Centric connect.engage.succeed

Digital business and complexity

Geschreven door Ben van Lier - 13 november 2013

Ben van Lier
Over the past weeks, IT research agency Gartner announced a new development that is going to change the industrial world: digital business. The launch was accompanied by a great drum roll and trumpet fanfare.

According to Gartner, digital business is based upon the development of the Internet of Everything, a term that was introduced by Cisco. Gartner stated that by combining digital business and the Internet of Everything, the industry is changed on three levels: business processes, business models and business moments. While stating this, however, it remains unclear why Gartner does not enter into existing terms that describe a similar development: Industrial Internet (introduced by GE) or Cyber Physical Systems (described by the National Institute of Science & Technology).

Business moments

According to Gartner, existing industrial processes and the resulting products will be digitised ever better and faster. The continuing digitisation within industrial production processes not only allows improvement of existing products and services, but also the development of new ones. Characteristic to both existing and new products and services will be that besides a physical form, they will also have a digital form based on which they are designed. As a result of new possibilities to connect in networks, the exchanging and sharing of information, and, for example, the real-time visualisation of production processes and the corresponding supply chains, the progressing digitisation of products and services is putting existing business models under pressure, Gartner stated.

Digital products and services enable new business models, Gartner said. New business models are to enable existing industrial organisations to anticipate the rapidly changing market and the competitive forces existing in it more flexibly. Organisations have to learn to cleverly handle the continuous flow of changes in their markets and be able to adjust their production processes to it quickly and adequately. Where Gartner is concerned, the points where market changes meet the ability to deal with these are called ‘business moments’: ‘These are transient opportunities exploited dynamically.’[i] According to Gartner, the combination of digital processes, digital products and services, and the ability to anticipate current business moments form the basis of Digital Business.

The power of four

With the term Internet of Everything, the American Cisco company wants to make clear that their concept is more than the Internet of Things. In his blog dated 8 October 2013, Evans stated: ‘[T]he Internet of Things is just one of four dimensions – people, processes, data and things.’ Let’s run through these for a moment. One of the most important consequences of the ICT revolution of the past decades may be considered to be the increasing interconnection of people by means of a diversity of technological applications, such as smartphones, tablets, smart television sets, or portable sensors (e.g. in glasses or even socks). The new opportunities still being created by this revolution are also reflected by the changes caused by, for example, social media and smartphones to our daily life and work. This development is not new in itself. For many years, processes in organisations are being analysed, adjusted and improved under pressure of these changes. The diversity of ICT possibilities have enabled a new way of thinking about processes and resulted in many changes in and among organisations. Aptly, Davenport observed [ii], in 1993: ‘We are only beginning to understand the power of ICT in Business’ (1993:17). Therefore, this part cannot, in itself, be considered new either. Neither is the third observation - that more data is created and stored as a result of technological applications - new. The exponential growth of data is a process that has been on-going since the mid twentieth century [iii] .

‘Things’

However, in my opinion, there is only one important analogy in the development of the Internet of Things, the Internet of Everything (people, processes & data) and Digital Business (processes, products and moments) that can be regarded as new or special. What makes these three developments so special and unique is the fact that physical and ‘digital’ versions of ‘things’ in the form of Cyber Physical Systems or ‘Intelligent Machines’ are being added to our already strongly digitised and industrialised world. At the same time, this addition also has great impact on the existing industry. The German initiative Industries 4.0 [iv] describes this as follows: ‘In the future, businesses will establish global networks that incorporate their machinery, warehousing systems and production facilities in the shape of Cyber Physical Systems. In the manufacturing environment these Cyber Physical Systems comprise smart machines storage systems, and production facilities capable of autonomously exchanging information, triggering actions and controlling each other independently’ (2013:5). With this, Digital Business has everything to do with the production and maintenance of new and intelligent products and services (‘things’) that are independently able to enter into network relationships. These relationships facilitate a clever exchange of information, enabling these products and services to carry out their tasks in an increasingly autonomous way.

Complexity

New relationships between people and things are creating a new reality. A reality that will be more complex than the existing one and will form a real part of the new Digital Business. This business will increasingly occur in networks in which temporary coalitions of people and machines are formed that are able to realise specific objectives, irrespective of place and time. These coalitions no longer just comprise people who collaborate with people, but increasingly people and ‘things’ that have to collaborate, trust each other, and share responsibilities during the execution of their tasks. This new reality still requires a lot of research and development, and drum roll and trumpet fanfare may actually cause more hindrance than anything else.

  • [i] http://www.gartner.com/newsroom/id/2602820
  • [ii] Davenport T.H. (1993) Process Innovation. Reengineering work through information technology. Ernst & Young. ISBN 0875843662
  • [iii] Hilbert M. et all, (2011) The world’s technological capacity to store, communicate, and Compute Information Science 33, pp. 60-65
  • [iv] Industries 4.0 

Ben van Lier works at Centric as an account director and, in that function, is involved in research and analysis of developments in the areas of overlap between organisation and technology within the various market segments.

Share
Schrijf een reactie
  • Captcha image