1 Leading the Disruptions How to deploy future-proof innovation strategies Confluence - 2016 Dominique Cerutti Altran, Chairman and CEO
Apr 15, 2017
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Leading the DisruptionsHow to deploy future-proof innovation strategies
Confluence - 2016
Dominique CeruttiAltran, Chairman and CEO
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R&D rules the planet
The most powerful engine of economic expansion…
…Fueled by Top 500 spenders…
0%
10%
20%
30%
40%
50%
60%
70%
80%
0 1000 2000 3000
500 companies concentrate ~61% of the global R&D spend
100 companies concentrate ~40% of the global R&D spend
Tail of top 2500 R&D spenders
2014, % of global R&D spend
Average company lifespan in S&P 500
33 years
1995 2015 2025
25 years
15 years
…Which are ever more challenged
-25%
-40%
R&D growth: 160% of GDP growth over the period
$630B(2,0% of GDP)
R&D spend
OECD, 1982-2014, $B and in % of GDP
$920B(2,1% of GDP)
$1 150B(2,4% of GDP)
1994 2004 2014
R&D rules the planet
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Innovate or abdicate
True innovators breakingthrough to the top…
…Creating massive disruptions…
$15B R&D investmentsFocus on autonomous driving and electric mobility
…Generating battles of giants
Tesla model S market share(US premium market, m/s in volume, 2012-15)
Uber market share(North America business taxi market, %, 2014-15)
#1
20152012
3%
26%
January 2014
March 2015
August 201415%
30%
50%
Rank 2011 2016
1
2
3
4
5
6
7
8
9
10
New entrants in 2016 top 10
Top 10 market capitalization
+23 ppt.
$4.5B R&D investmentsLeading the digital era
$12.3B R&D investmentsFocus on disruptive innovation (e.g. robotics, autonomous car)
Innovate or Abdicate
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Breakthroughtechnologies
Time to market obsession
Digital disruption
Differentiationfor competitive
separation
Draconian regulations
Global or marginal
R&DShift
1
6
35
2
4
The 6 R&D TyranniesThe 6 R&D Tyrannies
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The 6 R&D Tyrannies: the automotive industry
Breakthroughtechnologies
Time to marketobsession
Digital disruption
Competitive separation
Draconianregulations
Global or marginal
1
6
35
2
4
Internet of Things
Modularization
Car Sharing
Autonomous Cars
Industry 4.0Globalization
Disruptive players
Zero emission
Total safety
The 6 R&D Tyrannies: the automotive Industry
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Core vs. Context: the innovation circle
Source: Geoffrey A. Moore, Altran
COREProcess creates true differentiation and separation from competition
CONTEXTAll other processes
Mission CriticalProcess shortfall creates
serious and immediate risk
EnablingAll other processes
Differentiation
Ris
k
Flo
w o
fin
no
vati
on
Deploy differentiation at
scale
Deploy differentiation at
scale
ManageMission-Critical
processes at scale
ManageMission-Critical
processes at scale
Invent differentiated
offering
Invent differentiated
offering
Extract resources to repurpose for
Core
Extract resources to repurpose for
Core
CORE vs CONTEXT: the innovation cycle
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…so what?CORE vs CONTEXT: Key takeaways
Focus on
COMPETITIVESEPARATION
with a deliberateinnovation strategy
Declare your
CORE
Leverage a new
SOURCING MODEL
1 2 3
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Altran: sharpened business models to address Core & Context challenges
From deep domain expertise…
28 000 Altran experts: engineers & scientists
Product & Systems Engineering
Complex Systems Engineering
Intelligent Systems
Mechanical Engineering
Advanced Test & Simulation
Product Design & Innovation
Manufacturing & Operations
Supply Chain & Logistics Excellence
Manufacturing Techno. & Automation
Manufacturing Ops & Optimization
Civil Works, Infra. & Environment
Network Transformation & Performance
Digitization
Industrial Big Data Analytics
Digital Infra. & Governance
Digital Applications & Media
Product Lifecycle Management
Industrial Enterprise
Program Management
Security, Safety, Regulation & Risk
Enterprise Performance & Quality
Technology & Engineering Strategy
ALTRAN: Sharpened business models to address CORE/CONTEXT challenges
28 000 Altran experts: engineers & scientists
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Altran: sharpened business models to address Core & Context challenges
… to differentiated business models
CORE CONTEXT
Critical
Enabling
Innovative Product Development
To access new technologies and explore disruptions
World-Class Centers
To accelerate, leveraging the best expertise, IP and assets on the most advanced technologies
Industrialized GlobalShore®
To leverage cost-effectivetalent pools across the
planet
ALTRAN: Sharpened business models to address client CORE/CONTEXT challenges
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Partner to accelerate on Core: next generation E/E architecture
WHO:
A leading European car OEM
WHY:
Ambitious growth plans and exponential complexity of automotive features require urgent rethink of traditional E/E architectures to optimise costs and time to market
INNOVATION STRATEGY:
Partner and co-innovate to accelerate and create disruptive IP
Partner to accelerate the CORE: next generation E/E architecture
APPROACH:
Move from a complex architecture with 100+ dedicated ECU to a centralized domain
25% integration cost savings and 35% less cabin weight
Co-investment to develop a new software platform to manage the complexity of
embedded systems
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Transform to optimize Context: full variant application development
WHO:
A leading European car OEM
WHY:
Significantly optimize the cost of development and time to market of full variant applications
INNOVATION STRATEGY:
Leverage outsourcing on CONTEXT activities
Transform to optimize CONTEXT: full variant car development
Co-construction of a nearshore R&D center
to developfull variant applications
APPROACH:
Greenfield set-up of an ODC for activities related to variant applications development with Altran
Strong reduction of TCO and unlocking of critical resources
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Thank You