What’s interesting is recognizing how fintech companies, neobanks, and even large tech companies generate revenue through innovative business models and by offering more agile, accessible, and customer-centric financial services, which have already raised consumer expectations. By understanding these novel proposals, the new ways they provide value to consumers, and how they monetize services, we can anticipate the future of banking and banking systems. Moreover, these innovations, which have so far posed a challenge or a threat to banks, “could also be a source of strategic strength as banks incorporate them to complement their core.”

What is observed, at least in potential terms, is that digital banking business models allow customers to engage more and sign up for additional financial products, thereby exponentially increasing per-customer revenues.

So, what are the main shifts in focus that the new players in digital banking bring? Essentially, they change how financial services are integrated into people’s daily lives. Moreover, they tend to operate under the platform model. They focus on the customer experience and strive to simplify both the user journey and the features of the product or service.

Up to this point, new digital banking proposals worldwide have done a great job, especially in the onboarding process. However, it’s also true that from now on, they will have a lot of work ahead, as they must demonstrate their worth throughout the customer lifecycle with complex products such as banking for small and medium-sized enterprises, mortgages, investments, and financial management, among other things.

Banking Services

Beyond the distinctive focus brought by the new players, the reality is that there are several macro trends facilitated by technology that are reshaping the financial services ecosystem to varying degrees. Among them:

• Embedded finance, defined as the integration of financial services (loans, payment processing, or insurance) into non-financial company infrastructures, without the need to redirect to traditional financial institutions.

• Open banking practices, which provide external providers of financial services with open access to banking, transaction, and other financial data from banks and non-bank financial institutions, using application programming interfaces (APIs). This model has the potential to create a more competitive and customer-centric banking ecosystem

The open banking model, for example, gives rise to schemes such as Banking as a Service (BaaS), which allows fintech and other non-bank entities to partner with traditional banks to access their banking infrastructure and provide services such as deposits, loans, and payments.

In any case, what seems clear is that new open ecosystems based on partnerships, with intersectoral and complementary value propositions focused on consumer needs patterns, have the potential to deepen the relationship of banking entities with their customers and keep value circulating within the ecosystem. This collaborative model is in its early stages, and everything suggests that it will evolve and adopt forms that are not entirely predictable today.

Digital Banking

In a study conducted in the United States, 61% of consumers said they were “somewhat or very likely” to switch to a solely digital bank. The survey also revealed that, despite continuing to choose traditional banks as their main provider, consumers of all generations are using non-traditional financial tools more than ever and for more purposes. Additionally, almost half of consumers said they would probably use a banking service offered through non-financial companies such as streaming providers (48%), internet or wireless providers (48%), employers (47%), and national retailers or stores (46%).

On the other hand, another survey found that four out of ten customers now have an account with an online bank. Of these, 36% check their banking app at least once a day, and an even higher proportion (58%) says that online or mobile services are their preferred method of dealing with their bank. Furthermore, 67% say they would be tempted to use an AI-assisted system to manage their account. However, according to the report, the demand for a digital experience is also tempered by the fact “that many consumers still demand human interaction with their banks for various key issues.” Moreover, while consumers expect their banks to provide the intimacy of a personalized relationship, they also naturally want confidentiality and respect for the privacy of their data, which also draws a fairly thin line.

Personalized Financial Services

So far, modern digital banks have been able to capitalize on the changing preferences of millennial and Generation Z customers, who prefer to use digital channels. And they did so “by offering simple and convenient mobile and online banking services that meet the needs of tech-savvy consumers.”

Facing this challenging scenario, traditional banks don’t necessarily need to copy others’ strategies. But they would have to pay attention to some fundamental premises. For example, they could organize around the different needs of customers: entities must move away from focusing on their own financial products and services and put the customer at the center of their strategic designs.

Today, organizations in the sector have the advantage of being able to use technology and data to integrate more deeply into the lives of customers with real-time banking services. They have historical and current information about their customers, and new tools that allow them to move towards hyper-personalization and ensure frictionless experiences, which is also crucial in the new scenario.

