Salo IFP I3E 2014 China Sanya Keynote presentation Future of Value based digital business: Perspectives on organizations, processes and people

13th IFIP I3E conference on digital services and information telligence
27-30 November Sanya, Hainan, China
Value based digital business:
Perspectives on organizations,
processes and people
Jari Salo
Professor of Marketing
Head of doctoral program
Adjunct Professor (Aalto University School of Business)
Associate Editor of Journal of Information Technology Research
Oulu Business School
University of Oulu, Finland
Department of Marketing
© Professor Salo
P.O. BOX 4600, 90014 University of Oulu • tel. (08) 553 2905, fax (08) 553 2906 • www.oulubusinessschool.fi
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Presentation available
http://www.slideshare.
net/jarisa
Table of contents
1. Laying the foundation for Value based digital
business (VBDB)
• Concept of value
• VBDB: Strategy and technology perspective
• VBDB: Change in organizations and processes
2. Data rich environments
3. Mobile commerce
4. Social commerce/media
5. Change in digital everyday of people
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Value
• Value equation = Benefits (tangible/intangible) –
Costs (price, total costs)
• + CALT (comparison of alternatives)
• + Over life time evaluations (e.g. CLV)
Holds for all people - organizations, individuals
and employees
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Value based digital business (VBDB):
People
• Not the process
• Not the strategy
• Not the philosophy
• Not the technology
• Not the organizational abilities / competencies / resources
• But, knowing who the people are and personalizing as well
as delivering the digitally created and mediated experience
to them
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Strategic change
1. Understanding possibilities created by new
technologies (location based and context aware mobile
EB, social commerce/media, augmented/extended
reality)
2. Understanding change in individual experiences
(customer, employee, manager)
3. Creating and leading the experience
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Technological change (a)
1. Ecosystems and SW development are evolving
rapidly (competing clouds, SW business models e.g.
Paas, Laas, IaaS, SaaS, better GUIs, data analytics
for big data, social and virtual worlds)
2. Understanding different digital ecosystems (platform
competition, externalities, spillovers, networks,
migrations and integrations). How to excel in the
platform competition?
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Technological change (b)
3. Rapid development and use of mobile technologies
(tablet, smartphones, apps, location based SW within
organization and between organizations, augmented &
extended reality)
4. Public and private (company) internal data mashups
(data and functionality integrated, possibility to integrate
different apps/functionalities, databases to present
information in one seamless service to customer (single
view Dominos Pizza (Pizza builder for customers +
mobile apps, Pizza Tracker).
Technological trends from 1-4 enable creation of and
management of compelling experience
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VBDB: Change in organizational practices (a)
• Enterprise SW - Internal performance
management
• Big management data (influencing employees &
managers e.g. data visualization and analytics)
• From internal history data towards social behavior data
• Increasing productivity of employees and industrial
partners while deepening the customer experience and
lowering costs (cost to serve customers) (enterprise
SW – mobile functionalities + B2B integrations)
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VBDB: Change in organizational practices (b)
• Identifying relevant internal management data from
different channels (use of service, posting opinions, liking
& comments) and using that data to understand
employees and management in order to systematically
and continuously use data in influencing employee job
satisfaction, effectiveness of workforce, HRM practices in
general and at the same time creating positive
experiences that increases workforce commitment
(employee turnover decrease) while managing the overall
experience chain and at the same time measuring and
automating this process
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Data rich environments
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Its the way we analyze and utilize data
rich environments
(rather than big data itself)
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Data rich environments: Organizational
perspective
• Potential is obvious for managers but what kind of
infrastructure is needed? How to govern / manage
the exploration and exploitation of data?
• Should managers in-house or outsource data
collection, analysis and action to companies like
IBM? Or use in-house big data analytics (with SAP)
like eBay?
• How to manage effectively ”with cloud computing
and real-time data processing” ? - Amazon
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Data rich environments: Process
perspective
• Who is taking care of the process? Data unit?
• Who has access to the data?
• How it can be utilized internally or in B2B
relationships or with government agencies?
• How is data visualization / dashboards designed and
utilized?
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Data rich environments: Industrial
perspective
• Trucks
• Busses
• Dumpers (e.g. used to carry iron ore in mines)
• Autonomous vehicles
• Telematics (outsourced e.g. to Volvo)
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General retailing
example
• Lush sales team can change the
layout of their stores in response to
real-time sales data.
• "Not only has this helped to tap in to the ambitious spirit of staff -
competing over which store can do best in terms of sales and
performance - but it also gives them information to improve the
customer experience."
• For example, if staff notice a particular bath bomb is selling well
with a certain shampoo, they can change the store layout so the
items are closer together.
(Source BBC)
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Data rich environment - consumer
tracking
• Digital economy aspect: selling digital footprint
• Ethical considerations
• Privacy issues
• Security issues
• Legal issues - who owns the footprint?
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Data rich environment - research
Research team and infrastructure issues:
• Big data computing power & storage
• Big data SW and experienced staff (data based
programming skills etc.)
• Time-series analysis / econometric modelling
researchers
• Data visualization techniques
• Data rich environment analytics SW (Campalyst, Klout,
SAS, SAP, IBM etc.)
• Theoretically interesting and relevant questions?
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Mobile commerce
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Management view
• What is value of mobile?
• What are the costs and revenues in mobile are IT
leaders pondering?
• Mobile browsing (pads + other devices) and
popularity of apps
• Bring your own device (BYOD)
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Business potential
• Apps are used to drive content and services to
customers (B2C/B2B)
• Using data rich environment which is collated via
apps can drastically improve value to consumers.
