Are you digitally obese?

By Pierfrancesco Manenti | November 22, 2016 | 0 Comments

Supply ChainPower of the Profession

“Everything that can be digitised, will be,” writes futurist Gerd Leonhard in his latest book, Technology vs. humanity: The coming clash between man and machine, which discusses digitisation as the “technological shift that is rewriting our society.”

Pointing out a number of ethical implications of pervasive technology – including threats of a jobless future, which I’ve discussed here – the author says that, for consumers, “digitisation often means cheaper goods and widely improved availability”. For businesses, it “will have a transformational impact in logistics, shipping, manufacturing, food and energy”.

In this book, I particularly love the notion of “digital obesity”. As the author puts it: “we wallow and pig out on a glut of news, updates, and algorithmically engineered information that may be anything but”. While the author is referring to individuals, I’m thinking about organisations and their supply chains.

Inundated by terabytes of demand, supply, manufacturing and logistics information, from inside and outside the organisation, businesses are becoming digitally obese. How can they navigate across this ocean of information? How can they distinguish lots of useless data from the few nuggets that really matter?

Infographic illustrating 'digital obesity'.

The digitisation imperative

The results of our 2016 Future of Supply Chain survey verify the ongoing race to digitisation, while the perception of the importance and disruptiveness of a number of emerging technologies keeps on growing year-on-year.Chart listing 'disruptive and informative' technologies.Today’s wave of digitisation is miles away from the information technology revolution of the late 20th-century. Back then, the adoption of personal computers and ERPs helped organisations to gather and store information and, for the first time, build essential master data.

The challenge back then was lack of information. Today’s challenge is digital obesity and its antidote is modern digitisation – where sensing data is as important as the ability to understand its implications and respond to it.

Through digitisation, business leaders want to get more visibility of real-time information (internet of things, cloud computing), improve decision-making intelligence (big data analytics, machine learning), further automate operations (advanced robotics, drones) and transform business models (digital supply chain, 3D printing and the sharing economy).

The Matrix

In order to help businesses that are developing their digitisation strategies, we developed the SCM World Matrix methodology, which is geared around a very simple representation of end-to-end supply chain and its digital sense and respond capabilities.

Infographic illustrating the SCM World matrix.Businesses use it as a white canvas to draw their current digitisation strategy and plan for their digital vision of the future. The takeaway from such an exercise is a rough prioritisation of planned or proposed investments in new digital capabilities.

What’s constantly emerging from these Matrix exercises are clear symptoms of digital obesity. In most of the cases, businesses lack capabilities in both the Matrix’s core – supply chain visibility, integrated business planning, product lifecycle management – and the edge – demand and supply sensing, social listening and advanced robotics.

The Voice of the Customer

As community members are using the Matrix, they’re also reflecting on the technology vendors they’re currently using. In our recent Voice of the Customer survey, we asked customers to tell us their opinions on vendors’ solutions through these five metrics:

  1. Scale of impact – how vital is the solution to support your overall digital transformation strategy?
  2. Reliability – does the solution work flawlessly, meeting all the business expectations of the agreement?
  3. Innovation – did the solution bring you an innovative business approach and technologies to support your overall digital transformation strategy?
  4. Speed – how quickly were you able to fully implement and roll out these solutions to a point where you started getting benefits out of it?
  5. Value for money – do you view your total investment in the solution (including necessary implementation services and maintenance costs) as having been worth the cost?

The results are disappointing as the average appreciation of vendors’ services is only 3.2 on a scale of 1 to 5. Looking into the five individual metrics, there is no shining star. Not even innovation. The results show that users don’t think their current vendors have brought an innovative business approach or technologies to support their digital strategies.Chart illustrating survey respondents opinions regarding the voice of the customer: how customers evaluate their current supply chain technology vendors.So, the growth in digitisation finds supply chain technology vendors unprepared. In our ongoing Matrix research, we’re investigating these vendors through requests for information (RFIs), briefings and customer reference interviews in order to understand what they’re doing to better innovate their technology and to position their capabilities on the Matrix.

Vendors are aware of these gaps and investing millions in a race to integrate emerging technologies – especially cloud, big data analytics and the internet of things – in their business applications.

There is no time to lose. Technology development is accelerating exponentially. Businesses need solutions.

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