The Fourth Industrial Revolution Is Here. Are You Ready for It?
A fourth industrial revolution is under way, and the driving force behind it is data. How effectively organizations acquire, analyze and act on data to accelerate innovation and go-to-market strategies for new products and services will have a major impact on their future success.
Data insights analyzed from a plethora of sources – mobile devices, POS systems, websites, invoicing, inventory and supply chain platforms, customer relationship management (CRM) systems, and Internet of Things (IoT) sensors – teach organizations about customer preferences and habits. The challenge is to monetize those insights to more accurately target customer needs and differentiate from competitors.
This is achieved through software – specifically, through applications. Apps are how value is generated and delivered from all the technology infrastructure and data. At the end of the day, the app is what enables an organization to create new connections with customers, suppliers, partners and other stakeholders anytime anywhere.
Companies that have a digital-first strategy are starting to reap the benefits, with 32% of them telling IDG Communications that digital business has boosted their revenue by an average of 23%. Currently, according to IDG, 89% of organizations have committed to a digital-first strategy to improve employee productivity, enhance customer experience and drive revenue growth.
Data and Technology Redefining Businesses
Digitization promises to have a profound impact by transforming how we work, live and interact. Indeed, its effects may surpass that of previous industrial revolutions, starting with the invention of steam-powered machines in the 17thcentury. Two centuries later, electricity expanded mechanization to far-flung places. In the 1940s the semiconductor spurred the third revolution, bringing computing power to various dimensions of our lives.
Now, with data as the driver, new business models, relationships and services are redefining business success. Massive volumes of data are generated every second, thanks to recent developments such as social media, cloud platforms, mobile devices, and – now – the proliferation of sensors and processors in a vast array of devices, from thermostats to street lampposts to earth-moving heavy equipment to jet engines.
Gartner predicts that come 2020, some 20 billion devices will be connected. All these connected objects will generate data – lots of it. They’ll tell us about engine vibrations, moisture, temperature, fuel levels, road conditions, inventory, movement of people and objects, patient heartbeats and insulin levels – you name it. If it can be tracked, it will be.
Analyzing Data from the Edge
With data arriving from all sides, organizations will need robust strategies to manage the lifecycle of their data, from acquisition to analysis to action. Data will generate insights that elude the naked eye.
For instance, a manufacturer can determine if production costs are too high because of inefficient sourcing of raw materials. Cities can sync traffic lights to ease rush-hour congestion. Construction companies can track equipment to optimize scheduling and minimize theft. They can equip hardhats to sense worker movements and keep them out of danger in environments where taking a wrong step can be disastrous.
All this data, whether collected from customer websites, worker hardhats, moving vehicles or some other source, has to be analyzed and understood to produce outcomes that deliver a competitive advantage.
Organizations need strategies and platforms to acquire and analyze data for actionable insights. In many cases data will be generated at the edge – as physically close as possible to where the action is – to enable real-time critical decisions. Analysis of historical patterns, meanwhile, will help identify market opportunities and target new products and services to the right customers.
Digital Payoffs That Businesses are Taking Advantage of Today
Organizations need agile software development capabilities and easily updated platforms to optimize their data. Successful digital businesses such as Tesla, Starbucks and American Express have made substantial investments to introduce and update products, interact with customers and secure transactions.
Tesla, for instance, regularly updates vehicle software to add features that enable greater degrees of autonomy and better range. American Express notifies card members of transactions in real time through its app to curb fraud. Starbucks speeds up the ordering process by letting customers place and pay for orders by mobile app. General Electric offers predictive maintenance for oil drills to improve efficiency and cut costs. McDonald’s is building a cloud analytics platform to improve data management and let users self-service provision applications and infrastructure.
These are but a few examples of digital business at work – a continuous stream of improvements that are improving the lives of customers and adding to the bottom line. Many more will follow as digital transformation and IoT implementations proliferate.
Set the Vision
What’s making the fourth digital revolution possible? Economies of scale and Moore’s law have driven down the costs of compute processing and connectivity, and today we find the smartification of every imaginable object. To succeed in such a world, digital businesses need networks to move data between billions of devices and locations, from the edge to data centers to hybrid cloud environments; IT infrastructure and processes will need to adapt and become more agile for quick development, deployment and simplified management; and security must be integrated into the entire lifecycle of the application in order to protect the data, the business, and most importantly, the customer.
Companies that have succeeded in digitization efforts are giving us a glimpse of what’s to come in the fourth industrial revolution. They are demonstrating that efforts to harness, analyze and act on data can pay off. Those just starting to develop or implement digitization strategies should take their cues from these successful pioneers and carve their own path into the digital future.