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Industry 4.0 – Time to reassess business plans

Mouli Ganguly, Member, Board of Advisors, talks on Industry 4.0, Digital Transformation and more:

  1. How has market reacted to digital transformation so far? What are some factors that seem to aid it/ factors that act as a barrier?

Introduction of computers in the 80s and internet in the 90s were digital transformations (DT). These transformations speed up existing process in their own way.

Currently, with Augmented Reality (AR), Virtual Reality (VR), Mixed Reality (MR), Artificial Intelligence (AI), Internet of Things (IoT), Big Data etc, we are heading to the third wave in digital change. With this change, content reach has become faster and more specific to the user’s individual & specific context.

There is a question of what is the hype and what is the reality? The hype is often an expectation that Everything will turn digital from day one. But the reality is it takes a long, long time.

Digital disruption is when the whole user experience changes. When you look at the current technologies like AR-VR, you are in an immersive environment. Second thing that changes in a business is convenience. It gets faster and better. Take for instance YouTube, people are not wholly dependent on it for video services. We have now got other video streaming options. From being costly and time consuming to produce a video, now they’ve become so simple.  Within a span of five years, existing technologies have changed so much.

In the residential space, AR-VR is already there. If you look at smartphones or movies, almost every movie has a VR effect in it. Whereas in the enterprise phase, it is happening far more slowly due to change management issues. There are whole lot of processes, policies, rules that play out. These multi-factor influences act as barriers, at times.

Take a look at this scenario:

On a personal level, if you see a 3-D glass that you fancy, you just go ahead and buy it and try it and see. But in the enterprise phase, we cannot change what we do on a day-to-day basis, immediately. It is a gradual process to adapt changes and involves formal change management. Enterprises don’t have individual decisions like personal buyer choices. A new technology adaption must act in a certain business standard. In an enterprise space, one person cannot just act on it or start using something. There are other people involved. This is a huge barrier in adapting or initiating digital transformation.

  1. If you were to chart a blue-print for an enterprise’s digital transformation, what actions would it typically involve?

Adapting new technologies to businesses happen if there is a clear benefit. Unlike personal choices, a business cannot adapt a technology or a process without a defined benefit. There should be a strategy or a growth plan that cites the benefits.

Benefits can be divided into three: Either the customer or staff experience the product or service delivers is much superior leading to increased loyalty and willingness to adopt from them. Since organisations measure customer satisfaction, this is an inclusive environment.

Next one on the list is Product or process improvement. Take for instance claims processing in an Insurance company. It is quite difficult organising in person, especially if the person has availed trauma insurance. In digital world, you can have number of different tools from virtual assistance to people working in collaborative environments to remote diagnostics with tele-medicine, all of these improves the overall process.

Enterprises must include the market & customer in its product development. It is easier to create a digital product. One can quickly create a product and launch it and test it as a POC (proof of concept), before scaling up or canning it altogether.  Therefore, the whole product cycle in the market is faster than before. Through failure, you learn, Fail fast and fail without incurring a high cost or brand damage and you will innovate with successful offerings.

Finally comes the cost reduction factor. Basically, several things drive digital adaption. You grow the experience, generate customers, grow staff loyalty and therefore get more market opportunities. You get market opportunities to get new products by reducing the cycle time to market, your process has changed, you change the format quickly. And as your cost reduces, you become more productive. This sort of drives some of the opportunity.

Now, what is the big risk that you face while doing so?

Benefits, use cases & training/change management needs are not clear. For instance, when we say I’ll improve the claims processing experience in an insurance company, one needs to clearly articulate what is the use case. What is the customer roadmap of journey? How the customer uses the new digitised transformational services that you provide. Then one has to map it all the way. At each point you have to state what is different. How or where will I be delivering this serviceand  how will the business be using it. It is not a technology or process issue. Business must very clearly define the benefits they will get.

Now, how do you do it?

Firstly, create a simple proof of concept. And these concepts have been around for a long time, but very, very quickly you spin something up, like Appearition is doing at the moment, we can create an experience for the customer to show them the actual benefits very quickly.

