Why the Fortune 500 is Fast Becoming the Digital 500 – Part 2
Inspired by the annual issue of Fortune magazine that lists the world’s 500 largest companies, I wrote a blog little more than a year ago entitled “Why the Fortune 500 is Fast Becoming the Digital 500. “ At that time, Fortune editors asked CEOs of companies on the 2015 list, “What is your company’s greatest challenge?” Their number one answer then was, “The rapid pace of technological change.” So, what has changed in twelve months?
Surveyed again this year, CEOs’ first answer in the 2016 Fortune 500 published just more than one month ago was the same – but with greater urgency and focus on faster digital transformation. Adding further insights to their opinions, 75% of the CEOs said that “ … a trio of technologies – cloud computing, mobile computing and the Internet of Things—will be either ‘very important’ or ‘extremely important’ to their businesses in the future.” More than 50% added artificial intelligence and machine learning to the list.
How Do You Define “CTO?”
As digital adoption grows, perhaps it’s not surprising that the Harvard Business Review has freshly translated the title of corporate Chief Technology Officer (CTO) into the Chief Transformation Officer. The IT organization is also changing along with this description. Its perception as a cost center is evolving to become one of a business enabler. Technology is shaping companies’ business strategy. The digital forces changing business are so strong that you can even argue that all companies might one day become technology companies.
From the Factory to the Farm, Digital Technology is Reinventing Work.
Working with line of business managers, forward-looking IT departments have become the orchestrators of digital change. Examples abound: Remote sensors on off shore oil rigs monitor drilling activity in real time to both optimize the use of drilling equipment and ensure that the same equipment is proactively maintained to prevent accidents. Machine learning embedded in manufacturing tools ensures consistent product quality through digitally generated feedback so that real-time equipment adjustments can be made for greater factory productivity. A modern farm tractor moving through a cornfield has become a computing system on wheels that can determine via sensor data and related analytics when crops require irrigation or fertilizer to maximize agricultural yields.
The list of innovative new uses of digital technology is endless. Common to these and similar Internet of Things (IoT) use cases is that hyper-distributed data at the edge of a network demands instant analysis. Businesses can’t wait days or weeks to act upon the information generated; the data’s value is measured in seconds. Actions often need to happen in minutes.
So Much Data. So Little Understanding.
The consulting firm, McKinsey and Company, reports in their study, The Internet of Things: Mapping the Value Beyond the Hype, that “Most IoT data is not used currently … The data that are used today are mostly for anomaly detection and control, not optimization and prediction, which provide the greatest value.”
As I mentioned in my earlier blog on the Digital 500, “ … at the heart of digital business transformation is the ability to connect the unconnected. However, it is not just about connecting people to people, people to things, and things to things—it is about what you can do once they are connected.” Enterprises need to move fast to cope with digital change—but they also need to move with a purpose.
Sharpening Business Purpose: Edge Analytics to the Fore.
Having the right analytic tools helps give tangible meaning to ideas, transforming thinking into new realities. Taming the large and complex world of IoT also requires tools that are highly approachable, to speed development of applications and their adoption.
Cisco Edge Analytics Fabric (EAF) software is a great way for companies to accelerate their digital transformation. Truly successful IoT solutions require an entirely new infrastructure. The requirements for large-scale systems can range from millions of data-generating devices to the frequency of data generated, and from a diversity of locations to a diversity of industries. These and other requirements are all formidable barriers to adoption. EAF lowers them. Put simply, EAF is an open architecture software platform that enables immediate processing and analysis of distributed data from the fog to the edge of the network.
Analytics Designed From the Outside In.
Historically, enterprises have captured data from any source and moved it into a central data warehouse for analysis. But the process is slow. And all the data is often inaccessible to users (see my last blog on the virtues of data virtualization and removing this obstacle). As a result, analysis is sporadic or non-existent. Many times, it’s simply a case of data for the sake of having data.
Cisco’s approach to analytics is different. It works from the outside in – from the network’s edge all the way to the cloud. Data gathered at the edge is analyzed in context and in real-time – or stored for later analysis if desired. This approach helps edge analytics determine the immediate value within huge amounts of complex data in hyper-distributed environments.
Think Small: Micro Services Add Speed and Flexibility.
One important way Cisco Edge Analytics Fabric accomplishes its tasks is through the use of micro services. Rapidly implementing an analytics solution with a scalable architecture is non-trivial. If an IoT system is to be widely adopted, the time required to implement it must be reduced from years to weeks. Micro services show the path forward.
Micro services can be created and deployed in several major ways, including data acquisition, retention, transport, processing, manipulation, and control. The beauty of this modular approach is the ability for applications to work independently or in coordination with different subsystems. Third party software can even be added. Thanks to a uniform architecture, EAF software assures interoperability between micro services, common data encoding across all micro services, and different modes of communicating between them.
This open system approach supports both proprietary and standard interfaces. In short, it gives businesses the power, flexibility and speed they need to move at market velocity. It’s the fabric on which enterprises can build a digital future.
How is your company transitioning its business direction in the new digital world? How is analytics playing a role? Do you see your company becoming part of the new Digital 500? Tell me. I’d love to hear more.