The pace of change in the business technology landscape is breathtaking. It has been so rapid in this decade so far that most businesses simply haven’t been able to keep with with progress. Consider this: the world’s total stock of data is doubling every twenty months. That means that it now takes just twenty months for the world to generate as much data as has been created in the whole of human history. It’s this sort of exponential change that has led to over 12 billion internet connected devices worldwide, as well as a mobile phone industry now valued at over $1 trillion.
Recently, the world famous Mckinsey research institute put together a list of computing technologies that it thinks will be important over the coming decade. Many of the technologies were familiar to digital marketers, but they’re relatively alien to most businesses.
The key finding of the research was very interesting. What we’re seeing, according to Mckinsey, is an integration of digital and physical experiences. In effect, digital information is being used by companies to improve the physical experiences of customers of products. So what does Mckinsey think is just around the corner for business? Let’s take a look.
The Social Matrix
Social media has afforded businesses tremendous benefits since its inception over a decade ago. Now innovative companies are using their social matrix to help them solve problems that the company is struggling with internally. Take pharmaceutical company, Boehringer Ingelheim. It was struggling to predict whether a particular drug molecule would cause genetic mutations, so it reached out to its social media community. The company ran a competition to perform data analysis to see whether or not the drug would indeed cause disruption to DNA. The competition garnered more than 9,000 competitors from all over the world, with the winning team solving the problem using methods that were 25 percent more efficient than anything that the company had.
Other companies are looking for more sophisticated tools that will enable their employees to better manage their time. According to some estimates, over 60 percent of knowledge worker’s time is taken up interacting in the social world, including doing things like responding to emails and using social media. McKinsey has estimated that new social tools, designed to streamline the social experience, will be able to help workers improve their overall productivity by a quarter. Many companies are taking the drive towards better social interactions very seriously indeed, with firms like Atos vowing that they are going to go totally email-free in the future.
Then some companies are looking to social media to help them connect disparate teams together and enable better collaboration. Take Kraft Foods, for instance. The company is currently investing heavily in better social technology to encourage micro-blogging and community generation. The idea is to create better knowledge sharing within the enterprise and enable Kraft to respond faster to the actions of competitors.
Offering Anything As A Service
We’re very much used to things like an outsourced CIO or SaaS in the world of IT. But McKinsey sees this type of service granularity being extended into the world of physical capital and goods. Business models based around providing companies with marginal units of the productive capital that they need are gaining steam, and it’s leading to an entirely new business model, driven by information technology.
For example, Revlon, a cosmetics maker suffered a fire at its main plant in Venezuela back in 2011. The fire destroyed the factory and much of the data centre. But thanks to the fact that its systems were fully integrated, it was able to shift production to a New Jersey plant within a couple of hours. What the episode proved was that it is now possible for companies to move production because of the growing “anything as a service” market.
Companies are spreading beyond IT in their effort to use digital technology to monetise productive capital. Trucking companies, for instance, are now creating separate B2B rental businesses using digital platforms to rent out vehicles that they aren’t currently using. Digital platforms are allowing companies to generate returns from otherwise idle capital, helping them to maximise their return on investment. Even the Los Angeles Times is getting in on the act by using software to rent out it’s studio space while it’s not using it.
Automation Of Knowledge Work
Automation is going to dramatically alter the way we work in the near future. McKinsey has estimated that the frontier of knowledge automation is now moving towards the capability of replacing some of the world’s 200 million plus knowledge workers. Developments in machine learning and AI algorithms are solving problems at a pace that has shocked the scientific community and most of the people in the industry. Companies like Deep Mind, leading the charge, are making enormous inroads, creating machines that can learn without significant human input.
These technologies are already becoming established in places like Silicon Valley. Here, companies are using machine learning and language policies to understand context and meaning in documents, all while scanning them at superhuman speed. Clearwell Systems, one such firm, has developed a system that scans legal documents at superhuman speeds, finding patterns of information and meaning as it goes.
Just recently, Google announced that it has developed a system that actually answers questions based on an understanding of content, rather than just churning out results that provide keyword matches.
The thought now is that these nascent systems are so advanced that they will be able to replace knowledge workers, practically for free, once businesses understand the value that they offer. McKinsey has warned that we need to start thinking now about what all of this means for the future of work. With billions more digital citizens coming online over the next decade, the currently western-centric internet is going to go truly global. And so too are these powerful technologies that look set to disrupt entire economies. If these trends take hold, McKinsey, warns, they could herald the disruption of some of humanity’s longest-standing commercial and social relationships. These realities should give businesses pause before they start hacking the IT trends of the decade ahead.