Digital Transformation Lunch Event - From Digital Disrupted to Digital Disruptor

PowerPoint Presentation

Digital Transformation

Kevin Bouwmeester12016 Apigee. All Rights Reserved. From Digitally Disrupted to Digital Disrupter

dramaticThe industrial revolution wasTools

Communication

Urbanization

DIGITAL REVOLUTION HAS HAPPENED IN One generation vs 10 generations FOR THE INDUSTRIAL REVOLUTIONThats why the new gen is so different THEY dont even see a change

Urbanization takes hold people moved from agrarian/farming to urban/factory New tools with power supplied by machines rather than by people and animalsNew communication via telephones, mail service, transportation

Industrial Revolution: 1760 1990

In two centuries daily life changed more than it had in the 7,000 years before

The digital revolution isdramatic

Chet, Scott, I dont love the data on the previous slide for dramatic and fast . what think of this data instead? dramatic on left fast on right. its very on pointFor every 100 people in the world there are

95mobile subscriptions

40internetusers

32active mobile -broadband subscriptions

25social media usersand fastTime to reach 100 million users world wide

TelephoneMobile PhoneWWWiTunesFacebookInstagramCandy Crush Saga187819791990200320042010201275 years16 years7 years 6 years, 5 months4 years, 6 months2 years, 4 months1 year, 3 months

http://www.businessinsider.com/it-took-75-years-for-the-telephone-to-reach-100-million-users-and-it-took-candy-crush-15-months

DIGITAL REVOLUTION HAS HAPPENED IN One generation vs 10 generations FOR THE INDUSTRIAL REVOLUTION

DRAMATIC:1. HALF THE WORLD NOW HAS A MOBILE PHONE; ACTIVE MOBILE CONNECTIONS ALMOST EQUALS WORLD POPULATION2. MORE THAN 40% HAVE INTERNET ACCESSFAST3. 750,000 new mobile users every day -- or 9 new users every second4. 10% growth every year in each of the last 4ANECDOTENew internet users are likely to onboard for the first time via a messaging app

IF THE INDUSTRIAL REVOLUTION BROUGH URBANIZTION, THE DIGITAL REVOLUTION BROUGHT APPIFICATION

The digital revolution hasbeen a personal one so farImmediate

Intelligent

z5kmInterconnected

How we liveWe know how to be digital as consumers

How we workWe are moving slowly to be digital as businesses

customers

partners

employees

A digital business creates value by delivering digital experiences

Not just about building apps about changin the way we do business.

Accelerating digital business

Culture being digital

Code delivering digital

Community amplifying digital

SO WHATS THE NEW?

Those of us who remember a world before 1995 are different from all the ones who are coming of age now - digital natives - with new habits

An example of how consumers CREATE value from common information on web, USE digital bits (git hub, mash up apps, etc.) and SHARE/AMLIFY through social network/community

Takeaway > the digital consumer thrives on CULTURE of open information, COMMUNITY of sharing & collaboration and CODE that is free and extensible.

Culture: Being Digital

New Reality: Two-speed Enterprise

DIGITAL EXPERIENCE

SYSTEM OF ENGAGEMENT

CRM

ERP

Data Warehouse

Database

SYSTEM OF RECORDESB /Integration

Data Lake

Old technology will not get you there.

WHY? A MISMATCH IN THE SPEED OF SoRs AND THE INTERACTION LAYER THAT MOVES AT THE SPEED OF THE APP STORE

So What are companies doing in practice to unlock the digital opportunity?

Implement systems of engagement the two speed enterprise

However

HAVING A TWO SPEED ENTERPRISE IS NOT ENOUGH

Helen (H) - removed the data lakefixed ESB/integration

relabel with New Reality: Two speed enterise

put the whole backend in a box :-)

more icons for the connected experience Helen (H) - make gray bar (system of record) thinner

make blue bar thinner

red layer fatter

eliminate ESB/integration lauyer and make it one of the items/icons in the backend gray layer

Would be cool if when the red layer comes in theres some kind of cog or connection between the two speeeds??

changed CONNECTED EXPERIENCE TOCONNECTED DIGITAL EXPERIENCEFrom control to contextProcesses

guiding principles interaction patternsRoles

small x-functional teamsend-2-end responsibilityCommunication

transparent and openpull vs. push

ExampleSROLESAPIGEE doesnt have Large functionally specialized engineering teams -- WITH OVER THE WALL approach DEVto-QA to- OPS to SUPPORT

RATHERSmall x-functional teams tasked with end-2-end problem solving BETTER QUALITY code/product, brings CUSTOMER FOCUS - builder (engineer) close to the end user (customer)

COMMUNICATIONA pull model as opposed to push WE USE wikis, hipchat, slack

PROCESSEESInstead of rigid processes we have a set of guiding principles to help teams align, move fast, and deliver at speedCommon CSSCommon terminologySet of interaction patternsLinking (components and teams)

Community: Amplifying digital

Creating and participating in ecosystems is how value gets shared and amplified

Your product and service will be a part of a community or an ecosystem --\open to others, of your choosing

New Reality: Digital value chain

B2C

B2E

B2BUserAppDeveloperAPIAPI TeamBackend

customers

partners

employees

NEED TO ENABLE THE ENTIRE DIGITAL VALUE CHAIN.

