

Finance & MIS

Risk mgmt

HR & org

Connectivity with

customers,

colleagues,

suppliers and other

stakeholders 1

Digital reputation

management

Virtual co-making

Real-time supply chain

Social network risk

analysis

‘Golden source’ MIS

On-demand processing

power

Social network recruiting

Decision-

making based

on ‘big data’ and

advanced

analytics2

Next product to buy

Personalised product

and service offerings

Dynamic workflow

Real-time automated

decision making

Real-time financials

Dynamic hardware

provisioning

Predictive resource

management

Automation of

manual activity,

replacing labour

with technology3

Mobile channel

Virtual product testing

Straight-through

processing

Automated testing

Paperless MIS

Sensor-driven

maintenance scheduling

Self-service training

Behavioral pricing

Digitally augmented

products

Crowd-sourced support

Cloud computing

Crowd-funding

Risk socialization

Virtual workforce

Innovation of

products,

business models

and operating

models4UNDERSTANDING THE

OPPORTUNITIES AND YOUR

CHOSEN PLAYS AS YOUR

BUSINESS GETS RE-IMAGINED

30

4. WHAT DOES THIS MEAN FOR OUR APPROACH TO STRATEGY?

FRAME | DIAGNOSE | FORECAST

SEARCH | CHOOSE | COMMIT | EVOLVE

New questions

at each stage

▪ Are we being attacked or disrupted? Should we disrupt ourselves?

▪ If software is eating the world, how will it eat our business?

▪ How is our value chain transforming?

▪ Which players from outside our industry could now enter?

▪ What will my workforce look like in 5 years’ time as automation and

machine learning play out?

31

HOW TO ADDRESS THE LEADERSHIP CHALLENGES?

5.

32

A SET UNREASONABLE ASPIRATIONS

32

What does this mean? What does this not mean?

▪ Board level digital "owner"

▪ Stretching and coherent

digital vision

▪ Value-oriented targets

(i.e., Digital P&L)

▪ Adding "digital" to existing

responsibilities

▪ Uncoordinated digital initiatives

▪ Digital interaction targets

5. HOW TO ADDRESS THE LEADERSHIP CHALLENGES?

33

B CHALLENGE EVERYTHING

33


▪ Challenge the status-quo

▪ Go your own way

▪ Involve regulators in

change

▪ Accept historic norms

▪ Follow others

▪ Put your head in the sand


34

C OBSESS ABOUT CUSTOMERS

34


▪ Learn from every inter-

action with the customer

▪ Relentless iteration of

customer experience

▪ Infrequent aggregation of

customer insights

▪ Ad-hoc patching of customer

processes


35

D FOLLOW THE MONEY

35


▪ Zero-base tech budget

aligned with value at stake

▪ Invest in digital across the

value chain

▪ Scale success quickly

▪ Incremental spend in line with

last year’s budget allocation

▪ Focus digital effort only on

customer facing functions

▪ Pilots never rolled out


36

E BE QUICK AND DATA DRIVEN

36


▪ Continuous proposition

iteration

▪ Live beta

▪ Golden source of truth

▪ 12 month release cycles

▪ Quarterly investment boards

▪ Multiple customer records


37

F ACQUIRE CAPABILITIES

37


▪ Buy scarce talent en-masse

▪ Move into adjacent markets

▪ Hire for skills, not industry

experience

▪ Add resources one-by-one

▪ Random buying spree

▪ Recycling talent from industry


38

G RING FENCE TALENT

38


▪ Protect digital talent from

business-as-usual

▪ Digital talent management

▪ Embed digital in existing

businesses

▪ Retrofit existing HR model


39

Set unreasonable aspirationsA

Challenge everythingB

Be obsessed with the customerC

Follow the moneyD

Be quick and data drivenE

Acquire new capabilitiesF

Ring fence and cultivate digital talentG


40

Digital changes value chains and

enables new business models

DO DIFFERENT THINGSDigital changes the traditional way

of doing business

DO THINGS DIFFERENTLY

41

AS FINAL WORDS:

“LOOK UP AND LOOK OUT

DOCTOR HEAL THYSELF”

Juho Malmberg, Board Professional

Why is customer experience so important?

How to create competitive edge in a

mature business area?

How to differentiate?

How to grow in services business?

How to reduce churn and develop loyal

customers?

What is Great Customer Experience?

