Revolutions on demand
Inevitable and comprehensive, the digital transformation affects different sectors in different ways. How can each industry respond to these changes and what consequences can they bring?January-March | 2017
That digital technologies are transforming the way we do business in all segments is not new. However, how do the impacts affect every sector of the economy? To answer this question, six Deloitte’s global industry leaders analyzed the main transformations that the transition to the digital environment is causing in their segments, as well as developments and trends that these changes are promising for the future.
For the experts, it is clear that the connectivity tools are leading industries like manufacturing to a series of disruptive innovations and that already influence the perception of customers about what products and services they want. In health, digital technologies are changing the doctor-patient relationship and come with the promise of greater efficiency in the management of the resources invested. The financial services also transform with the digital revolution, either in the concern about online transactions or in the need to look for new trends, such as encrypted currencies. And the workforce will have to adapt to new times: the most promising talents are those that boast skills in communication, science, mathematics and information technology.
Consumer and industrial products – Smart manufacturing
The consumer goods industry has been impacted by the digital transformation in four different threads: consumer demand, offer of products that are more intelligent, technologies used for production and the way of distribution of goods. The analysis is of Tim Hanley, Deloitte global leader for Consumer & Industrial Products industry. To begin with, the consumers of today – especially the so-called millennials, those born after 1982 – prefer customized products than the standardized manufacturing, what already changes the production model in various fields of consumption. “Products that were analog in the past, such as vehicles, must now be intelligent, with connectivity tools and able to provide data for both the user and the industry”, says Hanley.
“The manufacturing lives the era of sensors, disruptive technologies and the information flow. Companies know that this is the trend, but few say they are prepared for the change. They are concerned about the investments and the workforce.”
Tim Hanley, Deloitte global leader for Consumer & Industrial Products industry
In addition, technologies like 3D printing and sensors are changing the way the industry produces and also the distribution logistics, which now has more tools for goods traceability, robots to operate equipment and storage centers that operate through voice command – the rise of Industry 4.0. Topics related to product sustainability, such as the origin of the raw materials and the environmental impacts, also receive more and more consumer attention – considering that it is not necessary to pay more for green attributes, emphasizes Hanley.
Technology, media and telecommunications – Communication in the digital forefront
If there is a sector in which the digital transformation has revolutionized the way in which the product is consumed, without a doubt, this is technology, media and telecommunications. The way information and entertainment are transmitted today to consumers is marked by the multiplicity of channels and by the speed: the news are presented almost in real time. “The proliferation of new channels creates a great wealth of information and new content providers. At the same time, the traditional press businesses are aware of the digital transformations and of the challenge of bringing content of value to their audience, with perceptions of credible sources” says Paul Sallomi, global leader for Deloitte’s Technology, Media and Telecommunications industry.
“No country seems to have a sufficient stock of talents in science, technology, engineering and mathematics to meet the demand of the digital evolution. There will be a need to establish new networks to pick them, beyond the border of conventional jobs.”
Paul Sallomi, Deloitte global leader for Technology, Media and Telecommunications industry
In the area of telecommunications, the life of the users is being transformed by emerging tools, such as speech recognition, language processing, robotics, cognitive computing and computer vision – and this whole package requires a watchful eye for the regulatory, governance, privacy and information security issues. ”In emerging countries like Brazil, the moment is to choose where to invest and how to take advantage of new technologies. The biggest challenge is to prioritize the allocation of capital in the opportunities that bring the greatest impact” says Sallomi.
Health – Quality and efficiency in care
With the aging of the population and the increased incidence of chronic diseases and cancer, there is a need for monitoring key quality of life indicators, such as blood pressure and glucose and fat levels in the blood. The good news is that the technology has been increasingly an ally of health. From the cell phone application that measures indicators and connects patients to specialists to the genomics medicine, which comes with the promise of preventing and treating diseases that one may present, the advances in the digital area are increasingly present in the area of health care.
“The major challenge of health care worldwide is not money itself, but how it is spent, which often implies inefficiency. Digital technologies will allow better control of investments and strengthen the doctor-patient relationship.”
