Challenge to Change

Challenge to Change
The impact of technology
David Smith
Chief Executive
Global Futures and Foresight
Copyright © 2014 Global Futures and Foresight Limited
‘Change is the only constant’
Heraclitis
Philospher
540 – 480 bc
‘Change is the only constant’
Looking back at the future
“interesting toys, but no military value”
Marechal Foch, talking about airplanes in 1911
Talking picture
"Who the hell wants to
hear actors talk?"
H. M. Warner,
Warner Brothers, 1927.
The Jazz Singer was released on
6th October 1927. The first widely
distributed ‘talkie’ and the dawn of
the new era of cinema began.
Mega trends
1.
Globalization
2.
Changes in work
3.
Demographics & people
4.
Technology
5.
Consumption
6.
Environment
http://csr-news.net/main/2008/08/04/megatrends-and-the-future-of-corporate-social-responsibility/
With change comes risk
• Root causes of declines in
public companies’ market value:
• ~60% strategic risks.
• ~ 30% operational risks.
• ~10% financial risks.
"the assumptions on which the
organization has been built and is
being run no longer fit reality.“
Peter Drucker
Source: Society of Actuaries (2013) : Enterprise Risk Management: Looking Forward
Shifting principles
• Technology overload
– Not well-equipped culturally and
emotionally for so much technology.
• Telemetrics and Smartphones
– The Principle of Loss Minimization.
• Precaution
– Precautionary Principle long-term shift.
http://4.bp.blogspot.com/-HBm3TfJzSQI/T_1uxqqDyUI/AAAAAAAADis/GSrOvMp_3rA/s1600/im-watching-you-focker.jpg
– Technology moves beyond what we
can knowingly see and understand.
Shifting principles
• Market of one
– Better analytics, and viral forms of
human connectedness.
– Craft reliable probabilities around small
groups - single individual or event.
• Risk transference
– No certainties in future only probabilities.
• Resolution & prevention
– Claims hard to remedy with money-only.
http://www.vitalbodies.net/site/images/stories/uploads/Caveat_Emptor_640x360_0.png
http://rlv.zcache.com/number_one_billiards_ball_sticker-p217117246426112368envb3_400.jpg
Structured to unstructured
– From:
• Structured data/tactical
decision-making/reactive
business model.
– To:
• Unstructured data/strategic
decision-making/preventive
model.
Half expect new sources and techniques in data
analytics to be the key competitive differentiator.
PWC survey
TECHNOLOGY & COMMUNICATIONS
Change is coming
Technology trumps all?
• Technology is ‘...likely to
have the most direct (and
perhaps instant) impact
on how businesses
operate and how they are
organised.’
Economist Intelligence Unit
http://www.21stcenturynews.com.au/wp-content/uploads/2013/06/innovation-technology.jpg
http://www.economistinsights.com/sites/default/files/downloads/EIU_Agent%20of%20change_WEB_FINAL.pdf
Technology
1943
1960
1963
1967
1970
1971
1975
1976
1979
1984
1985
1988
1990
1995
1999
2007
2010
2012
2013
2014
First electronic mainframe
First mini computer
Push button telephones
GPS for commercial use
VCR and dot matrix printers
e-mail, iNTEL chip & laser printer
Microsoft formed and IBM’s first portable computer
First Apple computer.
Compuserve connectivity service
Windows arrives
Mobile phones & video
Personal Computers
Internet growth
Social Media
Mobile internet
iphone
iPad
Home 3D Printer
Home drones
VR glasses
First we do things differently
Then we do different things
Adapt or die?
• Nearly 40% worry that
‘...their organisations
will be unable to keep
up with technology
change and will lose
their competitive
edge.’
http://www.burrus.com/wp-content/uploads/2012/08/98476609.jpg
http://www.managementthinking.eiu.com/sites/default/files/downloads/EIU_Humans%20&%20machines_FINAL_WEB.pdf
The rate of failure
• Only 71 companies remain
today from the original 1955
Fortune 500 list.
"the assumptions on which
the organization has been
built and is being run no
longer fit reality.“
Peter Drucker
http://notes.andrewromano.net/post/93865094/fortune-magazine-cover-images-1951-1955-it-was
http://www.briansolis.com/2013/02/no-business-is-too-big-to-fail-or-too-small-to-succeed-sobering-stats-on-business-failures/
http://www.businessweek.com/stories/2008-07-31/what-drucker-would-say-about-mervynsbusinessweek-business-news-stock-market-and-financial-advice
• Nokia was a phone company
in a world that had stopped
buying phones.
