Artificial intelligence to optimise any business
24 September 2018
Fabio Zoffi, President and Executive Chairman, ORS GROUP
In this era of rapid globalisation and digitisation, it has become increasingly important for businesses to take advantage of various technologies to increase their efficiency and optimise processes.
To do that, ORS GROUP President and Executive Chairman Fabio Zoffi says his artificial intelligence-based solutions company has been providing artificial optimisation software to Fortune 2000 enterprises for a long time.
“We have a very broad range of products for automating and optimising businesses through algorithms across processes and value chains, from financial services to supply chains. Our software is fully integrated with ERP systems like SAP,” the Venice-born entrepreneur said in his interview with Business Reporter.
ORS GROUP boasts a portfolio of more than 1,000 proprietary algorithms and over 100 solutions, which are saving global corporations more than €1billion yearly by cutting operational costs and increasing margins. Paybacks are typically under 12 months.
Zoffi elaborated that all business have a lot of hidden value in-house, or information known as big data. “They can use AI-based software solutions to optimise their business, meaning algorithms take key decisions,” he said. The tech entrepreneur sees any company’s operation as comprising three key flows: of goods and services, information, and payments, for which the ORS software makes the optimal decision for each single operational step in an automated manner.
In fact, the Munich-based businessman forecasts most businesses to be run by algorithms in the next two to three decades. “Businesses will be run by robots for production purposes and by algorithms for taking all relevant decisions about goods and services, information and payments,” he said. As for early this year, the company is connecting all of its algorithms with blockchain technology to help its clients with reaching productivity singularity.
Watch and read how ORS optimises global businesses thanks to AI: www.ors.ai
Ready-to-go software; payback <12 months. Contact us: email@example.com
Welcome to Business Reporter's digital transformation campaign. I'm Rachel Hicks. With Amazon, Facebook, and Google having developed into gigantic centralised databases, appetite for decentralisation and undoing the network effect is growing. Somewhat paradoxically, though, there seems to be a case for large enterprise, investors, and SMEs to join ranks and present an alternative model in order to counterbalance tech giants.
How can empowering SMEs through artificial intelligence, blockchain, and cryptocurrencies be the key to making it happen? Well with me in the studio is Fabio Zoffi, serial entrepreneur, investor, and visionary, owner and chairman of the ORS Group that invented the concept of the digital alphabet.
Hello, Fabio. Welcome to the studio.
Tell us about the digital alphabet. What is the concept? What does it mean for business?
Yeah, the digital alphabet, ABC stands for Artificial intelligence A, Blockchain b, and Cryptocurrency C. So these are the three necessary building blocks for extracting the highest amount of efficiency, optimization, out of any value chain. So let me explain.
Whatever business you do, you can think of your business, of your value chain, as composed of three key flows, goods and services, information, and payments. So you need to move goods and services as efficiently as possible. You need to gather information and use them and exchange information as fast as possible. And the same is true for the payment flow.
So these days, business is very complex because of globalisation. So any value chain is made of thousands, ten thousands of decisions to be taken real time for every single process, because the human brain is limited. And with this kind of complexity, that's where these new technologies, especially artificial intelligence, can help, and extract efficiency out of every single process.
So efficiency, optimization is the name of the game, as the universe is efficient, the law of conservation of energy. And everything is a matter of extracting the highest amount of output by using the least amount of input. Whatever business you do, that's the key rule, and if you are very efficient and optimise this trade off, output, input, you can be very competitive and very successful.
So in your view, is the enemy of an SME inefficiency?
Not only of SMEs. Every company these days has these kind of problems. Again, because complexity is so big, because you have production plants and warehouses and customers throughout the planet. So the key insight here is that because we also have now data available, we have been using European systems, like SAP, AS/400 and old systems to collect information about the transaction.
So inside a company, there is the new oil or the new gold mine or diamond mine. So the information you have can be used by science, algorithms. Later, we will speak about also the innovation of blockchain to optimise all of your company separations and extract cash efficiency.
If companies need to fight inefficiency and access these gold mines and these diamonds, how are they going to do it? What should they do?
They have in house a lot of value, hidden value, which is the information. So they need, of course, first to clean the databases. That's always a big problem. Once they do that, they can use these technologies, artificial intelligence based software solutions, and products to optimise the business, meaning that algorithms can take key decisions, how to move goods at what price, when to sell, to which customers, what kind or service level, how to do asset management, any decision as a mathematical model, where if you have the relevant data you can optimise that decision.
