The Amazon Effect

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Amazon has used technology to disrupt many industries over the past 20 years and there is no sign of them slowing down anytime soon.

Amazon has used technology to disrupt many industries over the past 20 years and there is no sign that their pace of expansion into new markets, or their efforts to further dominate multiple retail sectors, will slow down anytime soon. Much like Tesla and Elon Musk have forced the automotive industry to disrupt itself or perish, Amazon is doing the same to entire industries like grocery, apparel, electronics, house goods, building supplies, industrial supplies, medical supplies, etc.

Most people don’t understand the depth of automation that drives Amazon business processes. They are obsessive about creating accurate, real-time visibility into every aspect of every operational process in their business. With this visibility comes performance metrics and monitoring to ensure that every process meets the efficiency expectations from the beginning of its foundation by Bezos. For instance, I know from some indirect contact with their fulfillment processes that they defined the process for a third-party fulfillment transaction, down to the number of milliseconds allowable for network latency. After 23 years of building, servicing and supporting enterprise-scale business process automation systems, I can honestly say I don’t know any other business that has even close to the same degree of visibility or measurable performance metrics. However, more and more companies are moving in this direction– in large part due to competition from Amazon and similar business models. This is more than IoT: this is digital business transformation at its peak.

Due to a confluence of technology disruption cycles, we now have the ability to create accurate, real-time visibility of every operational aspect of any business, regardless of scope or scale. All thanks to the Cloud, Android, iOS, barcode scanning, video analytics, AI, network monitoring, even 3D printing. We can now use technology more than ever to drive more consistent behavior and outcomes for pennies per transaction. Digital transformation is as much about internal business process automation as it is about electronic customer engagement. This is what omni-channel retail is truly about.

So, what should a business owner that is concerned about Amazon and other techno-competitors disrupting their markets do? It starts with a vision from senior management. The kind of change and infrastructure investment requires C-level support and commitment to be successful. The right technology partner will be able to sit down with management and the board to discuss project methodology, tools, processes and ultimately budgets and project plans. It starts with a commitment to the future. It’s adapt or perish like many businesses: think Toys”R”Us, Sears, JcPenney, etc.

When you are done, your business will be scalable, repeatable and sustainable in a way that it has never been before. Specialized labor (experts) can be supplemented and even replaced with technology that allows a less experienced resource to do the same job, and more efficiently. This means positions that are a struggle to currently staff because of a skills gap in industries today can be staffed with cheaper resources supported by expert systems and scripted work flows. Artificial intelligence and other technologies are already delivering this reality for companies like Amazon and others. For example, Amazon’s new internal delivery network that uses contracted drivers with 1099s to deliver e-commerce orders to customers using their personal vehicles all over the world is a great example of this dynamic.

In order to be in a position to take advantage of these new technologies and efficiencies, businesses wishing to stay relevant or even compete will need years of accurate, labeled (reviewed by humans and noted for outcomes) data in order to train the expert system (AI) on the process. If you don’t get systems and processes in place to begin collecting and processing this data first and foremost, you will still be years out from effective implementation, and that may be too late.

Is Amazon, or someone like them, coming for your market? Do you have a digital transformation vision? Is management committed to the future or their industry? Do you trust your existing technology partners to lead you through this process? How will you scale acquisition, deployment, service and support when technology is a requirement for every process at every operational site?

What’s that sound you hear? I think it’s the Amazon train coming down your tracks.

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