We live in a time of inflection from physical to digital in the Brazilian's business environment, which must be intensified in 2017, focusing on decision-making and the adoption of positions, based on the strategic management of data and technology.October-December | 2016
Digital transformation: in the business world, the term defines the set of changes in processes, products and business strategies made possible by the recent technological innovations. The theme goes far beyond the mere adoption of new Information Technology (IT) solutions: it includes the understanding of all the possibilities offered by digital tools and how these resources can transform the customer experience and his relationship with the brand, its integration with internal systems for production and management and, ultimately, its impact on the organization’s business model.
“The digital revolution involves a new positioning in the value chain, the redefinition of the information flows within and outside the company and the transformation of such information into intelligence.”
“Companies are concerned about the digital transformation, but are still not ready for it”, says Marcia Ogawa, Deloitte’s lead partner for the Technology, Media and Telecommunications industry practice. This is, by the way, a vision supported by the “Agenda 2017” survey results. “It is not simply to create a smartphone app. It involves a new positioning in the value chain, the redefinition of the information flows within and outside the company and the transformation of such information into intelligence.”
Specialists in innovation and digital culture help us to understand the next steps on this path. One certainty is unanimous: 2017 will be a year of inflection from physical to digital in the Brazilian business scenario. The following is an overview of the major innovations that will pull the digital transformation in the Brazilian companies already in the short term, and the possibilities offered by these trends.
Analytics: data that become strategies
Digital tools that uncover and interpret patterns and meanings within large information flows combining statistics, programming and operational research.
In a world in which the amount of circulating information multiplies exponentially – producing the so-called big data -, it is necessary to use digital resources to understand the meaning and value of the data collected, in order to generate market intelligence. Hence the importance of analytics, which represents a segment that, according to a survey from IDC, a company specializing in market information, will move R$ 3.2 billion in investments in Brazil until the end of 2016. Already in 2017, the scope and sophistication of the tools will increase considerably, bringing scope, versatility and ease of use.
“Analytics will increasingly be combined with cognitive experiences, using the data from the environment in which users are to accompany their behavior. The idea is to provide differentiated experiences both within companies as to customers, increasing the relationship between companies and their public”, says Paul Pagliusi, director of the Deloitte’s Cyber Risk Services front. “The convergence between the expansion of cloud computing, mobility, digital devices and the information arriving via social networks will be enhanced by the use of analytics. A large part of the IT companies’ costs will be related to these technologies.”
IoT: the internet of everything
The connection of a wide range of appliances, machinery and everyday objects to the web, by means of smart sensors, defies the manufacturing and technology sectors to a new paradigm.
According to a survey released by the consultancy Gartner, in 2020 the number of objects connected to the internet can exceed 20 billion. “This is without counting the traditional connections, via mobile or computer”, says Jacques Barcia, trend consultant at Porto Digital, a technology pole in Recife. “Today we are understanding how to insert this type of connectivity in cars and televisions, and the next step will be to ‘embed’ the technology in the people themselves, in their clothes and personal effects”, says the expert.
The prediction for the Internet of Things (IoT) market in Brazil in 2017 points to investments that exceed R$ 4 billion, according to IDC. In this context, the manufacturing sector has already prepared to incorporate IoT into the factory floor. “It is what has been called Industry 4.0’”, says Luciano Lopes, IT senior manager at Embraco, a company specializing in the manufacture of cooling compressors (see more about Industry 4.0 in the piece about innovation). “The Internet is increasingly present in industrial processes, including assembly lines, systems of energy generation and distribution and maintenance and communication processes”. The specialist points out that aviation, rail transport, energy, health, and the chain of oil and gas are the segments that lead the trend.
The “smart cities” seek a more efficient and sustainable management with the extensive use of telecommunications and digital services.
In 2017, the 5,570 Brazilian municipalities will elect new (or re-elected) mayors. These managers need to be aware of the rapid changes that new technologies have applied to issues such as urban mobility, public security, infrastructure, architecture and entrepreneurship.
