There is a massive technological transformation going on around the world today and the key distinguishing characteristic of this transformation is the accelerating speed and scope of the IT platforms and systems that support modern society.
Jeanne Esterhuizen, President of the Retail Motor Industry Organisation (RMI), believes although so much has been said about this fourth industrial revolution (4IR), in its simplest definition, it boils down to the fact that “we are all connected and everything is connected to us”.
She says if one looks at the exponential growth that has ushered in the fourth industrial revolution, exemplified by new technology such as artificial intelligence, virtual and augmented reality, machine learning, bio-technology and the emerging Internet of Things, these new technologies may be distinct, but they all depend on ubiquitous and increasingly fast connectivity.
“The acceleration of innovation and the velocity of disruption are hard to comprehend or anticipate, but are most certainly having a major impact on businesses,” says Esterhuizen.
She says on the supply side, many industries are seeing the introduction of new technologies that create entirely new ways of serving existing needs. They are significantly disrupting existing industry value chains. “Disruption is also flowing from agile, innovative competitors who, thanks to access to global digital platforms for research, development, marketing, sales, and distribution, can oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.”
Major shifts on the demand side are also occurring. Growing transparency, consumer engagement, and new patterns of consumer behaviour, increasingly built upon access to mobile networks and data, are forcing companies to adapt the way they design, market, and deliver products and services.
She says a key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those we see within the sharing or on-demand economy. “These technology platforms, convene people, assets, and data creating entirely new ways of consuming goods and services in the process. In addition, they lower the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers.”
Esterhuizen says the impact of 4IR on business centres around customer expectations, product enhancement, collaborative innovation, and organisational forms.
Whether consumers or businesses, customers are increasingly at the epicentre of the economy – an epicentre which is all about improving how customers are served. Physical products and services can now be enhanced with digital capabilities that increase their value. New technologies make assets more durable and resilient, while data and analytics are transforming how they are maintained. “Meanwhile a world of customer experiences, data-based services, and asset performance through analytics, now require new forms of collaboration, particularly given the speed at which innovation and disruption are taking place. And the emergence of global platforms and other new business models, finally, means that talent, culture, and organisational forms will have to be rethought.”
“Overall, the shift from simple digitisation (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution) is forcing companies to re-examine the way they do business. The bottom line, however, is will our business leaders be able to adapt? These business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate,” she concludes.