At the same time, emerging technologies are revolutionizing digital banking itself. For example, new developments in artificial intelligence (AI) facilitate smarter financial management. With innovations such as chatbots and voice assistants, fraud detection algorithms, and solutions for process automation, AI collaborates to improve the customer experience and streamline operations in the banking sector. Meanwhile, blockchain technology optimizes security and transparency and enables decentralized finance (DeFi) initiatives.

Advanced analytics has also become a key tool in digital banking, allowing entities to understand customer behavior more deeply, improve decision-making, optimize risk management strategies, identify trends and opportunities, and develop more accurate predictions.

To provide outstanding and distinctive experiences, banking entities need to integrate existing customer data sets. They must harness data knowledge through agile technology stacks to reshape their business models and achieve hyper-personalization. And to do this, they have to strive to develop and plan data strategies.

Future Banking

Beyond the fascination that all these new developments and solutions may produce, ongoing digital transformation does not solely involve applying new technological tools. As an analyst indicates, the central point is to choose a business model suitable for the rapidly evolving digital landscape.

In this context, some suggest that economic forces and financial technology have put an end to the universal bank model, and that the banking of the future will be based on forming networks of specialized platforms that traverse different industries, giving rise to “ecosystems that meet customers’ needs in new ways.” From this perspective, the future of banking would be disputed in five competitive cross-industry areas: everyday banking, investment advisory, complex financing, wholesale brokering, and Banking as a Service (BaaS).

At Baufest, we continue to closely monitor the transformation of the financial services industry and collaborate to enable banks to transition to the financial services of the future. We help them use technological solutions and customer knowledge with much greater depth so that they can offer services when consumers require them, and even anticipate their needs.

Technology modernization is a journey every business eventually takes in some form, but what does that journey actually look like, and how can you prepare for the eventual obstacles and setbacks you will face?

Keep reading to find out.

Technology Modernization vs. Digital Transformation

Technology modernization is often confused with digital transformation, but they are actually very different.

Digital transformation changes an organization’s business model, markets, or processes to increase or expand growth into other markets, revenue streams, or other larger business goals.

Technology modernization upgrades technologies, methodologies, and processes without any changes to the business model.

The choice between the two depends on business goals and how much time and resources a business has.

Why Is Technology Modernization Important for Your Business?

Unnecessary code complexity. High computational costs. Databases that struggle to scale. Legacy architecture hindering growth.

If these problems sound familiar, it may be time to consider upgrading your tech stack. Many businesses choose to modernize to increase efficiency and productivity, improve their ability to adapt to new technological changes, reduce technical debt, and save costs on hardware and software.

Examples of Technology Modernization for Businesses

Some of the ways businesses are modernizing today include:

• Migrating to the cloud
• Switching to a new programming language
• Adapting automatic or managed security packages
• Automating software delivery pipelines
• Moving to more microservices architecture

The Realistic Path

1. Set Goals

The first step in any modernization journey is to know where you want to end. What are you trying to accomplish? How will your teams, and yourself, know when the process is considered done? Define these very specifically by having a clear target to aim for.

Remember, your goals should be client-centric. Always be clear on why this change will benefit your customer now or in the future. How will it bring business value?

Some examples of goals could be to simplify your architecture, standardize code quality, move your most high-traffic application to the cloud, or create a mobile app version of your software, like Starbucks did with their loyalty program, to increase sales.

2. Prepare Your Teams

Depending on your business structure, it is often times better to keep all your teams and leadership on the same page when setting goals. This is to prevent as much confusion and conflict as possible. Knowing who to make points of contact with and who will be responsible for what is also important in this preparation period.

3. Take Inventory of Current Technologies

You will need to know what systems, tools, and/or processes you’ll want to update first before taking any technical action. Have your teams take inventory of existing applications and determine what needs to be improved and what can be decommissioned.

This will be a discussion to prioritize which applications to change first, what the scope will look like, and what resources will be needed to make it happen. Other factors to consider are cost, potential obstacles, timelines, and if this will affect any other parts of the system.

4. Create a Modernization Plan

With all discussions completed from inventory checks, you should have a big-picture idea of what needs to be done to modernize your business to the next level. This is when your teams would create a plan on how to proceed. It is best to bake in incremental phase milestones to keep to obtainable goals and allow room for experimentation and setbacks since adopting new technologies and changing company habits can take some time.