DIGITAL NATIVES DONT HAVE TO THINK ABOUT THIS IT IS SECOND NATURE PART OF THE DIGITAL CULTURE

B2B B2C and B2E

AND YOU HAVE TO CONSIDER EVERYTHING ACROSS THE DVC HOW DATA FLOWS, HOW COMMUNICATION HAPPENS, HOW SECURIY HAPPENS

What to do?Roles small x-functional teams / end-2-end responsibilityProcesses- guiding principles / interaction patternsCommunication transparent and open & pull vs. push

From an army of workers to a network of makers

customers activatedusers as product managersCUSTOMERS ecosystem innovationextend and complementPARTNERS on boarding & analyticsx-company innovationINTERNAL DEVELOPERSenterprise data at coreunlock core valueSYSTEM OF RECORD

Facebooks valuation is because of the content created by its users.Uber is better because your Spotify music can play when you get into an Uber car.Walgreens photo printing was successful because 43 apps sent traffic through it.

Your imagination is not as strong as the collective imagination of your colleagues, partners and customers.

Become a platform. Let others innovate. They will be better, and you will be better.It is the tide that raises all boats. It is 2 Speed IT. It is the contract that binds independent innovations together.

Core - Your value is data and customers in your SoR (You must ensure that all assets are getting unlocked)

Within an enterprise, it enables independent innovation. The old idea of org structures is dead. It doesnt matter what he boxes and lines and organizational structure of who owns whom. The organization just needs to be able to deploy those resources to get the right set of priorities acted on quickly.(products and services can no longer be built only in the IT dept., - data and analytics no longer locked in silos)

With partners and developers, it enables new consumption models.

With partners, it creates eco-system models.

Users, customers are activated: app store reviews, social and business networks (e.g. , flavorprint, Nike women network

From the POV of data and analytics - some analytics that will be done locally, and there will be some that will be done centrally probably by IT. But the analytics and the data sets needs to be accessible to the larger organization in order to spur innovation and to change the way the company thinks and operates.

All of the culture changes described earlier are critical for this model to work

Chet Kapoor (CK) - Need a few bullet pts to show up

Here are a few. need to make em better

system of record unlock core value

internal developers innovation across company

partners ecosystems- extend and complement

userscustomers activatedapp store reviews

Helen (H) - will send bullets for her in a few minutes

Code: Delivering digital

22

New Reality: Digital scalefrom millions of users to billions

from limited data to massive data capture and usage

From connecting humans to programs to programs to programs

Digital scale is about there are billions of them going to be accessing your systems not tens of millions. limited data to massive amounts of data (even between 2014 and 2014 the total terabytes of mobile internet data increased 10 fold to almost 25 billion terabytes*) is about connecting programs to other programs. This is a fundamental shift from humans connecting to programs. In the past you had the luxury of assuming think times of several seconds when designing systems for concurrency and scale to handle tens of millions of humans. Programs dont have think times.

Availability @ scaleEfficiency @ scaleIntelligence @ scale

You need a fundamentally new approach to engineering systems that can handle digital scale.

-*http://www.cisco.com/web/solutions/sp/vni/vni_forecast_highlights/index.html

Globally, mobile data traffic will grow 10-fold from 2014 to 2019, a compound annual growth rate of 57%.Globally, mobile data traffic will reach 24.3 Exabytes per month in 2019, up from 2.5 Exabytes per month in 2014.Global mobile data traffic will grow 3 times faster than Global fixed IP traffic from 2014 to 2019.Global Mobile was 4% of total IP traffic in 2014, and will be 14% of total IP traffic in 2019.Global mobile data traffic grew 69% in 2014.Globally, mobile data traffic in 2019 will be equivalent to 12x the volume of the entire Global Internet in 2005.Globally, the average mobile connection will generate 2,807 megabytes of mobile data traffic per month in 2019, up from 359 megabytes in 2014.

Chet Kapoor (CK) - Need to work on this..more data..

Every Interaction Matters

ENGINEER FOR PARTITION TOLERANCE AND AVAILABILITY

When network failure happens, customer experience suffers

The system must continue to function when network partitions occur

REACT WITH SPEED AND AGILITY

Impossible to produce the diversity of digital-world things in the lab

Focus on deployment over testing; build redundant paths and retries

Fault tolerancePrograms must function even when errors occur

Continuous deliveryBite-size innovation

Monitor Monitor across all programs

We live in a world where every customer interaction matters. Customer interactions depend on networks of programs. one failed or slow program ends up bringing down the entire network and creates a poor customer experience. You cannot afford to have API calls fail. You cannot afford to have API calls take too long.

1>>But stuff happens, systems go down or go bad.The system must continue to function when errors occur you must engineer for tolerance. the system needs to continue to function in spite of external errors (shopping carts, etc.)

