Month: August 2020

To Succeed in the 2020s, Focus on Agility

To Succeed in the 2020s, Focus on Agility

OpsVeda CEO Sanjiv Gupta posted a great article on LinkedIn. With his permission, I’m sharing it here:

Disruption is nothing new; it’s just happening a lot faster and with greater impact than ever before. The good news, though, is that it’s not only possible to survive under such circumstances; great companies can even succeed and prosper in the midst of massive disruption.

Nearly a decade ago, author Nassim Nicholas Taleb released a book called Antifragile: Things That Gain from Disorder. The basic premise was that certain systems actually benefit from volatility and uncertainty. In other words, the opposite of fragility is not sturdiness; it is something else. Taleb calls it “antifragility”. 

Antifragility means that when disruptive things happen, you gain market share. You win new customers. You operate more efficiently than your competition. You win.

For companies facing unprecedented disruption in 2020 (and that includes just about everyone), agility is the key to that kind of success. But agility does not happen by accident; it is woven into an organization’s DNA. It must be created on purpose.

In nearly every case we could cite today, agility is driven by technology. Companies that understand the value of technology as a strategic asset will inevitably be better positioned to pivot when there is a shock to the system.

An Antifragile Example

Let’s consider an example: Back in 2013, L’Oreal embarked on an effort to build its e-commerce sales channel to 20% of total revenue by 2020. They recognized that they needed to make technology investments in order to diversify their sales channels.

L’Oreal achieved that goal in March 2020, just as the coronavirus crisis was becoming a reality. But those numbers are only part of the picture. The bigger story is that in the weeks following the onset of the crisis, the cosmetics company was preparing to shift from having 20% of revenue come from e-commerce to as much as 80%, or potentially even more.

That’s a company that understands the value of agility. L’Oreal’s shares are trading at a forward PE ratio of over 40, and their stock evaluation has not been this high since 2003.

Supply Chain Agility

So how do we build agility in the supply chain? The answer is in using technology that helps companies work smarter and more efficiently. The COVID crisis has resulted in massive swings in demand, testing the limits of supply chain resiliency worldwide. The organizations with the smartest supply chains will be the ones that survive and prosper.

In many respects, COVID has not created new problems, so much as it has exposed existing problems and made them worse. When slow-moving inventory starts to pile up, for example, agile companies will recognize the problem quickly and proactively disposition the product in order to avoid losses.

That’s what Global Brands Group (GBG) is able to do, thanks to OpsVeda’s Available To Sell Visibility solution. The On-hand ATS solution empowers GBG team to proactively identify slow moving inventory, intelligently narrow down prospective buyers, and prescribe profitable price points to sell.

And then there is the opposite problem; when a company is unable to fulfill orders. Spikes in demand, as well as upstream supply-chain disruption, may result in unfilled orders, lost revenue, and unhappy customers. Worse yet, those customers might go to your competition and you could lose their business permanently. 

OpsVeda is helping companies like Rodan + Fields with Fulfillment Visibility. The company is able to identify potential problems as soon as they happen, and can take corrective action early enough to fend off potential challenges or exceptions to customer order fulfillment.

GraceKennedy Foods, a division of the GraceKennedy Group, the Caribbean’s leading distributor of food and non-food consumer products, provides its sales representatives with OpsVeda’s Mobile Field Sales solution, with up-to-the-minute information that enables reps to better serve their customers.

It’s all about understanding your supply chain, and being in a position to respond quickly.

Real-Time End-To-End Visibility

A common theme throughout all of these examples is visibility. End-to-end (E2E) monitoring of all available inputs from the supply-chain, in real time, means that information flows faster and can inform good business decisions sooner than it otherwise would.

The velocity of data has increased rapidly in recent years. The growing adoption of IoT devices, combined with improved integration to trading partners, means that data from across the supply chain can be available in real-time or very near real-time. Faster access to that information means rapid response, which means greater agility.

When it comes to agility, technology is the deciding factor; and when unexpected events occur, agility will decide who will prosper in the new reality.

OpsVeda leverages machine learning and other advanced analytic techniques to monitor your supply-chain in real-time, and provides specific quantity and value assessments relating to such events. If the COVID crisis has prompted you to take a fresh look at your supply-chain practices, we would like to talk to you about how we can help. Visit us at https://opsveda.com or contact us at info@opsveda.com to learn more.

Sanjiv Gupta

Sanjiv Gupta is the President & CEO of OpsVeda, Inc., an enterprise software company bringing to market a real-time operational intelligence platform with machine learning capabilities.