The next thing that comes is change management. You have to say, if we are going to do things differently, digital is to be applied on a day to day basis, how do you make sure that when either our customers or suppliers or staff use it, how’d they be trained, accept it and use it. And most importantly, everybody in the eco-system, i.e. the staff, customers, suppliers should be able to deal with the change. This change management leads to a fully functional prototype. Proof of concepts at a very low price, say 30-50k dollars, roughly, you show them how it is done, from there we move to a fully functional prototype. From the prototype, we get a use case development.

In our design we use tools like machine learning, artificial intelligence, data from Internet of things and analytics to continually improve the experience.

The last one, which must be designed in terms of the blueprint, is integration. Every organisation has a whole lot of legacies. Because, nobody is working in vacuum. The new systems have to interwork with the legacy in most cases. This becomes a difficult, costly & cumbersome process.

3. What are some of the opportunities and risks that enterprises will face whilst adapting it?

Whatever digital services one provides, one must draw the data from those existing legacies. One of the elements to add to the risk is realisation. Because, sometimes, some firms do not have a clear strategy on how they want to go digital. They just dump and start an initiative without a strategy. So, if you get an application up and running, it will look very nice and appealing to whoever designed it and they will think this will change the world. But if there is no change management to support it, the customers, the staff are not wedded to it. It hasn’t been well thought through.

 

Follow this space for Part-2 of this interview.

AR Digital Transformation and the Indian Market

Ravichandran Lakshminarayanan, Member, Board of Advisors, Appearition India speaks on Augmented Reality, Digital Transformation trends and the Indian market and more:

Your take on the AR/VR market in India.

Though AR/VR arrived, so to speak, may be about three years back, significant impact or adoption (usage) is yet to be seen, be it in the consumer space (though we have VR centres in some malls or VR headgear sold with smart phones) or in the enterprise space.

AR/VR is certainly going to be a game changer for industries like retail, real estate, entertainment, and tourism in India.

Education is another area where we will see significant AR/VR adoption. (I foresee not only schools & colleges taking advantage of the power of AR/VR, but many other formal and non- formal fora including corporate/industrial training will take advantage of these frontier technologies).

 

Mobile market in India – Smartphones undergo constant metamorphosis. What features do you think they need to adapt to stay abreast with the AR/VR tech?

India is a price sensitive market. Today there are more than 300 million mobile phone connections, in India. Mobile phone sales literally skyrocketed, only because device prices came down drastically.

Mobile phones are going to drive AR/VR usage and it is very important that the AR/VR capable phones are priced right for the Indian market.

Next is content in local languages like Tamil, Hindi, Telugu, Kannada. For AR/VR to drive mass usage/adoption, local language content will be a key.

Last but not the least, the devices(phones) will have to be more user friendly than they are now.

 Your take on digital transformation for businesses these days.

Today there is no business that can shun or stay away from digital transformation. The degree of transformation or rather what percentage of the business is digital versus non-digital may vary from business to business but there’s not a single business that’s 100% non-digital.

In the Indian context, this is so particularly after the introduction of GST.

Though it has taken time, businesses have understood the benefits of digital transformation.

How has the Indian market reacted to digital transformation so far? What are some factors that seem to aid it/ factors that act as a barrier?

The Indian market was quite reluctant to accept/embrace digital transformation, initially.

The reasons were:

  • market did not understand what digital transformation is.
  • market could not see value in digital transformation immediately
  • digital transformation was taking firms/players out of their comfort zone
  • firms were unsure of the payback period if they opted for digital transformation.

Slowly but surely as a few early adopters took hesitant steps towards digital transformation and started ‘seeing’ the benefits, more and more firms followed. Today, I dare say, there are very few firms, if any, that have not been touched at all by digital transformation.

Today everybody understands that digital transformation is not only inevitable but benefits all. Firms are still evaluating their ROI and hence pace of adoption is not ideal yet.

