What business needs to understand about ICT trends
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Outlining the long-term effects of technology trends that have enabled or will enable a business to transform its physical, digital and social value-chains in order to change its basis of competitition.
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What business needs to understand about ICT trends
- 1. What Business Needs To Understand About ICT Trends Glen Koskela CTO Nordic 0 Copyright 2013 FUJITSU
- 2. The Fact Is, Trends Matter Picture: http://www.flickr.com/photos/anotherphotograph/2807945495/ Business aggregation. Transaction costs. Value chains. Remaining competitive. The way that technology influences business outcomes is changing. 1 Copyright 2013 FUJITSU
- 3. Two Big Definitions: Business & Technology The real revolution is in business structures, process es, value models, and how they use emerging technologies. http://www.mclarenelectronics.com/Systems/System/Data%20Systems Are you developing as fast as the world is changing? 2 Copyright 2013 FUJITSU
- 4. Before Global Economy Was Reconfigured Pre-1960s Co-location of all capabilities: social, digital and physical. Companies operated large factories near their customers, and used their overall organizational mass as a competitive barrier. Moving goods was costly, complex and uncertain. 3 Copyright 2013 FUJITSU
- 5. What Emerged Destroyed The Legacy The shipping container changed the world (97% lower loading costs). It globalized physical supply chains. Wholesale automation across the complete process, fully integrated end-to-end systems. Container unleashed waves of process innovation. 4 Copyright 2013 FUJITSU
- 6. Transformation of the Physical Value Chain 1960-2000 The ability to integrate physical value chains reliably and cheaply drove specialization and formation of business ecosystems. It changed the basis of competition within the physical value chain. 5 Copyright 2013 FUJITSU
- 7. Business Integration Platforms MRP, MRP II, ERP, SCM, SFA, C RM, extended ERP, SAP… How a business is represented… How it functions… How it operates… Streamlining. http://www.flickr.com/photos/kalleboo/2470243807/ 6 Copyright 2013 FUJITSU
- 8. What Business Needs To Understand… The long-term effects of emerging technologies and trends that enable digital and social value-chains will be profound – particularly for information and knowledge-intensive industries. Shifts in technology. Shifts in business model. http://www.flickr.com/photos/londonmatt/3163571645/ 7 Copyright 2013 FUJITSU
- 9. Transformation of the Digital Value Chain 1990-2020 The ability to distribute information to partners and to the public cheaply and quickly drives specialization of knowledge work. It is changing the basis of competition within the digital value chain. 8 Copyright 2013 FUJITSU
- 10. Complexity & Value of Today‟s Data Chains http://www.flickr.com/photos/38494596@N00/498663714/ Once only the ability to produce information in one form was required. Now companies must master hundreds of permutations in design and distribution. Powerful, fastpaced processes and information 9 Copyright 2013 FUJITSU
- 11. Business-as-usual Still Getting Reshaped People still are confused about the composition and depth of the modern digital value chain. “In today's world the value of people talking about your product is sometimes higher than the money you would get for it.” http://www.flickr.com/photos/heathbrandon/3187207970/ 10 Copyright 2013 FUJITSU
- 12. Transformation of the Social Value Chain 2005-2025 The ability to access resources and speed up distributed work cycles will drive new corporate structures and communities. It will change the basis of competition within the social value chain. 11 Copyright 2013 FUJITSU
- 13. Connecting With Elite Data Scientists Improved production of oil reserves. Improved risk profile by identifying financial distress. Earlier detection of driver drowsiness. Better and broader identification of talent. Etc. Solving pressing business problems by extracting insight from data. 12 Copyright 2013 FUJITSU
- 14. Already Emerging. New Technology Era. Traditionally, technolo gy has been applied to handle back-office workloads and to enable greater productivity. The convergence of physical and digital offers the greatest potential. Next it will move out of the „back office‟ into the heart of everything we do. 13 Copyright 2013 FUJITSU
- 15. Backbone of the „Digital‟ Economy From user‟s point, real world is a dynamically changing environment based on real time information. Physical world as the front end. Enables new types of solutions to be constructed that benefit entire industries or populations. 14 Copyright 2013 FUJITSU
