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Transformation at Microsoft

DIGITAL TRANSFORMATION IN THE FOURTH INDUSTRIAL AGE3–4TRANSFORMATION AT MICROSOFT5–6REIMAGINING IT LEADERSHIP TO ENABLE DIGITAL TRANSFORMATIONTHE ROADMAP TO DIGITAL TRANSFORMATIONENGAGING CUSTOMERS7–11RETHINKING CUSTOMER ENGAGEMENTBUILDING LOVE FOR OUR PRODUCTSBUILDING CUSTOMER RELATIONSHIPS WITH 360-DEGREE LIFECYCLE INSIGHTSLOWE’S: EXPERIENCE HOME IMPROVEMENT IN A WHOLE NEW WAYROADMAP FOR ENGAGING CUSTOMERSEMPOWERING EMPLOYEES12-16RETHINKING EMPLOYEE EMPOWERMENTENABLING THE EVERYWHERE OFFICE : MICROSOFT JAPANDELIVERING AN ENGAGING HR EXPERIENCEKENNAMETAL: REACHING AND EMPOWERING EVERYONEROADMAP FOR EMPOWERING EMPLOYEESOPTIMIZING OPERATIONS17–22RETHINKING OPERATION OPTIMIZATIONIMPROVING UTILIZATION OF BUILDINGS WITH IOTUSING PREDICTIVE ANALYTICS IN THE SALES PROCESSESDARTMOUTH-HITCHCOCK: REVOLUTIONIZING HEALTHCAREROADMAP FOR OPTIMIZING OPERATIONSTRANSFORMING PRODUCTS23–26RETHINKING PRODUCT TRANSFORMATIONUSING DATA TO ENTER NEW MARKETSPRIORITIZING AGILITYTEMENOS: BRINGING BANKING TO ANYWHERE IN THE WORLDROADMAP FOR TRANSFORMING PRODUCTSWHY MICROSOFT27

THE FOURTH INDUSTRIAL AGEWe stand on the brink of atechnological revolution that willfundamentally alter the way we live,work, and relate to one another.In its scale, scope, and complexity, thetransformation will be unlike anythinghumankind has experienced before.Leaders in digitaltransformation generate anaverage of 100 millionmore in additional operatingincome each year1Klaus Schwab, Founder and Executive Chairmanof the World Economic ForumJanuary 2016The first revolution helped humans mechanizeproduction with steam power, followed by the secondrevolution which was enabled by electricity and broughton the era of mass production. The third revolution usedelectronics and information technology.The speed of current breakthroughs and the exponentialpace of disruptive innovation now bring about a fourthindustrial revolution—characterized by unprecedentedprocessing power, storage, access to knowledge and theblurring of lines between physical, digital, and biologicalspace.It is a unique point in time, and it will fundamentallyalter the way we live, work and relate to each other.50% of the workforcewill be “digital natives,”connected 24/7 andwork the way theywant to by 202021 Keystone Strategy Interviews, Oct 2015 – Mar 20162 “Mind the gaps: The 2015 Deloitte Millennial Survey,” Deloitte Touche Tohmatsu , 2015Capitalizing on this phenomenon is the key toinnovation and growth. From the rise ofconnected devices and other “things” within theInternet of Things (IoT), the growing mounds ofdata, to augmented reality and the next frontiers,the challenge for business leaders is to harnessthe disruptive force of technology to increaseefficiency and shape their destiny.Naturally, this comes while navigating theexpectations of a changing workforce, addressingevolving cybersecurity threats, and managing ahost of other challenges.In response, companies are going through adigital transformation that is creatingopportunity, but also increasing the pressure toinnovate. Although many businesses are sold onthe “why” of digital transformation, they are stuckon the “how.” How do you transform for successin the future while running your business today?Microsoft partners with thousands oforganizations, and each is on a digitallytransformational journey. This report will shareinsights, examples, and answers on how to fostera digital-first business.

