The telecommunications industry has aspirations to become the platform on which all industries can base their operations, similar to the way in which the IT industry has become the platform for all non-performance critical enterprise applications over recent years.
This piece has been contributed by Cambridge Consultants, Gold Sponsor of the CWIC 2019 Connectivity plenary. Its author is Derek Long, their Head of Telecoms and Mobile, Wireless and Digital Services, and Chair of the conference steering committee.
The basis of this is clear. By connecting products and combining with cloud-based services, it is possible to reduce the complexity of devices and lengthen the relationship between vendor and customer. Reducing complexity will allow new subscription-based business models, reducing product cost and expanding market potential. Extending the relationship between vendor and customer will promote greater customer loyalty. Modifying products based on customer behaviour, for example, is one way in which businesses have gained value from this approach, providing additional, features, fault fixes and improved security.
Another example is the evolution of the music industry. After a long period of analogue storage and distribution via vinyl and magnetic tape, the CD combined with digitised music to enable superior mass market music distribution. Once it was understood that CDs contained little more than data files, it became possible to distribute music electronically, significantly reducing distribution costs, paving the way for new devices. CD players evolved to MP3 players, which in turn evolved to general purpose devices, such as smartphones. The impact on the industry was profound, as music downloads reduced the requirement for music stores. Whilst retailers found it increasingly difficult to do business in the new environment, the new distribution method broadened the market potential for non-mainstream music genres. The most recent innovation has been subscription based streaming services, which are based on reliable internet connectivity and have reduced the costs of enjoying music, whilst also expanding the addressable market.
A similar evolution is emerging in other industries, including retail and automotive. Retail is perhaps the most transformed, with customers commonly conducting online research before purchasing. Online retailers, such as Amazon and eBay, with lower cost bases and advanced customer preference analytics, can tailor offerings to an individual’s specific preferences. Combined with lower prices, fast delivery and flexible return policies, online retail has significantly disrupted traditional retailers, who have begun to suffer. The next phase is making an appearance, with companies such as Stitchfix offering subscription based clothing services, which leverage online platforms and machine learning to determine customer preferences and personalise the shopping experience.
So far I have discussed consumer facing transformations, but what effect will high performance, ultra-reliable communications have on the enterprise and industry. Two examples of interest are manufacturing and healthcare. Manufacturing is typically an investment intensive activity where large sums are invested into machinery that is operated at maximum efficiency. This typically reduces flexibility and requires retooling if customer requirements change. Such machines typically require some level of human operation and maintenance to operate at high efficiency. The first stage of transformation is to add sensors to perform superior analysis of changes to operating temperature or vibration, for example. This allows faults to be predicted and preventative maintenance to be performed, which reduces outages and improves utilisation. A further stage is to use more adaptable and intelligent machinery such as robots. Whilst robots are often designed to complete a specific task, they are mobile which allows changes to their working patterns. This allows factory and warehouse designs to be optimised for efficiency, productivity and safety, reducing the requirement for human operators to work in higher risk zones.
In healthcare there is a different path. Countries such as Sweden, one of the first to introduce electronic health records, have seen significant improvements in the ease of access to healthcare, as well as cost reductions through communicating prescriptions electronically. A further enhancement is the inclusion of connectivity in simple medical devices, such as inhalers. By giving a healthcare professional direct access to usage data, it is possible to get an accurate assessment of how efficiently the patient is taking their medicine and removes reliance on self-reporting, which can be misleading. This can help remotely monitor medicine intake, reminding patients of missed doses and informing heath care practitioners of irregularities. Improving quality of life for people, such as this, at manageable costs is increasingly important as societies age.
Looking forward, what is the next step in consumer subscription services and AI powered robotics? Will we see radical new innovations, such as the convergence of gaming, augmented reality and professionally produced content in the entertainment sector?
In manufacturing, will autonomous factories produce an infinite variety of products tailored to individual requirements? And in healthcare, will we witness the end of treating illness and the evolution of managing health through preventative care with minimum discomfort and cost?
In a dedicated session at CWIC 2019, Cambridge Consultants will explore such questions with a variety of major companies across the globe, illustrating the breakthrough innovations that will define the future of our industries.
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