Meeting the challenges of the Fourth Industrial Revolution
By Andrew Nichols, Tungsten Analytics Lead and Head of Procurement for Tungsten Network
On March 1, the government launched its long awaited Digital Strategy. Initially due in early 2016, its overdue publication outlined the vision of a United Kingdom spearheading a “world-leading digital economy that works for everyone”.
While the publication was overdue, the changes it covered are already under way. The Secretary of State for Culture, Media and Sport Karen Bradley spoke of the UK’s digital sectors as being a major driver of growth and productivity.
“We are determined to protect them,” she said. “This Digital Strategy sets a path to make Britain the best place to start and grow a digital business, trial a new technology or undertake advanced research as part of the Government’s plan to build a modern, dynamic and global trading nation.”
To support the Digital Strategy, a group of MPs led by Alan Mak have formed the All Parliamentary Group on the Fourth Industrial Revolution (4IR). Many believe the 4IR, characterised by a fusing of the digital and biological spheres and enhanced communication between machines, will create the businesses and jobs of the future that will ultimately bring prosperity.
Engines and factories powered by coal and steam changed the world’s economic landscape in the First Industrial Revolution, followed by subsequent revolutions shifting humankind away from being reliant on animal power, making mass production possible and bringing digital capabilities to billions of people.
When looking at this evolution, a recurring theme is removing friction; making the day-to-day easier. Any digital approach, for organisations large and small, should focus on technology’s ability to do away with tiresome and menial tasks and instead boost productivity and efficiency.
Take transport as an example. Currently dead time, a long car journey could in the future be spent checking email or drafting a document with the adoption of autonomous cars. Along with the convenience, many see the change as a step up in safety. Human error accounts for 70-90% of accidents, and automated vehicles are poised to improve impressively on this record.
Another example is invoicing, which when done manually is tedious, time consuming and causes huge amounts of friction. Every day businesses waste time and energy by checking invoice documents received from a growing global supply chain. Additional time is wasted calling and emailing to check on invoices statuses, instead of accessing the information online.
Later in the accounts payable (AP) process, unanalysed procurement data stagnates in these paper invoices, instead of being quickly captured to understand procurement trends that can inform spending decisions. For suppliers, potential working capital lies dormant in unpaid invoices, unavailable to fuel business growth through new contracts or equipment.
Automate the invoicing process, or even the whole of procurement through to purchasing, and the time previously chasing invoices and POs can be better spent chasing after new business, nurturing talent and raising standards. Invoice processing is a job for machines; strategic thinking and problem solving are a better use of the human mind.
Crucial to the viability of the digital revolution is access to data and skills. By automating the invoice process, businesses can access vast reams of data on where and how they are using their money. This data can be used in numerous ways to enhance spending decisions, enabling people to act more strategically supported by knowledge and insight. Access to skills is harder to achieve.
The supply chain is no stranger to skills shortages, and digital should be added to this list. The government’s Digital Strategy addresses this in some way, by establishing training schemes and funding for research. It is up to the business community, however, to lead the way. To get ahead and be well-positioned for the Fourth Industrial Revolution, businesses should be upskilling their existing workforce with the relevant digital skills they and their employees will need to thrive in the future.
With this approach needs to come the knowledge that technological revolutions are hard for people, for some more than others. Just as suppliers want help transitioning to e-invoicing systems (a need we pride ourselves on addressing with our onboarding practices), so the automobile industry will need to help humans get on board with advancement in automotive automation.
That could mean education (what does driver training look like in an autonomous car?), marketing (test drive, anyone?), or acculturation (imagine James Bond sipping a martini in an autonomous Aston Martin, the dysfunctional family in Little Miss Sunshine in a fully-functional autonomous VW bus, or, for the kids, Scooby Doo’s Autonomous Mystery Machine).
The same is true for all changes digital. From experience, digitising the procurement process needs to be done with the people involved and their needs front of mind. Technology doesn’t exist for technology’s sake. Reams and reams of data are useless without a pattern to look for or trend to analyse. The digital revolution should be viewed as a route to enabling prosperity and growth for people, and an opportunity to remove friction from our lives.