open innovation in services - citris and the banatao …citris-uc.org/files/steve_wright.pdfopen...

Open Innovation in Servicest C &21st Century Network & beyond

Steve WrightHead of Strategic Research, BT

23rd April, 2008

Agenda

• BT business transformation• BT business transformation• 21st Century Network• Networked Services - an example• Beyond 21 CNy

© British Telecommunications plc

The changing landscape

Convergence

Regulation

Convergence

Customer ExperienceCost Transformation

TechnologyM&A Activity


Open Innovation in Servicesp21st Century Network & beyond

What our CEO is sayingRecent quarterly results to the City

We are responding by accelerating our transformation –From Telco to software driven servicesFrom Telco to software driven services

Global communicationsT diti l t l ICT i Global communications services company

Narrowband Broadband

Traditional telco ICT services

• Be number 1 for customer service

• Develop innovative services by Building the most advanced network

Creation of Openreach

p ycollaborating with our partners

• Simplify and speed up the way we work

Our global 21CN platform allows us to deliver software-driven services that are faster, more


software driven services that are faster, more reliable and simpler to use.

Group revenue - new wave driving transformation

8.0£bn CAGR30% CAGR in 4 years

6.0

7.0

+ 71%

+ 44%

Mobility & Other

4.0

5.0

+ 20%

71%Mobility & Other

Broadband

2.0

3.0

Networked IT Services

Broadband

0.0

1.0

2002/3 2003/4 2004/5 2005/6 2006/7

Networked IT Services


2002/3 2003/4 2004/5 2005/6 2006/7

Q2 2007/8 - Group revenue up 3%

5.0£bn

1.7 1.94.0 10%

3 22.0

3.0 1%

3.2 3.21.0

0.0

Q2 2006/7 Q2 2007/8New WaveTraditional


Traditional

BT Global Services - Q4 2006/7 order intake

£3.4bn(H K ) 5 $20

5yrs £578m

(Hong Kong) 5yrs $20m

with HP 7yrs $450m

with CSC 5yrs > £30m

4yrs €22m

Signed 207 new customers

15yrs £296m


Signed 207 new customers

Open innovation Innovation

Aim is to exploit innovation globally for the benefit of customers and shareholders Revenue

EBITDAEBITDACustomer experienceCost

d ti

Innovate within each stage and through the entire value chain

P t

reductionInvent Architect Validate

& ImplementOperate Productise Channels CustomersPeople

& Organisation

U i iti GC t PartnersUniversities GovernmentCustomers



21CN21st Century Network

21CN – the current network

Copper PSTNPSTN

Leased lines

Copper

DSL

PSTN

K Stream

MSANATM

Fibre

SDH

PDH access

SDHC 12

IP

MSAN

SDHaccess

SDH VC-4

PDH

VC-12

PDH access

EndUser

~ 5.5ksites

~ 2ksites

~ 1ksites

~ 400ksites

~ 100ksites

~ 15ksites

PDH


11

21CN – our global network

Multi-service access Converged Core

CopperWWW

Intelligence / application

MSANFibre & Copper

Content ISP

Wireless

IP-MPLS-WDMMSAN

End -5.5ksites

-100 sitesUser sites sites


12

A global innovation platform

3rd party services

BT services

End customer created services

BT services

Global network and computing

Common software building blocks

Servers Storage Convergedbandwidth


Unleashing innovation

BT BroadbandTalk

BT Fusion

3rd party services


Common software building blocks

BT services

Wireless Networks

Servers Storage Convergedbandwidth



Monitoring and Control

Gaming

The opportunities -Societal ChallengesSocietal Challenges• Sustainability• Healthcare• Travel & transport

3 d i


Travel & transport• Ageing population• ….

3rd party services

BT servicesIndustry transformation• Retail

Digital contentCommon software building blocks


• Digital content• Media & entertainment• Advertising

Servers Storage Convergedbandwidth • Healthcare

• Supply chain & logistics• …..


…..


