21 Facts On Supply Networks In The Digital Economy

Peter Johnson

Part 6 of the six-part blog series “Facts on the Future of Business

Innovation in the business world is accelerating exponentially, with new disruptive technologies and trends emerging that are fundamentally changing how businesses and the global economy operate. To adapt, thrive, and innovate, we all need to be aware of these evolutionary technologies and trends and understand the opportunities or threats they might present to our organizations, our careers, and society on a whole.

With this in mind, I recently had the opportunity to compile 99 Facts on the Future of Business in the Digital Economy. This presentation includes facts, predictions, and research findings on some of the most impactful technologies and trends that are driving the future of business in the Digital Economy.

To help you more easily find facts for specific topics, I have grouped the facts into six subsets. Below is the sixth of these:

 

New value opportunities

Digital supply chains can reduce supply chain process costs by 50%, reduce procurement costs by 20%, and increase revenue by 10%.

Source: “Digital Supply Chains: A Frontside Flip,” The Center for Global Enterprise.

Companies with 50% or more of their revenues from digital ecosystems achieve 32% higher revenue growth and 27% higher profit margins.

Source: “Thriving in an Increasingly Digital Ecosystem,” MIT Sloan Management Review.

During their operation, the NASA space shuttles cost $60,000 per kilogram to get their payload into low Earth orbit.

Source: “Back to the Moon – Getting There Faster for Less,” National Space Society.

The SpaceX Falcon Heavy will cost an estimated $447 per kilogram to get its payload into low Earth orbit.

Source: “Increasing the Profit Ratio,” The Space Review.

 

Platforms

82% of executives believe platforms will be the glue that brings organizations together in the digital economy. The top 15 public platforms already have a market capitalization of $2.6 trillion.

Source: “Accenture Technology Vision 2016,” Accenture.

By 2020, over 80% of the G500 will be digital services suppliers through Industry Collaborative Cloud (ICC) platforms.

Source: “IDC FutureScape: Worldwide IT Industry 2017 Predictions,” IDC Research Inc.

The world’s biggest banks have taken the first steps to moving onto blockchains, the technology introduced to the world by the virtual currency bitcoin.

Source: “Wall Street Clearinghouse to Adopt Bitcoin Technology,” The New York Times.

By 2027, blockchains could store as much as 10% of global GDP.

Source: “Making The Next Moves With Blockchain,” D!gitalist Magazine.

Africa is leapfrogging the developed world’s traditional banking systems through fast adoption of mobile and Internet-based technology, and is poised to take advantage of the disruptive opportunity that blockchains offer.

Source: “The Blockchain Opportunity, How Crypto-currencies and Tokens Could Scale Disruptive Solutions Across Africa,” BitHub.Africa.

Car sharing could reduce the number of cars needed by 90% in 2035, resulting in only 17% as many cars as there are today.

Source: “Self-Driving Cars Are a Disaster for the Car Industry, but Great for the Rest of Us,” Seeking Alpha.

Millennials are more than twice as willing to car-share as Generation Xers, and five times more likely than baby boomers.

Source: “Cars 2025,” Goldman Sachs.

Airbnb usage is projected to grow 1,165% by 2025, reaching one billion “room nights.” Key growth factors include Airbnb’s high levels of repeat customers, and significant word of mouth, as more than 80% of customers are likely to recommend Airbnb to friends.

Source: “One Wall Street Firm Expects Airbnb to Book a Billion Nights a Year Within a Decade,” Bloomberg.

Once fully available, 5G data speeds will be 1,000-times faster than today. This revolutionary leap will enable ubiquitous connections across the Internet of Things, engagement across virtual environments with only millisecond latency, and whole new Big Data applications and services.

Source: “2017 Predictions: Behind the Scenes with 5G – 2017 Lays Groundwork for Telecom Revolution,” Canadian Wireless Trade Show.

 

Automation and circumventing technologies

Self-driving trucks are hauling iron ore in Australia, convoying across Europe, and appearing on roadways across the globe. And because they offer business savings, self-driving trucks are expected to be more rapidly adopted than self-driving cars.

Source: “Self-Driving Trucks: What’s the Future for America’s 3.5 Million Truckers?” The Guardian.

Amazon uses 30,000 Kiva robots in its global warehouses, which reduces operating expenses by approximately 20%. Bringing robots to its distribution centers that have not yet implemented them, would save Amazon a further $2.5 billion.

Source: “How Amazon Triggered a Robot Arms Race,” Bloomberg Technology.

88% of U.S. consumers say free shipping makes them more likely to shop online, and 79% would select drones as a delivery option if it meant they could receive packages within an hour.

