Trends and Implications

Transcription

1 Innovation through Software FFI Konferens 2014 Trends and Implications Jan Bosch Director Software Center Professor of Software Engineering Chalmers University of Technology Gothenburg, Sweden.

2 In the future, all companies will be software companies George F. Colony (CEO Forrester Research)

3 Three Key Take-Aways The automotive industry is moving from products to services this will cause fundamental shifts in the business models Innovating new systems, solutions and services at unprecedented rates is critical to survive the transformation Software is central as it enables these systems, solutions and services and allows for much faster innovation cycles

4 Overview Vem är jag? Wie ben ik? Who am I? Trends in Software: Need for Speed Innovation Experiment Systems Implications for Automotive Industry Conclusion

5 Academic Research Software Centre Consultancy Entrepreneur Industry Innovation Industry Operations

6 Software Center Mission: Improve the software engineering capability of the Nordic Software-Intensive industry with an order of magnitude Theme: Fast, continuous deployment of customer value Success: Academic excellence Success: Industrial impact

7 Overview Vem är jag? Wie ben ik? Who am I? Trends in Software: Need for Speed Innovation Experiment Systems Implications for Automotive Industry Conclusion

8 Trend: Products to Services This requires continuous deployment throughout the lifetime of the product

9 Innovation Approaches Customer driven innovation Technology driven innovation Strategy driven innovation This requires continuous experimentation with customers

10 You should wake up every morning terrified with your sheets drenched in sweat, but not because you're afraid of our competitors. Be afraid of our customers, because those are the folks who have the money. Our competitors are never going to send us money. - Jeff Bezos

11 10x every ~7 years

12 Trend: Need for Speed Value Creation Shifts Emerging companies highlight importance of user contribution and social connectedness Level of User Contribution Founded M users ~6 years 30 months 10 months 50M users N/A ~80 months ~44 months

13 Need for Speed in R&D An Example Company X: R&D is 10% of revenue, e.g. 100M$ for a 1B$ product New product development cycle: 12 months Alternative 1: improve efficiency of development with 10% 10 M$ reduction in development cost Alternative 2: reduce development cycle with 10% 100M$ add to top line revenue (product starts to sell 1.2 months earlier) No efficiency improvement will outperform cycle time reduction

14 Overview Vem är jag? Wie ben ik? Who am I? Trends in Software: Need for Speed Innovation Experiment Systems Implications for Automotive Industry Conclusion

15 What Do These Product Have in Common?

16 Example: Apple The Myth Inspired innovation Inspired design Brilliantly inspired marketing The Reality Create and winnow 10 pixelperfect prototypes Build a better backstory (intricate layers of business design behind the products) Engineer the perfect customer experience to create customer experience and buzz Reference:

17 R&D as an Experiment System Learning: the company running the most experiments against the lowest cost per experiment wins Usage and other data Decide on new hypotheses to test based on data, ideas, strategy and customer requests R&D iteration (2-4 weeks) Three types of functionality Customer-requested Strategy driven Experiments Installed Base customers) Decisions should be based on DATA, not opinions

18 We have an unprecedented opportunity to run A/B tests with online users and innovate more quickly based on actual user response. Microsoft needs to shift the culture from planning the exact features to planning a set of possible features, and letting customers guide us. - Ray Ozzie

19 Smart Business Experiments Davenport How to Design Smart Business Experiments

20 Overview Vem är jag? Wie ben ik? Who am I? Trends in Software: Need for Speed Innovation Experiment Systems Implications for Automotive Industry Conclusion

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22 The Cycle of Innovation

23 Length of Innovation Cycle Car Platform: years

24 Length of Innovation Cycle Car : 3-4 years

25 Length of Innovation Cycle Car Software: 1-5 days

26 Implications 1. Build it in software unless you really, really can t 2. Build it in hardware and keep it flexible (FPGAs instead of ASICS) unless you really, really can t 3. Build it in mechanics if you HAVE to and keep modular, easily replaceable and simple

27 Stairway to Heaven

28 Overview Vem är jag? Wie ben ik? Who am I? Trends in Software: Need for Speed Innovation Experiment Systems Implications for Automotive Industry Conclusion

29 Conclusion The automotive industry is moving from products to services this will cause fundamental shifts in the business models Innovating new systems, solutions and services at unprecedented rates is critical to survive the transformation Software is central as it enables these systems, solutions and services and allows for much faster innovation cycles

30 Not My Job?! Strong LEADERSHIP needed from YOU

31 Chalmers University of Technology