A part of this plan would include choosing which new technologies to use, what the goals are, who is responsible for what, etc. A plan can look like whatever works for the business, but an example of one would be FDA’s Technology Modernization Plan that you can check out.

5. Implement New Applications

Now it is time to implement the plan by starting small and testing changes with a proof of concept before moving on to full implementation. Taking a “one step at a time” approach will allow time and confidence to build on these new technologies and gain expertise in new tools and processes. During this phase, it is important to reward and celebrate wins to keep morale up.

6. Deploy New Applications Safely

When it is time to deploy the new changes to production, it is imperative to design the deployment so that the legacy system is still separate and operational along with the new deployment. Make sure to slowly transition traffic or use the new technologies over time to test how it works in the real world. Utilize blue/green and canary types of deployments to accomplish this.

7. Decommission Legacy or Unused Applications

The final step would be to decommission the legacy or unused systems once your business has fully transitioned to the new modern technology.

Common Obstacles and Solutions

Lack of Momentum

Adoption of new processes or tools can be slow at first, but if it continues to drag, it may be because of how the teams are organized. For example, if your teams are used to working in the waterfall approach, it may become more efficient to switch to a more agile methodology to allow room for experimentation and faster work.

This is if your teams can operate on agile.

Some teams may not be able to, like research or AI/ML teams, who tend to operate on Kanban due to the longer nature of their work. But don’t be afraid to look into different organizational structures that would fit better for your company.

No Trust

Entering the unknown can lead to mistrust of the future from employees. They may not trust the new technology’s ability to support legacy requirements or how it will keep data secure without loss.

Fears like this usually come from the unknown. So make the technology “known” by shedding light on it. Allow work on an MVP to increase knowledge. Protect legacy data and systems by keeping them separate and backing up data. This way, any forward movement can be retracted or changed without any damage to the current systems

Resistance to Change

Sometimes the greatest obstacle to a technological change is not the technology but the people and culture. It is understandable that big changes will disrupt normal habits, which can lead to resistance. Employees may feel forced into something they don’t want to do or remain mistrusting, which can harm work culture.

It is important to keep workers and leadership on the same page by involving everyone in the plans for the future. The more involved everyone feels, the more likely they will buy into it because they helped create it.

Technology modernization is a long-term benefit gain, and anything long-term can be hard to believe in at first. You can ensure that everyone understands the long-term gains of this effort by hosting informational office hours and maintaining open communication.

You can also give the example of how not modernizing can lead to disastrous results when unexpected events occur. Like how COVID-19 forced many companies to scramble to digitize early, creating havoc in their systems and loss because their tech stack was not ready for the influx of traffic and remote needs. To prevent this disaster, a company must prepare and think ahead.

Highly Coupled Legacy Systems

If your legacy system is highly coupled, that probably means one change will have a domino effect on others, which can cause issues. A way to deal with this is to chuck sections of the system to update at a time, make sure to take an overlapping approach, and have both the legacy and new system operational simultaneously to test for errors before fully switching over.

Next Steps

Technology modernization is a long journey that will bring sustainable benefits in the future. With these steps and tips, you can begin your path with confidence. If you still have questions or want individualized help, you can book a discovery call with one of our solution experts to get you started.

This makes digital transformation initiatives a priority for companies and of strategic importance. But reality sometimes shows another side, as these processes do not always reach the desired outcome.

The landscape of digital transformation is filled with projects that fail. For example, according to a Boston Consulting Group study, 70% of digital transformation initiatives fail to achieve their intended goals.

Denying this reality would be unwise. Therefore, one must ask: why do so many technology implementation projects fail? Often, the key factor is the lack of a plan to promote the adoption of new tools or technologies by users. This point is so important that it warrants the development of a specific strategy.

In the IT environment, this process is referred to as “digital change adoption.” It involves managing and driving change so that all involved parties adopt new tools, platforms, technological environments, migrations, and updates.

Focus on people

Focusing on People A Deloitte survey found that the lack of change management skills (37%) is one of the top three challenges organizations face during digital transformation.

Technology can provide highly transformative solutions for companies. However, it never solves everything on its own. In any case, changes always start with people, who must adopt the tools to enhance processes and optimize efficiency and productivity.

