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How technology is changing the world of the CMO.

Conway Kosi, SVP, Head of Digital Technology Services, EMEIA, Fujitsu.

The Tokyo Earthquake and Tsunami

On the 11th of March, 2011, the third largest earthquake ever recorded, struck 230 miles northeast of Japan…

…and the Earth literally shifted on its axis. Called the Great East Japan Earthquake it lasted an incredible 6 minutes and forced the entirety of Japan's main island (Honshu) east by 8 feet Thirty minutes after the main quake, the first tsunami hit Japan’s eastern coastline, reaching staggering heights of up to 130 feet and travelling inland as far as 6 miles. The wall of water and debris wiped out entire towns, key infrastructures and caused the Level 7 meltdown of the Fukushima Nuclear power facility.

But by far the most tragic impact was the many thousands who lost their lives that terrible day ….

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And this toll might have been far higher had it not been for the early warning that people across north east Japan received before the first violent shocks hit, and the subsequent tsunami made landfall. And thanks to the country's stringent seismic building codes and automated disaster response systems, many other casualties were avoided as high-speed trains, airports and factory assembly lines instantaneously shutdown.

Coping with the Disaster

As fate would have it my family and I had relocated to Tokyo only a few weeks prior and like most of Tokyo’s 35 million residents I was busy at work that bright and eerily still Spring afternoon. It’s difficult to overstate the experience of being on the 30th floor of an office tower as it shudders and begins to lurch backwards and forwards by over 20 feet as you try and comprehend how much longer concrete, steel and glass would withstand such forces. The sheer terror of my situation only intensified as I looked out across the city to my nearby apartment building (highlighted in this picture) where I knew my wife and 6 year old daughter would be experiencing the same emotions as furniture and personal effects were being tossed from side to side. The situation on the ground was made even more difficult as

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fixed and mobile phones were completely offline for several hours. BUT … remarkably, the Internet stayed up! And I believe what happened next has relevance for us as business people, and especially us as marketers. Born of absolute necessity, I saw people embrace and exploit the internet like never before, information gathering, assessing, collaborating and innovating in real-time to respond to the unfolding catastrophe. Given little choice ‘necessity became the master of invention’ and what people achieved by bringing together technology and human ingenuity was nothing short of miraculous …. That afternoon has long stayed with me, as a metaphorical shifting of my own axis and has had a profound impact on my perspective in both everyday life as well as in business.

A Different Type of Tsunami We now face a different kind of tsunami – the tsunami of change to which Duncan referred earlier today AND in responding these new challenges I think we can all reflect on how people responded to the Great East Japan earthquake ….

They were open-minded and hugely collaborative.

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They shared insights and information, and collected data from many sources to inform their decisions.

They formed teams of experts from many different organisations to devise solutions.

But above all, they acted with enormous speed.

Radical Agility I believe we need to find new ways of working to make that extraordinary response our ordinary behavior. Why? Because we currently operate in a two speed context.

Consumer speed, where customers are changing their habits and behaviors at a lightning pace, and …

Corporate speed, which operates on traditional monthly, quarterly or annual budget cycles.

…. And because of this, they are falling further and further behind their customers.

At Fujitsu, we are working with clients all over the world, who recognise the need for corporate speed to match consumer speed. However, there are still a significant number of organizations

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who are struggling to adapt to this kind of radical agility. AND why do I say radical agility? Because, the disruption we face today is revolutionizing the very nature of the business our clients believe they are in. For example, you might have thought you were assembling motor vehicles, but in reality you are now in the business of mobility. Customers don’t necessarily want to buy a car, what they want is a way to get from A to B. In that kind of service-based world, we all need to think of ourselves as service businesses.

Duncan earlier called this a shift away from traditional markets to Digital Arenas.

Reinventing the Business Model The first step in reinventing your business model is to fundamentally understand how your core activities are changing, This is because the disruption we are seeing does more than simply empower customers, it also creates entirely new customer segments – segments we’ve never been able to conceive of or reach before. This understanding of your core market is essential to the task of self-disruption. This is something that Fujitsu believe marketers must learn to

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lead in their own organisations. In a world where everything is changing this fast, the biggest risk is standing still. However, even in this period of digital transformation, the basic marketing concept remains constant: …to understand customers’ needs and then quickly satisfy them at a profit. That means holding on to customers you have, with new and improved services or products, …and finding new customers and generating new revenues. To make it even more challenging, we have to do this in the face of disruptive forces unlike any we have seen before. New competitors, new offers, whole new ways of thinking.

