As a new decade closes in on us, the science fiction of 1980 era is today becoming a reality with new “digitally connected, experience-centric, data enhanced products” being offered to digital consumers using crypto currencies based on blockchain based ledger systems. While the “Digital” hype has been around for a few years, the real impact on business is only starting now with the maturation of Artificial Intelligence, Hyperconvergence, Internet of Things and ubiquitous high-speed connectivity enabled by the emergence of 5G.
In the fourth industrial revolution, digital connectivity enabled by software technologies will fundamentally change society. As per the article – “The art of corporate endurance”, published by Harvard Business Review, the average age of a corporation listed on S&P 500 has dropped from about 60 to 18 years. Whereas, the new entrants like Facebook and Google took approx. five years to reach $1bn revenue. It is evident that disruption will flow from agile, innovative competitors who will design and deploy Digital Platforms to overtake the incumbents by improving the quality, speed or price at which they deliver value.
Successful enterprises in the fourth industrial revolution will have to understand the disruption of both demand and supply side. They will have to continuously innovate to understand the shifting customer expectations – they will also be experience-centric, collaborative and AI driven. We call this model “Enterprise 4.0”.
To get a deeper context of Enterprise 4.0, it is important to understand how successful enterprises have managed to stay relevant through different cycles of change.
Enterprise 1.0 – Mechanization, Steam Power, and the Weaving Loom
The first industrial revolution took place in the eighteenth century, when steam power and mechanization techniques were first used for production. The first glimpse of this could be seen in the weaving loom. Toward the end of the eighteenth century, the 2000-year-old handloom sector got a boost in production through steam- and water-powered machines. This eventually paved the way for the steamship and the steam-propelled locomotive, albeit one hundred years later.
Enterprise 2.0 – Electrical Energy, Assembly Line, Mass Production
In the 19th century, Enterprise 2.0 was set into motion with the discovery of electricity and the assembly line concept in production. By the turn of the century, electricity had also become the primary power source. Businesses were able to leverage this to enhance productivity by linking concentrated power sources to individual machines. Thus, came the era of manufacturing renaissance and mass production.
Enterprise 3.0 – Automobiles, Computer and the Internet
In the nineteenth century, Enterprise 2.0 was set into motion with the discovery of electricity and the assembly line concept of production. By the turn of the century, electricity had also become the primary power source. Businesses were able to leverage this to enhance productivity by linking concentrated power sources to individual machines, allowing for the era of manufacturing renaissance and mass production.
Enterprise 4.0 – Fusion of Physical, Digital and Biological worlds
It would be easy to dismiss Enterprise 4.0 as just another technology-driven hype cycle. After all AI, VR, ML, IoT are all part of the alphabet soup that we are ingesting every day. I believe that Enterprise 4.0 is much more than smart and connected machines termed as “Smart factories” in the manufacturing world. It is the fusion of technology breakthroughs in gene sequencing, nanotechnology, 3D printing, quantum computing and their ability to overlay & amplify across the Physical, Digital and Biological domains.
We will witness profound disruption across all the industries and reshaping of systems for production, consumption, transportation and payments.
How can business succeed in Enterprise 4.0 paradigm?
Companies combine multiple dimensions of physical- digital- biological will succeed in disrupting entire industry and its systems of production, distribution and consumption. In my conversations with CEOs and global executives the common underlying theme is “constant surprise” due to velocity of change, deluge of data and inability to comprehend innovation. Hence the first imperative of the business impact in Enterprise 4.0 is to look at oneself as business leader at your organization- Does the organization culture encourage innovation and failure (fail fast, fail forward)?
To succeed in Enterprise 4.0, organizations must be able to support millions of digital touchpoints while simultaneously developing, deploying, and delivering superior experiences. The IT reality in most enterprises makes it challenging to meet business aspirations.
My concern is that business and IT leaders will too often get caught up in designing traditional and linear business models, focussed on short term impact instead of thinking strategically about the forces of disruption and innovation shaping our future.
We at Zensar have answered this clarion call by launching “Digital Foundation Services”. And that will be the topic of my follow-up blog. Stay tuned!