Technological change may be well thought out and designed. But if it is not adopted, it will not deliver what it has to offer: making companies and their businesses go further. And this is a problem that must be addressed, as behind every digital project there is a strategic purpose that requires a significant investment, not only economically but also in resources.

Resistance to change

When a project of technological update, evolution, or innovation does not have a change plan, when communication is ineffective, and people are not involved at the right time, the following may occur:

Users may not see the value of the new solution. They may prefer to remain in their comfort zone. They may distrust the reasons that led to the implementation and express strong resistance to change. All of the above can lead to the technological implementation ultimately failing.

That’s why in projects, it is so important for IT and business areas that are undergoing or initiating digital projects to ensure the adoption of change in the affected people and avoid the frictions that naturally occur in these transitions.

Facilitating tools

To drive digital transformation effectively requires the most sophisticated, advanced, and challenging power that exists: people. In this sense, transformation cannot be just digital; it must be digitally human. Therefore, it is necessary to develop a digital change adoption strategy.

This strategy must be designed so that all team members feel involved and become change multipliers.

In practice, to promote the adoption of new technologies, a series of facilitating tools or elements (digital change makers) are needed to accompany the discovery and implementation of technological solutions. Therefore, a digital change adoption strategy must be based on the following pillars:

• Diagnosis of the current situation.
• Coaching and mentoring for sponsors.
• Early involvement of all project participants.
• Transparent and effective communication through milestones.

These digital change makers must closely accompany all teams that are undergoing or initiating digital projects. In these processes, it is also important to implement different approaches to ensure change adoption in the involved people.

Four-stage strategy

At Baufest, we understand that the work process to promote digital change adoption must include four tracks. These stages must be approached comprehensively, adapting them to the needs of each organization:

• Advising: understanding the current situation and the necessary change.
• Evaluation of the gathered information and reflection for planning, defining quick wins and a roadmap for change.
• Transformation: team building, training, coaching, and mentoring to carry out different initiatives.
• Feedback on results and visions, with progress monitoring, review, and adjustments.

Experience in the development and implementation of digital products is key in these processes, as it allows understanding where the focus of resistance lies and how to reach teams at the right time.

Key advantages

A good digital change adoption strategy provides a set of advantages that are key in digital transformation processes:

• It promotes the fulfillment of the purpose for which a technological project is decided.
• It achieves an agile, lasting, and effective change that replaces old habits.
• It optimizes communication and training.
• It unifies processes and provides clarity on tasks, avoiding rework.

Organizations with an excellent change management strategy are much more likely to meet or exceed their objectives. Moreover, studies show that the vast majority of companies with excellent change management strategies met or exceeded their objectives

In particular, a successful digital change adoption strategy has the power to transform mental barriers into bridges of action. It turns resistance to change into changes that endure over time.

Necessary motivation

Taking into account the people who make up the organization when implementing digital changes is fundamental. That’s why it’s so vital to work on aspects such as resistance to change and team motivation.

A company that does not give the necessary importance to these factors will have many more problems ensuring that its digital transformation is successful. Conversely, with a proper change adoption strategy, it is possible to:

• Get employees out of their comfort zones, turning resistance to change into an engine of innovation.
• Motivate teams.
• Unlock the digital potential of the company.

In this context, it is also important to create a culture of digital innovation that encourages employees to try new things and experiment with new technologies. To achieve this, it is necessary to ensure that staff feel comfortable trying out new tools and solutions.

At Baufest, we believe that to promote change adoption, it is imperative to work with a focus on training teams, which allows accelerating the adoption of new technologies and improving efficiency. By training employees and motivating them to be interested in learning and specializing in technological management, they will be more satisfied and have better expectations about their future job.

Baufest supports organizations with a specific practice of digital change adoption based on our significant experience in digital transformation processes in organizations. With this support, companies achieve the qualitative leap they need both in terms of efficiency and business innovation, consciously involving their main asset, which is their own people.

The Polaris star points to the north. In ancient times, navigators pursued the north star in the sky as a guide on their journey. Today, Polaris will lead us to a new universe… The universe of technology!

Here, we present to you our new multimedia concept that will allow us to explore the latest trends in technology and business through content filled with innovative ideas and deep analysis to help you navigate the digital age.

