Disruptions enabled by emerging and maturing technologies are impacting business and society with increasing pace and depth, and this trend will persist in the next few years. More importantly, such Digital Shockwaves will interact with each other in unexpected ways.
This will create a complex and uncertain environment, which will be ripe for opportunity if appropriately anticipated, understood and acted upon.
Perhaps the most significant business disruptions will come from a combination of the connected sensors, devices and objects (Internet of Things), coupled with new ways to analyze, action and monetize the resulting data streams. This will complement, and may help counterbalance, the existing capabilities of digital giants (Facebook, Google, Alibaba, Baidu, Amazon, etc.) to engage directly with consumers via their mobiles, wearables or computing devices. Commoditized sensors and actuators will provide both rich context and precise control to an almost limitless range of use cases.
In such a highly connected world we will see an explosion in the potential to understand status, anticipate outcomes and automate processes. If we are able to couple this with the ability to share and act upon the associated data and derived insights, significant new business opportunities will arise. Some of these situations will emerge as transient business moments that necessitate an immediate and orchestrated supply chain response; others will arise from the application of deep learning to observed trends and behavioral outcomes.
New business models will emerge both within and across organizations.
Traditional organizational silos will disappear, simplifying trust and contractual agreements. Business performance will be measured by new digital business KPIs and LIs (Key Performance Indicators / Leading Indicators). New security models will be developed that enable trusted collaboration and bring a balance between ‘Block and Prevent’ and ‘Detect and Respond’.
Increasing automation will cause off-shoring to diminish and favor a ‘Gig Economy’
As automation (both physical and virtual) replaces an increasing range of human tasks, we must rethink our ways of working and the types of skills that are required for the future human workforce. Offshoring of roles as a means of wage arbitrage will wane as human tasks are increasingly executed by robots, smart machines, smart systems and ‘bots’ capable of interacting in natural language. Virtual service desks, driverless vehicles and medical and legal research are just some examples of areas that will be heavily influenced by automation. We also expect that some traditional employment models will shift to regulated “Gig economies.” There is even the real possibility (according to a growing cadre of economists) that many human jobs will disappear; work may become a privilege, and concepts like Universal Basic Income may become a real consideration for governments in some countries.
We have already seen the impact of Digital Shockwaves in the world of consumer services – from taxis to hotels rooms and online shopping to house buying. We can now enjoy more immediacy, personalization and convenience, and often at more competitive price points.
Data and service aggregators have rapidly risen to a position of market dominance in this arena.
In many ways, the battle for end customer engagement has already been won by the Digital Giants. Digital marketplaces, search engines and virtual assistants relegate product and service providers to the position of somewhat disaggregated component parts of the supply chain. As the range of real-world interactions facilitated by personal smart devices increases, consumers will become more reliant on digital personal assistants to interact with the world around them – from household appliances to bank accounts and healthcare providers to grocery shopping. As a result, the role of the service aggregator will become even more significant, and the Apps Era will wane.
Industrial Data Platforms will help incumbents to digitally reinvent their leading roles.
The changing business models and applications of technology we have already observed in the B2C world are now propagating through B2B interactions. We anticipate that the result will be both exciting opportunities and business disruption (e.g. some logistic chains will disappear in favor of on-site 3D printed parts; wind farms will reach optimal performance by the autonomous coordination of smart and social wind turbines), just as we have experienced with consumer services. Whilst we expect the impact to be even more far reaching, it will not be a repetition of the B2C case. If wisely implemented, Industrial Data Platforms hold the potential to digitally reinvent a leading role for service incumbents (e.g. a truck manufacturer selling smart truck usage à la Uber and displacing transport companies; a logistics company reinventing itself digitally to be the champion of 3D printing services) before they are displaced by the Digital Giants.
A few of the areas will probably not have a mainstream impact until well beyond 2020, but we believe they should be factored into an organization’s strategy today. For example, whilst gene editing is already possible and has been carried out in humans, the associated ethical implications are unprecedented and must play a part in our thinking now, since its eventual impact will be far-reaching. Likewise, whilst generally available Quantum Computing is still some way from becoming a reality, when it arrives it will render most current security and analytics technologies obsolete almost overnight.
Take-aways for business
During the next few years, businesses will experience a fluctuating and tremulous environment. Waves of change originating from long term megatrends will be compounded by Digital Shockwaves, impacting business models, organizational structures, operational processes, collaboration, financial models… practically all aspects of business. Navigating such change and disruption will not be straightforward and there will be no one-size-fits-all solution. Nevertheless we do believe that there are a number of areas that businesses can and should focus on to ride the Digital Shockwaves.
Emphasize situational awareness before strategy: map the context, driving forces and trends affecting your business. Define your strategy from that dynamic map and do not limit yourself to previous customer journeys, which you may not be able to influence directly. Otherwise you will be limiting the scope of your thinking just when disruption calls for brand new concepts.
Simplify all aspects of your business: operations, processes, structures, portfolios… everything. Simplicity and automation (where possible) are keys to attaining the efficacy, efficiency, flexibility and adaptability necessary to thrive in the context of shockwaves.
Prepare for Common Industrial Data Platforms, as a host or a stakeholder. Which aspects of your data should really never be shared under any circumstances? Which data that you do not own could bring radical advantages to your business? Who are the potential partners that own such data? Which win-win mechanisms can you devise for joint and secure exploitation of shared data? Think of possibilities such as limitations of use, temporal limitations or guarantees of reversibility.
Multi-speed IT is not a magical solution: balance carefully its advantages and drawbacks. It can be smoother and more cost effective in some cases. It could be an unnecessary intermediate step and even a constraint to full digitalization in others.
Counterbalance the digerati: digital giants are in fashion, and certainly have powerful strengths, but traditional businesses have their own strengths – identify and exploit them. In particular, seriously consider Industrial Data Platforms, both proprietary and shared ones.
Disruptive vs incremental innovation: whilst the latter will be useful, its role should be carefully balanced in the next few years. Emphasize disruptive business innovation, leveraging on digital technologies. Experiment more.
Invest in data collection, stewardship and analytics: the most important aspect of this effort will be developing the talent necessary to execute these critical requirements.
These concepts are discussed in more detail in the following pages, we hope that in the messages presented you will find topics of supreme relevance to your own Business, both directly and indirectly. I
Increase the granularity of your processes and transactions so they can be easily recomposed in real time through Advanced Analytics (Fast Data, Deep Learning). Coarsegrain processes will result in inefficiencies, obstacles to automation and lack of adaptability and competitiveness when interacting with third parties.
Maximize Automation of processes as well as interactions, except where it would negatively affect Customer Experience, Trust or Compliance. Prepare for social machines, smart contracts and other types of more advanced interactions. In a few years, some machines will be indistinguishable from people from the perspective of business process and interaction: they will decide, orchestrate common actions, make requests or execute payments on their behalf.
Flatten your organization and enable new (transformational) leadership to emerge: Social Collaboration and Knowledge Sharing tools will be indispensable in enabling Innovation Value Webs, but prepare adequate change management since organizational culture will also have to be transformed.
Break internal siloes: this is one of the major roadblocks that companies face in their transformation, especially B2B and industrial ones. Siloes hinder evolution, waste the most valuable resources and lock organizations into inward looking dynamics.
Put the customer in a central place even if you are a B2B company: Operational Excellence alone will not do the trick. As an example, some standards came into being due to design or manufacturing limitations which may no longer apply: can your products and services be less homogenous and more adapted to your customers’ needs?atos-j2020