Digital Transformation in the Age of Digital Disruption

If you’ve ever come across a European article about the IT industry, you may have come across the term “Industry 4.0.” This is a very important term to understand, the so-called Digital Business Transformation. Based on a report by Protiviti, 54% of organizations in the US are undergoing a major IT transformation, and 31% are reporting a disruption as a result of the implementation of transformation technologies. Forty percent of organizations have increased their IT budget by 10% or more, and 39% utilize outsourcing to keep up with the changes, support, or to augment their IT functions.

Protiviti’s_From_Cloud,_Mobile,_Social,_IoT_and_Analytics_to_Digitization_and_Cybersecurity

Source: Protiviti’s From Cloud, Mobile, Social, IoT and Analytics to Digitization and Cybersecurity – Benchmarking Priorities for Today’s Technology Leaders p.8

The World Economic Forum’s Networked Readiness Index is a useful indicator of how countries are performing in the digital world. It measures how well an economy is using the information and communications technologies to boost competitiveness. Singapore is at number one. The ranking is, to a large extent, the result of a strong government commitment to the digital agenda. Gains from information technology are widely shared in Singapore, and it makes excellent use of digital technologies to provide access to basic and government services and ensure that schools are connected.

The United States has also risen in the ranking this year. The US stands out in terms of its extremely favorable business and innovation environment, which has led it to become one of the agilest and digitized business sectors in the world.

The Times They Are a-Changing

If we look at the history of industrial development, there have been three major events that revolutionize industrial production. The first one, obviously, is the Industrial Revolution’s mechanization of labor that became the foundation of capitalism, future creation of the middle class and greatest advancements in all areas of life. The second leap forward was the introduction of scientific management and the mass production line. The Third Industrial Revolution started with the introduction of three-term controllers and resulted in factories filled with robots in a process called automation.

Today we are facing what some have called the Digital Transformation, Digital Disruption, Technological Digitalization, but to understand what is happening to the production, businesses and economy at-large, one should perceive the digital transformation definition not as a “disruption,” but as The Fourth Industrial Revolution — Industry 4.0. Now it is very important to decide whether to adapt to the new world or stay in the past. One can digitalize the business and use new technologies to outcompete the ones that were too slow. It is the task of every CIO in the 21st century to understand what the digital transformation is to put one’s company at the top of the wave of the Fourth Industrial Revolution.

Information Age, Realized

We all know that we live in the Information Age –the time of a shift from traditional industry to an industry based on information computerization. People whose jobs are easily automated have had to find other jobs, and this issue is still to be solved. Information is becoming more important than capital, and it became possible for a group of relatively inexperienced people with limited capital to succeed on a large scale, akin to what Zuckerberg had reached with Facebook.

But we see that it goes further than that. Industrial sensors and devices have invaded production lines, connecting machines to each other and to data centers that results in huge chunks of data processed by the computers that handle huge amounts of data, while also performing an accurate analysis. Experts estimate that the overall amount of information in-use will reach 40 Zettabytes by the year 2020. A huge chunk of this will be created by sensors and devices.

There are many emerging technologies, and some that are already popular are becoming even more developed and find more and more use in business. This includes the Internet of Things, Machine Learning, Artificial Intelligence, Industry 4.0, Big Data, machine to machine communication, the blockchain, cryptocurrencies and more. Let us have a closer look at some of them to understand the nature of this disruption.

Internet of Things, Machine Learning, Artificial Intelligence, Industry 4.0, Big Data, machine to machine communication, blockchain, cryptocurrencies

Big Data

Big Data has been a very influential technology in many spheres. Although the Big Data market has gone up in recent years, its biggest spike in growth is yet to come. The market size is expected to reach $33.5 billion by the end of 2017 and triple in the period of 10 years. Terabytes of information are produced by self-driving cars, automated factories, drones and robots. Cloud, IoT and Big Data all work together to gather, compute and give insights for people who manage these machines. With the rise of connectivity, Big Data solutions are becoming increasingly more utilized by industrial production. Google has more than 100 billion searches per month, and eBay has two data warehouses with 7.5 petabytes and 40 petabytes. All of this data is handled by the Big Data solutions, and the insights are extracted. With the projections showing the growth of the amounts of data created, the demand for Big Data will rise.