Networked IT ServicesExample: HP-BT Alliance

Integrated IT and network services from BT and HP

Phil FlavinCTO BT HP Alliance, BT Global Services


Extending the integrated service delivery model

Higher

Level of service integration with real-time

information sharing

Deeper

Business value through application and business

process assurance

gg

ISD

Unified Infrastructureservice

Roadmap

Limited (transactional) integration

Number of service providers in the

ecosystem. An efficient

Wider

Two partnersCurrent

Capability

multi-sourcing platform



Beyond 21st Century Network

Transforming world – which way?

•Trusted Brand for the "Digital Lifestyle“usted a d o t e g ta esty e•Trusted Relationship in the “Digital Economy”•Personal Communications Service Provider•Enabling Platform Providers for 3rd party g p yservices•Connectivity Providers with maximum reach

…and where do we need to lead?


Our innovation trajectory

Open Eco-systems

Customer solutions& Co-innovation

O l tf

Alliances

Open platform


Our innovator’s dilemma …

CustomerCustomer

Business Vision


Open versus internal

BT R h d V t i

Research engine room – tuned to the BusinessBT Research and Venturing

Research Centres Ventures ProductiseResearch Centres Ventures

Digital Home

earc

h

cent

re

appl

icat

ions

)

s CT

icat

ions

tem

s

Development

Mobility

rate

gic

rese

sian

mob

ility

c

Mob

ility

stru

ctur

e &

a

Net

wor

ks

Per

vasi

ve IC

adba

nd a

ppli

ntel

ligen

t sys

t

Fore

sigh

t

Sec

urity

External venturingICT

Network t f tiS

tr As

IT (i

nfra

s

Bro

a In

IPR licensing

transformation

Customer experience


and systems

Visions

Business class services This vision envisages the ability to provide highly flexible end-to-end services for complex and often global business processes..

Companies like BT will develop new approaches to delivering services to

• Ad-hoc assembly of services and owned applications to meet business needsdelivering services to

customers, so that we can guarantee to meet their needs, by effectively coordinating components from any suitable source

The impact will be major improvements to the way that businessesoperate processes, resulting in improved business effectiveness

Creating customer value by managing complexity

business needs• Growth of Software as a

Service– no time/need to buy and

install

• Service Orientated Infrastructure

• End user “programming”

Open Media experience

Information networking This vision envisages a new Internet architecture focused on information and its surrounding concerns.

The concerns of individuals, organisations, communities and societies are often in conflict and lead to t ssles

Who to share with?Where to deliver information?

What is my return on investment? How to receive what I need?

What is it used for?

I don’t want access to my h t k

I want to access my

h t Open Media experience This vision envisages the emergence of the media internet which will provide customers with attractive high definition media with the level of quality of service that they need.

This will be done through developing co-operative internetworking between applications and networks,

lead to tussles.

In the future the Internet will be automatically configured in real time based on expressing concerns and capturing them in policies – providing information in a secure and trusted way.

The impact will be a wave of innovation to our industry, allowing customers needs to be fulfilled faster than at present.

Future Internet

home network

I want BT to protect me

from viruses

I want my friends to see my photos

photos

The knowledge enterprise This vision envisages the

f k l d Knowledge Infrastructureallowing dynamic changes to bandwidth and quality according to customer needs.

The impact will be a hugely increased market for media delivered over networks.

emergence of knowledge enterprises that can use the information they have to predict and out perform other players.

These enterprises will become more effective by providing the right knowledge to the right people at the right time enabling them to make the right decisions

Connecting People

Comm nication Infrastr ct re

Connecting Knowledge

Knowledge Infrastructure

The Adaptive Enterprise Vision

Business process

Grid deployment

The adaptiveenterprise

ptab

ility


right decisions.

The impact will be a restructuring of major enterprises to better understand customers, provide the best customer experience, and at the same time reducing costs.

Communication Infrastructure


Web services

Business process management

MainframePersonal

InternetClient server

Service-centric management

Horizontal architecture flexible, stable, supply matches demand

Leve

l of e

nter

pris

e ad

ap

Silos of technologyinflexible to change, over-provisioned

Time

Global innovation capabilities

UK

KUS

Israel

ChinaTaiwan

JapanKoreaUS

USIsrael

India

Taiwan

Malaysia

Academic ResearchInnovation Scanning Research Centres Academic Research Partnerships


Customer - Market focus

UK

KUS

Israel

ChinaTaiwan

JapanKoreaUS

USIsrael

India

Taiwan

Malaysia

Research Centres / partnerships


BT Labs current obsessions …

•Customer engagementg g•Co-innovation

•Sustainability•Own energy useS i•Services

•Science of services•Consumer services•Global corporateG oba co po ate

•Future Platforms•Open service ecosystems•Open informationI t lli•Intelligence

•Future Internet•Resilience•Business models


•Innovation

Open innovation

Aim is to exploit innovation globally for the benefit of customers and shareholders

Innovate within each stage and through the entire value chain

Invent Architect Validate & Implement

Operate Productise Channels CustomersPeople& Organisation

Universities Customers



Thank you!

