Big Data " A Dowsing Rod to Locate Innovations?!

Markus Breunig & Godehard Gerling!

Hochschule Rosenheim und go3consulting PartG

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Big Data –

"

Modern Dowsing Rods – pure High-Tech!

!

Big Data is ...

!

...like teenage sex: everyone talks about it, nobody

really knows how to do it, everyone thinks everyone

else is doing it, so everyone claims they are doing it.

(Dan Ariely – on his facebook page)

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Agenda

!

•

Recap - Big Data

!

•

Three Horizons of Innovation & Big Data

!

•

Methodical Approaches for the Individual Horizons

!

–

Incremental

!

–

Adjacent

!

–

Disruptive

!

Volume'

Velocity'

Variety'

3'Vs''

of''

Big'Data'

GB,'TB'or'PB'

Records/Transac<ons'

Tables/Files'

Batch'

NearA/RealA<me'

Streaming'

Structured'

SemiAStructured'

Unstructured'

Type'of'

Innova<on:'

Incremental% Adjacent%

Radical%-%Disrup=ve%

Management'

Objec<ve:'

Efficiency,%

DDD%

Op=miza=on%

Business%Transforma=on%

Tools'&'

Methods:'

Score%Cards,%

Cockpits%

Canvas%Modeling,%

10-Types%

Ethnographic,%Exploratory,%

Agile%Project%Management%

Im

pac

t%

Innova=on%

Type'of'

Innova<on:'

Incremental% Adjacent%

Radical%-%Disrup=ve%

Management'

Objec<ve:'

Efficiency,%

DDD%

Op=miza=on%

Business%Transforma=on%

Tools'&'

Methods:'

Score%Cards,%

Cockpits%

Canvas%Modeling,%

10-Types%

Ethnographic,%Exploratory,%

Agile%Project%Management%

Im

pac

t%

Innova=on%

Big Data & Business Model Innovation:

"

Phase%3%

Advancing'

the'

Goals'

Phase%2%

Boos<ng'

the'

Insights'

Phase%1%

Improving'

the'

Reports'

Which%reports%are%

currently%used%to%monitor%

the%business?%

Which%ques=ons%do%the%

recipients%of%the%reports%

answer%based%on%these%

reports?%

Which%goals%do%the%report%

recipients%pursue%by%

asking%these%ques=ons?%

(How)%can%Big%Data%

improve%the%accuracy%of%

the%numbers%in%these%

reports?%

(How)%can%these%ques=ons%

be%answered%beXer%using%

Big%Data?%

(How)%can%these%goals%be%

supported%beXer%using%Big%

Data?%

Incremental Innovation:

"

Type'of'

Innova<on:'

Incremental% Adjacent%

Radical%-%Disrup=ve%

Management'

Objec<ve:'

Efficiency,%

DDD%

Op=miza=on%

Business%Transforma=on%

Tools'&'

Methods:'

Score%Cards,%

Cockpits%

Canvas%Modeling,%

10-Types%

Ethnographic,%Exploratory,%

Agile%Project%Management%

Im

pac

t%

Innova=on%

Big Data & Business Model Innovation:

"

Adjacent Innovation:

"

Optimizing the business model

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Business%

Model%

The Business Model Canvas

Revenue Streams

Channels

Customer Segments

Value Propositions

Key Activities

Key Partners

Key Resources

Cost Structure

Customer Relationships

Designed by: Date: Version: Designed for:

designedby: Business Model Foundry AG

The makers of Business Model Generation and Strategyzer

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?

is your business more

Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing) Value Driven (focused on value creation, premium value proposition)

sample characteristics

Fixed Costs (salaries, rents, utilities) Variable costs Economies of scale Economies of scope

Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines?

channel phases 1. Awareness

How do we raise awareness about our company’s products and services?

2. Evaluation

How do we help customers evaluate our organization’s Value Proposition?

3. PurchaseHow do we allow customers to purchase specific products and services?

4. Delivery

How do we deliver a Value Proposition to customers?

5. After sales

How do we provide post-purchase customer support?

For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?

For whom are we creating value? Who are our most important customers?

