Today business leaders have a plethora of technologies that they need to be investing in that will transform and create new business models, products and services, many of which may impact interactions with customers. Fortunately these technologies are becoming cheaper to build, test and implement, and no longer require mass investments in infrastructures as we are able to leverage cloud based solutions. Today the investments will be in the weaving together of these technologies to create process solutions that will cause a decrease in costs and acceleration in transaction transparency and processing.
IT departments are being disintermediated with the confluence of new technologies, alternative sourcing options and tech-savvy stakeholders that will disrupt how value is created. What is needed most now with companies is strong leadership with an innate awareness of the emerging disruptive technologies and the knowledge necessary to lead this digital transformation.
Without strong leadership to drive the enterprise-wide transformations with a clear and focused business vision and strategy; companies will implement independent initiatives that could have initial quick wins, but will ultimately lead to disjointed solutions that may lead to longer term problems, increased operational costs and increase compliance risks.
We are experiencing the 4th Industrial Revolution. The 1st industrial revolution brought us manufacturing and shipping (steam – manufacturing and trains), the 2nd industrial revolution (electricity) brought about mass manufacturing and communication, and the 3rd revolution (the internet) brought us into a global world of communication and an accelerated pace of technological advancement. Now as we enter the 4th revolution which was kicked off by IoT, we are redefining everything from how we shop, medical care, agriculture and food safety as well as many business processes. Digital solutions are driving an exponential rate of change, through the integration of devices and data (Internet of Things), intuitive Systems (AI), Digital Labor (Robotic Process Automation) and the mass disruption of “old school” business processes. Hence we are now entering the 4th Industrial Revolution.
Mobility and Digital
Smart phones are providing humans across the world gaining to digital services. There are still billions of people in the world who don’t have bank accounts, but they do have a smart phone. Now through digital apps they are able to access markets, customers and services from their mobile phone and interact directly in ways never before imagined. Banking services are within reach, but not just from traditional banking institutions. Technology companies have entered into the financial services sector providing people payment, savings and lending solutions through easy to use applications accessed from smart phones.
Over the past decade numerous digital technologies have entered the market and in mass have become the building blocks for this 4th Industrial Revolution. During this time we have seen advances like crowdsourcing and social media become the norm. Now we are watching in amazement as Machine learning, Artificial Intelligence, GPS, Blockchain, Big Data and Robotics come together to create new automated services.
People have become accustomed to service providers and products being developed to meet their unique needs as companies embrace motivational design and 3D printing to create personalized solutions. Accessing software and platform solutions through a Cloud to save money and time was once considered too risky – is now considered to be more secure than using private servers.
These transformational capabilities include things like Cognitive automation, Digital currency, IoT, Autonomous vehicles, and Service computing, etc. Each of these are derived from the bundling and integration of multiple technologies to form disruptive capabilities. Let’s look at some of them in more detail.
Artificial Intelligence (AI)
Robotic Process Automation (RPA) – repetitive tasks are becoming automated through Digital Bots. Simple tasks with defined rules can now be completed quickly and accurately through programs built to manage tasks. RPA was the beginning of the Cognitive Automation (CA) phase where we leverage information from things, IoT (Internet of Things) and actionable insights, Big Data with advanced analytics and predictive, cognitive thinking to replace more human interactions. CA combined with RPA will become more prevalent in reducing the cost of providing services (think call centers, retail shopper assistance, medical screening).
Where is AI going? Today AI’s “deep learning” technique in which software learns from millions of examples how to perform tasks directed by voice recognition. Computers are able to recognize almost anyone’s speech dependably in transcription accuracy, computerized translations, text-to-speech and speech to commands. The meaning and interpretation of language is being worked on by company’s such as IBM who is researching how to enable AI to read and interpret peoples written and spoken words to determine a person’s mental health or their age. Now imagine that capability and parlay it into determining at a negotiation table if someone is lying, or providing guidance of attendee negotiation stress levels, or dynamically translates a foreign language with the correct nuances for sarcasm and interpretation.