Services and Systems Science

Objective: •Develop scientific methodology for defining compelling services with predictable levels of KPIs.

–Create systems that are ‘perfectly designed to give customers the services and experience they want’

Innovation

services and experience they want .

Benefits• Improved service design

– Reduced risk for new services Delivery Design

New ServicesNew ways to deliver services

– Improved service systems– Lower costs: better use of

people/ resources• Improved customer satisfaction/

Systems engineeringProcesses orchestrationResource co-ordination

Total Customer ExperienceCustomer Journey

Supplementary/support services

Front stageBack stage


Improved customer satisfaction/ loyalty

Internet - from 1980 to today

•Security•Mobility•Resilience•Resilience•Business model•Etc…


This is the age of the digital networked economy

• Connectivity and convergence are driving economies on a global basisB i i i f i d li i h i f

Where transactions are instant and secure, data is stored safely and collaboration is easy

• Bringing information and applications to the point of use• Communication and collaboration is key• The real benefits derive from IT that is connected• We call this networked IT


Open innovation strategy

• Businesses need to do more than the traditional models of throwingthe traditional models of throwing money at R&D

• Open Innovation Continuum –innovate at each stage and

“How a company innovates is just as important a source of sustainable market differentiationas what it innovates”g

throughout the entire value chain• Commercially driven and

accountable

Matt Bross, BT CTO

Invent Architect Validate &Implement

Operate Productise Channels People and Organisation


Implement Organisation

Internet - Users at the Centre

202019901960 2005 20201990MainframePlatforms

PersonalComputerPlatforms

UbiquitousSemantic

Trusted Platforms

1960 2005ServicesPlatforms


The Evolution of the Adaptive Enterprise

The

Business process management

Grid deployment

adaptiveenterprise

adap

tabi

lity

Web services

g

InternetClient server

Service-centric management

Leve

l of e

nter

pris

e a

MainframePersonal

Horizontal architecture, flexible, stable - supply matches demand

L

Silos of technologyinflexible to change, over-provisioned

Time


Global innovation capabilities

UK

KUS

Israel

ChinaTaiwan

JapanKoreaUS

USIsrael

India

Taiwan

Malaysia

Academic ResearchInnovation Scanning Research Centres Academic Research Partnerships


Summary

• Future Internet requirementsC iti l b i i f t t– Critical business infrastructure

– Converged– User created and unknown

• Urgent NEED for an upgrade– Global service platform– Supports innovationSupports innovation– Future flexibility


Services

NetworkVarious “patches”NAT, DPI, QoS,


Network NAT, DPI, QoS, Security …

Optics,Terabit routers

Scale: BGPv4

Small academic

TCP congestion control

Revenue - Transformation of mix

The Economist

% of revenue derived from voice – Feb 2006

© British Telecommunications plcExtract from Economist magazine published Oct 14th, data sourced from Westhall Capital

Service Firms*Knowledge Intensive andKnowledge Intensive and

Professional Service Firms– Employee skills/ knowledge– Innovation is embraced

Technology transfer between

S t Fi

– Technology transfer between industries

– Organisational knowledge/ operating routines (incl. KM)

– People basedSystems FirmsEg Banking, insurance, supermarkets, airlines

– High division of labour– Sophisticated technology

People based

Traditional ServicesSmall

– Complex organisations.– Innovation can be disruptive– Often subject to regulation– Asset based ?

– Small– skills gaps– threat from system firms– ‘low skills’ equilibrium


* Salter & Tether (2006)

Many thanks,

Any Questions?

open innovation in services - citris and the banatao …citris-uc.org/files/steve_wright.pdfopen...

Documents