We now buy small computers
that also make calls.
http://www.theatlantic.com/business/archive/2013/09/why-nokia-died-nobody-buys-phones-anymore/279337/
Failure to adapt, blindsided by the PC
• Digital Equipment
was satisfied with
its dominance in the
core minicomputer
market.
• Slow to adapt to
new markets for
personal
computers.
http://technologizer.com/2009/06/14/fifteen-classic-pc-design-mistakes/
http://www.analytics-magazine.org/may-june-2012/577-corporate-decision-making-why-do-large-once-successful-companies-fail
Technology and communications
‘For a list of all the ways technology has failed to improve the
quality of life, please press three.’
Alice Kahn.
•
•
•
•
•
•
•
•
•
Growth of the Internet
Cloud services
Social Networks
Avatars & the 3D world
Mobile devices
Predictive analytics
3d printing
Drones
Robots
Mobile technology
• Exploding Mobile Marketplace.
• 7bn mobile-connected by 2015.
• 5bn broadband users by 2016.
• Data traffic to increase 26-fold.
• Speeds increase 10-fold.
• Network capacity up 20-25 times.
– Chinese telecom, Huawei, predicts
traffic levels will rise x500 by 2020.
http://siliconangle.com/files/2012/01/consumerization-of-IT-3.jpg
Mobile first
• Mobile users surpass desktop
users in 2014. Morgan Stanley
• Just 33% of websites are
optimised for mobile Experian
The days of just ‘keeping up’ with advances in mobile
technology are over for firms.
PwC
http://www.iabuk.net/about/press/archive/consumer-mobile-usage-to-increase-dramatically-by-2015
http://www.blogging4jobs.com/wp-content/uploads/2011/12/mobile-recruiting-hr-best-practices1.png
http://www.experian.co.uk/marketing-services/news-digital-trends-2013.html
Mobile in context
•
•
•
•
•
Where am I?
What am I doing?
Who’s around me?
Where am I going?
What would help me?
– Where
– What
– Who
Social Business
• 57% of CEOs identify
social business as a
top priority.
• Global market for
social-media platforms:
– $767m in 2011.
– $4.5bn by 2016.
http://www.techpageone.com/wp-content/uploads/2013/02/Social-Media-at-Work.png
Social media and data analytics are the technologies
that pose the greatest risk to business models.
http://techcrunch.com/2013/09/23/64-of-organizations-have-invested-in-or-plan-to-invest-in-big-data-tech-but-only-8-have-started-using-it-says-gartner/
http://www.deloitte.com/view/en_US/us/Services/additional-services/governance-risk-compliance/explore-strategic-risk/index.htm?id=gx:sm:fb:srsurv:awa:grc:101013
http://www.weknownext.com/trends/game-on-how-gamification-is-changing-business
http://www.intuition.com/technology-centre/enterprise-knowledge-sharing/
Social Insurance
• 1.85bn people use social media.
• 70% of firms use social tech.
• $1.3tn pa of new value. McKinsey
• In Germany Friendsurance is a
pioneer of social/P2P insurance.
– Personal and commercial.
‘...insuring in self-selecting groups
can improve the quality of the risk.’
http://blog.premiersocialmedia.com/wp-content/uploads/2011/06/social-enterprise2.jpg
Gartner
http://www.newmediatrendwatch.com/world-overview/137-social-networking-and-ugc
http://www.jouve.com/en/emerging-business-models-and-impact-digital-technology-our-society
http://www.economist.com/blogs/schumpeter/2012/06/peer-peer-insurance
The Internet is evolving
•
•
•
•
•
•
Reduced the gap between insurance providers and customers.
Showcase products.
Reach market rapidly - opportunities in the global insurance industry.
Reduces administration and marketing costs.
Monitor risk.
First notification of claims.
This is only the beginning
http://www.authoritydomains.com/blogs/wp-content/uploads/2011/01/world-500.jpg
Internet of ‘Things’
• 99.4% of the 1.5
trillion physical
objects in the
world are still
unconnected.
• Creates $14.4tn
of value to 2023.