Source: “Reinventing Retail: What Businesses Need to Know for 2016 Whitepaper,” Walker Sands Communications.

Taxi drones will start flying passengers in Dubai in July 2017. Passengers will select destinations on a touch screen and will be able to travel up to 30 minutes at a top speed of around 100 kph.

Source: “Taxi Drones Set for July Launch of Passenger Service Over Dubai,” RT News.

Only 13% of U.S. and Canadian manufacturing jobs recently lost were lost due to international trade. 85% of the job losses stemmed from productivity growth — another way of saying machines replaced human workers.

Source: “Industrial Robots Will Replace Manufacturing Jobs — and That’s a Good Thing,” TechCrunch.

The European Union is proposing new laws that require robots to be equipped with emergency “kill switches” and to be programmed in accordance to Isaac Asimov’s “laws of robotics,” stipulating that robots must never harm a human.

Source: “Europe Calls for Mandatory ‘Kill Switches’ on Robots,” CNN.

By 2030, 25% of Dubai’s buildings will be 3D-printed.

Source: “25% of Dubai’s Buildings Will Be 3D Printed by 2030: Mohammed,” Emirates24|7.

Patients dying while waiting for an organ donor could soon be a thing of the past. By 2030, organs will be biologically 3D-printed on demand.

Source: “Healthcare in 2030: Goodbye Hospital, Hello Home-Spital,” World Economic Forum.

 

To view all of the 99 Facts on the Future of Business in the Digital Economy, check out the Slideshare or other subsets below.

 

To see the rest of the series, check out our page “Facts on the Future of Business” every Thursday, where we will cover these six topics:

  • The value imperative to embrace the digital economy
  • Technologies driving the digital economy
  • Customer experience and marketing in digital economy
  • The future of work in the digital economy
  • Purpose and sustainability in the digital economy
  • Supply networks in the digital economy

 

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Peter Johnson

About Peter Johnson

Peter Johnson is a Senior Director of Marketing Strategy and Thought Leadership at SAP, responsible for developing easy to understand corporate level and cross solution messaging. Peter has proven experience leading innovative programs to accelerate and scale Go-To-Market activities, and drive operational efficiencies at industry leading solution providers and global manufactures respectively.

Artificial Intelligence And Machine Learning Don’t Have To Be Creepy

Tim Clark

Over the past few years I’ve delved into the topic of customer experience, uncovering how new technologies are empowering businesses to know more about their customers than ever before.

While there’s nothing wrong with beer getting smarter at the shelf (and the data that is responsibly collected), it’s obviously not a good idea for businesses to take things too far. No one likes that “close talker” at a cocktail party. They can be downright creepy.

But avoiding the creep factor isn’t easy, especially when powerful capabilities like machine learning and artificial intelligence (AI) are on the guest list—and usually depicted as creepy forces in the world of sci-fi (I’m looking at you Blade Runner and Terminator).

The reality is that AI and machine learning don’t have to be creepy, and they shouldn’t be. It’s what businesses do with their data that matters, and how mutual value and trust are created with customers.

Dealing with doomsday scenarios

So what to make of recent comments from Elon Musk who believes the “global race for A.I. will most likely be the cause of World War III?” Or the notion that Musk has embarked on a “billion dollar crusade to stop the AI apocalypse?” No doubt about it, these are bleak, doomsday predictions of the highest order, coming from a modern-day visionary with access to bleeding-edge info, and they should be taken seriously.

As for machine learning, well, it doesn’t fare much better. Google’s AI chief John Giannandrea recently said he isn’t worried so much about Musk’s warmongering bots, but he is very concerned about “the danger that may be lurking inside the machine-learning algorithms used to make millions of decisions every minute.”

Yikes.

Thankfully, other tech luminaries have a much sunnier disposition about AI and machine learning.

Bill Gates recently told CNBC, “AI will make our lives more productive and creative,” while Mark Zuckerberg believes A.I. is going to make our lives better in the future. As for the doomsday scenarios making headlines, Zuckerberg thinks they are “pretty irresponsible.”

Personalizing the shopping experience

Gates and Zuckerberg’s thoughts are backed by serious research. IDC predicts cognitive/AI capabilities will figure in to some 40 percent of digital transformation initiatives by 2019.

And at SAP’s recent TechEd event, it was revealed that machine learning can help the $2.4 trillion fashion industry with a more personalized consumer experience, according to Margaret Laffan, director of Business Development, Machine Learning at SAP.

“Static window displays of the past won’t work in today’s world of fast fashion and consumer demands for an increasingly more personalized experience,” said Laffan in a recent story, The Ultimate Personal Shopper Is A Machine. “Machine learning gives retailers the speed and intelligence to quickly match the hottest looks with every customer’s fashion style.”