- 16. Human Centric Intelligent Society Rich capability to deliver all sorts of new experience and value. Work styles. Business activities. New value chains. Insights to drive value. Living environment. Daily lives. ICT will transform business and society. 15 Copyright 2013 FUJITSU
Editor's Notes
- IT Future Sweden 11.4.201316.20-17.00What business needs to understand about technology trends40 mins, approx.15 slidesIT Future Finland 17.4.201311.00-11.30 Mitä bisnesjohdon pitää ymmärtää ict-trendeistä? 30 mins, approx. 12 slides
- Whatthispresentationwilltalkabout.Individualtechnologytrends is a long list, and is ”just” trendspotting.Flawedassumptions: Since I don’tlikeoruseit, itwillfail. Since I like and useit, it’sgoing to be big.Every decade a new ICT usage and a new technology platform emerges to transform businesses and industries.Business platforms and transformation waves.ContainersData packetsIdentitiesObjects
- Technology is a tool for doingsomething.We expect continuity. We do not think from a systems perspective: product + service + content + process = consistent logic.Lack of long view.Motor racing is a sport at the very leading edge of technological innovation. The margins between winning and losing can be measured in split seconds. Every car in Formula 1, every US Indy car, and every US NASCAR, has an engine control unit (ECU) that was made in Surrey by McLarenSensors on a Formula One race car: 150 - 300Data generation rate while racing: 100 kilobytes to 0.5 megabytes per secondData generated during 1 Grand Prix race per car: 1 to 2 gigabytes, with all of it continuously broadcast in real time back to systemsData generated during 1 Grand Prix weekend: 100 gigabytesECU data collected per car per year (including practice laps and equipment testing): 2 to 3 terabytes, that's equivalent of nearly 5000 DVD-s[Source: McLaren Electronic Systems]The key ingredient is people, not softwareAnalytics is largely manual, an intelligence function.Spend time, money, management capital on people involved in analytics.Build a field of practice. Big data is by far more about the practice of using data and actually acting on it than anything big, parallel, in-memory, real-time..“If there’s no process for applying information in a specific context then you are producing expensive trivia.” -Mark R. Madsen, ThirdNature, O’Reilly Strata Conference, February 2, 2011The real revolution is in business structure and processes and how they use information!
- Consider the difficulties associated with the shipping of goods prior to containerization. There was little or no standardization and goods were packaged in boxes, bags or loose depending on the preferences of each supplier. On the supply side, each mode of transport had its own methods and cost structures for moving this huge variety, and each mode relied heavily on manual labor at the many hand-over points at which goods were unloaded and reloaded indifferent ways. Consequently, moving goods was incredibly complex, costly and uncertain.These obstacles prohibited the establishment of extended supply chains – especially on a global scale. The high costs, risks and unreliability of shipping the components required for integration encouragedcompanies to co-locate as much of their production as possible. Businesses operated large factories near their customers and used their overall organizational mass (i.e. scale across a wide breadth ofcapabilities) as a competitive barrier. High transaction costs prohibited the establishment of extended supply chains.Businesses operated large factoriesnear their customers and used their overall organizational mass (i.e. scale across a wide breadth of capabilities) as a competitive barrier.Co-location of all capabilities to avoidcosts of integration & coordination.
- As the costs of integrating global suppliers and customers fell, so did the value of existing businessmodels built around aggregation and co-location. Land and labor costs became the dominant factors instead of shipping costs. Most importantly, however, the ability to integrate physical value chains reliably and cheaply drove specialization, making supply chains ever longer, more complex and moreglobalized. In this way, the new business platform that containerization provided drove the formation of new kinds of business ecosystems. In this new economic environment, specialization, component integration and supply-chain coordination replaced vertical integration and co-location to become thenew critical competencies for the physical value chain.Containerization can, therefore, be considered the first wave of globalization. It changed the basis of competition within the physical value chain. It turned carefully crafted advantages of organizational mass, physical proximity to customers and vertical integration into disadvantages that dragged many organizations into oblivion.