OECD
http://www.cmswire.com/images/internet%20of%20things.jpg
http://www.fastcoexist.com/1681508/the-internet-of-things-could-save-9-billion-tons-of-carbon
http://www.pcadvisor.co.uk/news/network-wifi/3435214/internet-of-everything-to-unlock-96-trillion-by-2020-cisco/
http://www.huffingtonpost.com/2013/04/22/internet-of-things_n_3130340.html
Internet of ‘Everything’
• One trillion sensors embedded in humans and
machines by 2020.
• We will each own 50 internet connected devices.
http://www.tylersfox.com/blog/?tag=supraorganism
http://www.industrytap.com/the-hybird-age/3651
Big Analytics
• Big data to grow 40% each year.
• Demand for analytical talent exceeds
supply by 50%-60% by 2018.
• The United States alone faces a
shortage of 140,000 to 190,000
people with deep analytical skills.
– As well as 1.5m managers and analysts to
analyze big data and make decisions based
on their findings.
http://cpat-jacksonwhelan.netdna-ssl.com/wp-content/uploads/2008/06/061009.jpg
Source: http://slashdot.org/topic/bi/shortage-of-b-i-talent-a-critical-hurdle-in-quest-to-leverage-big-data/
The knowable future
• Tomorrow's technology will
know what we want before we
know we want it ourselves.
• 68% of consumers aren't okay
with targeted advertising.
‘…they don't like having their online
behaviour tracked and analyzed.’
It’s all about
TRUST
http://www.cnn.com/2012/06/18/tech/predictive-technology-future/index.html
Predictive insurance
• 85% of U.S. personal
lines insurers are
committed to predictive
modeling.
http://firedream.com/wp-content/uploads/2013/02/Predictive-Modeling-Image-240-px-wide1.jpg
Insurance transforms from reactive to
a preventative business model
http://www.businessinsurance.com/article/20120311/NEWS08/303119994
http://www.towerswatson.com/research/6291
http://press.pwc.com/GLOBAL/foreign-insurers-bank-on-new-business-models-to-succeed-in-china/s/6ea3c75e-76d1-47bf-bede-24f71794fb56
Hyper personalisation
• Crop insurance company.
• Crunches mass data from climate
models, weather measurements
and billions of soil observations.
• 50tb of live data are in its systems.
• Policies for specific plantings.
• Paid on specific events – not impact.
• Founded by ex-Googlers.
The Climate Corporation
If covered weather event happens
you get paid automatically.
http://futureoftech-discuss.msnbc.msn.com/_news/2011/10/13/8306533-insuring-against-extreme-weather?lite
Preventative Apps
• Apps and peripheral devices
monitor conditions, submit
insurance claims, shorten time
underwriting.
• Two Japanese car insurers
developed app to reduce claims.
• Warns of possible accidents
and to establish culpability in the
event of a crash.
https://d13uygpm1enfng.cloudfront.net/article-imgs/en/2012/07/20/AJ201207200064/AJ201207200065M.jpg
http://www.japantoday.com/category/national/view/car-insurance-companies-develop-smartphone-app-aimed-at-reducing-claims
Engaging with technology
• Artificial Intelligence’s
– “Weak” AI by 2019.
– We will interact with them
like humans. (Voice, gesture etc.)
• e-technology advanced:
– More strategic focus.
• Face & voice recognition.
• Holographic by 2015
• Haptic by 2020
Source: http://www.supplymanagement.co.uk/EDIT/Featured_articles_item.asp?id=16394
Engaged through technology
By 2019
• 3D virtual reality displays,
• Embedded in glasses & contact lenses.
• Connect with other people, computers,
the Web and virtual reality. Kurzweil
• Linking our senses with other people’s
senses or machines.
Driverless cars
• Autonomous vehicles likely 75%
of cars on road by 2040.
The Institute of Electrical and Electronics Engineers
– Transportation-as-a-service model.
– Renting on hourly rates becoming
a viable option.
The end of consumer
automotive insurance?
http://ww1.hdnux.com/photos/15/27/65/3505476/3/628x471.jpg
http://www.bbc.co.uk/news/technology-19726951
http://www.theatlantic.com/technology/archive/2012/09/driverless-cars-would-reshape-automobiles-and-the-transit-system/262953/
http://www.globalpost.com/dispatch/news/science/120923/driverless-cars-mid-century-our-likely-future-says-technology-associati
3D Printing
The next trillion $ industry
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•
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•
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A $3bn industry by 2018.
Airbus - 3D printed planes by 2050.
First “printed home” built.
Commercial buildings will follow.
