by administrator ·
As digitalization takes over the world, manufacturers everywhere need to change to survive, developing new capabilities that can drive competitiveness and growth. But what does this really involve and how do digital leaders succeed?
Growth, innovation and operational excellence have long been the business outcomes that manufacturers seek to achieve. And while these priorities haven’t changed, the means to attain them is changing significantly. Manufacturers need to move from an industrial environment consisting of physical assets to an ecosystem where tools are now digital, unseen, and untouchable.
In today’s digital world, technological advancements combined with external market forces—the new connected consumer, increasing influence of emerging economies, a growing skills gap in the manufacturing workforce, complex regulations governing both products and markets, and more—have catapulted the manufacturing industry into a new era, where the path to profitability is shifting.
For manufacturers to sustain competitive advantage, digital transformation is now essential. At Microsoft, we believe this shift reflects the opportunity to grow, adapt and evolve to meet the changing needs of their customers, and the new business opportunities of tomorrow, by thinking and operating like a digital business. That’s what a digital leader needs to drive.
With Industry 4.0 and the Internet of Things (IoT) now part of every discussion we have with our global customers, I sat down with some of the industry’s top disruptors to learn their views on digital transformation in manufacturing and industrial environments. These digital leaders understand that staying competitive means moving forward in digitalization. However, not every organization will approach digitization the same way. What is essential, for all manufacturers at any point in their journey, is to engage with people who understand digitalization.
In this video, learn from trailblazers from Schneider Electric, ItalPresse Gauss, Comau, Fleetboard, and Siemens on why they say leading with digital is so important today and what it takes to be successful.
Microsoft and manufacturers all over the world are inviting you to join the global conversation and start your digital transformation journey today!
You may also be interested in
Insights accelerate innovation in digital manufacturing
We have enabled disruptive innovation through sensor telemetry, and system data while optimizing manufacturing processes and improving product quality.
Microsoft Trusted Cloud supports highly regulated industries
Microsoft Trusted Cloud solutions to help customers in highly regulated industries ensure compliance and security for their organizations.
Predict demand with data-driven insights from Prevedere
Prevedere’s Demand Forecasting delivers data driven insights by analyzing external and internal factors to deliver accurate forecasts at the speed of business.
Drive Product Innovation with Azure Big Compute
Introducing Azure Big Compute, a suite of solutions hosted on the Microsoft cloud that empowers manufacturers to accelerate product innovation.
Let me ask you a question: if you work in a highly regulated industry such as government, financial services, or healthcare, and you haven’t started your move to the cloud, why not? The hard truth is, if you haven’t started moving to the cloud, you could be left behind. The cloud is not new anymore—it’s not untested—and chances are that many organizations in your industry are well into their own cloud journey. Consider these questions: what’s preventing you from moving forward? What’s the opportunity cost of staying put? And what advantages are your competitors gaining in this digital age? I want to share today why you should consider taking the first step in your journey to the cloud with the Microsoft Trusted Cloud platform.
A big barrier to the cloud that I hear about often is regulatory or industry compliance. I spend most of my time working with regulators and policy makers to ensure that the technology Microsoft is bringing to market meets local laws and aligns to regulatory policies for government and industry alike. I ensure we’re listening to their concerns and issues and tracking new laws and policies coming down the line. Everything I learn I take back to Microsoft engineering and our local teams to ensure we are working to meet whatever regulation or policy that exists or is being planned, so our customers can benefit from our cloud services without delay. But part of my role is also to help regulators and policy makers understand technology and where tech organizations like Microsoft are going with it, and to help organizations like yours understand how Microsoft operates around our trusted cloud principles—security, privacy, compliance, and transparency—and how we map those to policy and regulations that exist in regulated industries.