And you can have full automation. So algorithms take-- we are seeing this more and more, companies are digitising their business. And that's what's occurring. So they are using science, algorithms, artificial intelligence, machine learning, data analytics, for taking decisions, which are being taken so far or have been taken so far by the human brain. So when the next two to three decades, we're going to see business run by algorithms, by robots, for production purposes, and by algorithms for optimising all the processes.
So how does the ORS Group help in this business?
We are an artificial intelligence based software company. So we create products, software solutions, for optimising business through algorithms. So typically, we model mathematically, a process. And we model now any process you can think of from supply chain logistics, retail, banking, asset management, energy distribution, whatever.
And we connect with the companies databases and system. We give them the relevant data, also from outside data sources. And then we ran algorithms for taking decisions automatically, like when to ship what goods to whom and how. Or for example, how to distribute banknotes to a network of ATMs and bank subsidiaries. That's a decision which so far, has been taken by the culture in a suboptimal way, but you can use advanced science to decide how much to refill the ATM here in this square tomorrow. And you can collect data, for example, weather forecast data, because if it's going to rain very easily, less people will ask for receipt to collect money from the ATM machine.
And so this connection of data, algorithms, and automation, that's what we do for large companies. And now more and more also for SMEs, because any company, even the startup company has the same issue, how to run efficiently all the value chain, all the processes.
OK, so the bottom line for any company is most important considerations. How does what you do save money for them? And give us a sense of the savings that can be made.
Well, we are speaking of big savings. So we have calculated that so far all of our customers, we have extracted-- we extract one billion euro in cash every year, which is the sum of the savings and higher margins. Because these technologies can be used both in the back end for cutting operation cost, but also on the front end, increasing margin, like deciding how to price optimally a certain product for a certain customer. Or I'll make another example. For one of our customers in the US, fashion company, we have created a new algorithm called BAGA-- Buy Anything, Get Anywhere-- which solves a problem.
You have a store, retail store, a customer enters that, and the customer wants to buy a certain product. You don't have the product in the store. What do you do? These days, humans are trying to fix that in making phone calls to find a good-- it's very suboptimal, and typically you lose the sale and even you damage your brand. So these algorithms, they find the goods in a way which is optimising the whole marginality of the company, which means that the algorithm is designed not just to take the goods from a shop nearby or from a warehouse nearby, but they also estimate the likelihood of selling the same item in the other shop, so that if you would take that item out of that shop, you will destroy the sales of that shop. So you don't do that.
So there's a huge complexity and a huge amount of trade-offs. And these algorithms are deciding this. The result in a nutshell, we are recovering for this company between $10 and $15 million every month in otherwise loss sales. Or we're cutting inventory by half, saving 150 million euro for a large European company in a global inventories. These are big numbers.
That's a happy owner.
Absolutely. And so obviously, that releases a huge amount of potential with reinvestment and profits. But we've talked about that project. You work at the cutting edge of technology. What's the most innovative project you're working on at the moment?
Yeah, we're doing two things. One is we are connecting all of our algorithms. We have a portfolio with over 1,000 algorithms and over 100 solutions for different processes and verticals. We're connecting these algorithms with blockchain. Of course, there is tremendous value in efficiency, in using also the blockchain for this centralised or at least partly decentralised value chain. We are connecting artificial intelligence with blockchain.
And on the other side for a fashion company, they are the first customer we have using all of our solutions for end-to-end optimization, which means that in these companies, all the key decisions, from the supplier ecosystem in Asia, up to retail store assortment and pricing-- dynamic pricing-- are taken by our algorithms. So they will be reaching what we call efficiency singularity. So that theoretical highest amount of efficiency, and we are now connecting blockchain to these end to end optimization platform.
And we are opening up this platform to be used by other players. Because in our view business would be transforming the next two decades, and most verticals will become platform business, like companies in the IT industry have shown. So we thing those in the non-IT industry, business will be through these kind of platforms, where robotics will be producing, and algorithms will be deciding how to manage information, goods, services, and payments throughout the chain. Fascinating journey.
Incredible journey. Fabio, give us the three key takeaways that management would want to consider when making strategic decisions.
Go for speed. If you don't digitise, you're dead. Your competitors will do that. So do it now. Don't be afraid to do experiments. We blockchain, we crypto, we knew technologies, and taking young brains, young people to disrupt your own business and change it and make it more successful before your competitors do that. So young people, experimenting, and digitising.
I can hear them at our back already.
Fabio Zoffi from ORS Group. Thanks very much for joining us today.