Karim Marucchi at WCEU 2015 On Stage Featured Image

How is Industry 4.0
Advancing Digitalization?
Tech People Podcast

Karim Marucchi sits down with Ken Coyne of Tech People to discuss the importance of data ownership and the impact of Industry 4.0.

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Karim Marucchi, CEO of Crowd Favorite, sits down with Ken Coyne of Tech People to discuss Industry 4.0, the advanced digitalization of manufacturing companies, and the integration of technologies in all aspects of production.

He shares a fascinating case study of how Industry 4.0 can be used to improve efficiency and CX in the construction industry by developing a cataloging system for a construction equipment manufacturer that allows clients to get pricing for projects online, while still maintaining a human connection with clients. This is an engaging look at how new technology is impacting every industry!

Key Takeaways

  • Manufacturing companies and brands are looking to integrate technologies into every aspect of production.
  • Focus on data ownership. Think about using Open Source Software as a hub: if you own the central hub that's plugging into others as a business, you keep that.
  • One of the myths about Industry 4.0 is that it is going to take away jobs. 
  • When we speak about Industry 4.0, we're discussing how we bring together the different aspects of your business and it's all about the integration and workflows. 
  • We use Open Source Software as a hub, that way you're not dependent on just one SaaS system and are open to more business solutions.
Related Podcast

Open Source Software & Digital Transformation with Karim Marucchi, CEO of Crowd Favorite was originally broadcast by The Digital Transformation Podcast

Listen to the Podcast →

Podcast Transcript

Ken: Hey guys. Welcome to the Tech People Podcast. My name is Ken Coyne. I'm your host and founder as well as Head of Technology at Ops Talent. I believe at the heart of any success story are the people who made it happen. Diversity, creativity, and innovation when nurturing people can lead to an unbeatable formula.

I created this podcast to share the experiences of some truly inspirational leaders on their journey to success. Enjoy the show.

Hey guys. Welcome back to Tech People Today. I'm delighted to welcome Karim Marucchi to the show. Kareem has founded multiple startups and has a wealth of experience in digital strategy and transformations working with many of the Fortune 500s. He's kindly come on the show to share his experience on Industry 4.0, which is advanced digitalization.

I will leave it to Karim to expand further on this topic and explain how this is helping companies in terms of digitalization. Welcome, Karim.

Karim: Thank you, Ken. Thanks for having me.
Ken: No, my pleasure. I'm looking forward to learning all about Industry 4.0. I did do some research on it, but I'm looking forward to getting your insights and your experience. Now, before we go there, let's learn a bit about who you are and your current role.
Karim: I am the CEO of Crowd favorite. It's been 27 years now that I've been providing enterprise sized clients with digital solutions. Everything from complex content management systems to systems integration.
Ken: So talk to us. I mean, first about, I suppose, what is Industry 4.0?
Karim: That is an interesting question because people think that when you are talking about Industry 4.0, you're thinking only about companies that are producing items. What's happening really spans the universe. Really the base of it is machine AI learning, smart factories, smart production in general, and that's where you can even leave the factory and talk about Industry 4.0. Manufacturing companies and brands are looking to integrate technologies into every aspect of producing whatever it is they produce.
Ken: Okay. That for us is Industry 4.0. Okay. And how did this all come about, this evolution of industry 4.0?
Karim: It's been really slowly building quite literally over the last 20 years almost. But what really sped it up was how APIs application protocol interfaces have been, program interfaces have been accepted. If you write software today, you're writing these APIs so that you can integrate to other pieces of software. So now brands and industry are saying, how do I integrate these things to make my life easier?
Ken: Okay. And maybe just for the audience so they can get a better feel and understanding of it. Could you share some case studies or some examples of how this works in practice?
Karim: Absolutely. My favorite case study is one that sort of debunks the entire idea that Industry 4.0 is gonna take away jobs. One of our clients in the US is one of the largest manufacturers of construction equipment for commercial construction, and they're over a hundred years old. And with them we've created a cataloging system so that their clients can come onto the internet and check their catalog and actually get pricing for doing an entire construction project of their prices.

When they came to us, they said the number one important thing is that our sales force has a human connection with our clients, so we don't wanna completely automate it. We want the clients to be able to go online and automate the beginning of the process, but that entire process, that custom workflow has to drive that. Our human salesforce is talking directly to the clients once we have all the information.

