Consider the extent to which government, education, and health care—which often seem outside the purview of business leaders—could benefit from adopting digital technologies at the same level as many industries have. Productivity gains could help address the imperative (created by aging populations) to do more with less, while technological innovation could improve the quality and reach of many services. The embrace of digital technologies by these sectors is thus a trend of immense importance to business, which indirectly finances many services and would benefit greatly from the rising skills and improved health of citizens everywhere.
1. Joining the social matrix
Social technologies are much more than a consumer phenomenon: they connect many organizations internally and increasingly reach outside their borders. The social matrix also extends beyond the cocreation of products and the organizational networks we examined in our 2010 article. Now it has become the environment in which more and more business is conducted. Many organizations rely on distributed problem solving, tapping the brain power of customers and experts from within and outside the company for breakthrough thinking.
2. Competing with ‘big data’ and advanced analytics
Three years ago, we described new opportunities to experiment with and segment consumer markets using big data. As with the social matrix, we now see data and analytics as part of a new foundation for competitiveness. Global data volumes—surging from social Web sites, sensors, smartphones, and more—are doubling faster than every two years. The power of analytics is rising while costs are falling. Data visualization, wireless communications, and cloud infrastructure are extending the power and reach of information.
3. Deploying the Internet of All Things
Tiny sensors and actuators, proliferating at astounding rates, are expected to explode in number over the next decade, potentially linking over 50 billion physical entities as costs plummet and networks become more pervasive. What we described as nascent three years ago is fast becoming ubiquitous, which gives managers unimagined possibilities to fine-tune processes and manage operations
4. Offering anything as a service
The buying and selling of services derived from physical products is a business-model shift that’s gaining steam. An attraction for buyers is the opportunity to replace big blocks of capital investment with more flexible and granular operating expenditures. A prominent example of this shift is the embrace of cloud-based IT services. Cosmetics maker Revlon, for example, now operates more than 500 of its IT applications in a private cloud built and operated by its IT team. It saved $70 million over two years, and when an entire factory, including a data center in Venezuela, was destroyed by a fire, the company was able to shift operations to New Jersey in under two hours. Moves like this, which suggest that cloud-delivered IT can be reliable and resilient, create new possibilities for the provision of mission-critical IT through internal or external assets and suppliers.
5. Automating knowledge work
Physical labor and transactional tasks have been widely automated over the last three decades. Now advances in data analytics, low-cost computer power, machine learning, and interfaces that “understand” humans are moving the automation frontier rapidly toward the world’s more than 200 million knowledge workers.
Powerful productivity-enhancing technologies already are taking root. Developments in how machines process language and understand context are allowing computers to search for information and find patterns of meaning at superhuman speed.