Transform manufacturing, insurance,
distribution, logistics, retailing, food,
surgery …
Source: Futurist Speaker, May 2012
http://www.futuristspeaker.com/2012/05/transforming-the-future-of-the-insurance-industry/?goback=%2Egde_145854_member_118622940
Co-workers, brokers?
REEM
Acroid 1
Shakira 2
Clooney 1
Digital business
• Technology is moving
between 3-5 times faster
than management.
(McKinsey MD Dom Bartoon)
• Just 39% of execs
believe their companies
have practices to adapt to
digital. (Forrester)
http://4.bp.blogspot.com/-kkYV2ELTd0k/Ue5xNVjVSZI/AAAAAAAADx0/13if9_QJ_Nk/s1600/disruption.jpg
http://www.bloomberg.com/news/2014‐01‐23/davos‐stalked‐by‐tech‐disruption‐as‐intel‐to‐wal‐mart‐challenged.html
http://solutions.forrester.com/disruption‐sl?evar1=51174:943187&cmpid=PR:soc:tw:DDSL_Hub3
Business models
• Inside-out to outside-in
• From transaction to
engagement
• Gamification
• Standardisation vs
personalisation
• Hyperpersonalisation
• Consumer in context
• From historic to
predictive
• Structured reactive to
unstructured
preventative
• West to East to west
• Event driven insurance
• Countering complexity
Innovation chaos ahead
•
70% say innovation is a top three
priority for Financial Services.
•
40% lack organisational mechanisms to
facilitate innovation.
•
Many lack processes to prioritize
innovation initiatives and allocate
resources.
•
Cloud computing is a great way to test
and trial services without feeling any
limitation of scale.
http://www.swecr.org/business-innovation-and-the-solo-inventor-considered.html
Source: Booz, 2010 http://www.booz.com/media/uploads/BoozCo-Innovation-Financial-Services-Customer-Centricity.pdf
Reorientated business models
• Shift from ‘inside-out’
perspective to ‘outside-in.’
• A shift to a world of:
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–
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–
–
–
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Web-based.
Decentralised.
Front-office-oriented.
Mobile.
Touch-screen.
Consumer-oriented.
Co-creation
• Informed by data analysis.
http://www.theharteofmarketing.com/wp/wp-content/uploads/2011/02/customer-centric-outside-in-reorg-harte.jpg
http://www.insurancetech.com/management-strategies/insurance-companies-embrace-emerging-tec/232200668
Gamification
• Over 50% of firms will
gamify their innovation
processes by next year.
• Increasing public
participation in co-creating
products and services.
http://www.yourcarma.com.au/article/News/Speed-Camera-Lottery.aspx?id=59
http://mashable.com/2011/07/28/gamification/
Potential impact on brokers
• Disintermediation: the future of
brokers
• Transformation, not extinction.
– Retail was not killed by the internet,
but has evolved.
• Insurance is tailored products, of
negotiation and judgment.
– The domain of the human being.
http://www.briantracy.com/images/products/originals/reinvention_detail.jpg
• Data is raw material but context is
needed - brokers can provide
this.
Source: http://www.insuranceday.com/insday/disintermediation-the-future-ofbrokers/278264.htm?queryText=disintermediation&searchResult=true
Better relationships
• By 2020 new and more
sophisticated platforms will
cut out waste, facilitating
better communication and
fewer errors.
– Policyholders access instant
information about their policy.
– Claims tracking and reporting
online become commonplace.
Source: Insurance Times ‘E-Broking’
http://www.insurancetimes.co.uk/Journals/Newsquest/Insurance_Times/E-Broking_22_July_2010/attachments/EBroking_Jul10.pdf
Keys to the future
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•
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Innovation
Skills
Technology
Enterprise data
management
• Predictive analytics
• Distribution
• Customer centric
• Insight rich
• Process optimised
• Organisational
change
• New management
thinking
• Flexibility and agility
• Collaborative culture
Rework processes
• Internally, processes must be
reworked to enable people
who know how to best use
the technology.
• This may require...
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–
http://blog.zenoss.com/wp-content/uploads/2012/02/The-End-of-Silod-Monitoring-Silo-Collapse.jpg
Restructuring of workflows.
Perhaps even departments.
New management thinking.
Organisational flexibility/agility.
Collaboration.
Tomorrow’s successful insurer
• Built for change.
• Innovative.
• Customer-centric.
• Channel fusion.
• Insight rich.
• Process optimized.
Imagine it
If you want to get ahead – you need to look ahead
Thank you

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[email protected]
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