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Cisco Confidential 1© 2013 Cisco and/or its affiliates. All rights reserved.
The Internet of Everything (IoE) Value IndexMexico
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2
Agenda• IoE Value Index background, key findings, model,
and definitions
• Trends, drivers, challenges, and impact
• IoE value realized by country, value driver, company size, and industry
• How to capture value realized
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 3
The Internet of Everything:Networked Connection of People, Process, Data, Things
Delivering the right information to the right person (or machine) at the right time
Process
Leveraging data into more useful information for decision making
Data
Physical devices and objects connected to the Internet and each other for intelligent decision making
Things
Connecting people in more relevant, valuable ways
People
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 4
• SG&A and CoGS reduction from improved business process execution
• Improved capital efficiency
• Improved labor efficiency• Fewer or more productive man-hours
• Improved customer lifetime value• Additional market share (more customers)
• Improved RD&E speed, reduced TTM• New business models and new sources of
revenue
• Improved process efficiency• Reduced waste in supply chain
Internet of Everything:How It Delivers Value — and How Much Is at Stake
IoE Value at Stake: $14.4T
(2013-2022 10-year
NPV)*
* Net present value
Asset utilization: $2.5T
Improved customer experience: $3.7T
Supply-chain / logistics efficiency: $2.7T
Innovation: $3.0T
Employee productivity: $2.5T
21
use
ca
ses
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 5
• Conducted ground-breaking online survey of 7,501 business and IT decision-makers, split between enterprises and mid-sized companies
• Study executed by the Cisco Consulting Services Research & Economics Practice
• MIT Center for Digital Business provided advice on questionnaire development, but not on the IoE Value Index design or Value at Stake / value-realized estimates
Internet of Everything: How Much Value Will Firms Realize in Calendar Year 2013?
• Fielded in 12 of the largest global economies (70% of worldwide GDP): Australia, Brazil, Canada, China, France, Germany, India, Japan, Mexico, Russia, U.K., and U.S.
• Estimates actual value realized by firms in 2013 as a share of potential Value at Stake; explores key IoE enablers (people, process, data, things) that drive value
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 6
IoE Value Index:$1.2T of Value at Stake Is Available to Firms in CY2013
Global Value at Stake2013-2022
(10-year total)
$14.4T*2013$1.2T
Value at Stake 2013 (Jan. – Dec.)
$1.2T
Value realized in
2013
IoE Value Index
$613B(53%)
$544B(47%)
Value “left on table”
in 2013
Note: chart is not to scale* $14.4T is conservative because it is based on a set number (21) of private-sector use cases and discounts future cash flows due to uncertainty around privacy and regulatory issues.
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 7
Firms See Growing Significance of IoE as They Strive To Realize Value
N=7,501 respondents
79%Viewed IoE pervasiveness as having “increased” or “significantly increased” over past 3 years
84%Believe IoE pervasiveness will “increase” or “significantly increase” over next 3 years
Key Trends
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 8
Executives Are Positive About IoE’s Potential Impact …
Information Security - Total
Information Security - Mexico
Wages - Total
Wages - Mexico
Jobs - Total
Jobs - Mexico
4%
3%
5%
3%
4%
3%
19%
13%
6%
3%
28%
19%
26%
23%
42%
53%
36%
35%
50%
60%
47%
41%
33%
43%
Do Not Know Lower / Worse No Change Higher / Better
3-Year Outlook as Result of Increasing IoE Pervasiveness
N=7,501 respondents
Key Trends
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 9
... Because It Helps Them Stay Ahead of the Accelerating Innovation Curve …
N=7,501 respondents
#1 Accelerating pace of innovation
#2Satisfying customer demand for new ways of interacting
#3 Need to automate business processes
Key Drivers
Top 3 Business Drivers of IoE
Need to automate business processes
Satisfying customer demand for new ways of interacting
Accelerating pace of innovation
MexicoTotal
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 10
… And Thrive Amidst Exponential Growth of Devices, Data, and Technologies …
#1 New types of devices
#2 Volume of data generated
#3 Cloud-based technology
N=7,501 respondents
Key Drivers
Top 3 Technology Drivers of IoE
MexicoTotal
New types of devices
Cloud-based technology
Pervasiveness of high-speed networks
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11
But, Firms Must Confront Security, Regulatory, and IT Challenges as IoE Grows
Biggest Downsides of Increased IoE Pervasiveness
N=7,501 respondents
#1 New threats to data / physical security
Inability of IT systems to keep pace with change
#2Regulatory or compliance challenges
#3
Key Challenges
MexicoTotal
New threats to data / physical security
Inability of IT systems to keep pace with change
Potential for jobs to move overseas / become automated
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 12
... While Taking the Steps Required To Realize Value from IoE
N=7,501 respondents
#1 Need to invest in new technology infrastructure
#2Ability to integrate new technologies with legacy IT environments
#3Ability to update processes to absorb new technologies
Top Challenges to Realizing Value from IoE
Key Challenges
MexicoTotal
Need to invest in new technology infrastructure
Ability to update processes to absorb new technologies
Achieving real-time, data-driven operations
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 13
By Embracing IoE, Companies Can Attain Benefits in Key Areas of Their Businesses ...