Coping with Disruption We recently commissioned a global survey of business leaders to try to understand how companies were coping with this disruption..

Our Digital Transformation Survey canvassed the views of 1,600 business leaders, including many CMOs, from around the world.

One of the things this survey found, was that marketing is seen as the leading functional area for digital transformation.

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I have always felt that I’m still a marketer at heart and I know that to do all this effectively, the modern marketer must become:

- a far more influential strategist, - as well as analyst and - technologist.

Two Roles for Marketing In this context we think marketing has two roles. The first and most important is as a leader of organisational change. This requires us to:

use the power of insights from data,

develop a wider knowledge of technology, and

create strategies to drive growth based on a deeper knowledge of our customer.

The second is to change our own marketing functions, in order to be able to leverage the new technology and tools at our disposal, without which it will be simply impossible to achieve the first role. If we as marketers are not more proactive in helping this to happen, if we do not assume a more strategic role in the company, then we risk being relegated to a tactical advertising and communications function. On the other hand, I believe that marketing is now positioned at the epicenter of digital transformation.

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The power of connected services – IoT, Cloud, AI, cyber-security - is changing marketing forever. This is not a trend that you can sit out, or play ‘wait and see’.

Those that develop these tools fastest for their businesses will gain a major advantage.

The Digital Landscape

BUT The digital landscape is very uneven.

Change is taking place at different speeds across different industry sectors.

And different sectors are being impacted in different ways.

For instance, the retail sector is focused on becoming more competitive in response to online growth.

The automotive sector is being disrupted across several dimensions, from product features (including self-driving and electric cars), to the way customers actually use cars as we move towards more vehicle sharing business models.

In financial services, new payments technologies and business models are driving a new digital agenda as in the case of Open Banking Platforms along with disruptive technologies such as Blockchain and digital currencies.

Digital Muscle

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As part of our Digital Transformation Survey we were particularly interested to find out what was motivating business leaders.

And if one size does not fit all, were there any common principles or insights we could identify?

The answer was yes.

We found that organizations which had delivered the best outcomes showed strong capabilities across the following six factors:

Leadership,

People,

Agility,

Business Integration,

Ecosystem and

Value from Data.

We call these six dimensions “Digital Muscle”.

The survey confirms that digital is not merely about introducing new technology. It is about integrating across the whole value chain, starting with customers, but also extending to partners and suppliers to enable continuous reinvention.

Like an athlete we must find ways to ensure our companies are building ALL their digital muscles, in order to enable this reinvention.

And this is why we think modern marketers are in such a key position.

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So let’s take a closer look at how marketing can play a key role across the six digital muscle groups:

Leadership

Digital Transformation is a priority of the CEO, but who better to guide and help the CEO than marketing?

Because it all starts with the customer centric vision and purpose.

With the right data acquisition and analytics, we as marketers can help set direction and set the right metrics for change.

People

Critical for success is to ensure people have the right skills for Digital Transformation, and that everyone is aligned to the customer.

Here marketers must work with HR to align the skills and behaviors of people right across the organisation.

Agility

As I previously said, organizations need to become radically agile.

One way to do this is to adopt a “Design thinking” approach, which is a concept already familiar to marketers. It is a powerful way to rethink our business and approach to transformation, because it starts with imagining life from the perspective of our customers.

Armed with the right data, marketers can play an essential role in bringing together teams that have a diverse range of business, technology and design skills, in order to innovate new products and services.

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Business Integration

Organizations need to align new digital initiatives with the current processes and IT systems. Connecting the digital and physical parts of your business is essential to open up these new opportunities.

To ensure customer-centric digital is fully integrated into our businesses, here marketing must work with IT to help design and implement the best ways to bring this together.

Ecosystems.

Marketers can lead the establishment of an ecosystem of the right partners - especially technology partners – to help embrace open innovation.

We need to think about accessing data, ideas and competencies not just from outside our own business but also from outside our own industries.

Success in the era of AI requires co-creation, where innovation is delivered more openly, with the coming together of different skills, ideas and expertise.

Doing this plays to our strength, because, as marketers, we DO see the world from outside our organisations, from the customer perspective.

Extracting Value from data.

We must drive the focus in our companies to ensure we have the right set of digital tools that can be used to transform data into value.