As you can see from this video demo of what this level of personalization looks like, it becomes much easier to understand why AI and machine learning can improve people’s lives without being creepy.

For more on this topic, see Why The Time Is Now For AI And Machine Learning.

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Tim Clark

About Tim Clark

Tim Clark is the Head of Brand Journalism at SAP. He is responsible for evangelizing and implementing writing best practices that generate results across blog channels, integrated marketing plans and native advertising efforts.

Digitalist Flash Briefing: Answers To Two Burning Questions About Conversational AI

Bonnie D. Graham

Today’s briefing looks at a current hot topic – conversational AI and digital assistants for your business – from the perspective of another hot innovation from back in the day.

  • Amazon Echo or Dot: Enable the “Digitalist” flash briefing skill, and ask Alexa to “play my flash briefings” on every business day.
  • Alexa on a mobile device:
    • Download the Amazon Alexa app: Select Skills, and search “Digitalist.” Then, select Digitalist, and click on the Enable button.
    • Download the Amazon app: Click on the microphone icon and say “Play my flash briefing.”

Find and listen to previous Flash Briefings on Digitalistmag.com.

Read more on today’s topic

 

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Bonnie D. Graham

About Bonnie D. Graham

Bonnie D. Graham is the creator, producer and host/moderator of 29 Game-Changers Radio series presented by SAP, bringing technology and business strategy thought leadership panel discussions to a global audience via the Business Channel on World Talk Radio. A broadcast journalist with nearly 20 years in media production and hosting, Bonnie has held marketing communications management roles in the business software, financial services, and real estate industries. She calls SAP Radio her "dream job". Listen to Coffee Break with Game-Changers.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

Link to Sources


From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Blockchain: Much Ado About Nothing? How Very Wrong!

Juergen Roehricht

Let me start with a quote from McKinsey, that in my view hits the nail right on the head:

“No matter what the context, there’s a strong possibility that blockchain will affect your business. The very big question is when.”

Now, in the industries that I cover in my role as general manager and innovation lead for travel and transportation/cargo, engineering, construction and operations, professional services, and media, I engage with many different digital leaders on a regular basis. We are having visionary conversations about the impact of digital technologies and digital transformation on business models and business processes and the way companies address them. Many topics are at different stages of the hype cycle, but the one that definitely stands out is blockchain as a new enabling technology in the enterprise space.

Just a few weeks ago, a customer said to me: “My board is all about blockchain, but I don’t get what the excitement is about – isn’t this just about Bitcoin and a cryptocurrency?”

I can totally understand his confusion. I’ve been talking to many blockchain experts who know that it will have a big impact on many industries and the related business communities. But even they are uncertain about the where, how, and when, and about the strategy on how to deal with it. The reason is that we often look at it from a technology point of view. This is a common mistake, as the starting point should be the business problem and the business issue or process that you want to solve or create.

In my many interactions with Torsten Zube, vice president and blockchain lead at the SAP Innovation Center Network (ICN) in Potsdam, Germany, he has made it very clear that it’s mandatory to “start by identifying the real business problem and then … figure out how blockchain can add value.” This is the right approach.

What we really need to do is provide guidance for our customers to enable them to bring this into the context of their business in order to understand and define valuable use cases for blockchain. We need to use design thinking or other creative strategies to identify the relevant fields for a particular company. We must work with our customers and review their processes and business models to determine which key blockchain aspects, such as provenance and trust, are crucial elements in their industry. This way, we can identify use cases in which blockchain will benefit their business and make their company more successful.

My highly regarded colleague Ulrich Scholl, who is responsible for externalizing the latest industry innovations, especially blockchain, in our SAP Industries organization, recently said: “These kinds of use cases are often not evident, as blockchain capabilities sometimes provide minor but crucial elements when used in combination with other enabling technologies such as IoT and machine learning.” In one recent and very interesting customer case from the autonomous province of South Tyrol, Italy, blockchain was one of various cloud platform services required to make this scenario happen.

How to identify “blockchainable” processes and business topics (value drivers)

To understand the true value and impact of blockchain, we need to keep in mind that a verified transaction can involve any kind of digital asset such as cryptocurrency, contracts, and records (for instance, assets can be tangible equipment or digital media). While blockchain can be used for many different scenarios, some don’t need blockchain technology because they could be handled by a simple ledger, managed and owned by the company, or have such a large volume of data that a distributed ledger cannot support it. Blockchain would not the right solution for these scenarios.

