GOVERNANCE WORKSHOP PANEL DISCUSSION Enterprise Resilience in the Age of Disruptive Technologies Mr Shivaji Das Partner and Global Head, Public Sector Consulting Practice, Frost & Sullivan
34 years While we are living longer Life Expectancy - Global 71 years 1920 2012
67 years Organizations are finding it difficult to survive long enough.. Average lifespan of a company listed in the S&P 500 index 15 years 1920 2012
Three of the key factors bringing about this disruption Technology Business Model Changing Workforce
We are facing simultaneous confluence of maturity of several technologies Automation / Robotics Renewable Energy Gene Splitting / Nano Technology Social Media Big Data / Data Analytics Internet of Things 3D Printing
Example of disruptive technologies -1 Sensorization of Things Voice Touch Eye Facial Eye Tracking Analytics in cars Pay with Face Face Scanners Gaze controlled Mobile Eye Games Scrolling phone Tactical identification System Personal Digital Assistant Speech Recognition Voice Search (Google) Holographic Touchscreen AMOLED Touch Screen Sensory Tracking Technology in Consumers Devices Gesture Gaming 3D Air gesture control of Mobile devices 3D modelling on computer Mind Controlled Games Gesture Mind Remotes for TV Mind Controlled Cars Brain But enormous data collection results in concerns about privacy and cyber-attacks
Example of disruptive technologies - 2 Artificial Intelligence Artificial Narrow Intelligence These are machines that has expertise in one field or area. Example: Chess engines, Google Search engine Artificial General Intelligence These are machines whose intelligence matches the human intelligence across any field Example: IBM Watson (closest known example) Artificial Super Intelligence These are machines that are more intelligent than any human across any field. Example: None yet Can machines replace human scrutiny?
New business models are changing the economic landscape On demand economy Pay as you go Content as a Services Shared Economy Platform-centric Asset-lite Analytics as a Service IoT Services Product as a Service
B2B New business models are changing the economic landscape Ownership Access Industry Company Product Service Aviation GE (GE Aviation) Manufacturer of aircraft engines and systems IT HP Hardware provider Automotive Healthcare Consumer Goods Daimler (Car2Go) Toyota (Dash) GM (RelayRides) Biotronik Babolat (Play Pure Drive) Manufacturer of cars Medical device manufacturer Fitness equipment manufacturer Value added services such as Flight Efficiency Services through data analytics Separation of Products and services business Carsharing services on a pay-per-usage system Health-monitoring system Smart technology allows data analytics and value added services GE s fuel-use data analytics Improved focus on services Shared-usage model new mobility services Allows physicians to monitor patients devices Customers can improve their game performance while Babolat receives useful data to improve product quality
The nature of workforce is transforming with growth in freelancing No of Freelancers (Mn) Spend Freelancers (USD Bn) CAGR: 6% CAGR: 4.1% 104.6 896 1130 89.11 2010 2014 2010 2014
Best Practice Example Crowdsourcing will permeate more organizational functions, seamlessly integrating online and offline components. 1 2 Crowd Primary Users 5 Crowdsourcing Flow Model Crowdsourcing and co-creation platforms: Sample online hubs and campaigns Promotion-driven sites attract social media and brand enthusiasts Donation or prize exchange Paid Service Volunteer Service Coca-Cola s Liquid and Linked strategy mixes online and offline campaigns with prize components, promoting brand conversation. Welchs s Pass the Glass campaign donated to charity for online video postings B2Cs Challenge-driven sites attract amateur enthusiasts and hobbyists Innocentive awards prizes to crowdsourced problem solvers. Nokia s Ideasproject invites innovation ideas, sharing revenue with successful idea submitters B2Bs and B2Cs 4 Galaxy Zoo projects recruit amateur astronomers to help classify galaxies, greatly speeding up project progress. The Good Judgement Project uses volunteer forecasters to predict real world events, resulting in predictions more accurate than the US CIA s Nonprofits and government agencies 3
In such environment, even technology stars are struggling to survive
THE LONGEST SURVIVING COMPANIES ARE RATHER LOW- TECH
Kongo Gumi Founded 578 AD, Japan Business - Construction
Hoshi Ryokan Founded 718 AD, Japan Hospitality Chateau de Goulaine Founded 1000 AD, France Winery
Principles of Long lasting Companies Vision and Values specific yet not caged Unity and Trust Conservatism and Flexibility: Continuous Innovation Customer focused The sense of Ownership
SO HOW MANY OF OUR FIRMS WILL SURVIVE IN THE NEXT FIVE YEARS?
Among the current crop of S&P 500 companies
. 3/4 th s will disappear by 2020
WILL YOUR ORGANIZATION BE AROUND IN 2020?
CASE STUDY: HOW GOVERNMENT ORGANIZATIONS ARE ADAPTING TO THIS CHANGING WORLD?
The Outsourcing Chain Case Study: Even government organizations are adopting new business models and technologies Defense Space Travel Complete Outsourcing Sandy Springs, Atlanta Government Prisons Policing Data Collection Strategy IT HR
Case Study: adopting unique financing concepts Government issues bonds to raise fund for objective (e.g. reduce crime) Goals met? (Y/N) Y Government pays bondbuyer hefty returns N Bond buyer loses money Government benefits from lower long term costs Government suffers from high costs of future funding
Case Study:. and many other hitherto unimaginable innovations Chartered Schools USA Conditional Cash Transfers Mexico, Brazil Volunteering based resource allocation Tax no-filing Singapore UK Prison reforms REDD Dominican United Republic Nations Paying to stay healthy NHS, UK
Case study: By 2050, most governments will be rather fluid NGOs Media Citizens Idea Generation & Policy Development Technology Platforms Execution/ Implementation Businesses Regulation, Monitoring & Evaluation Think Tanks Government Watchdogs International Orgs.
Case study: Features of such a society will follow post-modern principles For all pillars of society, their role and scope will expand or contract on a case by case basis Policies/ Ideas could come from anywhere Implementation, Execution and Monitoring largely outsourced Government will still retain the scepter of authority
Case Study: The view of the government will depend on the perspective From the outside. as a virtual authority as a platform provider as a vendor manager Government From the inside. Performance Driven Lean, Fungible, contract based Constantly balancing short term and long term goals Heavily networked Technology intensive
HOW TECHNOLOGY AFFECTS CORPORATE GOVERNANCE?
Technology & Corporate Governance Technology for Stakeholder Interactions Virtual Voting Virtual AGMs Virtual Motions Board Governance Software/ Risk Management Software Technology leading to risks cyber security, breach of data privacy, reputational damage, loss for investors
Technology & Corporate Governance Management Compensation Disclosures
Technology & Corporate Governance Whistleblowing
Technology & Corporate Governance Monitoring & Evaluation Reporting Reporting Coverage Financial/ Social/ Environmental Risk Management Augmented Compliance & Audit
Technology & Corporate Governance Managing Risks arising from New Technologies Cyber attacks Service Outage Investor Loss
Technology & Corporate Governance Managing Risks arising from New Technologies Cyber attacks Service Outage Investor Loss
Technology & Corporate Governance The future employee 24/7 sensor attached, augmented and monitored?
Thank You Aerospace & Defense Automotive Transportation & Logistics Business & Financial Services Chemicals, Materials & Food Consumer Technologies Environment & Building Technologies Electronics & Security Energy & Power Systems Healthcare Industrial Automation & Process Control Information & Communication Technologies Measurement & Instrumentation Minerals & Mining Public Sector & Government