Digitalisation turbo: platform instead of pipeline
A decade ago, corporations in the oil and commodities industry and major banks were among the ten most valuable companies in the world. Today, nine of the ten most valuable companies in the global ranking are digital giants, eight of them from the platform economy. Like Apple, Microsoft, Amazon, Alphabet (Google), or Facebook, they come from the USA. Or, like Tencent and Alibaba, from China.
Europe hardly figures. In terms of their value, European platform companies make up just three percent of the pie.
And Germany? Europe's strongest economy in terms of digital business models takes a back seat. The coronavirus crisis has again highlighted the need for German companies to catch up in terms of digitalisation. Although digital communication and collaboration solutions were expanded during the pandemic, Germany is still a long way from changing into a genuine "Economy 4.0". According to the Cologne Institute for Economic Research, digital value creation in Germany is 5.7 percent of GDP.
Everything is networked: technologies for a better future
Rethinking your own company in a new and consistently digital way is at the core of New Industry. Behind the term, which was largely coined by Vodafone, lies the aim of intelligently and securely networking people, locations, machines, and objects (assets) across all industry and company sizes in a way that is ecologically and economically sustainable. New Industry is based on three pillars: mindset, connectivity, and solutions.
Mindset means being ready and willing to change, to continuously re-establish and control business processes and models in a data-driven and customer-centred manner and in a way that is sustainable and saves resources. Using intelligent, high-performance, high-speed networks from Vodafone such as Narrowband-IoT, optical fibre cable, and 5G (e.g. mobile private networks) as well as hardware (sensors), assets are permanently connected to each other and reliably and safely exchange vast quantities of data in real time. Data analytics, AI, and machine learning help with data interpretation, process optimisation, and the proactive determination of customer requirements. They enable smart services such as predictive maintenance of machines, sustainable energy management, or the tracking and securing of assets. AR and VR have the potential to revolutionise the customer experience. The result is an intelligent, data-based digital ecosystem for more efficient processes, more satisfied customers, and more innovative products – significant competitive advantages included.
"People's attitude towards technology is changing," says Vinod Kumar, CEO Vodafone Business. "We make sure that technologies are used meaningfully, and really do make a positive contribution to society. Innovation is not an end in itself and should benefit everyone, not just a few." That is why Vodafone strives to serve the needs of small and medium-sized enterprises (SMEs) as well as to be a reliable infrastructure partner to large corporations, and to make IoT accessible to all business models and social classes. For Kumar, this includes not only providing advice and support, but also networking SMEs in a community in order to develop solutions together. In a volatile market environment, Vodafone wants to offer major companies stable infrastructures that combine connectivity, cyber security, cloud, and applications – as a contribution to operational continuity, supply chain security, and resilience.
Sustainable and low-emission thanks to digital value creation
Michiel Muller went in a radical new direction when he founded the "Picnic" company in 2015. Muller, who is Dutch, wanted to combine regular grocery shopping at the supermarket with the booming online retail trade – and to do so in a way that is climate-friendly and convenient: without loads of packaging waste and CO2-producing transportation; without delivery charges and irritating delivery windows with waiting times. A logistical challenge that, despite their expertise, the major supermarket chains were unable to manage satisfactorily, as Muller found. "Households spend over half their money on food. Although shopping in a supermarket is by far the largest market, it is the least permeated by online business."
Muller's thinking along the entire value chain was consistently digital. All orders are submitted by app and processed by software that was designed by Picnic itself. Once paid for, goods are placed in delivery baskets at fulfilment centres. "Because the orders are absolutely precise, we are able to reduce food waste by 85 percent," Muller says happily. In addition, the process is able to dispense with a large amount of extra packaging.
But how do the goods get to customers without detours, time loss, and additional charges? Muller thought back to the good old milkman, who used to make his rounds at specific times. "We deliver at set times – like a modern milkman: personal and on time." Customers choose the day and delivery time they want, like you would on a bus timetable.
Their purchases are delivered in specially developed emission-free electric vans, which are loaded and unloaded from the side. This saves time and space. The agile vans can drive up to the front door and the baskets are instantly to hand. Picnic's deliverers are able to achieve six to seven stops an hour by this means. The delivery services used by the major supermarkets only manage two. "We can deliver three times as much at a third of the cost," notes Michiel Muller.
The market leader in the offline world doesn't usually become the market leader in the online world. It sounds illogical. But transforming one's business can often be more difficult than expected.
Picnic launched in Germany in 2018, first in North Rhine-Westphalia, close to the Dutch border. Since then, due to the high demand, capacities have expanded continuously. The first automated fulfilment centre is being built in Utrecht. Muller is expecting it to result in even greater efficiency when filling the delivery baskets. Picnic has also launched its own label in order to save even more transportation and packaging materials.
Picnic is a prime example of a New Industry company. The company has rethought the retail concept of the supermarket and successfully transferred it to the digital world. With its own app, software, e-vans, and services centred on customer needs, Picnic serves the entire value chain, saving time, costs, emissions, and packaging waste. Further automation is planned to optimise processes in the fulfilment centres in the future.
Vodafone supports companies on their way to New Industry with solutions for intelligent and secure site networking, such as the SD-WAN corporate network; with applications for communication and cooperation between people, such as the UCC (Unified Communication and Cooperation) platform; as well as with the networking of machines through IoT. It also advises on the development of digital value chains. Vodafone has launched an expert portal, the V-Hub, specifically for mid-tier companies to provide support with digital transformation. In doing so, Vodafone is following its growth strategy "Business 2025", which is all about the group's purpose of "Connecting for a better future", and focuses both on SMEs and major players.