This new online site will offer a variety of articles, notes, podcasts, and live streams in which our technology experts will address the latest trends in technology and software.

Additionally, we are unveiling our new Polaris studio at our offices in Argentina, which will give us the opportunity to share our Podfest 2.0 episodes in a completely innovative way and allow us to host live streams with the leading IT industry experts.

In partnership with the Baufest Institute of Technology (BIT), Polaris will showcase the latest research conducted by this center, created to drive significant growth in the training and learning of Baufest’s collaborators.

Finally, in this new portal, you will also find all the featured events in which we participate, as well as those we organize, such as the Baufest Financial Services Summit and the Baufest Consumer Products & Retail Trends, among others.

Polaris – Your North Star in Business & Tech

This celebration was established December 22, 2015 by the UN General Assembly, in recognition “of the key role played by women in the scientific and technology community.” It aims to achieve gender equality and women’s empowerment, support women scientists, and promote women and girls’ access to education, training and research in the fields of science, technology, engineering and mathematics.

Leaving behind gender inequality in science is key to both enabling higher quality science and technology, achieving economic development, and making progress towards the goals and targets of the 2030 Agenda for Sustainable Development.

Gender inequality in science

Statistics indicate that globally the number of female researchers is barely 30%. Although parity has been achieved in many countries in the field of life sciences, their share among PhDs in engineering and computer science is only 28% and 40%, respectively. Women account for barely 22% of the professionals who worked in the field of artificial intelligence (AI). And it is precisely these fields that are driving the digital revolution and will account for a significant proportion of the jobs of the future.

In addition, women receive less research funding than men and are less likely to be promoted. And they remain in the minority in technical and managerial positions in technology companies.

Women scientists

Diversity in researchexpands the number of talented researchers, bringing a new perspective, talent, and creativity. However, there is a historical gender gap in science and technology, and it is a field in which the achievements and participation of women have been made invisible.
Few people know the fundamental role of women in science, and few know the names of important women scientists. It is therefore necessary to recognize the contributions of women in the areas of research and innovation, to eradicate discrimination against women and girls in science, and to eliminate stereotypes.

Regarding the latter, it is well known that gender stereotypes already create barriers for girls and young women to pursue scientific and technological disciplines from an early age, but, women who choose this path find other ‘kinks in the wheel’: they tend to devote more time to family responsibilities and promotion is based on male standards and evaluation criteria.

In Latin America

According to a report, in comparative terms, Latin America and the Caribbean have a high rate of female researchers (45%), making it the region with the second highest gender parity in this field. However, within the scientific-technological system, a significant horizontal segregation (by disciplines) and vertical segregation (to reach managerial roles and hierarchical positions) can be observed.

In Argentina, data from another survey indicate that six out of 10 university students are women, but they only represent 25% of the total number of engineering and applied sciences students, and 15% of the enrollment in programming careers. Lately, the country has seen “greater prominence of women in research. But in terms of their participation in hierarchical roles and the integration of the gender perspective, there are still many challenges to be addressed”.

At Baufest we understand that the scientific and technological field requires more women and we advocate for more women scientists and to put an end to gender inequality in science. We seek to create an organizational culture where women can develop professionally in the IT industry on a daily basis.

This integration is a very important milestone in our international expansion process, as it will allow us to widen our target market into all of Europe, grow our team, and add technology capacities.

Vanadis has over 30 professionals and 10 years of experience in the Spanish market, offering services to clients such as Santander, Renault, PepsiCo, AirEuropa and Ence, among others. 

In Vanadis, we found a group of professionals with great capacity for innovation, vast experience, and specialization in the development of mobile applications, and a very mature structure for talent training.

This integration includes part of the shares package of ESTECH, a professional training school in Linares with ample experience and background in digital innovation and new technologies training. ESTECH offers their students careers such as Full Stack Development and Videogame Development.

This will allow us to be closer to our clients, in each of the geographies where they are present, offering truly comprehensive solutions, with a strategic look and building long-term relationships.

Besides, we will gain experience in new ways of evolving businesses with technologies in very developed economies, which will allow us to offer a better capacity of innovation.

