Digital Thinking and Innovation

CT109-3-1

Innovation in Digital Trends

 Introduction

This topic discusses how the traditional ways are pushed aside by the
digital technologies, and the trends that are well accepted and continue
to emerge

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 Learning Outcomes for the Lecture

• At the end of this lecture you will be able to:

– Explain how a business world is reshaped by digitization
– Understand the role of the Internet in the business world
– Explain the categories of digital trends

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 Content

• Digitization of Businesses
• Digital Trends:
– Big Data, Cloud Computing and Mobile Internet
– Software-Defined Anything
– Outsourcing and Crowdsourcing
– Prosumer Economy
– Long Tail
– Digital Finance
– Collaboration
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 Mind Map

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 Learning Outcomes for the Lecture

• At the end of this lecture you will be able to:

– Explain how a business world is reshaped by digitization
– Understand the role of the Internet in the business world
– Explain the categories of digital trends

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 A Business World Reshaped by Digitization

• As social media platforms have connected people from all over the
world with each other, time and space are no longer barriers to
communication
– Telegram: 400 million users
– Sina Weibo: 500 million users
– WeChat: 500 million users
– Facebook: 1.2 billion users
– WhatsApp: 1.6 billion users

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 A Business World Reshaped by Digitization

• With the rapid evolution of digital technologies, the flood of

information sweeps all over the world at virtually no cost
• Promotes closer links:
– between humans
– between things
– between humans and things
• Individuals, companies, industries and countries will be affected
when the revolution on the horizon arrives.

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 Kodak: Missing Its Own Moments

• Kodak (more than 130 years old giant) was the undisputed king
of photographic film, with two thirds of global market share.
Kodak created many “firsts”:
– It came out on top in the imaging and photographic film market
– It created the world’s first digital camera using a Charge Coupled
Device (CCD), a major piece of technology for digital imaging
– The first company to flame out in the imaging industry
• It failed to capture its own moments:
– To keep abreast of digital technologies

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 Kodak: Missing Its Own Moments

• How do you take pictures today? Where do you store the photos?

• Why do you think Kodak didn’t make it through?

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 Learning Outcomes for the Lecture

• At the end of this lecture you will be able to:

– Explain how a business world is reshaped by digitization
– Understand the role of the Internet in the business world
– Explain the categories of digital trends

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 The Ever-Changing Digital Business World

• The leaders in the digital age can easily fall behind

– Top 4 Tech giants Microsoft, Intel, HP, and Yahoo have been dethroned by
Apple, Google, Amazon, and Facebook
• Many companies have fallen because of a resistance to reform; or
have undergone disruptive changes
– Nokia and Blackberry ended up selling their assets
• Market Players are inspired by the Internet

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 Learning Outcomes for the Lecture

• At the end of this lecture you will be able to:

– Explain how a business world is reshaped by digitization
– Understand the role of the Internet in the business world
– Explain the categories of digital trends

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 The Digital Trends

Big data, cloud computing, mobile internet - focuses on changes in infrastructure

Software-defined anything - focuses on changes in productivity

Outsourcing and crowdsourcing - focuses on changes in production organization

Prosumer economy - focuses on changes in forces of economic growth

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 The Digital Trends

Long tail - focuses on changes in competitive landscape

Digital finance - focuses on changes in financial entities and technologies

Collaboration - focuses on changes in operations models

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 The Digital Trends

Big data, cloud computing, mobile internet - focuses on changes in infrastructure

Software-defined anything - focuses on changes in productivity

Outsourcing and crowdsourcing - focuses on changes in production organization

Prosumer economy - focuses on changes in forces of economic growth

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 Big Data

• Big data emphasizes not the amount of data but rather using new
thinking to interpret the data, with the help of the Internet
– Spotify, an on-demand music providing platform, uses Big Data Analytics,
collects data from all its users around the globe, and then uses the analyzed
data to give informed music recommendations and suggestions to every
individual user.
– Amazon Prime that offers, videos, music, and Kindle books in a one-stop
shop is also big on using big data.

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 Cloud Computing

• Cloud computing - an
environment that provides
resources and services accessed
via the Internet
• Computing over the Internet
• Virtualized Computing
Platform
• Scalable use of computing
resources
• Pay-per-Use concept
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 Mobile Internet

• If the PC has changed our work style and ways of production, then the mobile
Internet is reshaping our lifestyle.
– Jack Ma, President of Alibaba

• When you get lost in an unfamiliar place, Waze on your mobile phone will
guide you to your destination
• Wherever you are, you can browse the news, read a novel, tweet, play games
or watch movies on your mobile phone or tablet
• When you need a taxi, you can use Grab app on your mobile phone to find a
taxi nearby
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 The Digital Trends

Big data, cloud computing, mobile internet - focuses on changes in infrastructure