There are obstacles and challenges, the foremost being connectivity not only in terms of speed and price, but in terms of reach. There are still many areas in the country where connectivity is very poor or non-existent .

Technologies like 5G and other indigenous technologies and solutions, will hopefully, address this issue.

What are some barriers that companies face while venturing to a new geography?

In my opinion the most important barrier is culture. The culture in each geography is unique and the sooner companies understand the local culture the better for them. The next important challenge is to understand the local laws, business environment. There could be challenges in effective communication besides language differences. The pace at which things move, including the pace of business negotiations can vastly vary. Distance and time could be a challenge, too. Finding and hiring people who are trustworthy and competent can be a challenge. Establishing franchises, signing up agents and other business associates may take longer than what companies ‘back home’ are used to

What sort of obstacles did you face while setting up your e-commerce venture and how did you overcome them?

The very first challenge was not being able to register a domain name, from India.

(Internic was the only share registry and for registering any domain one had to pay $100; the only way to pay was online; this was not possible from India. I had to take the help of my sister in US, who paid this $100 and we registered chennaionline.com on Aug 15, 1997.)

One of the foremost challenges for a start up in a sunrise industry, which the online space was, way back in 1997, was getting the right people to come on board. We leaned on friends and other contacts to get the initial few hires.

The next challenge was funding –VC/Angel funding culture, back then, was literally nonexistent. Raising capital as equity was very difficult if not impossible. Debt funding or in Indian parlance, a bank loan was the only option.

Banks lend against tangible assets – land, building, plant & machinery – and also insist on security for the loan. Here was a business that had no tangible assets (except some PCs and servers and switches and modems – assets that depreciated faster than the mercury rising in Chennai summer) and a business model that was at best vague (actually from the bank perspective, it was all Latin and Greek).

The Bank Manager, professed he understood nothing, but said he was impressed with my sincerity of purpose and sanctioned the loan. (“As a breed we are risk averse, but if we do not take some risk to support highly qualified technocrats, when we get an opportunity, then we do not deserve to be sitting here”, he said!)

Though the potential of the web/online was fairly well established globally, India was slow to adopt or embrace this ‘new economy’ and hence every ‘pitch’ had to be from ‘ground zero’. One of our (founding team) important roles was to evangelise Internet& ecommerce; evangelise we did with passion and enthusiasm. This not only got us noticed but became a competitive advantage, too.

There were many more challenges including getting the right office space, etc.

There were so many Foreign Exchange rules & regulations that receiving or sending money out of India was a huge task. We did $ transactions wrestling with a plethora of forms and multiple agencies.

Do you see similar obstacles for firms these days, despite a bridge that filled the knowledge gap?

Certainly not. Thanks to information/knowledge available in one click, for anyone, and the more business friendly environment, many of the earlier day business challenges do not exist. However, each new firm (or old firm) has a unique challenge. It is much like a baby’s growth – from conception to infancy to childhood to adolescence to adulthood – at every stage in the life of a firm there are unique challenges. A successful firm is one which understands this and also understands every challenge is a possible opportunity.

The future of the print industry: Linking the Physical and the Digital

 

The world is sitting on the cusp of the 4th Industrial Revolution (4IR) – changing how industries operate, bringing greater automation and accuracy to a variety of business processes.

 

In this series, we will explore how 4IR is going to affect the industries of our clients, and how we believe the right strategy can empower you to embrace the inevitable.

 

First up: The future of the print industry.

 

Forbes article: Why everyone must get ready for the 4th Industrial Revolution

 

 

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 How is the future of the print industry turning into a reality around you?

 

In the last few years, we have seen a proliferation of small and start up label printers leading to increased competition. Good digital presses cost little more than US$45,000 – not a laughable sum, but certainly more than affordable for entrepreneurs with the right idea.

 

Meanwhile in emerging regions, larger multinational corporations are expanding operations and establishing themselves as they navigate the pricing politics of new territories.

 

The LaManna Alliance projects that “In 2017, you should be pushing 20-30% growth rate. Otherwise, you’re lagging.”