Right now, organizations I talk to are worried about the May 2018 deadline to comply with the General Data Protection Regulation (GDPR), which affects any organization—no matter where they are located—that offers goods and services to people in the EU, or who collect and analyze data tied to EU residents. Most organizations in the world engage with citizens in the EU, so they may see GDPR as a barrier to the cloud because they are worried about data compliance, downstream data processes, and the contractual requirements. But Microsoft’s position is clear: we support GDPR compliance, and we have the evidence and contractual clauses to help you and the regulators understand how. A move to our cloud technology can help you accelerate your readiness to meet GDPR compliance as the deadline approaches. And if you are already using our cloud technology—Microsoft 365, Dynamics 365, Azure—you have the data privacy controls and security capabilities to help ensure your organization demonstrates compliance as well.
Another barrier to the cloud I often hear about is security and the general sense of risk, both to the organization and to the data the organization holds. And while their concern is understandable—we could be talking about critical national infrastructure or national security, after all—many of these organizations who have moved to the Microsoft cloud are realizing that in many respects they have better security and resilience in the cloud than they could ever achieve on their own. In fact, Microsoft invests $1 billion a year on security—that’s way beyond what any organization could do on its own. In the UK and other geographical regions like Germany or Australia, we also provide access to the Microsoft cloud platform through local datacenters to help meet local laws or concerns about data residency. As a result, we’ve seen how some of our cloud customers, like the UK Ministry of Defence, for example, can show compliance with country or industry regulations and be confident in the security of their own data because they can control where their data resides in our cloud and they have the proper controls in place and tools like Office 365 Advanced Threat Protection, Customer Lockbox, Rights Management Services, Data Loss Protection, and other capabilities that help ensure they control use of their data.
Moving to the cloud isn’t only about compliance and security, though. Many organizations in highly regulated industries who have adopted Microsoft 365, which brings together Office 365, Enterprise Mobility + Security, and Windows 10, are interested in empowering their employees with better capabilities that enable virtual workspaces for teamwork, work from anywhere flexibility, and self-service analytics. Moving to Microsoft 365 enabled them to optimize their infrastructure and provide everything from a modern desktop to voice communication solutions to unified management controls in a secure, consistent way from a single vendor. Their employees are more empowered to deliver innovative products and services, using capabilities that are evergreen, managed as a service, and secured by Microsoft. Many organizations see financial benefits as well. Instead of buying more expensive best of breed point solutions and requiring additional people to integrate these disparate systems together and manage them—which adds cost, complexity, and risk—they can simplify their infrastructure in our cloud and reduce their overall vendor footprint in addition to reducing their security and compliance risk.
The bottom line is, you should be considering our cloud solutions to help you ensure compliance and security for your organization. At Microsoft, we look at issues of compliance and security at an industry-wide level and fundamentally believe that we won’t be successful unless you are successful, so we are dedicated to helping you simplify your journey. You can learn more about beginning your journe.
Optimizing product development, improving speed to market, fostering employee productivity, and driving a data-driven culture.
Our team at Microsoft has been collaborating with a Fast-Moving Consumer Goods (FMCG) manufacturer to tackle these business problems within R&D early-stage manufacturing. We have enabled digital manufacturing to deliver data insights through new experiences that also support changes in the company culture.
Together, we have enabled disruptive innovation through sensor telemetry, observational, and system data while optimizing manufacturing processes and improving product quality. These provided us with deeper insights and analyses.
The Internet of Things (IoT), which is an evolution of Machine to Machine (M2M) communication, was at the center of our approach. Because of the analytics and artificial intelligence that can be deployed, IoT opens new business opportunities not previously available with M2M. Companies typically ingest and process data from IoT-enabled devices into a cloud platform, potentially enrich it with additional data such as human observations or offline measurements, and then act upon it or use analytics to gain insights in near-real time. As the outputs, insights, and potentially, recommendations, are fed into existing systems, they drive innovation.
We posed the question: Could we use IoT and innovation opportunities to improve manufacturing?
Throughout our engagement with the FMCG manufacturing company, we fostered close collaboration between designers, developers, data analysts and the process engineers and operators to iterate on requirements in an agile manner. This mutual learning and level-setting of knowledge increased their comfort level, which meant we could more easily discover real user needs, and later, improve the likelihood that the users would accept the tools in production. We also drove an open data culture, enabling the organisation to share information more broadly between manufacturing sites and across the supply chain.