Organizations can use technologies like Cloud, IoT and AI to derive valuable insights and turn them into business outcomes.

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This data can come from multiple sources, including even personal information, that is appropriately shared among ecosystem partners.

Cyber Security and Trust

Therefore keeping data secure, is absolutely mission critical.

With so much Data flowing outside the firewall of an organization ….

- How can we protect these flows from cyber-attacks? - How can we make sure the data is correct and Usable? ….

without infringing on people’s rights to privacy?

Cyber-attacks are on the increase and becoming more sophisticated, we have found that 40 percent of companies have experienced serious damage due to cyber-attacks. And as digitalisation progresses, connecting everything, the risk from cyber attacks will only increase. Therefore TRUST becomes critical to the success of digital transformation.

ONLY those that get that trust formula right will be able to capture and exploit the data they need and enable the full potential of new digital capabilities.

Marketers understand the value of trust and reputations, brands and relationships. Who better to ensure trust is central to digital transformation?

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Deriving Insights from Your Data

However, even when insights are identified from data, we then need to decide what you do with them.

To monetize the insight may require a new business model, and for this we will require business skills with an entrepreneurial mindset.

The whole process, from the collection and curation of data to delivery of new business models, is a continuous cycle of learning.

Let me give you some examples of work we have done to illustrate some of these themes.

Working with clients to help transform the way we bank. A banking industry study we conducted earlier this year found that consumers are already on their way to adopting new banking behaviours, which threaten to shake up the financial structures that have held steady for so long. People are doing less of their banking in person – indeed our survey projected a 58% drop in the frequency with which people will visit a bricks and mortar bank branch. This presents a particular problem for banks faced with the challenge of customer retention – a key strategic priority for all retail banks. In Spain, we’ve worked with CaixaBank, to address this behavioral shift.

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As well as being a bank, Caixa also provides the country with its largest ATM network, dispensing as much as €32 billion across 560 million transactions a year. ATMs have served in the past as a key interface between bank and customer, but are also, of course, a prime example of the kind of physical infrastructure being squeezed out by digital services. In a radical example of co-creation Caixa invited a thousand customers to participate in an innovation project to design the ATM of the future. The result was a teller machine, based on Fujitsu technology, which incorporates a contactless reader that allows people to withdraw cash without a card by using, for example, their smartphone or other wearable device. In addition, new services can be introduced at the ATM such as bill pay or Insurance and loan applications. This is a great example of a business giving existing customers new services, but also finding new customers through innovative ideas. Working to transform the way we travel. For instance all rail operators want to get more trains on the tracks. Greater capacity means they can carry more passengers, more frequently, and provide a superior passenger experience.

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Few companies understand this better than Transport for London (TFL) – the busiest transport system in the UK. TFL needed fast and reliable Wi-Fi across its underground network, which Fujitsu were able to provide via 15,000 managed wifi points across 500 locations. This has significantly enhanced the passenger experience by offering seamless wifi coverage for their entire journey, and more reliable trains …. Why? Because, trains can now provide real-time condition-monitoring data that pre-alerts TFL to any parts that might need repairing. This wifi capability ALSO provides opportunities of generating new revenues by linking online passengers to TfL concessions and more precisely target advertising and promotions through their mobile devices. Transformation at Heathrow Airport. Another digital transformation took place while Heathrow Airport rebuilt its Terminal 2 infrastructure. We implemented a brand new integrated network to enable better collaboration between colleagues across the site. As a result of this improved communication, passengers have seen a drop in queue times and a jump in security levels. This has translated into a far superior customer experience.

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And with this comes a greater preference for them to choose Heathrow, and arrive early to eat and shop while waiting for their journeys to begin. In other words, additional revenue growth. Transforming the Post Office

Another example that shows how technology is transforming the customer experience, and enabling greater potential revenue sources, is the work we are doing to help transform the post office.

This digital transformation programme not only helps them to provide new services for their existing 17 million customers, but to find new customers and new revenue sources.

This is a vision that requires IT and marketing co-operation. Those of you that have visited a Post Office recently will know that queue times can be a challenge and many services require manual intervention. New digital systems will vastly improve these areas. At the same time the Post Office is looking at ways to exploit the boom in online services and find ways to generate additional income by extending its franchise to third parties. For example, we’re working on deploying post office services, such as delivery and collection, to new, non-Post Office locations through the development of new interfaces and automated systems.