Mass Market Niche Market Segmented Diversified Multi-sided Platform

What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they?

examples

Personal assistance Dedicated Personal Assistance Self-Service Automated Services Communities Co-creation

What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? catergories Production Problem Solving Platform/Network

What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams?

types of resources

Physical Intellectual (brand patents, copyrights, data) Human Financial

Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquairing from partners? Which Key Activities do partners perform?

motivations for partnerships

Optimization and economy Reduction of risk and uncertainty Acquisition of particular resources and activities

What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying?

characteristics

Newness Performance Customization “Getting the Job Done” Design Brand/Status Price Cost Reduction Risk Reduction Accessibility Convenience/Usability types Asset sale Usage fee Subscription Fees Lending/Renting/Leasing Licensing Brokerage fees Advertising fixed pricing List Price Product feature dependent Customer segment dependent Volume dependent dynamic pricing Negotiation (bargaining) Yield Management Real-time-Market

strategyzer.com

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Business%Model%Canvas%

!

Itera=ve%&%Incremental%

!

Doblin‘s%10-Types%

Alexander Osterwalder:

"

Keely‘s 10 Types of Innovation can be Matched

to Key Aspects of Business Models

!

•

Result of investigating > 3000 innovations

!

•

Combinations of types may be present in any

innovation

!

•

Successful & sustainable innovations

"

combine > 3.5 innovation types

!

Each Innovation Type is Comprised of

"

Multiple Innovation Tactics (112 in Total)

!

We have Identified the Data-Driven Innovation Tactics

!

(Example: 1

st

_{Four Types of Innovation)}

_!

Profit Model

"

"

Network

"

Structure

"

Process

"

o

AdASupported'

o

Auc=on%

o

Bundled'Pricing'

o

Cost%Leadership%

o

Disaggregated'Pricing'

o

Financing%

o

Flexible'Pricing'

o

Float%

o

Forced'Scarcity'

o

Freemium'

o

Installed%Base%

o

Licensing%

o

Membership'

o

Metered'Use'

o

Microtransac=ons%

o

Premium%

o

Risk%Sharing%

o

Scaled%Transac=ons%

o

Subscrip<ons'

o

Switchboard'

o

UserADefined'

o

Alliances%

o

Collabora=on%

o

Complementary%

Partnering%

o

Consolida=on%

o

Coopera=on%

o

Franchising'

o

Merger/Acquisi=on%

o

Open%Innova=on%

o

Secondary%Markets%

o

Supply'Chain'Integra<on

o

Asset%Standardiza=on%

o

Competency%Center%

o

Corporate%University%

o

Decentralized%

Management%

o

Incen<ve'Systems'

o

IT%Integra=on%

o

Knowledge%Management%

o

Organiza=onal%Design%

o

Outsourcing%

o

Crowdsourcing%

o

Flexible'Manufacturing'

o

Intellectual%Property%

o

Lean%Produc=on%

o

Localiza=on%

o

Logis=cs%Systems%

o

OnADemand'Produc<on'

o

Predic<ve'Analy<cs'

o

Process%Automa=on%

o

Process%Efficiency%

o

Process%Standardiza=on%

o

Strategic%Design%

o

User-Generated%

Data-Driven Innovation Tactics – Examples

!

Profit Model

"

Bundled Pricing

!

Sell$in$a$single$transac-on$

two$or$more$items$that$

could$be$sold$as$standalone$

offerings.$

Iden<fy'items'to'bundle'

based'on'data'analysis.'

Predict'the'resul<ng'

changes'in'revenue.'

Analyze'the'resul<ng'

changes'in'revenue.''

Product Performance

"

Feature Aggregation

!

Combine$a$number$of$

exis-ng$features$from$

disparate$sources$into$a$

single$offering.$

Analyze'which'features'are'

mostly'used'together'in'the'

disparate'sources.'Predict'

changes'in'usage.'Analyze'

changes'in'feature'usage/

revenue/profit.'

Service

"

Loyalty Programs

!

Provide$benefits$and/or$

discounts$to$frequent$and$

high@value$customers.$

Compute'the'frequent/

highAvalue'customers.'

Analyze'usage'of'the'

product'by'these'

customers.'Decide'which'

incen<ves'to'offer.'Model'

cost/profit'changes.'

Type'of'

Innova<on:'

Incremental% Adjacent%

Radical%-%Disrup=ve%

Management'

Objec<ve:'

Efficiency,%

DDD%

Op=miza=on%

Business%Transforma=on%

Tools'&'

Methods:'

Score%Cards,%

Cockpits%

Canvas%Modeling,%

10-Types%

Ethnographic,%Exploratory,%

Agile%Project%Management%

Im

pac

t%

Innova=on%

Big Data & Business Model Innovation:

"

Customer%

Disruptive Innovation: Develop new Business Models

centered on Customers and their Behaviour

!