MIND-SET FOR CHANGETo stay competitive, organizations shouldpivot toward “rapid incrementalism”—incrementally altering existing structuresto make the most of what is already in place.

TRANSFORMATION AT MICROSOFT

TRANSFORMATION AT MICROSOFTTHE ROADMAP TO DIGITAL TRANSFORMATIONAt Microsoft, we have identified these four pillarsas the core drivers for our roadmap to MPLOYEESOPTIMIZINGOPERATIONSTRANSFORMINGPRODUCTS

RETHINKING CUSTOMER ENGAGEMENTmillennials in the USconnect with companieson social media networks1Customer centricity integrated across the business:Rethinkinghow toengagecustomersCreating fans and segment of one:Data-driven customer insights:Marketing leaders as technology decision makers:1 Five Truths for Future Marketers. SDL research. March 19, 2014.

ENGAGINGCUSTOMERSBUILDING LOVEFOR OUR PRODUCTSSOCIAL LISTENING AND 1:1 ENGAGEMENTAzure MachineLearningMicrosoft SocialEngagementPower BI1 Five Truths for Future Marketers. SDL research. March 19, 2014

ENGAGINGCUSTOMERSBUILDING CUSTOMER RELATIONSHIPS WITH 360-DEGREE LIFECYCLE INSIGHTSGetting a consistent, 360-degree view of your customeracross all touch points and channels is the first importantstep in your engagement strategy. Microsoft hasembarked on a project that not only ties togethercustomer insights from various sales and marketingchannels, but allows us to build deeper, more contextualrelationships across all segments with our customers.We have created a Global Engagement Program,spanning pre-sales and post-sales customer journeys,which enables us to nurture customers digitally throughtheir lifecycle from unknown leads to free and trial usersto paying customers in the best-suited channels (email,web, mobile, in-product, social).The goal of this platform is to provide always-on,connected experiences with contextually relevant andpersonalized information to actively nurture customers toconversion and ongoing usage and engagement.Our Global Engagement Program is enabled throughmarketing automation tools for demand generation andemail marketing, Azure for data management, and analyticscapabilities (Azure Data Lake, SQL Azure, Azure ML, AzureStream Analytics, Power BI).360-DEGREE LIFECYCLE INSIGHTSProfiling, lead scoring, right content at right timeAnonymousMicrosoftDynamics 365LeadScoringTeleQualificationand TeleNurtureAdvancedanalyticsAzure Data LakePost yingCustomerSales –Field, Partneror TeleAzure Data LakeAnalyticsAzure MachineLearning

TRANSFORMINGCUSTOMERENGAGEMENTAT LOWE’SENGAGINGCUSTOMERSEXPERIENCING HOME IMPROVEMENT IN A WHOLE NEW WAY Lowe’s operates 1,840 homeimprovement retail stores inthe US, Canada, and Mexico. Because home improvementis an incredibly visualundertaking, it can be difficultto conceptualize a full-scaleremodel using just samplesquares and paint swatches. Microsoft partnered with Lowe’sto help reinvent visualizationand design in a whole new way,using holograms. Using HoloLens, Lowe’s isproviding customers in selectpilot stores a new way toexperience home improvement. Through HoloLens customersget to experience a variety ofdesign options for kitchencabinetry, countertops,appliances, and features likebacksplashes, in a visually richand interactive way. For Lowe’s, HoloLens bringscustomers a new way toexperience full-scale designand appliance options whilemaximizing precious floorspace Lowe’s can quickly andaffordably show an array ofoptions that can be digitallyrefreshed with far less impactthan what it would take toreplace tile or cabinetrysamples. In-store designers, friends, orpartners can view what thecustomer is seeing—andchanging in real time—througha hand-held Surface tablet.

