Digitization: increasingly strong ecosystems

Many companies underestimate the huge impact on the market of innovative business models and of their integration into digital ecosystems. Because the impact of Industry 4.0 does not only concern production but company processes in their entirety

by Valerio Alessandroni

As a well-known anecdote goes, “in the industry of the future there will be only two employees: a man and a dog. The man’s purpose will be feeding the dog, while the dog will be there to stop the man from touching anything”.
This anecdote, attributed to Warren Bennis, shows that Industry 4.0 and digitization are often perceived as merely technological concepts which aim at gradually increasing efficiency and reducing the costs of production departments by means of full automation.
This is a limited vision of the issue, which leads many companies to underestimate the huge impact of innovative business models and of their integration in digital ecosystems spread out both within and outside the company itself.

The impact of Industry 4.0 on all corporate processes
When we think of Industry 4.0, we cannot just limit ourselves to robotics and process automation, since it concerns the digitization of corporate processes in their entirety, also concerning the supply of materials, the development of the product and its delivery to the client. Data, systemized and recorded continuously, from the supplier to the consumer, offer companies a new predictive type of analysis, ensuring a broad information base to improve upon products and services, while supporting decisions in the best possible way. Uncertainty and change are undoubtedly the new constant of the ecosystem in which the company is immersed. New strategies, resources, organization models and business processes must be developed fast in order to be able to survive and grow in such a dynamic and changing context. The advent of Industry 4.0 and its effects on the corporate value chain also change the way in which administration, financial and control processes are managed, demanding unprecedented agility, flexibility and speed. In this respect, new cloud-based technologies may be very helpful.

Internal and external platforms
Corporate ecosystems may be defined as economic communities within which partnerships are established concerning the supply chain, clients, industry associations, institutions and other stakeholders. Specifically, a corporate ecosystem is formed by connected networks of autonomous entities which form complex interactions among themselves in order to share a common objective, with long-term relationships and based on common platforms. There are two types of predominant platforms: internal or company-specific ones, and industry networks. Particularly, internal platforms may be defined as a set of goods organized in a common structure from which a company may develop and produce efficiently a flow of derived products. We can therefore see an internal platform as an ecosystem where digital fabrication, robotics, big data, cloud computing, Internet of things and virtual reality coexist and are integrated within the company. External platforms may on the other hand be defined as products, services or technologies which function as a base where external innovators may develop their own products, technologies or complementary services.

The importance of having a solid 4.0 ecosystem available
A 4.0 ecosystem is therefore a digital platform integrated with a strong business vision, fast and effective governance and the entire industrial value chain. Such an ecosystem allows to improve resources and reduce costs, accelerate the development of new initiatives, guarantee coherence and quality of the innovative initiatives, prevent duplication of information and functions, manage initiatives to implement the corporate strategy. Some examples will allow to understand better that today it is essential to have a solid ecosystem. Suffice it to think that the main hotel booking company does not own a single hotel. The main mail order company does not own any products. The main taxi company owns no cars, and so on. These and many other companies are based on an ecosystem of partners. Companies cooperating with their clients tend to cooperate with their suppliers in a similar way.

Digital supply chains for corporate process and data integration
The integration of the digital supply chain is therefore becoming increasingly dynamic. Access to requests and demands of clients must be shared efficiently, and it is necessary to track the delivery of products and services to provide visibility in the supply chain.
The integration of corporate processes is based on reference standards and architectures which must provide the integration of the product data. At the same time, companies operating in the supply chain establish the integration of processes and data by means of specialized intermediate companies, whose role is to ensure interoperability by mapping and integrating company-specific data for various systems and organizations. And it is above all the integration within the cloud which could offer a convenient business model and to obtain interoperating digital supply chains.

The conditions which need to be satisfied to be ready for Industry 4.0
Digital technologies therefore help corporate and inter-corporate integration and cooperation, improving the quality of information streams and the time to market of the business. Smart manufacturing and smart supply chains within Industry 4.0, enabled by the Internet of Things paradigm, are bringing greater effectiveness and more intelligence to many industries and corporate environments. Data, systemized and recorded without interruptions, from the supplier to the consumer, provide companies with a new predictive analysis capability, ensuring a broad information base to improve products and services, supporting decisions in the best of ways.
But the Industry 4.0 paradigm may achieve a full accomplishment provided that a few fundamental conditions are satisfied: overcoming the size gap and digital divide of Italian companies, with the help of support to investments; networking, by means of the creation of virtual value chains, to include the many excellent concerns present on the territory, focusing on projects which help exports and the creation of value along the entire chain.
Finally, an adequate upgrading of human resources, by means of the spreading of digital skills in their functional, specialist, collaborative and holistic aspects, a greater cooperation with the academic world and a fruitful discussion with social partners are another essential point.

Blockchain technology against cybercrime attacks
If on the one hand the growth of digitization helps the development of services for citizens and new business models for companies, by means of the management of supply, production and sales processes using network technologies, on the other hand, however, it is prone to new and dangerous cybercrime actions, which could cause a breach of the “corporate system” and undermine drastically its competitiveness.
A solution may be provided by the blockchain technology. A blockchain may be simply described as a process where a set of subjects share information resources (memory, CPUs, bandwidth) to provide the community of users with a virtual database, generally public (although private types of implementation exist) where every participant has a copy of the data. The use of an updating protocol considered secure by the community of users and of encryption validation techniques generates reciprocal trust on participants’ part in the data kept in the blockchain, which makes it comparable to the “registers” managed centrally by recognized and regulated authorities (banks, insurance companies and so on).