“The Brazilian Network of Smart and Humane Cities (RBCIeH) and the National Front of Mayors have guided these managers to initiate the movements for the adoption of innovation ecosystems in cities” recalls Andrew Gomyde, president of RBCIeH. In 2017, we should see the action of the Mixed Parliamentary Front in the National Congress in support to Smart and Humane Cities.
The Brazilian Agency for Industrial Development (ABDI) also maintains a working group on the theme, in which experts discuss strategies and priorities within the Federal Government. “We see, in projects already in progress, a bigger IT presence in the management of municipalities”, tells Carlos Frees, leader of Information Technology and Communications Projects at ABDI. Some examples are security centers with integrated cameras and sensors, smart traffic and mobility controls and telemetry on public lighting systems. “A major initiative of the Ministry of Science, Technology, Innovation and Communications (MCTIC) is the deployment of basic digital infrastructure in small towns, which is expected to benefit approximately 170 locations in 2017”, says the expert.
The smart grids, which allow the use and a more rational distribution of electric power over the public network, will gain momentum. “It is possible to use the public lighting network to integrate data transmission and connectivity to an entire city”, foreshadows Andrew Gomyde. ”The municipalities are already developing Public-Private partnerships to their networks and this is the time to create the smart grids.”
Virtual reality is real
Interaction Interface between the user and an operating system replicates environments as close as possible to reality.
The concept is an old one – the first sets of virtual reality (VR) goggles and gloves were marketed in the 1980s. However, the rapid evolution of devices and the drop in costs in recent years have made virtual reality an increasingly popular resource, especially in developed countries. In Brazil, VR is still very associated to the entertainment segment (such as interactive game consoles). But that is changing. “We’re beginning to see enterprise applications based on technology from abroad, a process that will continue in 2017”, says Marcia Ogawa, from Deloitte.
“We still have to rely a lot on imported technology”, agrees Frees, from ABDI. “The good news is that the systems are increasingly refined and versatile. An application that will be strong is the use in learning labs, which will recreate virtual spaces, such as operating rooms or command cockpits, or will offer simulated training in hostile and dangerous environments, safely.”
3D printing: a factory at home
Technology that enables the printing of 3D models of objects, in materials such as resin or nylon, must grow.
In comparison to virtual reality, 3D printing must gain space at a more accelerated pace in Brazil. Even models for home use are already on the market, with prices starting at R$ 3,500, and a number of IT and design startups are studying solutions based on the new technology, which should popularize the service even more. The trend is that these printers will become similar to fast graphics shops: everyone will be able to download a project from the Internet, go to a 3D printing shop and leave, in a matter of hours, with a prototype ready.
“The citizen no longer wants to just buy things: he wants to build, modify them, change their meanings”, says Barcia, from Porto Digital. With 3D printing, these experiences come out from laboratories and gain the streets. “For companies, the possibilities in the creation of products and various pieces are immense. Even though the stages of research and development are costly, the prototype building is very cheap.”
Blockchain beyond bitcoin
Popularized with the use of the Bitcoin cryptocurrency, data systems collate financial negotiations “blocks” and ensure the confidentiality and validity of various types of transactions.
The technology known as blockchain became famous for making possible the purchase and sale of bitcoins and other cryptocurrencies (or “virtual money”). Its permanent and inviolable transaction records, however, offer other opportunities.
This type of database is being studied by financial institutions, investment funds and governments to make possible the “signature” of smart contracts, purchase and sale of securities and other services. Thus, while the bitcoin fever has cooled over the last three years, the blockchain technologies received investments of R$ 1 billion in 2016.
“It is a technology that potentially can cause a big impact on our economy, but the prospect of use is in the medium term. The most known application here is for bitcoin, but is not the only, and neither it should be the most relevant for us”, says Marcia Ogawa.
The Deloitte’s partner sees more varied uses, such as asset, securities and contracts certifications, handling of points on loyalty programs and the payment of commissions. “Blockchain brings agility and efficiency, as well as greatly reduces the risk of fraud. It may be important to bring more transparency to the financial market.”
Health in the digital age
New technologies arriving to solve historical bottlenecks in health services include diagnostic, monitoring, prevention and management tools.