DDS - Salzburg

!

!

Customer%Journey%

Stanford Innovation Masters Series •

10

Prototyping is Part of a Design Process

EMPATHIZE

EMPATHIZE

TEST

TEST

IDEATE

IDEATE

PROTOTYPE

PROTOTYPE

DEFINE

DEFINE

Stanford Innovation Masters Series •

11

3 Stages of Prototyping

# of

Prototypes

What could be

What should be

What will be

INSPIRE

EVOLVE

VALIDATE

(from Moggridge)

Embrace failure

Build to think

Low resolution

Expect changes

Experiment

Targeted models

Manage Changes

Build to spec.

Integrated Models

Not Just for Products

Interactions

Spaces

The Exercise

Roll up your sleeves and Prototype!

The Task

: Get the ball from the top of the

table into the basket as many times as

possible in 45 seconds,

subject to the rules

!

Design%Thinking%

!

Itera=ve%&%Incremental%

Customer/User Journeys

"

Serve as the Foundation for New Insights

!

Observable%Behaviours%

Data%

Persona%

Source%1%

Source%2%

%Source...%

%

Data%

Sources%

Design Thinking Provides a Structured Discovery

and Improvement Process

!

The current broader use of the term Design Thinking denotes an

interdisciplinary approach

to problem solving based on

radical collaboration

. It promotes

hands-on research

(observations, enquiries, interviews, self-experiments),

ethnological

(v. statistical)

methods

,

various ideation techniques

(brainstorming, sketching, prototyping), and

repeated user and

reality feedback

by way of

prototypes

to

iteratively refine

an approach or a solution. Design

Thinking is

biased towards action

. It works under the assumption that all design activities

are ultimately social in nature and that

making ideas and concepts tangible will improve the

discussion

en route to solving a problem.

!

DDS - Salzburg

!

Stanford Innovation Masters Series •

10

Prototyping is Part of a Design Process

EMPATHIZE

EMPATHIZE

TEST

TEST

IDEATE

IDEATE

PROTOTYPE

PROTOTYPE

DEFINE

DEFINE

Stanford Innovation Masters Series •

11

3 Stages of Prototyping

# of

Prototypes

What could be

What should be

What will be

INSPIRE

EVOLVE

VALIDATE

(from Moggridge)

Embrace failure

Build to think

Low resolution

Expect changes

Experiment

Targeted models

Manage Changes

Build to spec.

Integrated Models

Not Just for Products

Interactions

Spaces

Experiences

The Exercise

Roll up your sleeves and Prototype!

The Task

: Get the ball from the top of the

table into the basket as many times as

X-Functional Team - Competence Profiles

"

!

Business'

Data'Scien<sts'

IT/Infrastructure'

How%to%use%which%

data%most%beneficial%

to%further%my%

business%model?%

What%can%be%

inferred%from%

the%data%using%

which%

algorithm?%

How%and%where%

will%the%data%be%

collected,%stored%

and%processed?%

%

!

%Score%Cards%

!

%Canvas%Modeling%

%%%%%10-Types%

!

%Design%Thinking%

!

Sta=s=cs%

!

Data%Mining%

!

Hadoop%Ecosystem%

!

Cloud%Storage%

Type'of'

Innova<on:'

Incremental% Adjacent%

Radical%-%Disrup=ve%

Management'

Objec<ve:'

Efficiency,%

DDD%

Op=miza=on%

Business%Transforma=on%

Tools'&'

Methods:'

Score%Cards,%

Cockpits%

Canvas%Modeling,%

10-Types%

Ethnographic,%Exploratory,%

Agile%Project%Management%

Im

pac

t%

Innova=on%

Conclusions

! !!

•

Innovation can be modeled in 3 horizons – Big Data

can be instrumental in all 3 of them

!

"

„DDD“ – Adjacent Innovation – Structured Disruption

!

•

Each horizon requires a specific approach

!

•

Success results from a structured combination of

well-established innovation methods and Big Data

!

Thank you for your attention!

!

Prof. Dr. Markus Breunig

!

+49 151 23344 657

"

[email protected]

"

[email protected]

"

www.fh-rosenheim.de

"

!

Godehard Gerling

!

+49 160 975 23522

"

[email protected]

"

www.go3consulting.de

"