Just a recap, we learnt in my last update, the making of Data that makes an AI system successful. In this excerpt we are going dwell upon the design and delivery of Digital business models and solutions thereof.
The ‘first wave’ of data creation, which began in the 1980s and involved the creation of documents and transactional data, was catalyzed by the proliferation of internet-connected desktop PCs. To this, a ‘second wave’ of data has followed — an explosion of unstructured media (emails, photos, music and videos), web data and meta-data resulting from ubiquitous, connected smartphones. Today we are entering the ‘third age’ of data, in which machine sensors deployed in industry and in the home create additional monitoring-, analytical- and meta-data.
Given that much data created today is transmitted via the internet for use, ballooning internet traffic serves as a proxy for the enormous increase in humanity’s data production. While as a species we transferred 100GB of data per day in 1992, by 2020 we will be transferring 61,000GB per second. Beyond increases in the availability of general data, specialist data resources have catalyzed progress in machine learning. ImageNet, for example, is a freely available database of over 10 million hand-labelled images. Its presence has supported the rapid development of object classification deep learning algorithms.
In summary, harnessing the power of the new machine alone is not enough. The final piece of the puzzle, and the ultimate determinant of your success, is surrounding it with the right business model.
The traditional retail behaviors of buying from the physical outlet have changed drastically as today, the amazons/flipkarts have changed the retail business models with speed and price (cheaper of course). Hence most of the industrial models are currently too slow, too expensive, and too cumbersome. They crumble under their own weight in the face of digital competition. In most well established organizations these business models and supporting processes make sure that the knowledge work could be harvested, refined and distributed to the right people at the right time and in the right format.
Of course such a buffet scenario sounds absurd. Yet you will soon look back on several aspects of your business with the same disbelief that Buffet views the old newspaper business. With the growing common appearance of the new machine, however, as I have outlined earlier stability is no longer a viable strategy. Competitors, new and old, will not only be able to change the rules of the game from the outside by delivery vastly improved customer experiences through digital with mobile apps. Instrumented products, and advanced analytics for one-to-one customer management. They will also being changing the basis of competition from the inside, using the new machine to rewire core internal processes. Doing so will fundamentally change their cost base, as well as the speed of their operations and their ability to derive insight on all aspects of the business. Truly better, faster, cheaper. Very simply, in the face of the new machine, manually based knowledge processes do not stand a chance. So the question still remains will the winning business model be just digital only. I guess it will be mixture of part physical and part digital. For instance: even if the tomorrow’s airplane carries the much of the passenger experience and flight operations through digital, it still would be a 280 ton, 300 seater physically. So essentially in an organization the decision will be based on which processes will physically remain intact and which processes will go digital and completely unrecognizable and obviously what becomes a mix of physical and digital – and to what degree.
Let us now look at building the winning Mix model of business and there you will come across two big insights in building one.
- Four misadventures to avoid
- Confusion over best way to becoming digital
- Following the digital leaders in our implementation
- Going big bang in the digital journey
- Obstructing a Digital change
- 5 ways to Harness the new machine
- Build Automation
- Enhance human potential by Machine support
- Cost effectiveness to compete in market
- Investment for Innovation
Hence we have to radically rethink and fundamentally affect yet help us return to our humanity. These are the nit bits of all emerging Managements who are doing the hard work to rewire their companies for the fourth industrial revolution, to define and implement the new business models.
Stay tuned…. Part IV of this foray, we will dwell upon the construct of the business model with a focus on the 5 ways to harness the new machine.
Authored by Venugopala Krishna Kotipalli