The chronic shortcomings in the public health sector are many: lack efficiency, investment and care and prevention infrastructure. Providers of private health services suffer with the growth in the number of users, lack of rationality in the use of resources (such as consultations, examinations and admissions) and the increases in costs, which often are higher than inflation.
In order to combat these obstacles, digital innovation has been an important driver for the sector. We have already begun to experience the spread of mobile device applications (capable of performing quick diagnosis, schedule consultations or monitor body indicators) or the use of analytics in the interpretation of databases on patients.
“Becoming digital is an old dream of companies in the industry”, says Marcia Ogawa, who foresees the beginning of a health “uber” in 2017. With the neologism, the Deloitte’s partner means that we will see a series of initiatives which will take advantage of technologies and connections already available to improve the efficiency of services.
“The new applications and software will bring fast results for individual questions, such as the monitoring of chronic diseases, a more effective management of idle hospital beds or the optimization in prescriptions and purchase of medicines. The major companies in the industry dream with electronic medical record systems that may create a single database that is shared between the public health system and private health care plans”, says Kevin. “However, this is still a distant project, given its complexity.”
The management technologies and processes dedicated to prevent and mitigate risks related to sensitive data in IT environments gain relevance.
The Brazilian Association of Software Companies (ABES) pointed out recently the growing concern of companies about cyber security, marked by the proliferation of new forms of access to the Internet and the expansion of sensitive processes, often confidential, for mobile platforms.
“If not updated, the ancient practices of digital security become obstacles.”
There is a perception that new controls and management methods need to be implemented to account for the changes. The definition of security practices and governance limits, including cloud data and employees’ personal devices, is a priority of the managers. “If not updated, the ancient practices of digital security become obstacles”, says Paulo Pagliusi, from Deloite. “As with any modification in an environment, the digital transformation brings benefits and risks. The old model, based only on meeting standards, is not enough.”
For Pagliusi, progress in this field depends on governance and engagement. “The leaders of the areas involved have to inspire trust on the people and the environment around them. This involves continuous monitoring, threat intelligence and situational awareness. In addition to the protection mechanisms, it is necessary to create a resilience culture and adopt a proactive rather than merely reactive posture, in the face of the growing invasions, leaks and data breaches.”
The systems able to manage, on their own, IT resources and mechanical applications, using automation to accomplish tasks and reduce human interference in the production, should be expanded in the short term.
The autonomous platforms are an important part of the digital transformation in – and not only – the manufacturing industry. Their architectures provide the automation of tasks such as controlling demand for materials, production monitoring and resource management, taking advantage of the ubiquity of sensors and software on machines and their interconnections. Their autonomy includes the ability to analyze their own performance and promote improvements and bug fixes.
“Yes, the manufacturing sector is the responsible for disseminating the use of these platforms for other economy segments”, confirms José Rizzo Hahn Filho, President of Pollux Automation. The company, based in Joinville (SC), specialized in the supply of smart assembly lines and robotics industry systems. For the entrepreneur, the sensors and smart machines form the basis of the industry’s digital transformation, in conjunction with analytics and training of the people for the change.
“The possibilities of autonomous platforms have already been much discussed during 2016. The crisis, however, has inhibited the implementation of the initiatives”, says Rizzo, who sees, for 2017, the advancement of their use on two fronts: “big companies that offer integrated solutions, ecosystems that combine data warehousing and analytics, and startups that are dedicated to modernize the equipment already installed.”
In addition to commanding Pollux, José Rizzo Hahn Filho also chairs the Brazilian Association of Industrial Internet (ABII), an entity created in 2016 to bring together the Brazilian companies operating in the area. With the support of the Federation of Industries of the State of Santa Catarina (Fiesc) and the local National Service of Industrial Apprenticeship (Senai), ABII wants to popularize a market that will move, at the end of the decade, $15 trillion around the world.
About 50 Brazilian companies in the IT field, of all sizes, have already shown interest in joining the ABII. “Companies are gradually realizing that the industrial Internet should be an essential part of their projects. The medium and large national companies are a potential market for more complete solutions, integrating machines and smart systems. In multinationals, there is room for cooperation with local software developers”, says Rizzo.
To access the contents of “Agenda 2017” survey in its entirety, click here
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