Here are some common factors that can help identify potential blockchain use cases:

  • Multiparty collaboration: Are many different parties, and not just one, involved in the process or scenario, but one party dominates everything? For example, a company with many parties in the ecosystem that are all connected to it but not in a network or more decentralized structure.
  • Process optimization: Will blockchain massively improve a process that today is performed manually, involves multiple parties, needs to be digitized, and is very cumbersome to manage or be part of?
  • Transparency and auditability: Is it important to offer each party transparency (e.g., on the origin, delivery, geolocation, and hand-overs) and auditable steps? (e.g., How can I be sure that the wine in my bottle really is from Bordeaux?)
  • Risk and fraud minimization: Does it help (or is there a need) to minimize risk and fraud for each party, or at least for most of them in the chain? (e.g., A company might want to know if its goods have suffered any shocks in transit or whether the predefined route was not followed.)

Connecting blockchain with the Internet of Things

This is where blockchain’s value can be increased and automated. Just think about a blockchain that is not just maintained or simply added by a human, but automatically acquires different signals from sensors, such as geolocation, temperature, shock, usage hours, alerts, etc. One that knows when a payment or any kind of money transfer has been made, a delivery has been received or arrived at its destination, or a digital asset has been downloaded from the Internet. The relevant automated actions or signals are then recorded in the distributed ledger/blockchain.

Of course, given the massive amount of data that is created by those sensors, automated signals, and data streams, it is imperative that only the very few pieces of data coming from a signal that are relevant for a specific business process or transaction be stored in a blockchain. By recording non-relevant data in a blockchain, we would soon hit data size and performance issues.

Ideas to ignite thinking in specific industries

  • The digital, “blockchained” physical asset (asset lifecycle management): No matter whether you build, use, or maintain an asset, such as a machine, a piece of equipment, a turbine, or a whole aircraft, a blockchain transaction (genesis block) can be created when the asset is created. The blockchain will contain all the contracts and information for the asset as a whole and its parts. In this scenario, an entry is made in the blockchain every time an asset is: sold; maintained by the producer or owner’s maintenance team; audited by a third-party auditor; has malfunctioning parts; sends or receives information from sensors; meets specific thresholds; has spare parts built in; requires a change to the purpose or the capability of the assets due to age or usage duration; receives (or doesn’t receive) payments; etc.
  • The delivery chain, bill of lading: In today’s world, shipping freight from A to B involves lots of manual steps. For example, a carrier receives a booking from a shipper or forwarder, confirms it, and, before the document cut-off time, receives the shipping instructions describing the content and how the master bill of lading should be created. The carrier creates the original bill of lading and hands it over to the ordering party (the current owner of the cargo). Today, that original paper-based bill of lading is required for the freight (the container) to be picked up at the destination (the port of discharge). Imagine if we could do this as a blockchain transaction and by forwarding a PDF by email. There would be one transaction at the beginning, when the shipping carrier creates the bill of lading. Then there would be look-ups, e.g., by the import and release processing clerk of the shipper at the port of discharge and the new owner of the cargo at the destination. Then another transaction could document that the container had been handed over.

The future

I personally believe in the massive transformative power of blockchain, even though we are just at the very beginning. This transformation will be achieved by looking at larger networks with many participants that all have a nearly equal part in a process. Today, many blockchain ideas still have a more centralistic approach, in which one company has a more prominent role than the (many) others and often is “managing” this blockchain/distributed ledger-supported process/approach.

But think about the delivery scenario today, where goods are shipped from one door or company to another door or company, across many parties in the delivery chain: from the shipper/producer via the third-party logistics service provider and/or freight forwarder; to the companies doing the actual transport, like vessels, trucks, aircraft, trains, cars, ferries, and so on; to the final destination/receiver. And all of this happens across many countries, many borders, many handovers, customs, etc., and involves a lot of paperwork, across all constituents.

“Blockchaining” this will be truly transformational. But it will need all constituents in the process or network to participate, even if they have different interests, and to agree on basic principles and an approach.

As Torsten Zube put it, I am not a “blockchain extremist” nor a denier that believes this is just a hype, but a realist open to embracing a new technology in order to change our processes for our collective benefit.

Turn insight into action, make better decisions, and transform your business. Learn how.

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Juergen Roehricht

About Juergen Roehricht

Juergen Roehricht is General Manager of Services Industries and Innovation Lead of the Middle and Eastern Europe region for SAP. The industries he covers include travel and transportation; professional services; media; and engineering, construction and operations. Besides managing the business in those segments, Juergen is focused on supporting innovation and digital transformation strategies of SAP customers. With more than 20 years of experience in IT, he stays up to date on the leading edge of innovation, pioneering and bringing new technologies to market and providing thought leadership. He has published several articles and books, including Collaborative Business and The Multi-Channel Company.