Digital Transformation: Substance vs. Hype

In the late 1990s I worked for an ERP services company that made an all-out strategic shift toward hosting business applications. The founder believed that someday (presumably in the not-too-distant future), software would be deployed in the cloud and delivered on a pay-as-you-go utility model.

Unfortunately, he arrived at that conclusion about a decade too early.

The technology hype-cycle can be tricky. It’s tempting to adopt a cynical view of these things, especially when the hype curve starts to look like the slope of Mount Everest. In most cases, though, there is at least some substance behind all the hype.  With each new tech trend, there’s almost always an upside somewhere along the way.

The question is: When and where is that upside to be found? What’s the pragmatic approach? How aggressively should companies invest, and how early should they take the leap into new technologies?

That question is on a lot of people’s minds right now, as the COVID-19 pandemic has shifted business agility from being a “nice to have“ to being an outright necessity. With that, the case for digital transformation has become stronger than ever.  What are the practical implications for today’s business leaders?

Throw a bunch of new technologies into a big pot and stir.  These are ideal growing conditions for innovation.  Now it is up to innovators around the world to do something with all that goodness.

In our view, digital transformation has fully arrived, and companies that fail to develop and execute on a digital strategy are at risk of losing competitive advantage.  Hype and reality are tracking fairly closely right now, and while optimism should always be tempered by common sense; those who hesitate for too long risk being left behind.

How Is Digital Transformation Different?

How does digital transformation differ from the technology hype-cycles of the past? In a nutshell, digital transformation isn’t about just one thing. It’s about a handful of emerging technologies reaching a critical stage of maturity, all at the same time. It isn’t about just one new possibility; it’s about a whole world of new possibilities opening up. 

For business leaders, this is an opportunity to establish a foundation upon which innovation can happen frequently, quickly, and relatively cheaply.

Let’s consider the difference between specific innovations versus innovation in general:

In the late 1990s, hosted applications were a new idea.  That concept has evolved over the past few decades. Connectivity became faster, more ubiquitous, and more reliable.  A new generation entered the workforce, having grown up with the Internet. Security practices have improved dramatically.  In 1999, the world simply wasn’t ready for software-as-a-service. Today, it is.

None of that changes the fact that SaaS is, broadly speaking, a single innovation.

Digital transformation, on the other hand, is what happens when a bunch of nascent technologies all become viable at the same time.

Ride-sharing services like Uber and Lyft would not have been possible without a variety of relatively new technologies: GPS and mapping software, mobile phones, secure payments, and push notifications, all held together with fast & secure cloud connectivity. Someone saw an opportunity to combine those technologies in a way that had never happened before. 

Now add drones, blockchain, IoT, AI & machine learning, high-performance analytics, location intelligence, plummeting storage costs, improved integration… and a few more that I probably missed.

Digital transformation has fully arrived, and companies that fail to develop and execute on a digital strategy are at risk of losing competitive advantage. 

It’s not that these technologies didn’t exist before; it’s that they have reached a threshold of maturity, affordability, and viability that has opened the door to widespread adoption.

Throw a bunch of new technologies into a big pot and stir.  These are ideal growing conditions for innovation.  Now it is up to innovators around the world to do something with all that goodness.

Widespread deployment of 5G networks will add a nitrous-shot to all of that.

Bringing it Down to Earth

None of this is to say that you have to be the next Uber, Lyft, or Airbnb.  More often, digital transformation technologies can be applied to distinct business processes, creating efficiencies and driving competitive advantage.

We see insurance companies using fine-grained geolocation data to change the way they evaluate risk. In the past, risk of property loss might may have been based simply on a street address. By combining detailed geo-coding with machine learning algorithms and big-data analytics, insurers can look at the specific location of a building on a plot of land, its distance from lakes or ponds, proximity to combustible materials, and other factors that affect risk. Better accuracy equals higher profits.

In supply chain execution, we see AI and machine learning being used in combination with IoT sensors, weather data, and a host of other inputs to make earlier and more accurate predictions that impact value in the supply chain. That translates to increased fill rates, improved margins, and higher customer satisfaction. In other words, higher profits.

Drones are being used to monitor the condition of crops and livestock, to map and survey land, and to apply fertilizers and pesticides more efficiently.  Efficiency translates to lower costs and reduced environmental impact.

Digital transformation doesn’t necessarily result in wholesale changes to entire industries. More often, it is driving meaningful improvements in efficiency, accuracy, and customer service across individual business processes. All of those changes add up to something bigger. Companies that make a strategic commitment to digital transformation stand to gain a long-term competitive advantage. Those that do are late to the game will find themselves struggling to catch up.