A great practical example of the utilization of such systems is Predictive Maintenance (PdM). The main purpose of this system is to allow the scheduling of maintenance and to prevent unforeseen failures. PdM can recognize the state of the equipment by performing periodic or constant monitoring of the equipment sensors. This makes maintenance time more accurate and less demanding. One of the first companies that used this technology was Rolls-Royce, on their jet engines. The system is constantly reviewing the performance of all engines that are in-use at the same time. If any sensor starts sending the information that is deemed abnormal, the system instantly notifies the owner of the jet engine. There are many technologies that use PdM. Sensors are able to detect the changes in the sounds machinery makes on the both sonic and ultrasonic level, noticing the friction and stress in rotating machinery earlier than any experienced maintenance team would.

Artificial Intelligence (AI)

Artificial Intelligence has been developing in accordance with the rise of computing capabilities. We already see many AI systems being used everywhere — from simple AI assistants on your phone to machines such as Watson used in healthcare that helps doctors make decisions. With artificial intelligence becoming more mainstream, one may ask about its impact on automation and, in particular, on the more knowledge-intensive tasks such as the discipline of predictive analytics. AI is a great example that demonstrates clearly what is digital disruption is all about. Increasing levels of automation that continue to replace labor may result in outsourcing becoming a moot point, as technology costs become far less than the low-cost labor from developing countries. In theory, choosing the right mathematical algorithm becomes obsolete as the machine determines the right technique. The machine, through its artificial intelligence algorithms, outputs the solution that can be applied immediately to a given business problem.

Cognitive Computing

Cognitive computing solutions, as they are sometimes called, are probabilistic, meaning they are designed to adapt and make sense of the complexity and unpredictability of unstructured information. They can “read” text, “see” images and “hear” natural speech. And they interpret that information, organize it and offer explanations of what it means, along with the rationale for their conclusions. They do not offer definitive answers. In fact, they do not “know” the answer. Rather, they are designed to weigh information and ideas from multiple sources, to reason, and then offer hypotheses for consideration. A cognitive system assigns a confidence level to each potential insight or answer.

Our company has vast experience in MS Cognitive Services that is extensively used by our team in our inside project as a part of our R&D development.  

PaaS, IaaS and SaaS

Everything as a Service is becoming bigger and bigger and is a part of any IT transformation strategy. Organizations working in many industries such as banking, insurance and many others, are taking a cloud-first approach to building their IT infrastructures. The age of Everything as a Service (XaaS) has arrived. Enterprise PaaS provides line-of-business software developers a self-service portal for managing computing infrastructure from centralized IT operations and the platforms that are installed on top of the hardware. The enterprise PaaS can be delivered through a hybrid model that uses both public IaaS and the on-premise infrastructure, or as a pure private PaaS that only uses the latter. XaaS solutions are also constantly updating, which means ongoing testing to ensure that data and integration integrity and configuration changes take advantage of new features.

SaM Solutions offers the best way to create a Software-as-a-Service without the vendor lock. We provide a system “SaM Java Cloud” that allows to invest in business features, not in tech frameworks that let you integrate any app and still own your platform. Many customers don’t enjoy the vendor lock that almost all modern platform have. The problem with it is that if you use any public cloud service, you can’t leave it. We offer a base for your business that doesn’t lock your application, but also provides live auto deployments, auto-testing, real-time quality metrics and integrated project management dashboards.

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The Future Is Now

If you visit any CIO conference where the transformation of business in the current digital times is discussed, many speakers use the same phrase when talking about digital transformation strategy. “It is now not about having a digital strategy, but rather having a strategy in the digital world”. This mindset is shaping the industry worldwide.

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Eugene

A copywriter at SaM Solutions, Eugene is fond of writing about innovative technologies and solutions that improve living standards and add value to business operations.