Top Business Benefits of IoE
N=7,501 respondents
#1Operational efficiency (VAS drivers: asset utilization, supply chain, employee productivity)
#2Customer service(VAS driver: customer experience)
#3Collaboration within company(VAS drivers: innovation, employee productivity)
Impact
MexicoTotal
Operational efficiency (VAS drivers: asset utilization, supply chain, employee productivity)
Customer service(VAS driver: customer experience)
Strategic decision making(VAS drivers: asset utilization, innovation)
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 14
Firms in Emerging Markets Already Recognize IoE’s Game-Changing Potential
Executives’ Confidence in Their Firms’ Ability To Capture Value from IoE
N=7,501 respondents
8.2 Indian business and IT leaders
8.0 Chinese business and IT leaders
7.9 Brazilian business and IT leaders
6.7 Non-emerging market business and IT leaders
7.4 Mexican business and IT leaders
Impact
10-point scale: 1 = extremely weak ability; 10 = extremely strong ability
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 15
… But, Firms in Developed Countries Are Currently Realizing the Most IoE Value
N=7,501
Mexico
Russia
Australia
China
Brazil
India
Canada
U.K.
U.S.
France
Japan
Germany
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
47.1%
47.7%
47.9%
48.8%
51.0%
52.5%
53.1%
53.4%
53.5%
54.2%
57.7%
62.2%
52.9%
52.3%
52.1%
51.2%
49.0%
47.5%
46.9%
46.6%
46.5%
45.8%
42.3%
37.8%
IoE value realized IoE opportunity
Firms in:Value at Stake2013 ($B)$87.5
$71.2
$59.4
$472.9
$53.3
$56.8
$34.8
$34.0
$157.7
$74.4
$35.6
$19.6
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 16
Customer experience - Total
Customer experience - Mexico
Supply chain - Total
Supply chain - Mexico
Employee productivity - Total
Employee productivity - Mexico
Innovation - Total
Innovation - Mexico
Asset utilization - Total
Asset utilization - Mexico
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
51.1%44.1%
51.1%46.7%
54.2%47.8%
54.5%47.9%
56.4%52.0%
48.9%55.9%
48.9%53.3%
45.8%52.2%
45.5%52.1%
43.6%48.0%
IoE value realized IoE opportunity
Value Is Distributed Nearly Equally Across 5 Key Business Functions ...