• Businesses that develop data tracking and analytics
will improve delivery to customers, increasing
customer loyalty and acquisition
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Business potential
• More efficient development and shorter PLC with
cloud + integrated enterprise SW for mobile apps and
services.
• Expanded user interface models including richer
voice and video.
• Appification (freemium / in app purchases)
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Context / location awereness
• Apple's iBeacon technology - in-store
Bluetooth location trackers designed to
interact with smartphones - enables
retailers and app publishers to identify
people individually the moment they
enter a shop
• iBeacon available with many vendors
• Similar to iJack service developed by
Teliasonera in early 2000 which they
abandoned in 2004
Sales/deals
80%
Content relevant to interest/
Location 62%
Swirl 2013
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Research potential
• Location specific services – consumer reactions /
emotions e.g. in retailing
• Are Bluetooth e.g. iBeacon services influencing
consumers in the way we planned?
• What creates successful apps? Why Angry Birds,
Class of Clans etc. are so popular?
• How is company internal use of mobile apps and
mobilization of processes influencing bottom line? Or
influence to B2B/Industrial relationships between
companies?
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Social commerce / media
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Organizational perspective
• Social collaboration, sharing and processes are
becoming more commonplace
• Who governs social commerce / media?
• Digital business / marketing department? Public
relations?
• Focus in internal use of social media (knowledge
sharing – social extranet / FB), customer facing or
both?
• How value is measured ?
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Process perspective
•Two months ago, Urban Research, a
fast-growing and popular fashion, home
and lifestyle retailer, launched an
experiment in Tokyo’s Parco Ikebukuro.
•Allows customers to stand in front of
one of two 60-inch screens, select
clothing items they want to try on and
see themselves dressed in the products
within seconds.
•Customers’ movements are
represented fluidly on the screen in 3D
and customers can use an integrated
iPad to take pictures of themselves and
share them with friends on social
networks.
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Process perspective
• Virtual service allows companies to sell product
without the burden of managing inventory, directly
from their existing e-commerce back ends.
• In the Wearable Clothing pop-up, to purchase an
item, customers need only scan a QR code and click
‘buy.’
• Virtual changing is also relatively effortless for
customers, saving time and lowering resistance to
trying on clothes — especially among men.
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Process perspective
• Social login - Facebook or other SNS enabled social
commerce by given retailer
• Authenticate identities
• Pull customer information from particular SNS
• Tailor / customize in real-time the retailers website
• Social labs study showed that in 2012 only 6% of top 500
online retailers used social login
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Too much of Facebook?
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People perspective
• Social media addiction
• Social media privacy
• Trust towards companies / individuals
• Selling / using digital footprint
• How is analytics information used and stored?
• New mediums and their safe use devianArt,
Instagram, Whatsapp, Path, Pinterest - Learnist,
Medium, Impossible, Sulia, Sharebloc etc.
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Research
• How are social commerce / media influencing path
to purchase?
• How social influence can be commercialized?
• Mobile social?
• Emotions and social commerce?
• Multichannel operations?
• Increasing number of services and platforms?
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Change in digital everyday of people
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Change in ”digital” everyday of people?
Key question to ask - What kind of experiences are sought after in
general and specifically by customers, employees, managers?
• Search online recipes - by the ingredients / goods online
(Foodie.fm) delivered to your home/office
• Music (Spotify)
• Phone - video (Skype)
• Movies, TV-series (Netflix)
• Health and wellbeing (Polar activity bracelets)
• Coffee machine / tea boiler with LCD display and times
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Key question to ask - What kind of experiences are sought after in
general and specifically by customers, employees, managers?
• Online learning (younger generation)
• Young people share sports / events of everyday to Instagram, FB
and Flickr
• Sharing baby pictures?
• Smart houses (Bluetooth, infrared enabled devices, digital locks,
fire alarms e.g. Nest Labs bought by Google)
• Smart cars (telematics run by e.g. Volvo)
• Routine work done by computers / robots while idea generation/
creativity left to humans (Eero Aarnio said without ideas and
designs industrial machines wouldn't produce anything)
What's next?
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Digital Nomads (work follows where person goes)
• Working for the same company as before but
leaving country for somewhere nice (weather, cost
of living)
• Popular places for Finns are Thailand e.g. Chiang
Mai or Bali Indonesia
• Using internet to do the work (and renting via
Airbnb)
• Remote connections to enterprise SW e.g. mobile
ERP/CRM/SCM/Innovation
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• Privacy,
• Security,
• Trust,
• Identity theft / cheats and
• FB /SNS Addictions
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Other VDBD important topics not covered
specifically here:
• Open data, SW, innovation
• Crowdsourcing/funding
• Gamification, digital economy
• Internet of everything (people, things,
information, place) / machine to machine
internet
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To summarize
• Value is the key (increasing benefits, decreasing
costs, providing better than alternative experience
over life time)
• People and their experiences are to be maximized
• VDBD is strategic change from ”me too” IT to value
based IT
• VDBD is technological, organizational and process
change from ”lets have it” to lets use it wisely
• VDBD is leveraging data rich environments to create
experiences in social, mobile and web.
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Q&A !
jari.salo@oulu.fi
jari.salo@aalto.fi
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Salo IFP I3E 2014 China Sanya Keynote presentation Future of Value based digital business: Perspectives on organizations, processes and people

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Salo IFP I3E 2014 China Sanya Keynote presentation Future of Value based digital business: Perspectives on organizations, processes and people