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This means, New customers, New Channels and New Revenue. All this is not possible through the IT function alone - these new services are being designed in combination with the business and marketing functions – hand in hand with Fujitsu as their digital development partner – …..helping the Post Office become radically agile.

Transforming the 2020 Tokyo Olympics

Fujitsu, as Gold partner, to the International Olympics Committee (or IOC) is helping to transform the Tokyo Olympic Games in 2020.

The IOC is already innovating for these games by introducing many new disciplines like karate, surfing and skateboarding.

But I'm particularly excited about the work we are doing to help them innovate in ways that:

improve the experience for spectators, and

generate significantly increased revenues.

To do this, we are working across several areas.

The first is in the area of sports sensing and artificial intelligence.

Using highly sophisticated 3-D motion tracking sensors, and high-speed analytics, we will be able to:

help athletes analyse and improve their training programmes and performance in the run-up to the games.

assist judges in being far more accurate in their scoring

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during events

And, provide more immersive entertainment possibilities for spectators by using video playback of the 3-D motion sensing videos.

We are also working with the organisers to improve services to spectators, building an ecosystem with other industries, which will help to expand sales of tickets and other goods.

Here we will be using connected services to:

improve the efficiency in the operation of venues, as well as safety,

enhance spectator experience, by providing additional entertainment at each venue, AND

provide new channels for live viewing from any location. Including more intelligent audiovisual solutions, like Virtual Reality, new smart phone apps and live streaming.

All of this will increase audience capacity and participation which will in turn drive new revenue.

Tokyo 2020 promises to be the most accessible and immersive games ever thanks in part to these new digital innovations.

Marketing is not Just Marcomms

At Fujitsu, we do not believe that marketing is simply a communications and advertising function.

Our experience is that, when marketing works well, it becomes the catalyst to ensure everyone in the business thinks about the customer in the same way.

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It bridges that gap between consumer speed and corporate speed. At Fujitsu we have empowered marketing to play a much more crucial role in our success, and speed up our ability to respond to customers and anticipate their needs. For us, it starts with the Voice of the Customer. We strive to build our customer insight by starting every management meeting with Voice of the Customer - independent surveys that capture feedback on the service we deliver, and our performance. For example, our customers are telling us that if we want to win their business, they want us to provide more innovation. And to do this, marketing has helped deliver ‘design thinking’ across our organisation. This design-thinking approach helps our customers solve challenges and grow revenues in often unexpected ways.

Digital Transformation Centres One of the key initiatives this year has been the launch of our new Digital transformation Centres in Tokyo, New York, Munich and London…

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These are state of the art facilities which enable joint co-creation with our customers. They build on many years of experience in using Design Thinking to work with customers to identify and implement innovative ideas. One recent example – from our London transformation centre – is where we had a hotel group who wanted to find if there was a way to generate more revenue from the thousands of under-used parking spaces across their many hotels. We formed a multi-disciplined team made up of

our expert facilitators and technologists,

their operations and marketing people

as well as some of their external suppliers. In no time at all, this team had designed a simple way to combine new connected services and technology to generate significant new revenue streams by using these spaces more effectively. Marketing had a very wide role in this innovation – which perfectly illustrates my point. First, they had a role in bringing the opportunity to the table, Then they helped co-create the solutions. And now they will have a key role in bringing this new offering to market.

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To ensure these co-creation centres work brilliantly, we are able to draw upon the successful delivery of over 700 engagements. We have helped organisations solve challenges as diverse as …

re-inventing the process of testing wind turbine blades…

developing completely new services for financial institutions and …

redesigning entire supply chains. In our purpose built interactive studio in London, we can help companies tackle some of the most challenging business and technical opportunities in an innovative and collaborative way. So please take this as an open invitation to bring us your business challenges and let see if we can help you design some innovative solutions that bring new revenue opportunities to your business.

In Conclusion To conclude let me share a final thought …. These are exciting times for marketers. We have never been better placed to help our organisations transform and thrive. To do this we must have a better grasp of the technology and tools now available to us.

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We must focus on ensuring our companies can capture, manage, secure and mine the data that will be so essential to understanding customer needs. And armed with these insights we must help to form new eco-systems, which will enable radical agility in finding new products and services. But we must do all of this fast. Really, really fast. As Duncan said in his introduction, we live in a world of mega opportunities and mega dangers.

The biggest danger is that we stand still and do nothing. In the world of mega opportunities, I believe that iis marketing that must stand up and take the lead.

Thank you.