A core tenet of ours was to deliver innovation through a true digital manufacturing platform, and not just digitise existing ways of working. This project would provide operators and engineers with new insights from machine telemetry and human observations. Our agile approach would ensure flexibility, help us meet deadlines, and reduce unnecessary development efforts, and related costs.
I always think the most fascinating stories on “60 Minutes” and other investigative programs are about government fraud, waste and abuse. That’s why I’m excited to have Microsoft partner Pondera Solutionsoffering state-of-the-art, Azure Government-powered cloud computing solutions to fight this insidious problem. It was a pleasure to recently interview Pondera’s founder and CEO Jon Coss since his company pioneered many fraud, waste and abuse systems, which are now integrated with our secure, trusted Microsoft government cloud. Here’s Part 1 of our two-part series:
Recently, government agencies have had a focus on fraud detection and management. What’s the current state of fighting fraud, waste and abuse by government agencies?
Not that long ago, fraud, waste and abuse was a small subset of requirements in larger systems for tax, Medicaid and other programs … it was bundled in with all the other system functions, like paying claims and enrolling beneficiaries. Government has really started to shift away from that, which makes fundamental sense. You want the company and the system that’s doing the actual processing of transactions to be separate from the company and the system that’s (ensuring) the integrity of those transactions.
We also hear from our clients and prospects, “We don’t need anomalies that may not mean anything and are difficult to investigate; we need investigation-ready leads that our analysts and auditors can work on.” We’ve seen a move away from this focus on discrete transactions to looking at it more holistically—looking for larger trends, patterns, clusters of suspicious activity … transactions over time.
Two other significant things:
- We’re seeing governments start to move toward more prepayment prevention vs. post-payment, pay-and-chase activities. The availability of cloud computing like we can do in Azure, gives us the ability to process massive amounts of transactions very quickly so that if we identify highly problematic claims prior to a payment being made, then it gives the government agencies the opportunity to not make that payment at all.
- We’re also starting to see a really encouraging trend: within a state, agencies are starting to talk to each other. We’re starting to see the first few bids come out … to address fraud, waste and abuse across agencies instead of within an individual agency. There’s also a lot more discussion across states. The bad actors that are defrauding systems … they act across programs and in multiple states.
We offer a true software-as-a-service (SaaS) architecture, with a true multi-tenant environment to accommodate multiple programs within a state, same programs across states—different combinations to really effectively fight fraud. This architecture also allows us to add new data sources as they become available and we can push new fraud detection algorithms as we develop them. If we find an emerging fraud scheme on the East Coast we could develop a fix for that in our algorithms and then deploy it to all of our customers.
States are starting to look at fraud, waste and abuse more holistically … Last week, we just pulled in a transaction file from one of our larger clients and it’s 750 million records— when you combine it with 20 to 30 external databases, that’s a ton of data. We take all of that data—we certainly provide alerts on individual anomalies, suspicious activities and suspected fraud—but we pull it all together and we add it with our behavioral models and then we provide back a triaged list of cases. We uncover larger, more collusive activities and we provide a single fraud risk score … then we return back that investigation-ready lead that our clients are asking for—and we do it quickly and we do it accurately. That’s really what our clients can expect from us: rapid responses, very low false positive rates, triaged cases and, importantly, an understanding of a (larger) network that a case might be a part of.
Can you elaborate on why you decided to go with a SaaS approach?
What the cloud allowed us to do was take this massive computing power and advanced analytics and get really smart people to run this data … without having to build our own datacenter and with the ability to leverage Microsoft’s security protocols. Without that, we never could have ever started this company … All we do is fraud, waste and abuse, and yet we can have as much computing power and as advanced analytics as any (traditional IT) company. Microsoft lets us be a fraud, waste and abuse company instead of a technology company; that’s how I think Microsoft is changing the world.
