October 3, 2017 | Written by: Matthieu van Bilsen
Categorized: Thought Leadership
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High-tech companies develop devices and technologies on which digital interactions take place. These interactions create massive amounts of valuable data that enable industry disruption. But while they’re creating the very tools required for digital disruption, these companies themselves are not immune to their own displacement by revolutionary innovators. Industries are converging, creating huge opportunities, but also facing new unexpected threats.
To survive in this tumultuous environment, high-tech companies need to reinvent themselves constantly by driving four strategic priorities:
- Subscribe to outcomes that are relevant for their customers.
- Realize a digital supply chain that accommodates the heightened expectations of responsiveness.
- Deliver intelligent products, allowing for new services and offerings.
- Achieve customer intimacy: put the end consumer at the center of every decision.
The heart of reinvention lies in two key-areas: the business model and the business process. As new business models are driven by services, insights and an increased interaction with the end-user, a profound impact and adjustment is needed. Organizations must examine how products and services are developed, sourced, manufactured and sold while continuously meeting the heightened expectations of the customer. The digital reinvention of business processes necessitates an ecosystem approach that includes suppliers, value-add resellers and trading partners as usual. But now in addition, it requires active collaboration and the sharing of data across the entire ecosystem.
For example, a device manufacturer’s ecosystem involves a diverse range of globally sourced components, suppliers, manufacturers, assemblers, wholesalers and retailers. Problems arising for the end-user can thus be caused at various stages of the value chain. So, the creation of a platform that connects a traceable supply chain, production assets, finished products and big data analytics would enable fast feedback loops providing information quickly to all partners, and would ultimately improve the end-user experience.
The use of artificial intelligence can play an enormous role in this. IBM’s own supply chain organization was confronted with an overload of data which caused the organization to react to situations rather than anticipate them. Furthermore, when situations were resolved, the team dispersed, and with them went the valuable knowledge that was gathered to solve the crisis.
Today, with the use of Watson cognitive supply chain, potential crisis situations are identified and communicated much sooner. Analysis and understanding is supported by Watson and alternative courses of action are suggested. This approach leads to better informed decision making and faster resolution of the crisis situation.
The selected response is fed back into the AI system, so it keeps improving for crisis situations to come. This application of artificial intelligence in the IBM internal supply chain has reduced data retrieval time by over 75 percent and has saved over USD 40 million in inventory and freight costs.
The reinvention of the core of your business is critical to continue winning in an increasingly competitive environment.
In a recently published ebook, IBM and SAP set out their joint vision of the challenges and opportunities facing the industry. In it, you’ll find more ideas about how high-tech companies can digitally reinvent themselves as well as information about how IBM and SAP are developing intelligent solutions. These solutions can increase customer value through cognitive computing, enhanced customer and user experiences, and high-tech industry-specific functionality.
Learn more about the IBM and SAP alliance.