• CX is a Journey, consists of

all touch points with the

company

• CX requires as a foundation

great products and a strong

brand

• CX development requires us

to view our business both

outside-in and inside-out

CASE

Framework for customer experience development Include both Outside-In and Inside-Out Views

Case Emirates: Customer Touch Points

Developing Customer Experience based on Touch Point

Analysis

Validate the touchpoints

Measure the importance

Measure our performance

Implement the right actions

Actual Performance Importance

Developing Customer Experience in a systematic way

Use best practices from your own organization and from outside

Pilot and learn

Limited number of global initiatives, for example: – Customer insight through segmentation

– Selling value

– Great customer communication

– Service excellence

Systematic and disciplined execution – Clear project plans including schedule, milestones and deliverables

– Full-time people

– Clear metrics for progress and success

– Project management with strong follow-through

Strong processes and tools create a foundation for building

a great Customer Experience

– All customer data in one place

– Full visibility to global sales data

– Global processes based on shared best practices – often invented in-house in one of the country units

– Common platform enables continuous improvement and learning

– Common platform enables fast implementation

– Successful rollout across 50 countries and 3000+ users in one year

Seamless Service Chain with End-to-end Integrated

Processes

Web-site

CRM

Product Configurator

Order Management

Supply Chain Management

Installation Management

Customer Feedback Collection

Simple Things Matter

– Be friendly

– Be honest

– Keep your promises

– Appreciate

customer’s time

– Ability to turn a bad

experience to a good

one

Some Best Practices based on

Customer Experience Development at

KONE

• Customer focus high on

the strategy and

management agenda

• Empower employees to

deliver great customer

experience

• Clear and disciplined

development projects

• Right balance of sense of

urgency and persistence

20

Rolf Hall & Lars Göransson, Salesforce

Sales Service

Marketing

Community Apps

Analytics

Analytics for the rest of us

Analytics Cloud

Powered by the Wave Platform

Analytics Cloud: Analytics for the Rest of Us

Mobile

insight on any device

Everyone

gets answers faster than ever

Platform

for any data, any app

Extend the Platform

Self Service Collaboration Exploration Analytic Apps Search Based Any Data Governance & Trust

Grow sales faster

Sales Cloud

Sales Service

Marketing

Community Apps

Analytics

Hard to Grow Sales if Sales Process is Broken

Manual

Processes

Hard to find information and experts

Time wasted on emails and approvals

Limited coaching and feedback

No lead routing or opportunity management

Lack of pipeline visibility

Poor data quality

Slow Sales

Cycles

Missed

Target

No Mobile

Access

Hard to access information on-the-go

No way to access all your critical apps in one place

Hard to manage your day from anywhere

Sales Cloud: World’s #1 Sales App

Sell

Smarter

Sell

Faster

Sell from

Anywhere

Transform the customer experience with Service on Salesforce

Service Cloud

Sales Service

Marketing

Community Apps

Analytics

Unhappy

Customers

Difficult to Service Your Customers Everywhere

No context

Not personalized

Inaccurate answers

Poor Customer

Experiences

Siloed service channels

Multiple knowledge bases

No support for social

Inconsistent Service Across

Channels

92% Companies reported decline in

Customer Satisfaction

Multiple service screens

No single knowledge source

Not connected to back-office

Low Agent

Productivity

54% Agents must use multiple sources to

answer inquiries

86% Customers stop doing business

after one negative interaction

Service Platform for Customer Success Transform the customer experience with Service on Salesforce

Personalized

Service

Smarter

Support

Innovate

Faster

Connect 1:1 with every

customer, anywhere

Empower agents and

managers with the right

tools and intelligence

Build and scale at the

speed of your customers

Marketing Cloud

Sales Service

Marketing

Community Apps

Four Questions

Do you know who your

customers are?

Where are they

in their journey?

Are you engaging

and moving them

along the journey?

Are you measuring

the impact on your

business goals?

Marketing Cloud The Platform for 1:1 Customer Journeys

Build a single view of the customer

Plan and optimize the customer journey

Deliver personalized content across every channel and device

Measure the impact on your business

Journeys Contacts Content Channels Analytics Apps

Martha Bennett, Forrester

Making Your Data Speak Martha Bennett, Principal Analyst

April 2015


Guess which car service continues to be widely used?