Ken: Okay, cool. So how would you achieve that?
Karim: We put together a cataloging system that has over 30,000 different SKUs in it. And when the client comes they can upload their own construction project and it'll do quantity surveying and it'll find out how many widgets they need and this and that, and the other plumbing fixtures.
What will end up happening is that it is all automated, tying together multiple systems. And that's the industry 4.0 piece. But the beautiful customized workflow piece is that our team engineered it so that once the customer does that, it's feeding it all as an informational piece to a human sales workforce.
That's then reaching back out to the clients and saying, okay I see this is what you're looking for, I have all the specs. Now let's sit down and talk about how we can give you the best service in getting you these products. And depending on the types of clients they are, they get different levels of discounts or treatments or any number of things, priority for hard to reach items that kind of thing.
Ken: Okay, cool. So I mean it's, there's no kind of standard methodology or process to this. Is there, or is each project solution quite unique?
Karim: The concept is standard, which is, let's find the ways that automation can help your industry be more organized. But workflow is the unique piece. Every individual instance will be a separate workflow. Another good example is Walt Disney. For the Walt Disney Company, we integrate a lot of different aspects of broadcast information onto one website. That is shown to different media outlets, depending on their level of access, what they need to know, who they are and other things. But those are literally 18 different systems that have come together. To provide one dashboard, if you will, for their media client.
Ken: So before you implemented that system , how would that system have looked previously? How would they have achieved that before Industry 4.0?
Karim: Well, they would've either had to actually have separate logins or separate windows. Or they would've had to manually bring those systems together into dashboards that their clients can see, which would create tens and hundreds of hours of work in bringing that together.
Ken: I can imagine. That's quite interesting. So you went on one side, like the construction example. On the other side it's Disney, which is, you know, I mean, I would say is Disney. I suppose it's, it's a big company. So are you saying you could literally apply this to any industry? Are there any specific industries?
Karim: That's the beautiful thing. When we speak about Industry 4.0, we're really talking about how we bring together the different aspects of your business, and it's really about the work. So we get questions all the time. My job is the easiest because I'm not literally selling any product, right? It doesn't matter the products they're working on digitally. They come to us and they say, can you take an hour of time and talk to us about, quite literally, these are the six things or the 60 things we're dealing with. Is there a way to bring them together? And that's the most fun conversation in the world. It's why I got into this business. It's putting together a puzzle piece and figuring out, yes, this is how we could bring them things together.
Ken: Cool. So in, in one of those examples, could we just maybe go into a bit further in detail as in like, how would you approach implementing?
Karim: So let's take, for example, any manufacturing. Let's take it away from our client and talk about it if somebody has a widget out there that they wanna sell. We've all heard about how now you can automate the inventory and sales process and people are expecting that in business to consumer transactions. The shipping and the inventory process is all tied together these days with all sorts of SAS products that are out there.

But if you have a unique workflow where you need to either engage with clients or you are getting products from very many sources, to be able to automate and bring together different streams and flows of information will help you run your business more quickly, more efficiently, and ultimately make you more money.

