AI holds the cards when everyone has the same access to Web3 data

The Situation: In Web3, everyone has the same access to data. Your advantage resides in your interpretation of it, the speed at which you can derive insights and act on them, and the pace at which you can configure and reconfigure increasingly complex supply webs in response. Supply webs combine interrelated supply networks, each embedding interlaced supply chains and involving multiple organizations. Leaders can embrace this complexity—but only by turning to artificial intelligence (AI) for future wins.

What does it mean for leaders to embrace complexity?

Leaders need to get comfortable with complexity, and that means getting comfortable with not knowing all the answers. It means being prepared to test and learn your way to the best outcomes. We reference “unstructured” data as information that either does not have a pre-defined data model or is not organized in a pre-defined way. Most of the world’s data is like this. AI now plays a key role in identifying and understanding unstructured data and then delivering the insights it gleans.

It does this not by “knowing” how to respond to a series of rules-based triggers but by starting without certainty. It conducts rapid experiments defined by the type of learning model applied. The details are beyond the scope of this article, but you can read more about the capabilities of different kinds of AI here. Suffice to say, leaders can already rely on AI to learn how to find key information in unstructured documents, based on training models which may, for example, identify and respond to the frequency and association of relevant words or apply shape recognition to understand handwriting.

Be ready to adopt AI’s “unstructured approach”

AI’s unstructured approach is already applied in the processing of such things as mortgage applications and insurance documentation using intelligent document processing (IDP) technologies delivered by businesses such as Automation Heroes and AntWorks.

AI both applies and inspires an “unstructured approach,” encouraging leaders to share in the technology’s readiness to begin without certainty and to trust in experimentation. This approach will gain increasing significance as enterprises tackle the shift from the rules-based processes that served us well in the world of supply chains and causal certainty, toward HFS OneEcosystem’s complex supply webs and unknown unknowns (Exhibit 1).

Exhibit 1: In Web3, the speed and accuracy with which you can reconfigure supply webs, among a universe of unstructured connections, will decide the fate of your business

Source: HFS Research, 2022

AI is beginning to get creative, delivering more than it has been taught

AI’s abilities extend all the way through to how AlphaGo beat the world champion at the notoriously complex game, Go! In this case, AlphaGo invented novel moves to defeat its human rival. It got there by first learning from amateur players and then taking on multiple AI versions of itself, learning each time from its mistakes. AlphaGo tested and learned its way to better outcomes than it had ever been trained on. It didn’t learn and apply a series of rules—it discovered a better way. This is beyond simple probability calculations based on rules; it is creative.

Complex Web3 data flows need a fresh approach vs. siloed or cross-enterprise processes

In our Point of View describing how Web3 can finally deliver the internet’s promise of democratized experiences, we explained that data ownership would become a thing of the past thanks to Web3 being built on the blockchain, where all data is replicated on all nodes (devices) on the network. Instead, in a Web3-enabled HFS OneEcosystem, end-to-end data flows across supply webs become king. The processes enabling them will connect you effectively and in real-time with your customers, employees, and partners.

These become more complex than any supply chain we have witnessed because the number of potential connections in a supply web—a network—scales rapidly (in a 2n formula) compared with the relatively straightforward number of options in traditional supply chains. Success requires going beyond those connections you may have neatly laid out in supplier databases. Instead, the right connections at the right time will be discoverable through universally available unstructured metadata, much of which will be generated by the behavior of your potential partners in Web3 (see Exhibit 1). The sheer volume will mean AI must be deployed to keep pace.

In Web3, success will depend on how rapidly and accurately you can connect and reconnect across these unstructured supply webs, with relationships of trust a given, delivered by smart contracts enforced by the blockchain. See our Web3 A-Z for more on smart contracts and the blockchain.

Exhibit 2: In Web3, everyone has access to the same data—look to AI for your competitive advantage

Source: HFS Research, 2022

You will need to configure and reconfigure composable processes to provide the data you need to be effective in your job, whether it is helping to improve internal knowledge, predict customer demand, or understand how to optimize the relationships in your supply webs and external environments. You must manage relationships between connections (see Exhibit 1) in an unstructured supply web with new magnitudes of complexity. The data flows will switch in real time, dependent on the insight they gather as they connect, trade, and respond to demand, often in first-time scenarios laden with unknown-unknowns.

Rules-based alternatives to true AI may be able to keep up with the sheer volume of decisions to be made – but only by following the known best practices you define.  But rules-based approaches won’t come up with a breakthrough insight—a creative new move that takes the opposition by surprise and wins the game. That’s where AI can deliver.

The Bottom Line: AI will prove the competitive difference in the new landscape of Web3

AI will become core to decision making amid the complexity of supply webs that Web3 enables. Leaders will be unable to keep pace with the sheer volumes of decisions. Most daily decisions will have to be automated. Applying AI’s “creative” ability to develop novel moves will be the difference between also-rans and winners in the new competitive landscape of Web3.

Read more HFS Research on Web3:

• How Web3 will democratize experience
• When to expect Web3 and how to prepare
• The A-Z of Web3