Competing in the Digital Economy

Competing in the Digital Economy

We know how the world of business will look tomorrow. It will be more dynamic, more customer-driven, and even more global. What capabilities will accelerate your journey and make you successful in the Digital Economy?

Think of the economy after the current lock down. Hopefully we will soon be back to normal, but this normal will be different from before. The current situation showed how fragile the business ecosystem is, and how much more we can do with the available technologies.
We found that a lot of work can be done online – meeting, negotiations, education, grocery shopping, parties and even movie nights with friends.

And if the change affected you, it has also affected your customers. They will expect customized, real-time experience with every interaction with your company. And your internal processes will have to enable it.

The current situation will blow many of the internal barriers and we will see further digitization of company processes. This, in turn, will make the business much more data-driven. For example, customer demand will be assessed using predictive algorithms that consider all the available information inside and outside of the company.
Every transaction and communication will be recorded and analyzed to assess customer satisfaction and guide future interactions. The connected sensors will generate data to bring real-time awareness for each subsystem, providing ongoing quality control, delivered by self-managing automated production lines.

The companies that successfully digitized their internal operations will be able to connect to each other and form a real-time Digital Ecosystem. This in turn will enable seamless, flexible and scalable supply chains. So, when a customer pushes the “Buy” button of an online store, the whole supply chain will light up as the neurons in the brain. Inventory updates, shipping labels, delivery service request, restocking from the vendors – all of these steps will happen in a fraction of the second, and will go like a digital ripple through the whole ecosystem.
All these connected companies will be exchanging value in a Digital Economy. And integrating a new vendor will be as simple as connecting a new API.

The following diagram shows our perspective of how the adoption of one technology will accelerate the development of the next one, and together will bring us closer to the Digital Economy.
We put them in perspective of time horizons, where Horizon 1 is the current time. Horizon 2 is between 6 months and 2 years in the future, and Horizon 3 is beyond 2 years ahead.

Let’s start with Horizon 1. Most companies today are using some form of IoT devices or other sensors for collecting viable operational information. They provide accurate data about the important business inputs from inside or outside of the company.

The connectivity to these sensors is a mesh of licensed and unlicensed wireless and wireline technologies. Swisscom is one of the first telecom providers deploying 5G – the fifth generation of mobile connectivity. It will offer a much faster network connection and very low latency (or delay) for the messages between connected devices. Using 5G the companies will collect more real-time data and respond faster to changes in their environment. Swisscom demonstrated this in a joint project with a pharmaceutical company called Ypsomed, where a full 5G network was deployed on the factory floor. It provided operational data for real-time automated decisions.

Cloud – The Cloud today provides reliable and cheap resources for computation and storage.  Having more data from different sources and different locations will push the need for the heavy computation from the centralized cloud to the decentralized edge. What we call the Edge will depend on the type of the business and the type of connectivity.

Edge analytics – The current development of Machine Learning algorithms is focused not only on new capabilities but also on making the algorithms smaller and able to learn from fewer data. Smaller algorithms plus better edge infrastructure will enable analytics at the edge of the networks. Which will allow the workforce to perform corrective measures or predictive maintenance earlier before the issue escalates and impacts the production line. Smart edges will also benefit the different types of transportation. It will help to optimize the truck routes and will improve traffic safety for self-driving cars, where a delay of few milliseconds can have a significant impact on the reaction of self-driving vehicles.
It can even help the navigation of industrial-grade drones like Swisscom already demonstrated with our partner Involi.
In the manufacturing industry, the Edge Analytics will provide instant quality control and will make the industrial robots smarter, so they can take decisions on the factory floor.

Smart Cities – Having smarter infrastructure will help the development of the Smart Cities. Optimized traffic, safer streets, autonomous transportation, and decreased pollution are some of the features we expect in the connected cities of the future. Places like Boston, Las Vegas, Kansas City, and Chicago are already taking advantage of smart solutions to address transportation, sanitation, connectivity, and safety issues in their communities.

Data Exchanges – Companies will accumulate vast amounts of operational data, but they will also need to exchange it with their partners. The role of the Cloud will change from siloed computation farm to intercompany data exchange where the data is stores and securely shared. The information will travel with the speed of light allowing the business partners to coordinate complex business decisions. The Digital Economy is a digitally connected economy.

As the data accumulates, it creates its own gravity – it brings new use cases and new customers. For that reason, the providers of the Data Exchanges will become the center of the digital ecosystems. They should be the reliable partner and trusted guardian of the Information, the most important asset of the Digital Economy.

Companies like Bdex, Dawex, and even Amazon already provide data exchange services. At the moment there are more than 7000 companies offering anonymized operational data on Dawex. This data covers many business sectors, including Healthcare, Banking and Insurance Services.

Having enough data does not automatically bring the benefits of Machine Learning and AI. There need to be experts in the company who can prepare the data sets and train the algorithms. Having the data available in the Data Exchanges will allow third part companies to take on some of the routine tasks and provide AI as a Service. Google already has several AI and machine learning products, like AI Hub – a hosted repository of plug-and-play AI components, and AI building blocks – with image and language understanding, and conversation capabilities.

Enterprise Blockchain – It is a ledger shared between business partners that shows all the transactions and events, in the same order and with the same status. This way each participant has the same understanding of the status of the system.

In some implementations, the future business transactions could be codified as programmable contracts, that can be executed when a specific predefined event happens. For example, a sensor detects a predefined insurance event, which will trigger automatic payment from the insurer.

Such a system will simplify the relationship between business partners, and speedup the business transactions. One of the most successful examples so far is the blockchain collaboration between Walmart and IBM. Walmart is requiring all of its suppliers of fresh leafy greens (like salad and spinach) to trace their products using the system.

We will have a challenging, but exciting journey ahead of us. The good news is that Swisscom is already providing these technologies or developing them together with our partners.

The core ingredients of the digital economy are key pillars of the Swisscom strategy:

  • Connectivity
  • Cloud
  • AI and Data Services
  • Security
  • Blockchain

Swisscom can help you connect the dots and deliver integrated services that can help you be competitive in the digital economy of the next decade.

The Swisscom’s Outpost in the Silicon Valley partners with Startups and established vendors to identify and develop new solutions for our internal and external customers in Switzerland.

Stefan Petzov, VP Technology & Innovation, Outpost Silicon Valley, April 13, 2020

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