Mitch Morris, Deloitte global leader for Life Sciences & Health Care industry
The technologies are also a weapon to help the public power to better manage their expenses and investments in the area, in the evaluation of Mitch Morris, global leader for Deloitte global leader for Life Sciences & Health Care industry. “The cost of health is increasing in all countries, and digital technologies are the key to direct this investment to what really matters, eliminating flaws and waste” he says. The challenge, both in rich and in emerging countries, is to accelerate the incorporation of these tools in the private and public networks – what can be done through partnerships and cooperation agreements between the two segments, in Morris’ evaluation.
Infrastructure – A more integrated chain
Every economy chain that involves the infrastructure, energy and natural resources segments became very globalized, with companies that operate in the four corners of the world. When you look at the main competitors in the mining area which are in emerging markets, for example, one can note how the knowledge dissemination and the digital tools have become an important part of the companies’ operations. “Even with a poorer infrastructure in some regions than in others, we see organizations overcoming these limitations with the use of technologies of satellite images and outsourced providers to ensure greater level of connectivity, even in the most remote areas”, says Rajeev Chopra Deloitte global leader for Energy & Resources industry.
“The digital technology is a facilitator of innovation, especially when it comes to information and processes organization in transnational companies. We can say that innovation has become globalized.”
Rajeev Chopra, Deloitte global leader for Energy & Resources industry
In addition to facilitate communication for companies in the sector, Chopra highlights the impact that digital integration and analytics tools provide in terms of accountability. “The digital creates transparency throughout the operations, which, combined with the data analysis, enhances the decision-making process and leads to better accountability”, he says. The second biggest impact that leading-edge technologies bring is the reduction of production costs: as they tread digital paths, companies have reported operational savings between 15% and 30%, fruit of the perception that there were excesses to be cut in their activities.
Financial services – Agility in the money circulation
In the present society focused on mobile services, consumers are seeking responsive applications and connected products, have less loyalty to brands and more opportunities to discover things for themselves – and this attitude resonates in the choice of a bank or provider of financial services, in the evaluation of Bob Contri, Deloitte global leader for Financial Services industry. “New technologies are forcing organizations to review their business models and to understand how to use the tools available today to be more efficient. Digital identification and cybernetic risk management have become important on the banks’ radar” says Contri. According to him, robotics and cognitive computing are also changing the way the institutions interact with regulators and meet the compliance needs.
“Keep up with the speed with which the new digital technologies emerge and are incorporated into the business is a big concern of companies in the financial sector. The technology is forcing the industry to review their business models.”
Bob Contri, Deloitte global leader for Financial Services industry
Another theme that has been receiving a lot of attention from companies is the blockchain, a technology behind encrypted currencies, such as the bitcoin. Large international banks are launching projects to understand and exploit the potential of this technology. “The financial institutions need to anticipate the pace of change, and many are partnering to startups and fintechs, which can innovate more quickly”, says the expert, who emphasizes that having an arm of the business with a focus on innovation and experimentation is a way of responding to the technologies in transition and the opportunities they bring.
Public sector – Technology for active citizenship
Digital technologies are helping to reduce the distance between citizens and governments, as they increase the possibilities of interaction between the two ends. Through the internet and applications, it is possible to discover when the government will invest in a particular project, investigate contracts with services providers and also check the schedules of major bus lines that operate in the cities. “The big change that digital technology has brought to the public sector is related to access to information, which has never been so easy for the citizen to reach”, says Mike Turley, Deloitte global leader for Public Sector. Another major change in course is in relation to the workforce, in which automation systems and robotics are starting to change the until then linear profile of jobs in government departments.
“In the near future, most of the public services and management practices will be made possible by software. This is already happening and tends to expand, so we need to be aware of the regulatory and competition issues.”
Mike Turley, Deloitte global leader for Public Sector
In relation to the services provided by the public power, one of the most sensitive areas is urban mobility, in which Industry 4.0 technologies begin to be used to reduce traffic bottlenecks. Turley mentions the example of London’s Department of Transport, where the use of sensors in major intersections is helping to understand the dynamics of the flow of cars in the main regions of the metropolis. These sensors collect data which, combined with other analytics tools, generate real-time answers for the improvement of traffic.