The internet has already disrupted some sectors. Retail and banking, for example, are sectors where incumbents face stiff competition from new entrants who are unencumbered by traditional delivery channels, high fixed costs or legacy systems. These new challengers have very different, digital-first, cultures or mindsets.
Now, digital technologies that enable intelligent automation threaten further disruption.
Cognitive computing can be used as an umbrella term to cover artificial intelligence (AI), machine learning and natural language processing. It spans from humans telling computers what to do through computers teaching themselves what to do, to computers being able to tell us what to do. Soon, computers will be able to get work done independently of humans:
Artificial intelligence (AI) is about programming a computer to use its superior data processing capacity to gain insights or derive algorithms. In 1997 IBM’s DeepBlue computer beat Garry Kasparov, the world chess champion. It had been programmed to develop algorithms that allowed it to process far more data about potential moves than a human could handle.
Artificial neural networks replicate humans’ non-linear thought processes by using algorithms to recognise patterns and correlations in data and to cluster and classify them.
With machine learning, computers use a neural network to learn iteratively from data about past outcomes or new data generated through modelling. In effect, they program themselves.
Natural language processing (NLP) allows computers to analyse text, speech, images, etc., to understand humans, answer our questions and even to tell us what to do. When IBM Watson beat the champions of ‘Jeopardy!’, a television game show in 2011, it demonstrated both its ability at speech recognition, etc., in communicating with humans and its superior computational power.
Deep learning, the combination of machine learning with NLP, allows computers to replicate human thinking. When DeepMind Technologies’ AlphaGo, beat Fan Hui, a Go world champion, in 2016, it relied on deep learning. AlphaGo had taught itself how to play Go through analysis of data from past games and from data generated in further games against itself.
Internet of Things (IoT): Allows objects to communicate or to relay data for remote monitoring. This data can be monetised by providing advisory or maintenance services. It can also be used to trigger automatic spare-part orders or to adjust machines to improve efficiency or prevent problems. In effect, this allows machines to get work done without human intervention.
A Digital Twin is a virtual or digital representation of a real, tangible thing or asset. Through the internet of things, the real asset can relay data about its performance or condition. This allows simulation and analytic analysis using its digital twin to determine any action to be taken.
In their 2019 annual report and accounts, Unilever Plc shares a strategic report5 that includes an overview of what is happening in their industry.
This is how they outline some key trends affecting their stakeholders and markets under the heading of Digital and Technology Revolution.
In the strategic report section of their 2019 annual report6, Ocado presents its view of trends affecting the grocery sector.
Under the heading of Transformative Technology, Ocado notes the same disruptive technologies but can claim that they are already using them as a basis of their business model.
Ocado has developed an online shopping solution (the Ocado Smart Platform or OSP), Centralised Fulfilment Centers (CFC) and local logistics capabilities for delivery to customers’ doors.
They work in partnership with major grocery chains across the world who might use some or all of Ocado’s services to offer online grocery shopping.
5 Unilever Plc strategic report 6 Ocado strategic report