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22Aug

The Fourth Industrial Revolution will redefines the relationship between business and tech

Innovation

This article first appeared in the "Information Age - Insight and analysis for IT leaders", Posted by Nicholas Ismail

on 19 August 2016

The Fourth Industrial Revolution gave a name to a gathering of global trends that have been building toward a deep transformation of both business and technology

Something big has been happening, so it’s not hyperbole when Klaus Schwab, executive chairman of the WEF, says:

“We stand on the brink of a technological revolution that will fundamentally alter the way we live, work and relate to one another.  In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.”  

Long time business and technologies leaders may be tempted to see this as the normal hype that surrounds major new technologies like the Internet of Things (IOT), big data, and the cloud.

Whilst this tech is exciting and a key component of the Fourth Industrial Revolution, the changes at hand are deeper and more substantial than just an expanded tool box. 

We’ve been writing about this oncoming transformation for some time, and what lies ahead is not simply more tech, but a radical reshaping of the relationship between technology capabilities and business opportunities. 

It is a fundamental change that shifts the role of technology from creating “digital assets” to being pervasively embedded within a “digital business”, an organization whereby most creative market opportunities are shaped and enabled by technology.

IT began as a support function to the business, enabling scalability and efficiency as part of the third industrial revolution. 

While information mattered, it was not the principle source of business value, so technological development could often proceed on its own slow steady course, separated from the hurly burly of a shifting marketplace, a process and control dominated relationship conducted at arms length.

As market opportunities increasingly leveraged technology, business leaders  collaborated more closely with technologists, seeing them as partners in developing differentiated services and products.

Agile delivery became widely accepted and market centric product development teams adopted market centric techniques like user centered design and lean startup thinking.

This team level collaboration was the beginning of a shift from the third to the Fourth Industrial Revolution.      

The final step in this evolution requires a much deeper enterprise-wide disruption; a new way of thinking and working that moves technology into a position where it is the prime enabler of new business opportunities.

At ThoughtWorks we call this “tech-at-core” and it is quite literally game changing.  

Tech-at-core reshapes the approach to creating business opportunities and forces foundational changes in the way organizations work. 

While there has always been technology driven innovators, they were seen as crowding into the NASDAQ and competing within their own private club.

That is no longer the case, as today every business is fundamentally a new kind of digital business with technology at the core.

Tech-at-core’s explosion of opportunity

The Fourth Industrial Revolution’s new technologies empower business model level disruptions, creating a new type of opportunity where it is possible to reinvent entire industry ecosystems.

These possibilities are both deeply threatening and immensely exciting. They are forcing business and technology to draw together in a shared ownership of the future. 

This is not just about the use of a new technology or the introduction of a new product.

Uber’s story suffers from overexposure but even with all the print dedicated to it, the point of the change is often missed.

Uber didn’t just field a better service offering or find an innovative use for mobile technology - they redefined the rules of an industry.

In Big Bang Disruption, Larry Downes and Paul Nunes describe how these disruptive competitors enter the market better, cheaper and more customized.  

At Uber, Garrett Camp and Travis Kalanick did this by architecting a fundamentally new business ecosystem with a radically different set of operating constraints.

Instead of being locked into a cab company’s fixed capacity, which is purchased and sustained at great cost, Uber couples variable pricing with on-demand capacity to automatically respond to the ebb and flow of travel needs.  

They put more cars on the road when it matters and simultaneously avoid paying for unused capacity in down times.  

Uber became the child of disruptive impact, not because it leveraged a dramatic new tech innovation, but because it cobbled together widely available technologies with creative new business strategies.

Its mobile app wasn’t technically groundbreaking, but it redefined the model for customer acquisition.

Traditional taxis were forced to use the same limited resource that earns revenue to troll the streets for customers.

Uber avoids this inefficiency with a customer pull model that can serve periods of even low demand with a car that is a few blocks away. 

It’s not a fair competition.

That’s why it only took four years after its 2011 New York City launch for Uber to put more drivers on the street than venerable NYC taxi companies.  

The WEF doesn’t sugarcoat the scope of the change ahead.

Kurt Schwab notes that this revolution “is disrupting almost every industry in every country,” and even as retail leaders like Macy’s retrench, closing stores worth less than the property underneath, customer experiences are ripe for a reimagining that goes far beyond the mechanics of omni channel buying.

Synergies between technologies like IoT and big data are poised to deliver transformational personalization that could enable retailers to escape from the box that has defined the concept  of “the store” for a hundred years.

A Pervasive Change

The divide between enterprise and insurgent thinking blurs, with neither startups nor enterprises free to focus on traditional areas of strength.

Tech-at-core should be seen as providing innovators with a full spectrum of capabilities ranging from radical disruption to ruthless efficiency.

This transformation is not limited to IT or sequestered in a few designated teams.

Not only is every business now a digital business, but every part of every business is digital.  

As a result, a growing team of tech empowered CXO’s is emerging to lead the cross enterprise application of technology.

These leaders are developing enterprise capabilities across the entire spectrum of tech enabled business opportunities.

 Original post at: http://www.information-age.com/technology/applications-and-development/123461886/fourth-industrial-revolution-redefines-relationship-between-business-and-tech

Pedro  Cortonesi
Pedro Cortonesi

Pedro Cortonesi é Engenheiro Eletricista formado pela FEI (Faculdade de Engenharia Industrial), com Pós-graduação em Marketing, Especialização em Empreendimentos na área de Petróleo e Mestre em Administração de Empresas na área de Gestão da Inovação. Possui mais de 30 anos de experiência na indústria, sendo grande parte na área comercial, em posições de Marketing & Vendas, em empresas de médio e grande porte. Pedro é atualmente Senior Marketing Manager na Schneider Electric e sócio licenciado da Bizup Consulting, empresa de consultoria empresarial. Pedro também é professor da Febracorp University na área de Inteligência de Mercado.