Software-defined anything - focuses on changes in productivity

Outsourcing and crowdsourcing - focuses on changes in production organization

Prosumer economy - focuses on changes in forces of economic growth

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 Software-Defined Anything
• “Software-defined anything” is identified as one of the “Top 10
Strategic Technology Trends” as a technology with the
potential for significant impact on enterprises
• In an era where young entrepreneurs are keen on disruptive
innovation, “software-defined anything” is not merely a
concept but a growing trend towards disrupting traditional way
of thinking
– Examples include: Amazon, the world’s largest bookseller; Netflix,
the largest video service by number of subscribers; Apple’s iTunes,
one of today’s dominant music companies;
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 The Digital Trends

Big data, cloud computing, mobile internet - focuses on changes in infrastructure

Software-defined anything - focuses on changes in productivity

Outsourcing and crowdsourcing - focuses on changes in production organization

Prosumer economy - focuses on changes in forces of economic growth

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 Outsourcing and Crowdsourcing

• The idea behind outsourcing is “focus on what you do best and let others
do the rest”
• Crowdsourcing encourages consumers and users to take charge and
pursue their goals
Table 1: The difference between Outsourcing and Crowdsourcing

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 Outsourcing and Crowdsourcing

• Wreckage searching: When MH370 went missing, DigitalGlobe, an

American satellite mapping company, set up Tomnod, a crowd-
sourcing initiative, encouraging internet users to scan and tag
images of more than 1200 mi2 of ocean to locate the missing plane
• Mapping: User editors made hundreds of millions of map edits and
updated Waze’s map to reflect the changes on the ground

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 Outsourcing and Crowdsourcing

• Software testing: Applause (formerly uTest), an American venture-

funded software and application testing company collaborates with
more than 140,000 crowdtesters and debuggers, to remove all the
possible bugs in the software applications
• Knowledge: Wikipedia has over 4 million entries in English, and
other standalone Wikis in 282 languages totaled up to 21 million
entries, 32 million users and 1.2 billion edits. Wikipedia is ranked
among the ten most popular websites on the Internet

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 The Digital Trends

Big data, cloud computing, mobile internet - focuses on changes in infrastructure

Software-defined anything - focuses on changes in productivity

Outsourcing and crowdsourcing - focuses on changes in production organization

Prosumer economy - focuses on changes in forces of economic growth

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 Prosumer Economy
• Competition is getting fierce
globally
• Companies are under great
pressure to offer more and better
products and services at lower
costs and higher speed
• A game change: from Supply
Chain to Prosumer Economy

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 Prosumer Economy
• Prosumer Economy: Consumer demand play a leading role
reshaped into the demand chain
– The term prosumer is a portmanteau of the words 'provider' and
'consumer‘
– A prosumer is an individual who not only consumes but also
produces

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 The Digital Trends

Long tail - focuses on changes in competitive landscape

Digital finance - focuses on changes in financial entities and technologies

Collaboration - focuses on changes in operations models

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 Long Tail

“We can summarize the secrets of creating a prosperous long tail

market in two sentences: Provide the customers with all the products;
Help me to find it.”
—Long Tail Theory

• Companies focus more on achieving economies of scale

– Average costs decrease with the increase of production
• A company experiences diseconomies of scale if its profits decrease
with expanded production
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 Long Tail and Economy of Scale

• Refers to the large number of products that sell in small

quantities, as contrasted with the small number of best-
selling products
• Companies achieve economies of scale by increasing
production and lowering costs - costs are spread over a larger
number of goods. Reduction in per unit cost of production when
production volume increases e.g.
Fixed cost of $1000 needed to produce 10 units of Pencil A
a) Therefore, Cost = $100 per pencil
b) To produce 50 units of Pencil A, Cost = $20
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 The Digital Trends

Long tail - focuses on changes in competitive landscape

Digital finance - focuses on changes in financial entities and technologies

Collaboration - focuses on changes in operations models

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 Digital Finance stopped here

• In traditional payment models, customers can’t gain access to the

settlement systems of all banks given the cost and efficiency
restrictions
• Third-party payment companies integrate the gateway interfaces and
build a bridge between numerous merchants and banks
– PayPal
– Alipay
– Google Wallet

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 The Digital Trends

Long tail - focuses on changes in competitive landscape

Digital finance - focuses on changes in financial entities and technologies

Collaboration - focuses on changes in operations models

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 Collaboration

• Collaboration: When a group of people come together and

contribute their expertise for the benefit of a shared objective,
project, or mission.
– A photographer working with a designer to create a cover image
– A technology department regularly meet with the marketing team to plug
away at quarterly goals

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 Collaboration
• Collaboration Tools:
– Google Drive
– Google Meet
– Skype
– GoToMeeting
– Microsoft Teams
– One Drive
– SharePoint
– Yammer
– Many, many more…
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 Group Discussion

• Watch and discuss the content of the video:

– https://www.youtube.com/watch?v=5sKb8IM7veA

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 Group Discussion

• Watch and discuss the content of the video:

– https://www.youtube.com/watch?v=JMLsHI8aV0g

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 Summary

• Digitization of Businesses
• Digital Trends Affecting the following areas:
– Infrastructure
– Productivity
– Production Organization
– Economic Growth
– Competitive Landscape
– Financial Entities and Technologies
– Operation Models
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 Questions and Answer

Q&A
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 Next Lecture

• Innovation through Artificial Intelligence

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