 

We recently visited PacPrint 2017, the region’s “premier show for print, sign, display and graphic communications” and with over 150 exhibitors and a rumored 15-20 million dollars in sales taking place on the event floor, it’s understandable that key players in the industry are looking to shake things up and keep this momentum going.

Quick Link: Our CEO, Vivek Aiyer, recently spoke of trust and the Designer Enterprise

 

What are some challenges faced by the industry given this success?

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How can the future of the print industry be populated with millennials Generation Y and eventually, Generation Z?

Ageing workforce: The growth of the digital industry has meant that younger, computer-literate and tech-savvy employees have been more inclined towards seeking employment outside the print industry.

Companies are increasingly realizing the need to standardize onto the one platform helps with strategic alignment across business systems and broader business processes.

Standardization, Centralization & Flexibility: Most companies in this space have different systems and machines through acquisitions or then, as with most large organizations, inherited implementations of legacy software. These, in turn lead to errors in compliance, alignment, downtime and ultimately, inefficiencies.

How can we prepare audiences for these technologies, bearing in mind that innovation doesn’t always come cheap?

Active & Intelligent Packaging (A&IP): When it comes to product security, authentication and even preservation to some extent, A&IP will grow increasingly commonplace around us. It certainly seems like these technologies for a part of the future of the print industry.

Clients now require “relationships” with “partners” – as compared to “services” from “suppliers – and this is unavoidable!

The vendor/client relationship: Clients of all sizes are becoming increasingly demanding of one-on-one service. The fact of the matter is that there are a number of players who can top quality service, and price competition isn’t the only factor anymore.

 

Previous post: Customer Experience is all about Managing Relationships

Previous post: Culture of Trust – How does your customer feel?

 

How does a digital transformation lead to the future of the print industry?

Tech-driven process/information management & workflow tools

Have systems set up for verification of jobs, improved reporting and integrated with management tools. Enable remote access of presses – improving efficiency as the press process becomes more computerized. Tech processes can also improve internal processes and stock ordering and tracking. Clients (or Partners) with their increased expectations can now be empowered to track their orders through all stages of production.

 

Customer/Client/Partner engagement & New business

Technology proliferation has led to a variety of methods to increase and improve engagement. For example, QR codes, NFC, RFID, Augmented Reality and randomized designs. Understanding how these technologies serve well as data collection points and having them integrated into information managements systems help track interaction and build insight. In addition, improved traceability and big data enable the client relationship evolve into one of consulting – and partnering for growth and offering unique and individualized experiences.

 

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“Labelprinter 4.0” – Digital transformation & change management 

 

On the outset – it all seems tremendously exciting and simple. But that is the fallacy of innovation. Installing systems doesn’t just mean clicking one button – it includes change management. Upgrading machinery isn’t just reinstalling software – sometimes it’s training staff who are afraid of failing (or trying). Terms like myopia and pain avoidance are a lot more real than the buzzwords they are dismissed to be sometimes.

 

Opportunities like bundling print and digital ad sales to push greater RoI sounds great, but how does that mean the adsales team needs to be re-structured? For example, having a sales team that also possesses analytical skills and understands programmatic sales becomes critical. In such scenarios – if that’s the preferred mode of linking digital to physical – then print companies must understand marketing requirements, more so than before – as these multimedia experiences reach out to audiences with more targeted accuracy than ever before.

 

 How can we help?

 

Innovation is no longer “nice-to-have” but that’s not to say it’s something to jump into. The key remains identifying a larger strategy that can assist with the growth of the clients you work with. Adding value to the labels and packaging produced, but also understanding how these products are being disbursed and the user experience of the final consumer.

 

At Appearition, we understand that the print industry has traditionally operated within certain models – for example, buying hardware outright or leasing systems for slow and steady returns. Crossing the chasm of technology is one that isn’t so simple. Our goal is to enable others success – and finding the neutral state of partnership so we can all grow together. We look forward to hearing from you.