When AI provides instant services – EconomyMorning


In a few months, everything changed. People of all generations who had never had recourse to e-commerce or Click & Collect have used it, educated in a rush. This phenomenon of the acceleration of a movement that has been underway for a while is only the prelude to a major change in uses and business models.

While most companies are barely transforming their customer journeys, the most advanced, GAFA and pure players in the lead, have already taken the next step: the transformation of their internal processes which results in a drastic change in their business models and almost instantaneous processing, thus making their back office transparent. And it looks like a real tsunami!

Immediately ordered, also quickly delivered!

Amazon will announce again this year a record profit, boosted by the global pandemic which has led many consumers to its platform, attracted by its competitive prices and its “Prime” promise to be delivered in 2 hours. We are not necessarily aware of it, but this possibility offered by the American giant represents a fundamental break in e-commerce. From a logistics point of view, 2 hours is just the time it takes to collect the package from the warehouse and deliver it. This means that to offer this service, the order must be ready to go before it has even been placed!

Thanks to its colossal data flows, combined with predictive algorithms, Amazon is now able to predict all or part of its future orders. Ahead of the customer journey, he is able to anticipate his sales and thus keep his promise of immediacy.

Data, artificial intelligence and transparent back office concepts are changing the rules of the game

This predictive approach based on artificial intelligence foreshadows the advent of a new phase of digital transformation which, after shaping the customer relationship, operates on internal processes and business performance and not only allows new operational cost structures but also transparent back-offices by the immediacy of the processing. Pure players are now able, thanks to AI, to automate all of their processes and increase their performance. This feat gives them the possibility, like Amazon, to promise instantaneity.

An explicit example comes to us from the United States with Assurtech lemonade.com, specializing in comprehensive home insurance. Between the sending of information related to the disaster and the compensation on the customer’s account, it takes 1 minute 30, where this processing requires at least several days for traditional players. Many large companies view this new entrant with a certain irony. After all, they think, who would fragment his insurance on such actors? However, by not taking this start-up seriously, they are making the same mistake as large retailers when Amazon launched.

Of the urgency to learn from the past

This misunderstanding is linked to the ignorance of the growth models of these pure players. 20 years ago, Amazon entered the book market and, apart from booksellers, did not scare many people. However, they are dangerous predators, which we will call “market takers”, which once a certain critical mass has been reached on a vertical scale, spread horizontally with new business models that disrupt the markets in depth. lemonade.com reproduces exactly the same pattern and this time with artificial intelligence by entering the insurance market through the back door, multi-risk home insurance. But it would be very naive to believe that it will stop there. The start-up is now testing its model, investing in its R&D, raising funds and patiently waiting to reach critical mass. When it succeeds, it will then duplicate its transparent back-office model and its operational cost structure across the various insurance businesses. By radically modifying its cost structure, it will be able to offer prices much lower than the market at constant margins. For its competitors, who will have remained anchored in their certainties as have been the large distribution or traditional commerce with Amazon, it will be too late. Usage has become a de facto standard and the prices charged will immediately take them off the market. The insurance sector is only one sector of activity among many, but all will be impacted to different degrees by this new stage of digital transformation. Already in France, the Alan mutual insurance company or the payroll outsourcing start-up, PayFit, were created on this model and are making rapid progress.

A second step in the digital transformation to be initiated without delay to ensure its sustainability

This transparent back-office concept and the underlying digital transformations of businesses and processes clearly shape the future of our companies and their sustainability. Tomorrow, instantaneity will be a de facto standard as well as its corollary the reduction of operational processing costs and the increase in the performance of the businesses. Putting 1 week to respond to a customer request, 3 months to obtain reimbursement of a claim or 3 days to be delivered will no longer be possible for the consumer. As B2C creates de facto standards, it will quickly be the same in B2B.
The first thing to do for traditional players in all sectors is to become aware of this revolution and its challenges. They will then need to map the processes to be transformed as a priority, then draw up their roadmap. This is what was called before the Information System Master Plan, which will now have its counterpart on the digital transformation of processes and businesses with the Data and IA Master Plan.

This upheaval will require companies to have a more strategic than technological vision of digital transformation. All the technologies to build a transparent back office exist and are available off the shelf or at worst in open source libraries. Just help yourself. The urgency today is to launch its transformation and to choose its priority projects to ensure its sustainability in this new stage of the digital transformation of our companies!

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