And this is reflected in the acceptance figures: according to a report from 2019, for example, 91% of companies were already using the public Cloud, and 72% were using a private one. The majority of companies used both, and 69% opted for a hybrid Cloud solution. On the other hand, 66% of the companies already had central Cloud equipment, or an excellence center in the Cloud; and other 21% planned to have it in a near future.

But beyond this favourable view, there is a reality to be pointed out. And that is the fact that deploying an operative scheme that enables the extraction of all the value within the Cloud environment, without staying muddled in the complexities the migration presents, is not an easy task. Often, companies find some difficulties to transcend the “marsh” of processes, methodologies and legacy technologies and displaying a Cloud operative model which responds to promises, and allows for enhancements of its digital transformation.

Even though the complexity we mention must be seriously taken into account, it should not be discouraging. Going towards a Cloud operative model presents some clear benefits: cost efficiency, elasticity and management ease. Besides, it offers the possibility of keeping up with the latest in technology, effortlessly; and moreover, it lets the business ‘key players focus in their main activity.

As a matter of fact, as it is explained in this article that we´d like to share from McKinsey consulting, when incorporating four changes in the operative model, organizations can accelerate their way to the Cloud, overcome migration difficulties and extract all benefit from the new environment. 

Cloud-ready operative model

 “Even if the majority of organizations need to adopt an IT approach of hybrid Cloud in a foreseeable future, it will be difficult to capture a great portion of the Cloud´s value without reinventing IT infrastructure – which is ground zero for the Cloud operative model. If properly configured, the infrastructure could quickly expand access to new services and products, accelerate commercialization times for application teams and reduce operative costs at the same time, all of which liberates the companies ‘innovation potential”, as reads the article we are summarizing.

To capture these benefits, companies have to begin a holistic transformation of their IT infrastructure, based on four changes which reinforce themselves mutually: adopting a new site dependability engineering model (SER), designing infrastructure services as products, management of results (more than activities) and building an engineering centered talent model. When reuniting these four practices in a same Cloud ready operative model, the achievement will be a powerful combination of capacities which will radically improve the way in which TI operates.

In fact, according to the authors of the abovementioned note, there are companies which simultaneously improved resilience, work productivity and commercialization time a 20% or more, with this combination.

First change

The first challenge is to adopt a site dependability engineering module (SER). SER engineers “are the glue that unites application development with those in charge of operating applications and infrastructure teams. They also improve stability and dependability of applications in production, and reduce or automatize repetitive manual tasks so the development team can focus in product construction”.

Besides SER engineers can help achieve the execution of applications in a coherent and uniform manner, on any Cloud infrastructure, backing the efforts of containment and platform change.

The site dependability engineering model offers quick benefits, as it brings closer the infrastructure experience to the applications, and allows for face to face direct collaboration between developers and experts in infrastructure. It brings in substantial change, as infrastructure resources are grouped so that functional experts attend to the whole applications portfolio.

To portray this change, IT organizations could start by aligning SER teams with applications or application groups. As the maturity of the operative module increases, and operations become automatized, SREs can integrate to the applications development teams.

Second change

The second practice proposed in this changes dynamic for the IT operative module is to design infrastructure services as products. To obtain an agile and Cloud ready infrastructure, Infrastructure & Operations (I&O) must organize themselves focusing on the products it admits, as opposed to role based. In order to do so, companies must create agile product teams formed by people with experience in the relevant areas, including product owners, solution architects, software and infrastructure engineers and safety specialists. These product owners could collaborate with applications teams to understand which services or products are needed. And should as well work with SER teams in order to understand the challenges when consuming such services.

Which is the key advantage this practice proposes? It helps avoid that infrastructure teams develop solutions that nobody needs.

Third change

The third practice proposed is to manage results versus activities. Historically, the majority of organizations centered themselves in following the activities or had different key results (OKR) for different teams, reason why many lost potential value. Even if this type of metric is still in place, infrastructure teams ready for hybrid schemes must be weighed with focus on their commercial results, as adoption by the Customer.

Establishing key objectives and results (OKR) in the beginning of the transformation helps applications development and infrastructure teams to align with what they seek to achieve with their new, agile and automatized IT infrastructure. These metrics also create responsibility in all teams.

