When was the last time you bought a newspaper, CD or DVD?
These finite physical items have been replaced by infinite digital services that allow us to access any story, song or movie that we want, within seconds.
This is the age of abundance. The age of Business 4.0. Media services may have been the earliest to be disrupted by abundance, but this phenomenon is now reaching into every part of the economy and having a transformational effect.
What is Business 4.0?
Let me give you some context to Business 4.0. The era of industrialization from the late 18th century has been punctuated by revolutions that redeﬁned how an economy functioned – ﬁrst steam, then electriﬁcation and the advent of computing.
Today, we are seeing the Fourth Industrial Revolution, or Industry 4.0, which is driving the conﬂuence of the physical, digital and biological worlds.
Alongside this, big enterprises are having their own technology evolution. Having built their digital spines and moved to the cloud, these agile organizations are now embracing automation, robotics and artiﬁcial intelligence. They are putting experience ﬁrst, winning over new customers and growing at a super-accelerated pace. We call this evolution ‘Business 4.0’.
Companies that expect to thrive with Business 4.0 are using technology to meet the high expectations of today’s customer. We identify four characteristics of Business 4.0: mass personalization, the leveraging of ecosystems, exponential value creation, and embracing risk.
When speaking about the first mass-production of cars, legend has it that Henry Ford said: “If I had asked people what they wanted, they would have said faster horses.”
There is truth in that aphorism: customers often think along current processes. To deliver Business 4.0, you have to help your customers get their job done in new and better ways, rather than improve a current process for that job. Technology today allows you to reimagine services, in a personalized way.
Mass personalization requires an intimate knowledge of your customers, so that you can offer products and services that they haven’t even imagined possible. Using AI to derive insights from customer data can enable this.
Swedish postal service PostNord, for example, did exactly this. Björn Ekstedt, Chief Information Officer at PostNord, says that while customers had told the business that they wanted to track shipments; after further delving, it transpired what they really wanted was to know when their shipments would arrive.
The company developed ‘Egil’, a machine-learning bot that scans all real-time transactional data. It searches for patterns in the data that indicate a delay will happen before it occurs, helping to take action to correct it. This provides a level of certainty over deliveries for every shipment of every customer. Each PostNord customer knows when to expect the shipment and worries less about it.
Meanwhile, the airline KLM is using AI to develop a personalized sales approach for its customers, offering them deals on specific flights before they even start looking.
There are any number of examples of mass personalization in action: recommendation engines for retailers; genome interpretation to personalize health and treatment; nudging individual behavior towards safe practices at work and so on.
Thriving in this age of abundance also means acknowledging that there is a whole world of answers and solutions out there beyond your company. Delivering the best results for your customers will mean collaborating with others.
As Amit Bajaj, CEO of TCS Europe, says: “The whole concept of innovation or disruption is less about technology and more about mindset and ways of working. You need a mindset to harness abundance, rather than harnessing scarcity.
“There is a change of mindset from working in a very proprietary way to more of a collaborative way of working.”
For Dutch bank ABN AMRO, this has meant opening up its APIs (application programming interfaces) to external software developers so that its services can be made available to customers through all kinds of smartphone apps. The bank has created a Developer Portal in partnership with TCS and others that currently offers four APIs for commercial clients to build into their own apps.
Many banks are starting to consider fintechs as partners rather than competitors and have started working in collaboration with them. In fact, enterprises in every domain are finding emerging technology companies to be valuable partners.
Creating Exponential Value
Whether you are a software developer or a heavy machinery manufacturer, every part of your business must be digitally connected to truly tap into the abundance of the digital age.
Data focused on your operations can help you work faster, smarter and more efficiently.
Consider the concept of a ‘digital twin’: take a thermal plant that uses coal. Every batch of coal has different properties. Controlling emissions or getting the right output from each batch requires recalibration of all plant parameters. This takes a lot of time and expertise. However, simulating on a digital twin of the plant enables this to happen faster, with fewer errors. Simulation uses historical data, or data you already have, to build digital models.
Rolls-Royce is another company that is using new tools for data innovation. It uses the Internet of Things to collect, store and process data to eliminate manufacturing and supply chain inefficiencies. These shared data and insights will enable Rolls-Royce to develop new products and services at a faster pace.
As was the case for the pioneering technologies of the 18th century onwards, the transformational journeys of today are bound to encounter risk.
But this can be managed by relying on the very technology that is driving these transformational journeys.
Enterprises are going to rely on automation to mitigate risks. AI, blockchain and lightweight encryption are just some of the approaches that will play a big part in this.
K. Ananth Krishnan is the Executive Vice President and Chief Technology Officer at Tata Consultancy Services.
TCS Innovation Forum is an annual event that brings together select TCS clients, startups, venture capitalists, top universities, analysts, industry experts, and senior TCS leaders, to network and learn about the latest enterprise technologies, industry best practices, trends and more.
The 2018 TCS Innovation Forum, which will explore the shift from the ‘Age of Productivity’ to the ‘Age of Abundance’, will run from 2-4 May. Regular updates and insights will be available via a live blog.