I write a lot about the Analytics Revolution (aka 4th industrial revolution), the proliferation of data and how skilful data scientists can distill information into better recommendations and decisions that will not only propel companies but also improve our everyday lives. The Analytics Revolution is as powerful as the industrial revolution in terms of how it transforms industry – all industry from manufacturing to healthcare to the service industry. The use of data is no longer an option or a decision every company needs to consider since failure to embrace data analytics does not stop the disruption in the industry. The competition will do it with or without you. So how do we prepare for such a transformation and how has the pandemic hastened the extinction of old business models just like a meteor vanquished the dinosaurs?
Lean and Mean
In the Great Recession companies transformed into ‘lean and mean’ organizations. They learned to double down on core parts of their businesses, how to improve them and be more efficient with less expense i.e. people and capital expense. And they cast out other parts of their businesses with poor margins, less certain future cashflows and those less likely to be refitted to the ‘lean and mean’ models. During the Great Recession, hours worked dropped 9.8% while output increased by 5.5% by 2010. This was not accomplished simply by people working harder, but multiple factors such as more efficient business models, process redesign and machines. Yes, machines and automation and that may be exactly what we see next.
Void of Workers Creates Space for AI
Automation itself is not new to the workplace however, automation coupled with advanced analytics, machine learning and AI is relatively new. It shows up in our everyday lives whenever we deposit a paper check with our smartphone or place an order online. What is different now is the void of workers in the post-pandemic world either created by hindered businesses or workers less willing to take risks, will give new space for robotics, automation and AI to grow. Once these new paths are formed it will be relatively impossible to revert to the old ways of doing work. Take these examples:
- Self-driving Delivery Bots. Starship food delivery robots look like six-wheeled roving coolers and were largely only deployed on college campuses. They have seen more business during shutdowns and their boost in awareness of their food ordering app will likely continue to grow their business
- Medical Robots. Stanford’s new hospital opened in November and is using 23 TUG delivery robots and three pharmacy delivery robots developed by Aethon. In a time with increased health risks to hourly workers, having a robot carry supplies seems like the right and permanent solution.
- Floor Sweepers. In 2019 Wal-Mart introduced floor cleaning robots in their stores and plans to add more. Cleaner stores with less exposure to workers just seems smart.
- Restaurant Kiosks and App-ordering. McDonalds is making big investments in technology (Plexure.com) and testing in-restaurant kiosks and automating drive-thru service. Their AI learns from customer profiles and weather patterns and offers customized menus at the drive-thru and of course a recommendation engine – do you want fries with that?
Post-Pandemic World Brings Change
It is a new world. Somethings will remain, others will change and the change is inevitable. Once a revolution is started, especially one driven by data, it is hard to put the positive changes back. Hastened by pandemic disruption, the need for analytics and automation may be exactly what is needed.
Note: My views are my own.