Today the adoption of AI is being applied to other sources of data: drones scanning fields for soil nutrition content based upon IoT sensors, or micro-scanners that look beyond what we can visibly see to look into our bodies to detect unthought-of ailments or cures, and can predict of the spread of cancer, or the sweetness of a strawberry? Hybrid eco-friendly wearables can use AI to monitor an athlete’s performance or a patient’s recovery?
Let’s look at how this advanced use of AI and data will help digitize how health care can be made available through someone’s mobile phone or wearable device. Imagine a doctor in a remote part of the world having access to tools such as a molecular light sensor as big as a smart phone (or embedded within a smart phone) that gathers a patient’s vital health information, shares it to the cloud where advanced analysis and predictive analytics outline recommendations for the patient or healthcare provider, then orders and sends the correct prescriptions to deliver a state of the art health care solutions. This is truly becoming Star Trek’s tricorder that can read and diagnose symptoms. These types of spectrometers can be leveraged across a wide variety of industries , from analyzing food quality and safety (molecular fingerprint of the food with analysis to know not only the quality, but the sweetness, nutrition value, and even more), to the quality of raw minerals, human diagnosis, oil quality, etc.
What would these transformations mean for your business? How can you take advantage of them? Who in your company is tasked with investigating and learning what is coming?
Another breakthrough technology in the 4th Industrial Revolution: Blockchain is a digital platform that records and verifies transactions in a tamper- and revision-proof way that allows access across both public and private networks. A fundamental element of Blockchain is how transactions are approved and added to a distributed “ledger” as each transaction is verified by each network participant through complex algorithms that leverages cryptography to verify its authenticity.
Blockchain’s decentralized, cryptography-based solution can cut out the middle man. This will redefine business processes and transactions from the seed or crop all the way through aggregators, distributors and manufactures to customers and then to the back office in a multitude of different industries. All transactions will be secured through an open ledger that shows “notarized ownership” through this distributed shared ledger. Now all transactions and interactions can be made quicker, less-expensively and more securely. Removing the need for middle men, companies can lower security concerns from hacking to corruption as well as speeding up business processes.
Therefore, Blockchain is becoming the new economy, governance and business technology platform on which new fundamental capabilities can be leveraged across disparate networks. Today the most known use of Blockchain is in financial systems such as Bitcoin (which is a cryptocurrency). What Blockchain has is an open ledger whereby all parties can see a shared instance of truth. The ledger does not care if the “Bitcoin” represents a US Dollar or a share in a company, a unit of electricity, a harvest of corn oil or barrels of crude oil. It can represent everything. This means that for businesses interested in tracking the authentic transparency of goods and items –the Blockchain platform can be used to provide ownership to source transparent tracking.
A Blockchain entity called “Miners,” are entities that confirm the authenticity of information on the open ledger, passing trusted information from one step to another . . . just like a having Notary present throughout the process. This ensures that transactions cannot be made unless the open ledger authenticates that what is requested is validated by both parties. The processes of Blockchain can ensure compliancy upfront before the transaction occurs (items cannot be sold twice). You can place predetermined governance on each transaction, for example to ensure that the transaction or resource is used by a specified time, or it will return to the issuing entity. Thus people can no longer horde resources or items. This could be very interesting in consumer goods markets or exchanges.
Bottom line: Blockchain enabled business processes will disrupt many middle men and streamline processes throughout the world. Taking costs out of ecosystems while speeding trade, ownership and most importantly increasing trust.
As the accuracy and transparency continue to improve, IoT and AI and CA will continue to replace many activities currently done by humans. According to a study done by Forrester called the “Future of Jobs”, by 2025, automation will replace 22.7 million jobs.
What does this mean to all of those call centers, order entry centers, testing and processing centers that are being used as outsourced service? Well they are replaced, but they are not being on-shored, they are being replaced by Cognitive Automation and voice responsive AI solutions. These solutions will take from multiple disparate systems both structured and unstructured data (leveraging other technology solutions such as Apache Hadoop) with knowledge bases and voice recognition software to revolutionize industries. Context based solution will replace what we know as knowledge workers today.