Nevertheless, it is important to establish objectives from the top downwards, as well as from the bottom upwards, and to make sure those are ambitious, tangible and specific. And besides, the adequate support and tools to measure results should be counted with.

Fourth change

The last practice proposed is to build an engineering centered talent model, which is, to create an engineering talent bank that can develop automatized infrastructure solutions. Organizations can develop these capacities through formal learning (in the classroom), informal tutoring or learning from superior engineers.

With these four coordinated changes, organizations can optimize their chances of migrating to the Cloud and obtaining the ample benefits the Cloud environment promises. At last, as it is stated in the note we shared, “building an IT infrastructure operative model for the future is a complex effort, but it is essential for the companies that wish to survive and prosper at a digital pace”.

For further insight into these arguments, we recommend reading the complete article.

Is a Cloud ready operative model being profiled in your company? It would be enriching to know how it was organized!

For that purpose, we not only appeal to theory, but make progress based on specific cases. Recently, for example, we carried out a concept test through AI about the classification of the ripening stage and diseases in fruit. It was a very rapid test for an insurance company; the idea was that, starting from image classification, the level of damage to fruit shipments can be measured considering two different dimensions: the ripening stage and the eventual presence of mechanical damages or diseases.

The case arose from the need of the mentioned company, which insures international cargo. When a claim is presented before them, this company needs to see the damage that was inflicted to evaluate if a refund applies, and the amount in question.

This way, the IA focus application has to do with the diagnosis of the state of the fruit. Now, in reality, all artificial intelligence systems are data-based (from which the model learns to recognize patterns), and precisely the facts of obtaining, elaborating and handling them implies the major workload, as data has to be cleaned (eliminating altered data, and keeping that which is representative for the problem we need to solve), labelled, scaled, and the training data made to look like the data that will be used in production, among other tasks. Then, there is a cycle when algorithms are trained with machine learning  models.

It is expected that these algorhythms have a level of precision close to that of an expert. With this concept test, the team at Baufest started with a reliability of 80%. Logically, with a dedicated project, with more time and a larger volume of information, we could improve that percentage.

Automatized Report

In this opportunity, the business requirement was the automatization of reports of damage in fruits, in order to determine the level of damage and the cause. To solve this requirement, we proposed a simple solution architecture, in Python language, which would allow us from the beginning to take pictures of real inspections of bananas in fruit transportation.

With these photos, we built two models of artificial intelligence: one for the classification of the ripening stage; the other one, for the classification of the damages themselves. With the results these two models delivered, combined with more generic information, we built an automatized report which can be exported to a typical Excel and pdf file.

Data and the model

The original set of data with which the ripening model was going to be trained in order for it to learn to recognise the different categories or states of the bananas, was composed of 273 images taken in a uniform manner. Then, we expanded that set of data with data augmentation techniques: specifically, we created a new set of takes for each of the images making certain alterations, such as zooming, cuts, rotations, vertical and horizontal inversions. This added more variability and allowed us to have a final set of three thousand images, that we divided into four categories according to the ripening stage (green, yellow, half-ripe and over-ripe).

Once we had these data available, we had to pick a model to train. To create it, we opted for a Google tool called  Google Teachable Machine, because in this first instance of the concept test, we wanted to have something functional, as fast as possible, and without having to write code lines.

Once we uploaded all the images, we moved on to the instance of model preparation. It is true that training time was under two minutes, and it returned a very high level of precision: 99% in the training set, and 93% in validation. That is to say, in a very short time, we could obtain a model that recognises damage categories and maturity of bananas with considerable precision.

Enabling technologies

In this concept test, we could generate a quite thorough report where it is possible to determine the amount of fruit that us lost due to advanced ripeness level or due to damage. This was achieved in a lapse of 7 to 10 days. During this period, we were able to obtain the data set, extend it with data augmentation, train the model, download it, make the report and generate it.

This experience proves that we can develop a functional product in a short period of time and with considerably high precision, considering the reduced data set we manage, and the little time.

The conclusion is that, with a low level of investment, the feasibility of this type of artificial intelligence projects can be seen quickly: if they can be done, with which scope, if they are viable for the business and if they offer the expected value.

