In the past few years, we have seen digitization bring its first benefits to the industrial sector, particularly in processing and manufacturing, yet enormous untapped potential remains. Digital capabilities such as e-commerce platforms can significantly improve traditional customer-supplier experiences. Additional advances in automation, big data and analytics, and the Internet of Things create additional opportunities for substantial gains along the entire industry value chain.
Digitization – Another industrial revolution
Early signs of the digital revolution are already here. Amazon Business, a B2B e-commerce platform launched in April 2015, turned over $1 billion in sales in its first year, growing at an impressive 20 percent per month. B2B buyers increasingly prefer digital, with 94 percent conducting some form of online research before purchase.
Further changing the rules of the game are the decreasing costs of new processing technologies such as additive manufacturing and advanced robotics. For example, 3-D printing costs came down by 60 percent between 1990 and 2014, and industrial robot costs decreased 5 percent annually between 2000 and 2012.
Digital’s disruptive power
But digital is not only a means to optimize a company’s existing operations. It also gives both attackers and incumbents the power to disrupt value chains, enter new sectors, and create innovative business models. Established companies face threats from new competitors like Amazon Business, which offers millions of products, from automotive components, industrial lifts, and ramps to lab products, protective gear, and electrical equipment.
To get ahead of threats like this, industrial companies can use digital to transform and extend their own business models before change is imposed on them by attackers reshaping their industry. Some incumbents are joining digital platforms and B2B marketplaces to aggregate demand and sell direct to end users. BASF, for example, was the first chemicals company to sell products online through Alibaba. Other businesses, such as the 3-D printing start-up Sculpteo, are selling services rather than products. Still others are offering their manufacturing capacity as a service to third parties.
Five ways to win with digitization
Companies that want to get ahead of the digital pack would be wise to take five key steps:
- Prioritize and scale-up.
- Adopt a test-and-learn approach.
- Put foundations in place.
- Treat data as a competitive advantage.
- Work across functions, and manage change in the organization.
Digital’s potential in industry is massive, not only in operations, but across all functions of the sector, and the levers that make the most difference to a company’s bottom line vary—from e-commerce to automation to advanced analytics. But industrial companies must begin taking advantage of digital opportunities in order to avoid losing the value to others. A commitment to digitization from top management is critical to succeeding, as is a systematic method of defining priorities and the ability to leverage early success to drive change.
The Fastcomm Advantage
Fastcomm’s business is to build technology platforms that empower its clients to digitally transform their businesses and therefore to understand and address the growing needs of their customers. Our mission is to build long-term technology partnerships that help transform companies, allowing them to concentrate on their core business.
We have a proven track record of understanding disruptive technologies and the effect that they have on businesses. We have built platforms in the IOT and OTT technology domains that allow us to connect people, places and things successfully.
The Fastcomm group of companies have been providing solutions to its partners, since 2002. We have offices in the USA, Europe and South Africa, allowing us to produce innovative solutions, utilizing know-how and skills acquired worldwide.
Our skilled engineering teams have, over many years, created platforms and building blocks that allow for rapid development and deployment of solutions.