042 WHAT'S THE STORY RETHINK
“WE ARE IN THE MIDST OF A REVOLUTION!” The increasing digitalisation goes hand in hand with profound change, thus not only challenging traditional business models. Carsten Bange, a renowned market analyst, sat down with style in progress to discuss the big changes caused by digitalisation and what opportunities these changes offer. Text: Nicoletta Schaper. Photos: Peter Schaffrath
Mr Bange, you predict that digitalisation will lead to revolutionary changes within all industries.
We ar in the midst of the technological revolution, primarily in terms of data and its analysis. How can data improve processes? To what extent can data act as a basis for completely new business models? One of the buzz words is “Industry 4.0”, which means nothing else than the digitalisation of the manufacturing field. Another slogan is that software is becoming more important than hardware.
In many cases, the buyer doesn’t really want to buy the machine itself, but what it produces. Many manufacturers are in the process of changing their business models and provide their customers with machines in 415 style in progress
combination with a commitment regarding certain production volumes - for which the customer then pays. For example, the compressor manufacturer Kaeser does not only supply compressors, but it also offers a billing model for the amount of compressed air used. Another example is Schwäbische Werkzeugmaschinen, which calculates on the basis of the units its machines actually produce. And let’s not forget car sharing, which is now also an integral part of the strategies of carmakers. It’s no longer about the product price, but about the service. This business model has enormous potential, especially in Germany. Our hardware is, compared to international levels, usually high-priced. So software is a competitive advantage of the future?
So is the control of the machine that comes with it, which makes the profit controllable. Maintenance costs are crucial for machinery manufacturers. So far, this was the customers’ problem, but now it’s the machinery manufacturers’ responsibility. When the latter have data-driven, more intelligent maintenance methods, it’s an important lever for their profitability. Regular measurements of sensor data allow a more precise prediction of when parts need to be replaced. This means that unplanned outages, which cause huge costs, are much rarer. Even robots are becoming more intelligent due to new software. Today, one no longer utilises fixed programming to ensure that a robot identifies parts; now the robot is, instead, capable of autonomous action by means of software. Google’s self-propelled car and corresponding announcements of German carmakers at the IAA prove that the future is all about software and controlling, respectively. The car itself is turning into a mere accessory. Do carmakers understand the seriousness of the situation?
I think they have finally realised the urgency; there are many initiatives, even from German carmakers. However, the race is still wide open. IT companies,
especially Google, are setting the pace, not Mercedes or BMW. What about the other industries?
I think the strategic importance of data has been recognised. The problem is implementation. Many companies hesitate due to a lack of know-how in terms of technology and application. Technology has already progressed much further than many imagine. As early as 2011, Facebook processed 500 terabytes of data every day! To be able to utilise that data, Facebook further developed technologies in co-operation with suppliers and can now place targeted advertisements. This has transformed Facebook into a highly attractive space for advertising. What does digitalisation mean for the retail industry?
Currently, e-commerce is the growth sector. It is still unclear what effects this will have on the stationary retail industry. There are, in fact, products that I don’t need to see and touch physically. In a subway station in Seoul, one can - for quite a few years now - view a supermarket shelf on a screen and scan the codes of the products on display. The shelf and the milk carton are purely imaginary. Do I really need to touch a milk carton? After all, I only want information. When is the expiration date? How high is