Is your company ready for the transition? What are your plans to remain competitive and not undergo the “Uberization” of your business?
Omnichannel Consumer Control
Information about where, how and why consumers are purchasing is cutting across multiple media and purchase channels. Big Data (structured and unstructured data from multiple disparate sources) to predict this purchasing behavior and is at the core of digital marketing activities today. How consumer goods companies find, engage and convert these consumers to purchase their products vs competitors is the new digital marketing war. Transactions have to be personalized, easier, faster and intuitive for consumers.
Today consumers have a vast array of tools and services to get the information they need to know what products are best suited to their needs. Digital sales are replacing brick and mortar stores at an alarming rate, for example Walmart looks at Amazon as a bigger competitor than it does other retail grocery stores. Many retail stores are becoming showrooms or distribution centers for items, thus reducing the need for human interactions (e.g. auto dealerships). Amazon’s new store, Amazon Go enables consumers to fill a shopping cart and leave the store with no cash register transaction.
Consumers are at the center of each buying decision. Where they get their information from to make an informed rationale purchase decision is critical for marketers to understand and know how to influence – whether through thought leaders, social media, mainstream marketing, etc. Digital marketing is now the key but with an omni-channel campaign surrounding that ensures all consumer segments have their own brand experience. This is extremely difficult to achieve in some categories and with some items, but it can be done. Marketers need closed loop thinking to bring the information, influence and purchase to its conclusion through all mediums with the consumers preferred e-commerce solutions (and delivery) that meets that individual’s needs.
Internet of Things
The Internet of Things (IoT) is the mass placement and use of sensors (some smart) around the world or business process to make actionable and timely changes to environments with advanced and predictive analytics directing actions. Think of farms needing to know when to put down more fertilizers in certain parts of a field to increase the yield, or when to water; or that jet engine that has 50,000 sensors monitoring hundreds of thousands of interactions every millisecond to ensure flawless flight. IoT utilizes vast amounts of Big Data with its volume, variety, velocity, and veracity of data.
Let’s look at some other potential uses of IoT technology that is being developed. Video streams that will not only enhance our security (e.g. facial recognition or observing suspicious activity) but could also assess an individual’s personal stress level? Add to that, wearables that can gather more performance data and a coach could be informed that an athlete is not performing at their optimum or may be injured. Or consider how the safety of a group of coal miners can be monitored to know if miners should be removed immediately from a mine because of impending respiratory issue in the mine.
Thus, new “solution provider” companies and business models are springing up with advanced capabilities to leverage the IoT and advanced analytics (including everything from ad-hoc statistical analysis, predictive modeling, data mining, text and voice analytics, optimization, real-time monitoring, machine learning etc.). These companies will have solutions for all industries including farming, manufacturing, the airlines, etc. Companies can then “rent” the capability and can move to a new capability when they need or they perceive a new advantage in the market place. These solution providers will be in high demand, as companies need to create the ability to seamlessly switch providers as the need arises and not get stuck with one technology provider or another, but rather based upon new state of the art capabilities and needs.
Reduction in cost of compliance and increased revenues are the obvious outcomes of leveraging IoT. Consumers are more appreciative and receptive to improved customer experience by companies that leverage IoT and Big Data analytics across the omni-channels.
The 4th Industrial Revolution will require new thinking and leadership that has a new strategic approach in many industries. We will see the changing of the guard across the leadership of multiple companies, with leadership coming from people with a blend of CIO/CMO experience to Supply Chain and Operations personnel. The operating models of the past are going to need to be transformed into highly flexible integration solutions that cut across multiple business processes and organizational boundaries and serving clients across channels. One could say the IT leadership becomes Business Leadership, as both will be integrally intertwined in the future. Companies must leverage those visionaries and start the process of transformation or be “uberized” by a competitor who is faster and more nimble, or be purchased by private-equity firms, who like to buy these typically big, slow-growing companies.
The revolution is coming, and it’s coming fast. Welcome to the 4th Industrial Revolution!