Pervasive digital interactions and innovative cloud services are redefining the value proposition for banks, as new entrants bring fresh ideas and customers expect ever more. Creating new customer value will allow banks to thrive in this increasingly digital and competitive market.
Enabling bankers to work more productively is about empowering them to create new value for the customer and maximise the customer’s value to the business. “By providing modern productivity solutions banks can build the necessary cultural foundations to speed up vision, break silos that exist within the organization and foster improved cross-functional collaboration with a clear focus on the customer,” says Josh Rice, general manager, modern workplace at Microsoft. “These modern workplace tools bring intelligence and automation capabilities that enhance bankers’ roles and empower them to better serve the customer.”
“Banking organizations realize that the customer experience is one of the few assets they have that it is difficult for competitors to imitate,” says Chad Hamblin, director, worldwide financial services industry at Microsoft. “The ingredients of financial services – such as rates, terms, conditions and products – can all be replicated by other institutions. With an ever-increasing choice of products and providers, the experience that bankers create for customers has become key to competitive differentiation.”
Empowering bankers to collaborate efficiently will reformulate customer value. “Banks are looking for ways to become more efficient, effective and innovative by empowering their people to work seamlessly together across product and department silos,” says Hamblin. “And they’re asking how they can provide more relevant products, services and experiences for their customers and for the business.”
Increasingly, banks are looking at how modern workspace tools, combined with advanced cloud computing intelligence, can provide bankers with a more holistic view of the customer and save time to focus on high-value activities. “Banking organizations are striving for better collaboration and productivity solutions that help them orchestrate products and services in an omnichannel capacity,” says Hamblin. “They’re looking at how they can fast-track their products and services in a way that’s timely and convenient to customers. For that to work, they also need to empower their bankers to make best use of the customer insight those touchpoints yield.”
Leading financial services organizations have already started this transformational journey. For example, AIA has put in place social networking and language translation capabilities, combined with secure, mobile access to data, to enable its employees to collaborate wherever they are. UK bank NatWest (part of the RBS Group) has created a consolidated view of all client touch points, freeing up employee time to focus on clients and using powerful analytics to gain customer insight
By harnessing these collaborative capabilities, banks are moving away from a traditional approach that was narrowly focused on specific products and past actions. Instead, they are achieving a forward-looking view that addresses a broader spectrum of customer needs. “Banks are looking at how analytics can empower their people to gain a personalized understanding of individual customers’ needs, and how they can derive data and trend insight from those sources,” says Hamblin. “Advanced analytics can enable banks to see which products and services are selling faster than others, identify customers who might be at risk, and take proactive action. Crucially, we’re starting to see banks looking at how they can better predict the future in terms of customer needs so they can offer the right product at the right time in the right way for each customer.”
As banking organizations empower staff with digital automation technologies, they’re also looking for ways to optimize their operations – and artificial intelligence is inspiring them to transform. “Moving forward, the transformation of banking organizations becomes very interesting as banks start to blend artificial intelligence with human-led channels,” says Hamblin. “For example, we’re starting to see new developments like Skype service bots that can answer customers’ basic questions, call in relevant offers based on the customer’s interest and then hand them over seamlessly to a live video banking agent once they have expressed an interest.” In the near future, banks will focus on sentiment analysis for voice, video and text, giving customers the ability to utter requests that the banker or an artificial intelligence bot can respond to. Banks will use sentiment and language analysis tools that can analyse customer communications, identify whether the customer is unhappy and use pre-built workflows to automate and send this issue to a banker who can address it on the spot.
“A Microsoft partner is working in Europe to enable bankers to take the powerful holographic capabilities of HoloLens to their customers to enrich their discussions of financial planning and portfolio management. Bankers will be able to immerse clients in these graphic representations and walk them through various financial scenarios, manipulating charts, spreadsheets, graphs and dashboards to illustrate the client’s current finances and their options for the future.