Value at Stake2013 ($B)
$194.51
$202.83
$164.8
$310.75
$284.31
$1.3
$4.3
$1.7
$8.1
$4.1
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 17
... And Across Midsize and Large Firms
N=7,501
500 to 1,999 employees - Total
500 to 1,999 employees - Mexico
2,000 to 9,999 employees - Total
2,000 to 9,999 employees - Mexico
10,000 or more employees - Total
10,000 or more employees - Mexico
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
54.1%
47.6%
53.3%
48.9%
52.4%
46.2%
45.9%
52.4%
46.7%
51.1%
47.6%
53.8%
IoE value realized IoE opportunity
Value at Stake2013 ($B)
$639.9
$299.4
$217.9
$10.8
$5.1
$3.7
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 18
Retail / Wholesale / Hospitality
Energy
Manufacturing
Transportation
Other
Healthcare / Life sciences
Services
Financial services
High tech / Telecoms
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
44.9%
45.8%
46.0%
50.7%
50.8%
54.2%
57.4%
60.5%
65.4%
55.1%
54.2%
54.0%
49.3%
49.2%
45.8%
42.6%
39.5%
34.6%
IoE value realized IoE opportunity
However, IT-Driven Industries Are Capturing the Greatest Share of This Value
N=7,501
Value at Stake2013 ($B)
$118.3
$115.2
$276.9
$98.7
$65.4
$23.6
$224.4
$55.0
$179.6
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 19
Manufacturing Firms: Real-Time Data Analysis Can Increase Value Realized from IoE
Type of connection M2M M2P P2P
Share of VAS 39.0% 40.3% 20.6%
Top use cases
• Smart factories• Smart grid• Supply chain
efficiency
• Connected marketing and advertising
• Next-gen workers
• Faster time to market
IoE enablers: current strengths
• Managing energy consumption through smart, connected systems
• Viewing KPIs through information dashboards
• Unified communications
IoE enablers: largest opportunities
• Intelligent machines/robots
• Remote tracking of physical assets
• Decision support through real-time, multi-dimensional data analysis
• Integrated video collaboration
The largest opportunity areas for manufacturers are “intelligent” robots,
remote tracking of physical assets, decision support,
and integrated video collaboration
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 20
Energy Firms: Integration of Sensor Data Can Increase Value Realized from IoE
Type of connection M2M M2P P2P
Share of VAS 49.0% 23.6% 27.5%
Top use cases
• Smart factories / automation
• Smart grid• Faster time-to-
market• Next-gen
workers• Smart buildings
IoE enablers: current strengths
• Proactively monitoring energy production and supply equipment
• Analyze and use large amounts of data
• Unified communications
IoE enablers: largest opportunities
• Making operations more sustainable through sensor data
• Predictive analytics
• Ability to locate experts
The largest opportunity areas for energy firms are
sustainable operations, predictive analytics, and
expert location
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 21
Retailers: Data Visualization and Predictive Analytics Can Increase Value Realized from IoE
Type of connection M2M M2P P2P
Share of VAS 21.5% 47.7% 30.8%
Capabilities
• Connected marketing and advertising
• Innovative payments
• Connected marketing and advertising
• Connected vending
• Next-gen workers
IoE enablers: current strengths
• Remotely tracking inventory
• Viewing KPIs through information dashboards
• Unified communications
IoE enablers: largest opportunities
• Location-based marketing
• Customized offerings, marketing, and advertising
• Data visualization
• Predictive analytics
• BYOD• Rich media
customer interactions
The largest opportunity areas for retailers are
location-based marketing, data visualization, and
BYOD
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 22
To Increase Value Realized, Firms Must Integrate IT & Management Best Practices
Information accuracy
Information accessibility
Information ease of use
Measurement practices
Human capital practices
Information management practices
Inclusiveness practices
Quality of technology infrastructure and tools
0% 5%10%
15%20%
25%
5.1%
8.2%
9.7%
13.1%
13.3%
14.3%
16.1%
20.1%
ThingsPeople Process Data
Relative Importance of IoE Enablers in Predicting Value Realized
0% 5% 10% 15% 20% 25% 30%
N/A
N/A
N/A
N/A
24.4%
25.2%
26.8%
23.6%
Total Mexico
Together, these factors explain 66.2% of changes in value realized (R2 = .662). This is a robust model of what predicts value realized.
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 23
IoE Is Raising the Stakes, While Presenting New Opportunities …• Firms will capture just 53% of IoE’s Value at Stake for 2013, leaving $544B of
unrealized value
• IoE is driving competitive parity, raising the stakes for differentiation among companies and countries:
Emerging-market countries and midsized companies are poised to realize significant value from IoE, enabling them to quickly achieve parity with — or even outpace — developed countries and larger firms
Smaller companies are already realizing as much IoE Value at Stake as some enterprises
• To capture maximum value from IoE, firms should focus on the IoE-driven capabilities that will benefit their industries most:
Manufacturing firms: real-time, multidimensional data analysis; integrated video collaboration; remote tracking of physical assets; intelligent robots
Energy firms: integration of sensor data; ability to locate experts; predictive analytics
Retailers: data visualization and predictive analytics; BYOD; location-based marketing
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 24
…Making It Essential To Adopt a Strategic Approach for Maximizing IoE’s Value• To capture more value in the IoE Economy, companies must:
Invest in high-quality technology infrastructure and tools
Adopt and follow inclusive practices
Develop effective information-management practices
Move from…Better is betterBigger is better
To …
Clout
Access to information
Big data
Business intelligence
Connectivity
Cloud
Big judgment
Intelligence at the point of decision
Connectedness
Expertise everywhere
Thank you.