Keynote delivered by Dominique Cerutti, CEO Altran While the emergence of AI announces a new wave of breakthrough technologies and innovations which will shake up industries organizations and operations, Dominique Cerutti will explore in his speech the different strategic orientations that industry leaders must envisage to manage innovation in their organizations. How to drive and organize a variety of ER&D activities and focus on value adding areas? Which type of partners and engagement policies shall be set up to leverage on the new opportunities revealed by the disruptions ahead?

1. 1
Leading the Disruptions
How to deploy future-proof innovation strategies
Confluence - 2016
Dominique Cerutti
Altran, Chairman and CEO

2. 2
R&D rules the planet
The most powerful engine of
economic expansion…
…Fueled by Top 500 spenders…
0%
10%
20%
30%
40%
50%
60%
70%
80%
0 1000 2000 3000
500 companies concentrate ~61%
of the global R&D spend
100 companies concentrate ~40%
of the global R&D spend
Tail of top 2500 R&D spenders
2014, % of global R&D spend
Average company lifespan in S&P 500
33 years
1995 2015 2025
25 years
15 years
…Which are ever more challenged
-25%
-40%
R&D growth: 160% of GDP
growth over the period
$630B
(2,0% of GDP)
R&D spend
OECD, 1982-2014, $B and in % of GDP
$920B
(2,1% of GDP)
$1 150B
(2,4% of GDP)
1994 2004 2014
R&D rules the planet

3. 3
Innovate or abdicate
True innovators breaking
through to the top…
…Creating massive disruptions…
$15B R&D investments
Focus on autonomous
driving and electric
mobility
…Generating battles of giants
Tesla model S market share
(US premium market, m/s in volume, 2012-15)
Uber market share
(North America business taxi market, %, 2014-15)
#1
20152012
3%
26%
January 2014
March 2015
August 2014
15%
30%
50%
Rank 2011 2016
1
2
3
4
5
6
7
8
9
10
New entrants in 2016 top 10
Top 10 market capitalization
+23 ppt.
$4.5B R&D investments
Leading the digital era
$12.3B R&D investments
Focus on disruptive
innovation (e.g. robotics,
autonomous car)
Innovate or Abdicate

4. 4
Breakthrough
technologies
Time to market
obsession
Digital
disruption
Differentiation
for competitive
separation
Draconian
regulations
Global or
marginal
R&D
Shift
1
6
35
2
4
The 6 R&D Tyrannies
The 6 R&D Tyrannies

5. 5
The 6 R&D Tyrannies: the automotive industry
Breakthrough
technologies
Time to market
obsession
Digital
disruption
Competitive
separation
Draconian
regulations
Global or
marginal
1
6
35
2
4
Internet of Things
Modularization
Car Sharing
Autonomous Cars
Industry 4.0
Globalization
Disruptive players
Zero emission
Total safety
The 6 R&D Tyrannies: the automotive Industry

6. 6
Core vs. Context: the innovation circle
Source: Geoffrey A. Moore, Altran
CORE
Process creates true differentiation
and separation from competition
CONTEXT
All other processes
Mission Critical
Process shortfall creates
serious and immediate risk
Enabling
All other processes
Differentiation
Risk
Flowof
innovation
Deploy
differentiation at
scale
Deploy
differentiation at
scale
Manage
Mission-Critical
processes at scale
Manage
Mission-Critical
processes at scale
Invent
differentiated
offering
Invent
differentiated
offering
Extract resources
to repurpose for
Core
Extract resources
to repurpose for
Core
CORE vs CONTEXT: the innovation cycle

7. 7
…so what?CORE vs CONTEXT: Key takeaways
Focus on
COMPETITIVE
SEPARATION
with a deliberate
innovation strategy
Declare your
CORE
Leverage a new
SOURCING
MODEL
1 2 3

8. 8
Altran: sharpened business models to address Core & Context challenges
From deep domain expertise…
28 000 Altran experts: engineers & scientists
Product & Systems Engineering
Complex Systems Engineering
Intelligent Systems
Mechanical Engineering
Advanced Test & Simulation
Product Design & Innovation
Manufacturing & Operations
Supply Chain & Logistics Excellence
Manufacturing Techno. & Automation
Manufacturing Ops & Optimization
Civil Works, Infra. & Environment
Network Transformation & Performance
Digitization
Industrial Big Data Analytics
Digital Infra. & Governance
Digital Applications & Media
Product Lifecycle Management
Industrial Enterprise
Program Management
Security, Safety, Regulation & Risk
Enterprise Performance & Quality
Technology & Engineering Strategy
ALTRAN: Sharpened business models to address CORE/CONTEXT challenges

9. 28 000 Altran experts: engineers & scientists
9
Altran: sharpened business models to address Core & Context challenges
… to differentiated business models
CORE CONTEXT
Critical
Enabling
Innovative Product
Development
To access new technologies
and explore disruptions
World-Class Centers
To accelerate, leveraging the best expertise, IP and assets
on the most advanced technologies
Industrialized
GlobalShore®
To leverage cost-effective
talent pools across the
planet
ALTRAN: Sharpened business models to address client CORE/CONTEXT challenges

10. 10
Partner to accelerate on Core: next generation E/E architecture
WHO:
A leading European car OEM
WHY:
Ambitious growth plans and exponential complexity
of automotive features require urgent rethink of
traditional E/E architectures to optimise costs and time
to market
INNOVATION STRATEGY:
Partner and co-innovate to accelerate and create
disruptive IP
Partner to accelerate the CORE: next generation E/E architecture
APPROACH:
Move from a complex architecture with 100+
dedicated ECU to a centralized domain
25% integration cost savings and 35% less cabin weight
Co-investment to develop a
new software platform to
manage the complexity of
embedded systems

11. 11
Transform to optimize Context: full variant application development
WHO:
A leading European car OEM
WHY:
Significantly optimize the cost of development and
time to market of full variant applications
INNOVATION STRATEGY:
Leverage outsourcing on CONTEXT activities
Transform to optimize CONTEXT: full variant car development
Co-construction of a
nearshore R&D center
to develop
full variant applications
APPROACH:
Greenfield set-up of an ODC for activities related to
variant applications development with Altran
Strong reduction of TCO and unlocking of critical
resources

12. 12
Thank You