Imagine that it is Saturday afternoon and you go to the local supermarket you always shop at. You are surprised to find a supermarket employee who greets you personally with a shopping cart filled with the goods based on your individual needs and wishes without you having to lift a finger. An amazing idea, don't you think? No more long lines; service based on your personal tastes and no time-consuming search in the shelves for the right product - utopia. This may sound farfetched and unrealistic; however, we are not too far off from this becoming an every day reality. Everyone today seems to be talking about digital transformation, but few know that we’re already in the midst of it: Digital reality awaits. Welcome on board!
You may be thinking about what this type of reality would involve. If we speak about digitalization, its mostly about linking information and services. Data is collected and content is analyzed in a predictive way, which leads to building new business models. Where operative decisions need to be made in a broad scope, digitalization can be used to automate many core processes. Despite millions of decisions, it is possible to make each decision optimally and individually. But let's stay with the example of commerce: for example here in Germany we experience poor customer service with unfriendly and anonymous customer service, products that are hard to find, and not enough sales. These are just a few main complaints that come up typically. At the same time, the number and diversity of products in sellers’ shelves continually grow. Today it is hardly possible anymore to process manual order lists for deliveries. Let's examine a large warehouse-like shopping mall. There are easily 160,000 products on hand there. Supermarkets have up to 27,000 products. No individual can have an overview of this product range in their head, day and night. For this reason, for some years now, all data has been digitally captured and processed. In addition, commerce is confronted with a growing number of customers who not only want to have an influence on the product itself, but who also want to have their individual needs more and more taken into account. The product off the rack is a thing of the past; the individual customer experience is in! Whether organic, vegan, or lactose-free, how is an individual retailer to permanently and on a daily basis ensure goods availability for each product and at the same time keep write-offs to a minimum?
Using predictive applications, the needs and the wishes of the individual can be taken into account. The increasing high degree of automation means better key figures in commerce, efficient processes and improved customer satisfaction. Data is the "raw material" of the digital world that enables the realization of digital business models. Today, thanks to modern sensors and technologies, more data can be captured than ever before. Targeted forecasts can be created today using the analysis of data, which make decisions easier.
But not everyone views automation as a great opportunity. Concerns have arisen to the effect that jobs will be lost en-masse and that people will be replaced by machines. Some even speak of "robotization," which will supposedly destroy the job market. The critique doesn't stop there. It includes data being misused and the complete loss of control of the technology.
But why do we have such fear of innovation? In my opinion, digitalization should not be viewed as a danger, but as a new opportunity. Our society will change in the near future and new generations of "digital natives" will grow up, who will become the customers of tomorrow. That generation will be molded less and less by today's buying and consumption habits. On the contrary, expectations are growing and habits will change. Enterprises must respond to this. A current study by consulting firm Roland Berger for the German Association of German Industry (BDI) shows that digital transformation of industry in Europe offers enormous opportunities. The challenges that go along with that will also need to be mastered. According to the study, Europe could thus have a growth in industrial gross value creation of 1.25 trillion euros by 2025 — or could lose 605 billion euros if things don’t go so well.
Numerous enterprises underestimate the challenge that societal change brings and they have no digital strategy. Too little is being done at management level with the many opportunities that can be realized with the internet of things. And the lack of courage to make digital change is surely a problem zone for the German economy.
I would like to invite you to get to know the digital future of tomorrow, as part of this blog. Check out our 10 Data Stories, how you can control your Business in the digital future.