›Cheaper

›More convenient

›Better service

“Uber-isation of all industries…”


This is the world we live in …


65% 55%

40% 30%

35%

45%

60%

70%

… and failure to embrace it is not an option

New companies in the

Fortune 1000 Top 20

Source for chart on left: Built to Change: How to Achieve Sustained Organizational Effectiveness, 2006 *estimated

1973-1983 1983-1993 1993-2003 2003-2013*

Less than 15% of

companies in the

original 1955 Fortune

500 list exist today


Good To Great characteristics: not enough (bankrupt 2009)

(home mortgage scandal)

(improvements in past two years, but transformation from

mail-based business remains work in progress)

(absorbed by P&G)

(received $25B from TARP)

(performed adequately)

(performed adequately) (performed adequately)

(only one in list to outperform)

December 2014: Investing in the portfolio of those 11 great companies covered in 2001 would result in

underperforming the S&P 500.

http://en.wikipedia.org/wiki/S&P_500


Focus & market dominance: not enough

(absorbed by DHL)

(underperforming — missed mobile market)

(net income fell 72% before company was taken

private in 2013)

(underperforming despite repeated turn-

around initiatives)


Disrupt, adapt, reinvent – or be disrupted


Digital dysfunction at executive level

Source: Forrester/Russell Reynolds 2014 Digital Business Survey

93%

• Believe that digital technologies will disrupt their business over the next 12 months

74% • Claim the company has a “digital” strategy

33% • Think it’s the right “digital” strategy

15% • Believe they have the right people and skills to execute the strategy


What do these companies sell?

47 © 2015 Forrester Research, Inc. Reproduction Prohibited

Key trend: selling an outcome Used to sell:

› Aero engines

› Air conditioning units

› Lifts/Elevators

› Cars

› Agricultural machinery

› Medical testing devices

› Health insurance

› Toothbrush

Now sell, or may in future:

› Units of propulsion

› The right temperature

› Moving people/goods up/down

› Ability to get from A to B

› Optimum yields

› Number of tests

› Wellness program

› Healthy mouth and teeth


Results need to be pertinent & trustworthy


Business outcome

Data sources

Deeper insights

More data

For everyone

What business

value do we want?

Who needs what

insights for this?

What analysis

tools do we need?

How can we

manage all the

data needed?

What data

do we have?

How can

we process that

data?

What can

we learn from this

data?

How

do we deliver

those insights?

What business value

can we create?

What data sources

do we need?

There’s no single right way to get there B

ott

om

-up

te

ch

no

log

y-d

rive

n T

op

-dow

n b

usin

ess-d

riven

© 2015 Forrester Research, Inc. Reproduction Prohibited

Making your data speak: 3 Cs to success Culture

• Data treated as an

asset

• Data-driven

• Data shared

across silos

Capabilities • Advanced data

management,

delivery and

analysis

Competency • Technology skills

• Analytical skills

• New approach to

data governance

• Agile processes

Data at

its most

eloquent


Focus on getting the basics right 1. Always start with a question that’s

linked to a business objective or

known issue

2. Create an environment that

supports collaboration, agility and

short time to value

3. Having made your data speak, be

prepared to do what’s needed

Inka Vilpola, Wärtsilä

Embracing the new age of digital

Inka Vilpola, General Manager, Wärtsilä

Wärtsilä in brief: EUR 4.8 billion, 17 700 employees, 200 locations

Ship power

Oil&gas and shipping

Total offering of marine products,

integrated solutions

Power plants

Utilities, IPPs and Industrial customers

Flexible, efficient and environmentally

advanced energy solutions

Services

Shipping and power generation

Expertise, proximity and

responsiveness

5

Customers

Wärtsilä excellence

Installations

Digitalization cornerstones 2015

How do we change in digitalisation?

Running our business

Customer digital lifecycle

• We capture opportunities and make things happen

• Optimizing customer operations whenever

Users and stakeholders

• Transparency and efficiency between stakeholders

• Extended enterprise and customer collaboration

• Optimised user experience

Process and technology development

• User studies to identify development opportunities

• Combined data and process

• Seamless integrations between systems

6

Collaboration

Customers

Sales collaboration

Technical collaboration

Own product

Sales

Opportunities

Account planning and visits Offers

Contract reviews

Delivery

Customer

Products

Statuses

Leads

Innovation

Open cross-Wärtsilä and cross-

partner collaboration

Agility and visibility are boosting the

innovation

Cross-functional collaboration

Open collaboration speeds the

operations and improves

communication between functions.

Increased availability of expertise.

Change in roles

6

Customer focus

Improved customer centricity, 360

view. Customer service in realtime

Reduced steps to deliver

Thank you

Inka Vilpola

GM, IM Technology Office

Wärtsilä

Thank You!

Arman Alizad, Adventurer and Provocateur