These capabilities make financial information, which is a challenge for many people, into a smart, living and breathing workshop that helps them better understand and make the appropriate investments. “These technologies will have a huge impact,” says Hamblin. “Banks that have the foundational aspects of real-time, cross group collaboration and improved banker productivity will unleash the full power of the team, enabling bank employees to deliver proactive and insightful customer service and completely transforming the banking business.”
A colleague recently lost her mother. She wanted to settle some affairs with one of the world’s largest banks. The bank insisted on only using faxes and a manual exam that would take 7 to 10 business days just to confirm receipt. Unfortunately, one of the faxes went astray. When she questioned the bank, they claimed never to have received it. For the bank, the resolution was simple: have the customer send another one. For our colleague, this was a moment of extreme frustration at a time of excruciating pain. That one moment of disappointment—when a crucial need was not met, and excessive effort was required—led her to end her relationship with the bank and move on.
We have another story to share. We had just finished a meeting and were ready to go home. It was a long way to the airport. Time was short. We both tried to request an Uber from our phones; it didn’t work. So, one of us downloaded the Lyft app. In minutes, our ride arrived, and then provided an experience that convinced us both to use Lyft ever since. The drivers are great. The cars are great. The experience is great. Why go back? The cost of switching to Lyft was low while the experience was better. We have also moved on.
Moments of truth
What can we learn from these two experiences in very different contexts?
First, despite the extreme differences in technology, both organizations failed to meet expectations. Neither had a back-up plan. Everything depended on the performance of their technologies at specific, moment of truth. Both companies lost customers because they required too much effort to work with them.
Regarding our colleague’s bank distress, she wonders why, in a digital world, one of the world’s leading electronic banks is still using faxes. In our case, Uber knew we wanted to go to the airport and that it was some distance away. They had that information from the app. It would have been a simple matter of using that information to prompt a chatbot to contact us and say, “I see there is an issue with obtaining a driver, let me help you.”
Secondly, the Lyft experience continued to impress at each stage of the journey. With Uber, the car was almost half an hour away. The Lyft car arrived within minutes. Maybe it was coincidence. But the result was clear, no matter what: Lyft gained customers and Uber lost them.
Customer-centricity at every stage
We live in a world of constantly rising customer expectations and diminishing patience. Customers are comparing their experiences across industries. If getting a ride to the airport is so easy, why is dealing with a bank regarding a death so hard? We can get in the car with a stranger more easily than we can transact with a bank we have used for decades.
Operations can no longer be something that happens entirely in a back office or some remote datacenter. They can no longer be based on processes that remain unchanged for decades. They must be customer-centric at every stage—and they must constantly evolve.
The CEO of ClearBank, recently in the U.S., was showing his vision for payments in his business using an app on his smartphone. He demonstrated how to buy a cup of coffee for his daughter in Sydney, Australia. The transaction was virtually instantaneous and relatively inexpensive. This simple, memorable example epitomized his vision of a world where real-time payments can happen anywhere in seconds, and at a fraction of the cost.
In a world where emails are frictionless—but payments are not—antiquated systems may soon evaporate.
An operating model for the digital era
The call to action for banks is to embrace a new, digital operating model based on customer-centricity at every stage of their journey. In that journey, the effort required of customers must be measured and optimized to eliminate friction and create a memorable experience.
The contours of this mandate are increasingly clear:
- Satisfying customers is no longer enough. We must turn them into fans.
- Great apps and online channels are not enough. Whether your organization is a bank, a taxi firm, an airline, or a hotel, every aspect of your operating model must serve the twin ends of consistently delighting your customers and delivering value at a cost-efficiency ratio that shows Wall Street you have a command of your business AND your customers.
- Technology alone is not enough. Data will only get you so far. There needs to be that additional element of empathy: understanding customer’s needs and exceeding them; turning moments of truth into relationship opportunities.
And, the operating model must continue to evolve.
Microsoft has the same charge. Our success depends on our ability to consistently empower every person and institution on the planet—and make their lives better.
Let’s take this journe.