At Baufest, we see artificial intelligence as an enabler of technological solutions. The main goal is not the creation of models themselves, but to develop applications that use those models to solve problems. These projects still require important investments, and therefore, must be applied to something that is of main importance to companies, and really adds value.

Isolated companies could find many more obstacles to compete in today´s digital business scenarios. Instead, properly integrated with their commercial partners (trading partners), they can grow stronger together in unimaginable ways.

Today, companies need to be as agile as possible, and to automatize routine processes to the maximum. Relations with commercial partners and the capacity to adapt rapidly to their needs are key to growing and keeping up with any activity, moreover, in these times of e-commerce boom. Allowing for the automatization of central commercial processes (business process automation), such as acquisitions, sales and production, reduces costs drastically and allows managing business in a more effective manner.

In a time when business intelligence or company intelligence is talked about so much, and big data and analytics have made data management software fashionable, automatizing matters such as operative circuits with B2B customers looks almost as a basic requirement. Nevertheless, many organizations still have not worked it out.

Frequent inconveniences

The idea of automatizing frequent processes and transactions with B2B partners may look very reasonable and tempting, but to advance in this direction, companies often come across some common issues. For starters, it has to be said that it is not always easy to do business with commercial partners; and besides, many times companies do not count with integrated systems which allow for automatization of the business. On the other hand, it is frequent that communications with these partners present weak security and confidentiality levels. And besides, sometimes it also becomes complicated to update integrations when commercial partners change their requirements.

To face all these difficulties, electronic data interchange software (EDI) was developed, that precisely fosters the exchange of commercial documents from computer to computer in a standard electronic format between business partners. 

Somehow, EDI software replaces email, but with some advantages: with email, interchanged documents still have to be managed by people and not computers. Having people involved slows down document processing and also introduces errors. Instead, “EDI documents can flow directly into the correct application in the receptor´s computer (for example, the requests management system), and processing can start immediately”

In order to be processed by computers without human intervention,  EDI documents must use a standard format.  At present, there are many EDI standards, and each has several versions. Because of that, when two companies decide to interchange EDI documents, they should agree on the standard and specific version. Anyway, modern management tools EDI / B2B business give us the possibility to accept the widely used standards (X12, EDIFACT, HC7, etc.) and the most common connectivity methods (AS2, FTP / SFTP, etc.), which allow for the integration of the legacy supply chain and ERP systems, apart from bringing in more agility to incorporate new commercial partners.

Solid advantages

In this way, the natural evolution of the legacy supply chain and company management software (ERP) from the organizations to the Cloud, must be accompanied by Cloud native tools which can resolve EDI needs to guarantee the business ‘continuous functioning.

The adoption of EDI tools in a B2B context (business to business) reduces company costs, automatizing the business with their commercial partners – particularly at a central processes level, such as acquisitions, sales and production. On the other hand, this automatization of main commercial transactions also increases data integrity. 

As well, when implementing this type of solutions, transaction security and confidentiality is increased. The business of commercial partner requisite changes associated costs is isolated.

As shown, when transitioning from a paper based document exchange to an electronic one, companies enjoy important benefits, as more processing speed, costs reduction, less mistakes and better relations with B2B partners and customers.  On the other hand, as environments mature, these EDI tools can help organizations reach new technology offers in the Cloud without commercial interruptions.

This type of integration allows for an increase in productivity when extending automatization outside the organization. In this way, B2B commercial partners can carry out trusted transactions among themselves, and they reach a level of communication that generates satisfaction, besides having availlable transparent documentation for all the process of the supply chain.

The ideal partner

If your company is looking for a unique partner which can integrate various systems, from Baufest we can assist you as well with EDI B2B management, in such way that you can advance in the automatization of commercial processes with your partners in this segment. Our proposal is to train customers in the most beneficial integration options available for their environment and commercial objectives. We guide them through a solution which solves their current weak points, fast to implement and scalable, and that adjusts to their budget and outcome expectations. On the other hand, we never implement technology solutions just because; we only proceed in the cases where we can define a clear and beneficial result for their commercial needs.

From Baufest, we believe that the value of strategic integration benefits our customers as much as their customers. If an integration solution is implemented with precision, bearing in mind the commercial needs, costs and time efficiency of operations, and is really sustainable, the positive impact will be seen almost immediately.

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