ROADMAPFOR CHANGEENGAGINGCUSTOMERSCustomer engagement starts by understandingcustomer behavior. Intelligence plays a critical role inunderstanding and dissecting massive amounts of datato recognize patterns of sentiment and behavior acrossour customer base.The roadmap for a digital-first business translates intothese key priorities: Build the infrastructure to enable customerengagement, such as telemetry, a 360-degree view ofthe customer, and modern commerce systems. Drive viral find, try, and buy opportunities thathelp cross-sell and upsell, and build these capabilitiesinto our product services. Ensure core services are API (application platforminterface)–enabled to allow simpler integration.PHASE 1: DESIGN AND AGREE ON YOUR DATA MODELPHASE 2: SHARE 360-DEGREE VIEW OF CUSTOMERPHASE 3: GAIN INSIGHT AND CONNECTPHASE 4: ENABLE PREDICTIVE EXPERIENCES AND OFFERS

EMPOWERING EMPLOYEESThere will be ashortage of 40 millionhighly skilled workersglobally by 20201Strategic:Data driven:Rethinkinghow toempoweremployeesSelf-service and simplified processes:Skills:1 Mark J. Barrenechea,“Digital: Disrupt or Die,” OpenText, 20152 Research Institute for Corporate Productivity, October 19, 2015

EMPOWERINGEMPLOYEESAT MICROSOFTEMPOWERINGEMPLOYEESENABLING THE EVERYWHERE OFFICE: MICROSOFT JAPANENABLING THE EVERYWHERE OFFICE3,281Office 365Skype/Skype Translator2. Encouraged teleworking inresponse to economic andsocial changes throughmanagement.SharePoint/OneDriveOneNote 10,0001. Established a technologyinfrastructure to enable work fromanywhere, at all times. Teleworkingas an integral part of businesscontinuity plans.4. Instant communication andvideo replay—made relevantcorporate info available throughsocial groups.3. Provided internalcommunicationand training.

EMPOWERINGEMPLOYEESAT MICROSOFTEMPOWERINGEMPLOYEESDELIVERING AN ENGAGING HUMAN RESOURCES EXPERIENCEnew approach and in delivering on anew vision called HR Reimagined.To help drive the strategy and culturalchanges, Microsoft fundamentallyaltered its approach to managingemployee performance anddevelopment to promote new levels ofteamwork and agility. The humanresources organization took the leadrole in designing and implementing theMicrosoft also embraced talent analyticsto analyze volumes of data generated inthe recruiting effort, and developed amobile digital companion applicationfor the recruitment process, to attractmillennials with a better recruitmentexperience.HR-related data is madeavailable to internal customers throughself-service Power BI in a single liveMicrosoftDynamics 365100,00025,000dashboard, allowing managers to trackkey HR insights for their business.1. Used analytics to processvolumes of data from pastrecruiting efforts.The new tools and resources providedas a result of the HR Reimaginedinitiative are used by Microsoftemployees daily, and have resulted inproductivity increases and cost savingsby standardizing on Azure.Azure2. Built a mobile CandidateExperience App as a digitalcompanion for candidatesinterviewing at Microsoft.AzureAzure4. Personalized onboardingand training—be part of theteam from day one.SharePointOnline3. Implemented a self-service HRportal to empower all employees withmobile-first HR experiences accessiblefrom anywhere at any time.

REACHING ANDEMPOWERINGEVERYONEEMPOWERINGEMPLOYEESBeing a CIO is about more than just achievingbenchmark performance and lowest costs fortechnology assets. It’s really about collaborating withyour business leaders. At Kennametal, we recognizethe huge impact it makes on getting those results ifwe have the right people onboard, particularly whenthey work together.BUSINESS NEED With 14,000 employees in60 countries, across many corecompetencies, Kennametal foundit challenging to connectindividuals with each other. Kennametal needed a secure wayto foster collaboration among itsthousands of materials scientistsand engineers spread fromGermany to the United States toIndia, and drive closer connectionto its 5,000 factory workers whodo not have their own desktop.SOLUTIONOUTCOME