- The container brought with it the potential for any manufacturing company, regardless of its location, to be competitive on the global stage.A level of maturity in leveraging best practice processesEverysort of data to describe a businessA stablecore to run a businessHow abusiness is representedHow it functions How it operates….Multiplegenerations of business applicationsover the years, moreautomation, moreefficiency, morevalue of out the physicalvalue-chain.Streamlining, just-in-time, lean,…
- The long-term effects of emerging technologies and trends that enable digital and social value-chains will be profound –particularly for information and knowledge-intensive industries.Even those companies operatingphysical value chains will not escape these 2nd and 3rd-wave disruptions, however, as physical assets increasingly become connected, digitized and available as a service.One of the most profound effects of the digitization and socialization of individual business capabilities will be a need to rethink the purpose of the firm across two different dimensions. One dimension concerns the shifts in business model required as external digital and social services become available for integration and remixing. The other concerns the more fundamental impacts of digitization as suchdigital and social services become the de facto external expression of an organization’s capabilities.Firstly, the ability to access specialized physical, digital and social services consistently via the globalnetwork will mean that the purpose of the firm will no longer be to minimize the transaction costs of doing business by gaining scale and executing efficient in-house processes. Instead, in accordance with our experiences within the physical value chain, we believe that the successful company of the futurewill be as small as possible and will focus on building world-class digital and social value webs. They will do this by specializing, integrating external capabilities and employing cloud platforms to achieve core digital transformation (i.e. the digital encoding of their own specialized business capabilities asapplications, processes and services for sharing with others). Again, as with physical value chains, we believe that integrating and orchestrating specialized providers within extended supply chains will radicallyimprove outcomes to an extent that no individual organization could hope to achieve alone.Secondly, such a “core digital transformation” changes the relationship between business and technology.In the past, organizations used IT as one of several non-core tools for increasing the scale and efficiency with which they executed traditional in-house processes. IT was effectively one of the “implementation technologies” underpinning the creation and execution of business capabilities. However,the shift to cloud has a profound impact here, too. As business capabilities of all kinds are increasingly becoming digitized and socialized, these digital services come to encode and encapsulate a company’s core IP. That transformation then enables them to share and monetize their valuable core IP withinnew digital and social supply chains.The digital platforms of the future will allow the accelerated delivery and low-cost scaling of a company’s specialization without requiring the firm to scale the size of the organization and its available resources. The container brought with it the potential for any manufacturingcompany, regardless of its location, to be competitive on the global stage. It is likely that digital and social supply chains will have a similar effect, unleashing new value for those that are willing to embrace it.What lessons can your company learn from the fate of the firms that were on the losing end of the first wave of changes to the value chain?Is your company positioned to take advantage of the standardization, automation and streamlining of IT?How can you prepare your company for the agility that this digital transformation will be bringing to your industry?What does your company have to do to achieve the core digital transformation required to remain competitive in the emerging environment?
- Data packet = TCP/IP protocol +digitalnetworks (similar to 40’ container and shiplines)Email, web-sites, Intranet,extranet… e-commerce, web-shops…De-materialization: hugeimpact on previoustransformation, redesign of physicalvalue-chains.Press, media and music industriescompletelytransformed, manycompaniesstillhavenotfound a properstrategy for future.Informationoverprocess.Currenttrends: mobility and cloudcomputing, office.com, dropbox,…Fast-forward to the present day, and most people looking at early cloud platforms and services wouldsee something akin to the “Ideal X” – familiar technologies delivered with some new characteristics. Once again, people stand on the threshold of a new global order and see only a jerry-rigged ship rather than the transformational direction of travel it embodies.Today’s IT industry has much in common with the shipping industry at the dawn of containerization.There is little or no standardization in the way that businesses design, build and operate their systems; each company has an IT organization that largely sets its own standards. On the supply side, the companies that provide technology and services (e.g. hardware, middleware, applications andmanaged services) each have their own tools, methods and cost structures. Solutions are painstakingly assembled in a way that relies heavily on manual labor at the many hand-over points. Taken in sum, these realities mean that the process of developing solutions often results in single-tenant systems thatare too fragile, unreliable and costly to be used beyond the tightly controlled environment of a single enterprise.Together, these issues have left little room for building systems that can be shared across many organizations. Consequently, they have offered only limited opportunities for specialization within the digital and social value chains. The high costs, risks and unreliability of building business services for integration has largely encouraged companies to co-locate much of their business-process and knowledgework within large organizations. That leads them to operate “information factories” and to use their overall organizational mass as a competitive barrier.