Ken: Yeah, definitely. So that's the workflow piece. Because you also mentioned the AI aspect. How does that work with that? Or does it depend on a case by case basis?
Karim: Well, it can depend on a case by case basis. I can give you an example from another project we worked on where they're using AI to literally monitor the inventory that's going out and to build models of what their flows of inventory are over time. Therefore, the AI would start predicting things that maybe you couldn't catch. It's easy to say, well, I have a seasonal business, therefore certain things only go out in one part of the year. But with the AI model, our particular client was able to project different sub pieces, different vendors needed to give them so they could put together their product right in different timelines, because they were seeing when products were coming in and when products were going out. So you're able to see things that might not be visually easy to see with the human eye, but with AI, they start tracking that over a long time basis. And over a series of quarters, they're able to start negotiating better prices with their vendors because they could order ahead of time or do just in time ordering as the case may need.
Ken: Very cool. And in terms of that approach is that quite a large project to undertake or is it gonna be delivered quite quickly?
Karim: Well, it used to be that you had to be one of the Fortune 500 to invest for these things. Using the old commercial term from many years ago, “Everybody wants to be like Mike”. So it's really been coming downstream and we have small startups that are coming to us and saying, how do I create this custom workflow out of these six or 60 APIs? And it's possible it doesn't take a budget from an enterprise to do a project like this any longer. It's not completely cheap, but depending on what your margins are going to be, it's an easy conversation to have.
Ken: Right. And, and that example where you mentioned 60 APsI. Do you take them all and do them all together or do you do step by step because they're bang approach?
Karim: You have to do it step by step, but that's where the digital strategy comes into play. Based on when you have multiple APIs, based on not only the workflow, but also the complexity of each API. Some systems are more legacy than others, meaning they're older than others. Some systems are much easier to plug. Unfortunately, still today, most SaaS companies, most companies that have software for industry are saying that, oh, it's just plug and play no matter what it is. But then when you literally lift up the hood and you start playing with it, there's a couple of gotchas, and one of our specialties is making sure that we can separate the gotchas from what's easy to actually implement as somebody's interested in this. You can do this in phases. You don't have to do one giant project. We have plenty of clients who say, this is a marathon, not a race. I have smaller budgets, but I have to do this over a certain period of time. Can we plan something out? Can we do something that ramps up so I start seeing a smaller return on investment more quickly, and then that'll help me fund this next part of the integration.
Ken: Okay, great. Are there some common challenges that you see regularly in these projects that you have to overcome? Maybe you could share some examples if there is, or share some examples when companies go about or implementing industry 4.0.
Karim: Yes. Two quick things that come to mind. The first one being it's part of our job to save our clients from themselves. We all want the perfect system, but we have to work with what we can do now for the right budget and the right timing. So part of our approach is to sit, literally sit down with them and say, okay, show me the big picture, and then let's back up and say, how will this affect your business? And how can we approach it in a way that makes sense for your business? So that's the first thing that folks should keep in mind. And the second thing is, there's a list out there now of SaaS systems called the MarTech 8,500, and it shows literally 8,500 different SaaS systems that are out there to help people run their business and run their marketing online. And no matter how you think, there's only one solution to do what you think you want to do, there's always another one out there. If one piece of software is too difficult, chances are you don't have to build something from scratch. You can adapt another piece of software. The key we use for that in our business is we use open source software as a hub, that way you're not dependent on just one SAS system.
Ken: Okay. And is there, I mean, is this kind of normal, is there like an IP from this or not? Can you, do you think you can put up an IP sometimes?
Karim: Well, what we learned with our cutting edge enterprise clients is that clients want to own their own data. And the more you're doing things on a SaaS system, the more your data is broken up on different clouds. So the reason why customers are coming to us and saying we want to use open source as a hub is they want to own the source of truth of their data. So that way, if they want to move from SaaS system A to SaaS system B, because somebody comes up with something cheaper or better, or both, they have that true source of truth. That way they don't have to completely rebuild. You can unplug one SaaS software and plug in another one. I don't want to make it sound that simple, but when you own the data and the source of truth and you're not just relying on that SaaS, it's not a migration project. It's not a project where the data is actually sitting on somebody else's servers only.  So you can actually decide which is your best of breed product. 
Ken: And I think based on experienced data seems to be the key. 
Karim: And maintaining the ownership of that data if possible. Absolutely.
Ken: But I suppose that comes down to cost as well, doesn't it?
Karim: Well, it does. For instance, speaking about the Walt Disney Company.

They have a 100% data ownership expectation. So they don't want us using any software that will store data on client servers. And that means if you have a 100% policy of that, almost any implementation is more expensive because you have to do an on premises data store for. Instead of letting the SaaS system do it, there are other clients of ours who say, we want a copy of the data. So at any instant we can turn off that service. But we don't have to have unique ownership of all data, only certain security data.

Ken: Right. Okay. Very cool. Really cool. What you're saying is that this has been developing over the last 20 years. How do you see it evolving? Is it going to be, I don’t know how, who names these? Like who gives it industry 4.0? Is it going to be industry 5.0? How do you see this for the future?
Karim: I think as the customer base brands, companies out there insist more on data portability, insist more on a standardization of these APIs. I think it's just gonna get easier and easier for the customer and it's gonna get harder for services out there, data services and SaaS, to show why they're unique. So you have to have a truly good idea to get somebody to churn away from what they're using at the moment if they have a good setup. So I think we're going to see a paring down of the SaaS services and a best of greed to really emerge. It's not based on how many marketing dollars they can spend, but it's based on what their actual function and functionality really is.
Ken: Okay. Cool Karim. So thank you. Really interesting. It sounds like it can add a lot of value to a lot of businesses. If people would like to learn a bit more or learn a bit more about you, what's the best way to get in touch?
Karim: Please come to Crowdfavorite.com and get in touch with us. You can find me on Twitter, you can find me on our website. Always happy to schedule a call. Again, it's just a matter of figuring out what a client's custom workflow is. But the key out there, I want to let people know whether they want to work with us or anybody else, is to think about the data ownership. Think about using Open Source software as a hub, whether that's Droople, WordPress, or something much more complicated. But if you own the central hub that's plugging into others as a business, you keep that.
Ken: Actually, can I ask one last question on that point? Is using Open Source, the security aspect of that Open Source Software, would you see that as a challenge or an issue?
Karim: It used to be, it was a big challenge years ago. What's mitigated that challenge these days is it depends on where you're hosting. You have to go to reputable hosting or a reputable platform to put your Open Source. These are companies like Pantheon and WP Engine and companies that really have security first and foremost in mind, and they're taking care of most of that layer. And then the rest of it is really based on the things that you control as a business. And making policies that are secure, friendly, not letting people have bad passwords and the like. 
Ken:  Fantastic. Listen, thank you so much for coming on the show today. Really appreciate it. Thank you.
Karim: Ken. It's been fun.

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