2>>It is impossible to engineer for precision at massive scale. Think about trying to get your SLAs absolutely precise across global scale. you have to build in a margin of error and be ok with that level of imprecision.

3>>BECAUSE YOU cannot produce the diversity of digital world things in the lab & Cannot test for all conditionsYOU MUST embrace failure - dontobsess over testing every scenario Focus on deployment over testing slow rollout in production (essentially test in production with low traffic ) Build redundant paths and retries - if this path fails take different paths; if something doesnt work, retry

Accelerating digital business . . .

Being Digital Culture

Code Delivering digital

Community Amplifying digital

SPEED MATTERS

Most importantly it is about speed.

Speed matters you can do the 3 Cs and do it in 18 months and it all becomes irrelevant, because you still get disrupted.

How can Apigee help?

Apigee EdgeSytem of Engagement

DIGITAL EXPERIENCE

SYSTEM OF ENGAGEMENT

CRM

ERP

Data Warehouse

Database

SYSTEM OF RECORDESB /Integration

Data Lake

Old technology will not get you there.

WHY? A MISMATCH IN THE SPEED OF SoRs AND THE INTERACTION LAYER THAT MOVES AT THE SPEED OF THE APP STORE

So What are companies doing in practice to unlock the digital opportunity?

Implement systems of engagement the two speed enterprise

However

HAVING A TWO SPEED ENTERPRISE IS NOT ENOUGH

Helen (H) - removed the data lakefixed ESB/integration

relabel with New Reality: Two speed enterise

put the whole backend in a box :-)

more icons for the connected experience Helen (H) - make gray bar (system of record) thinner

make blue bar thinner

red layer fatter

eliminate ESB/integration lauyer and make it one of the items/icons in the backend gray layer

Would be cool if when the red layer comes in theres some kind of cog or connection between the two speeeds??

changed CONNECTED EXPERIENCE TOCONNECTED DIGITAL EXPERIENCEApigee EdgeSupporting your Digital Value Chain

B2C

B2E

B2BUserAppDeveloperAPIAPI TeamBackend

customers

partners

employees

NEED TO ENABLE THE ENTIRE DIGITAL VALUE CHAIN.

DIGITAL NATIVES DONT HAVE TO THINK ABOUT THIS IT IS SECOND NATURE PART OF THE DIGITAL CULTURE

B2B B2C and B2E

AND YOU HAVE TO CONSIDER EVERYTHING ACROSS THE DVC HOW DATA FLOWS, HOW COMMUNICATION HAPPENS, HOW SECURIY HAPPENS

What to do?Roles small x-functional teams / end-2-end responsibilityProcesses- guiding principles / interaction patternsCommunication transparent and open & pull vs. push

Apigee EdgeEvery Interaction Matters

ENGINEER FOR PARTITION TOLERANCE AND AVAILABILITY

When network failure happens, customer experience suffers

The system must continue to function when network partitions occur

REACT WITH SPEED AND AGILITY

Impossible to produce the diversity of digital-world things in the lab

Focus on deployment over testing; build redundant paths and retries

Fault tolerancePrograms must function even when errors occur

Continuous deliveryBite-size innovation

Monitor Monitor across all programs

availability @scale

We live in a world where every customer interaction matters. Customer interactions depend on networks of programs. one failed or slow program ends up bringing down the entire network and creates a poor customer experience. You cannot afford to have API calls fail. You cannot afford to have API calls take too long.

1>>But stuff happens, systems go down or go bad.The system must continue to function when errors occur you must engineer for tolerance. the system needs to continue to function in spite of external errors (shopping carts, etc.)

2>>It is impossible to engineer for precision at massive scale. Think about trying to get your SLAs absolutely precise across global scale. you have to build in a margin of error and be ok with that level of imprecision.

3>>BECAUSE YOU cannot produce the diversity of digital world things in the lab & Cannot test for all conditionsYOU MUST embrace failure - dontobsess over testing every scenario Focus on deployment over testing slow rollout in production (essentially test in production with low traffic ) Build redundant paths and retries - if this path fails take different paths; if something doesnt work, retry

New reality

MusicBookConsultingRetailCPGCleaningServicesCarFoodMiningWeightlessIntermediateHeavyB2BB2B2CB2C2030s2020s2000sNature of ProductNature of MarketDigital will DISRUPT every industrySource: Gartner - CEOs and CIOs Must Assume That Every Industry Will Be Digitally Remastered, 2014, Raskino

CEOs and CIOs Must Assume That Every Industry Will Be Digitally RemasteredPublished: 20 August 2014 Analyst(s): Mark Raskino

if you're a music company today, no aspect of your business is not digital...

The pace of digital acceleration

Healthcare

Travel and Leisure

Retail

Media and Entertainment

Financial / brokerage

Telco / CommunicationsAPI Call Volume

HBR - Productivity Is Soaring at Top Firms and Sluggish Everywhere ElseEven within industries the pace varies. The Gap Between the Most Productive Firms and the Rest is Growing

Helen (H) - reordered the industries along the API call vuumenaxis on the bottom

that line should probably have an arrow to the right?

CodeCultureCommunity

Thank you