- Where once only the ability to produce information in one form was required, now companies must master hundreds—if not thousands—of permutations in design and distribution.In a world where old business models no longer suffice, where predictability and time-tested assumptions no longer hold true, business-as-usual is rapidly being reshaped by powerful, fast-paced processes and information.In the early days, the digital value chain meant electronic data interchange transactions—simple communications between organizations that shared inventory levels, demand data, forecasts, replenishment amounts, purchase order acknowledgements, and the like. This sort of connectivity remains powerful and necessary at many companies, but it pales in comparison to the complexity and value of today’s data chains. For example, when systems began to come about that provided the ability to view and order products and services online, it was both a novelty and an inspiration. Many business leaders struggled over the ensuing years to define a viable e-commerce strategy, having to determine the correct courses of action without much in the way of research: deciding whether to merely display products and branding or to offer the ability to place orders, how to handle online pricing, and how to manage fulfillment, among other concerns. It is a sad truth, but, at many organizations, e-commerce was an afterthought or simply a mechanism for brand and company awareness. The worst offenders were late in developing systems that could provide both strong functionality and a viable customer experience. At many companies, e-commerce was seen as a technology issue, so ownership was given to information technology departments. As the discipline crossed the threshold to legitimacy and became critical to business success, many leaders discovered their e-business strategies were insufficient and inconsistent when it came to product portfolio management, pricing, return policies, and shipping charges. Some companies had internal strife, with departments competing against one another. Practices such as supply chain planning, sourcing, warehousing, and transportation and logistics became far more complex.
- In a world where old business models no longer suffice, business-as-usual is rapidly being reshaped.People still are confused about the composition and depth of the modern digital value chain and its effect on the traditional physical supply chain.
- Identity (similar to data packetor 40’ container).Unifiedcommunications,wikis, blogs, onlinecommunities, social networking, tweets,…Communities: hugeimpact on previoustransformation, redesign of digitalvalue-chains.Mostcompaniesstruggle in understandingwhat ”social” means to them. Is it just brandprogram, is itFacebook?Communities and insightsover data.Currenttrends: crowdsourcing and big data, self-serviceappstores, mobile gadgets,…Email, web-sites, Intranet,extranet… e-commerce, web-shops…Press, media and music industriescompletelytransformed, manycompaniesstillhavenotfound a properstrategy for future.Informationoverprocess.Currenttrends: mobility and cloudcomputing.Large-scale social and collaborative services have demonstrated the potential of social supply chains by enabling highly distributed communities to work together in new ways. We need to build the new end-to-end platforms that will standardize, automate and streamline the creation, monetization and distribution of their valuable business IP. And this has already begun to happen.
- The Physical+Digital+Social+Insight Business ModelTechnology is unobtrusive, invisible even, but it is at the forefront of everything we do. It naturally adapts itself to the way we work, enhancing all that we do.We deliver insights and knowledge giving us ever greater understanding and control over our world.The pace of change is accelerating, technologies are falling off the pages of sci-fi into our present day. Human augmentation, additive manufacturing and crowd prediction have become reality.Eco-design; resource and energy efficiency in road construction and maintenance Virgin material reduction by substitution or recyclingEnhanced durability and life-time extensionRapid and non-destructive methods for routine quality and performance checks of materials and constructionKeeping freight routes open through zero-intrusive maintenanceEnsuring infrastructure performance under all weather conditionsAdvanced predictive infrastructure performance processes