Plugging into bandwidth

How businesses can harness the power of the NBN Jason Juma-Ross National Leader PwC Digital Intelligence @ideasoc

PwC Source: http://www.nbnco.com.au/get-an-nbn-connection/wholesale-speeds.html

2

512/128 kbps

25/10 mbps

50/20 mbps

100/40 mbps

12/1 mbps

25/5 mbps

PwC

Off the charts or ‘normal’ growth?

0

1

2

3

4

5

6

7

8

9

10

1960 1970 1980 1990 2000 2010 2020 2030

Dom

estic

Ban

dwid

th A

vaila

bilit

y (L

og)

Source: PwC analysis 3

100 mbps

100 gbps

PwC

Wireless Operators

Media

Impact on business varies by industry sector

4

Full Service Telcos

Financial Services

ConsumeTech.

Health & Public

Retail & Consumer

Resources & Energy

Core Business Model Risk & Opportunity

Digital Operations Risk & Opportunity

PwC

5 Opportunities presented by increased digitization

1.  Market & geographical expansion

2. More efficient sales & service

3. New sources of talent

4. Better, more competitive processes

5.  Faster innovation

5

PwC

Erosion of market & geographical barriers to entry, improving access to alternates

•  Access to new markets (e.g. extension into customer journey on basis of virtual supply chain)

•  Access to new geographies (e.g. previously uneconomic to sell to or serve through traditional distribution channels)

6

K1

Geography

Prod

uct/

Mar

ket K2

PwC

Carrying capacity ultimately limits market growth causing shake out

8

dN dt

= N K-N K

t

Carr

ying

Cap

acity

(K)

K1

K2

PwC

This process happens faster in digital markets, which move quickly to ‘winner take all’ dynamics

32%

19%

12% 7%

30%

Share (%)

‘Traditional’ stable market structure

Others

Nichers

Challenger

Follower

Leader

Source: Strategic Planning Institute Profit Impact of Market Strategy (PIMS) database http://www.fool.com.au/2013/05/21/google-stock-buy-it-and-hold-it-for-life/ http://blog.bazaarvoice.com/2008/11/14/how-to-stop-losing-market-share-to-amazon/

9

PwC

Market fragments into niches as feature displacement drives differentiation

10

PwC

Digital channels reduce overall cost to serve allowing asset re-investment

Observations from ‘real life’ •  50% reduction in time to resolution •  30% reduction in call volume •  60% reduction in abandonment •  70% of answers from community •  50% reduction in call center staff •  Content creation costs reduced by $

+1M

11

Redistribution Opportunity

Cost

Per

‘Ans

wer

’

$5

$3 $2

PwC

Efficiencies in talent acquisition & retention

12

100,000 data scientists solving commercial and public sector problems

PwC

Process efficiencies can feed back into high cost business functions, like marketing

13

PwC

Process optimization through collaboration

http://www.societyone.com.au/how-does-it-work 14

PwC 15 http://www.wired.com/design/2013/05/threadless-disney-t-shirts/

Sponsored design competitions for Thor, Monsters U, Iron Man, Muppets…

Faster innovation cycle time: Threadless

PwC

Warning: the days of taking a BAU approach to digital are well and truly over

Now Digital BAU Growth

16

Physical Only

Multi-Channel

Online Only

$100

Customer Value

$175

$45

Physical Only

Multi-Channel

Online Only

Churn

Loss in store & branch

sales

Growth

Channel growth in line with market

Physical Only

Multi-Channel

Online Only

Same # customers, lower value

Growth

Aggressive online

growth

Growth

Digital-driven store

sales

PwC

Develop organizational structure from siloed to integrated

17

Strategy Production Distribution Sales & Marketing Digital

Digital

Strategy Production Distribution Sales & Mrkt Advocacy

PwC

5 Characteristics of digital organizations

18

Strip out time & cost from innovation

Data is the lifeblood

Create networks not hierarchies

Experiment to reduce uncertainty

Digital is not an appendage

PwC

Thank you! Jason Juma-Ross National Leader, Digital Intelligence @ideasoc jason.juma-ross@au.pwc.com

19