There are times when it feels like the whole world is rushing at you at once. For product-oriented companies like manufacturers, retailers and software developers, this is one of those times.
We're entering the age of the Fourth Industrial Revolution (4IR), where radical change is happening on all fronts: from the way products are designed and tested, to the way they're manufactured, delivered and maintained.
Those changes are sweeping aside everything we thought we knew about the industries we operate in, and replacing it with tantalizing glimpses of an entirely new world. Like Captain James T. Kirk surveying an alien planet, what we're looking at is "life, but not as we know it".
With so much change happening, it's easy to feel overwhelmed by the possibilities, and to get distracted by "shiny objects" that aren't the most appropriate thing for your business to focus on.
We've created this interactive guide as an orientation point: a place to pause and survey the landscape of 4IR, and start to plan your journey through it.
Throughout, you'll find popups to explore, with links to case studies and further information to help with your decision-making. And if you'd like to discuss a pilot or proof of concept of your chosen approach, we have the tech and the experts to make it happen.
So, what would you like to know?
A key question to ask as you plan your 4IR strategy will be: How will the new approach be different from the way we work today?
Some companies use a 4IR approach to make dramatic improvements to existing business processes. For example, sensors in cargo fleets and freight containers can provide a much better understanding of capacity and flow, and the data can be used to radically improve logistics efficiency.
Others use it to add new services and revenue streams to existing ones. And some have seen it as an opportunity to disrupt their entire business from within, and completely change their underlying business model.
Discover different types of 4IR strategy you could consider for your own organization.
Where to start: Your customer experience analysis will guide you towards the right choice for your organization - whether that’s a step-change improvement to your current business processes, or a completely new business model.
Performance step change
4IR technologies are helping companies to make exponential improvements to existing processes - vastly improving efficiency, utilization and profitability. Examples of step-change performance improvements include:
Flexible production technology means different versions of a product can be manufactured to individual customers’ specifications. It’s custom production with the economics of mass production.
Data from sensors in the cargo fleet and containers is used to optimize routes, modes and load levels, enabling goods to be transported faster and more efficiently. Masonry firm Mutual Materials saved $1m in interbranch freight costs with intelligent logistics.
A rapid testing capability for complex discrete products (such as aircraft), using sensor data to build and test a digital equivalent Siemens uses a digital twin to test its industrial control systems in a virtual factory before manufacturing them in its real facility before manufacturing.
A connected and collaborative environment to source, design, test and commercialize new product ideas faster.
New services / business models
For product-oriented companies, many of the new revenue streams and business models involve a shift from a product business to a service business. Examples of new business models include:
A product is delivered and maintained as an ongoing service A tire manufacturer delivers new tires as the customer’s old ones wear out, based on sensor data from the vehicle. Rather than buy new tires each time, the customer pays a regular subscription for the service. on a subscription basis. The vendor generates continuous service revenues and the customer benefits from a predictable, monthly cost.
Customers do not buy the product, but rent it when they need it. A family summons a driverless car when they need to make a journey, rather than owning a car of their own. The manufacturer retains ownership of the car, and telematics in the vehicle enable per-use pricing. This saves money for the customer and enables manufacturers to generate regular revenues rather than one-time transactions.
The product continuously monitors and reports on its own status, Sensors in a leased front loader detect a problem with the oil pressure in the machine. That triggers an automatic service request with the leasing company, who dispatch an engineer to fix it before the machine has to be taken out of operation. triggering a service request if certain parameters are not met. Over time, faults can be predicted well in advance of any failure.
The customer manufactures the product locally, An auto parts company allows its network of dealers to 3D-print parts on their premises for faster vehicle repair. The parts company enjoys substantially lower shipping costs. using specs licensed from the manufacturer. The customer gets the item faster and the manufacturer slashes materials, inventory and shipping costs.
The customer does not buy the product but instead buys the right to use the product, Philips provides “light as a service” to Amsterdam Schiphol Airport, supplying all light fittings and maintaining them under a service contract, while retaining ownership of the hardware. which is owned and maintained by the vendor.
Because of its focus on delivering a service experience, a 4IR approach often requires companies to connect elements of their enterprise in radically new ways. Oracle calls a 4IR-ready organization a Connected Enterprise.
In a product-oriented company, a Connected Enterprise sees supply chain, customer-facing and internal operations being connected and aligned around the customer’s needs.
As with any major change initiative, succeeding with 4IR means effectively aligning People, Process and Technology to deliver on your strategy.
Here are some key points to consider in each area as you chart your path to 4IR:
4IR can represent a major shift in the way your organization develops, markets and sells its products, and in the way you view and interact with customers, suppliers and partners. It's critical to have everyone on board with the change, otherwise it may not get off the ground.
For example, if your salespeople don't feel excited and confident selling the new service, they may fall back on selling the "old product" because they feel more comfortable with it.
You'll need to think very carefully about training, hiring, organizational structure, KPIs and incentives, especially if you're making a wholesale change from a product-based model to a service-based one. One popular approach, for example, is to build an internal startup to "test drive" the innovative product and service.
Moving to a 4IR approach will undoubtedly change the way your business operates - possibly quite radically.
The business processes you use today may not be fit for purpose in a 4IR world, especially if they are confined to silos and don't connect the various areas of your enterprise that need to be aligned in order to deliver the new service.
Companies that are succeeding with 4IR are using Cloud technologies to orchestrate processes across business functions. The results are threefold: customers enjoy a seamless experience, the organization can transition to the new model in the most efficient and agile way, and the flexibility of the cloud means it's easy to keep adapting to changing customer demands and needs.
Here are five examples of 4IR-ready business processes that Oracle has helped leading companies to adopt:
- Innovate to Commercialize
- Source to Settle
- Order to Cash
- Plan to Produce
- Maintain to Optimize
Where to start: Every organization's journey to 4IR is different, and a lot depends on how siloed (or not) your critical processes are today. Start by mapping the ideal customer experience of your new service, then assess which business processes need to be aligned in order to deliver it.
To get the most from your 4IR initiative, you'll need the right technology to support it. In choosing the right tools to support your strategy, it's essential to consider your entire technology environment, including:
Which of your products do you plan to connect to the Internet of Things, how will they be connected, and which technologies will you need in order to do that?
You’ll need a technology infrastructure that supports the entire lifecycle of the service or revenue stream you intend to create, including R&D, production, service delivery, sales, service, human resources, collaboration, and financial planning and management. This is where Cloud comes into play - with applications that are continually updated and designed to support modern, end-to end business processes.
You’ll also want to be able to make the best possible use of the data that your initiative generates: including data from your connected devices, from your production processes, or from your customer service interactions.
Re-organizing your workforce around the new 4IR model may require more remote and mobile access to core systems and data than your people have currently.
It’s life, but not as we know it. The world of the Fourth Industrial Revolution may seem an alien place at first, but with the right planning and support, it’s a world you can quickly make your home.
This guide has provided an overview of the key considerations you will need to bear in mind when drawing up your 4IR strategy - and given some pointers on where to start with your planning.
Whether you’re planning to make a step change in your current operational performance, or looking to pilot a completely new business model, Oracle can help. Our Cloud platform and Cloud applications are built from the ground up for the modern world, enabling you to create a 4IR-ready Connected Enterprise.
With modern business applications in the cloud, you can quickly realize your 4IR ambitions in a way that is both cost-effective and ready to accommodate future changes.
And our experience of working with hundreds of customers on 4IR initiatives - including many of those mentioned throughout this guide - means we are well placed to help you plan and create the technology environment to support your 4IR strategy.