Part 1 of a 2-part series
There is no doubt that the digital transformation is in full swing. Innovation and technology cycles have become significantly shorter, and driving innovation feels like being in the fast lane on the digital journey highway. Whenever time allows, it’s good to take a moment and think about the direction this journey is taking. I would like to share some thoughts about an important aspect of the digital age that is not only a priority for me, but also for many partners and customers I speak with.
Paradigm shifts don’t come and go overnight
The credo of modern technology is openness. The ease with which we can now switch between technology, software, and devices means we can all expect much greater flexibility going forward. This change requires new approaches to engagement for IT vendors and connectedness for all of us; the role of vibrant ecosystems will become increasingly important. And while new technologies and growing ecosystems boost digital businesses, they also create or increase complexity.
In addition, the move into the digital era is already impacting workplaces globally – since 2000, 52% of the Fortune 500 have either experienced bankruptcy, been acquired, or gone out of business entirely, according to Capgemini. The speed of innovation is continuously increasing, and making use of technological trends such as the Internet of Things, artificial intelligence, and blockchain allows us to optimize and reinvent business processes and introduce new business models. However, the ever-increasing levels of automation will also have an impact on the future of our work.
With these new technological and business opportunities come new or as yet unanswered questions – questions that are fundamental to all of us. How can we build trust in the digital economy? How can new ethical standards evolve and become the norm? How can we create meaningful innovation for a bigger purpose?
Integral aspects of new paradigms
These questions include three main topics that become increasingly important for any technological and economic development in the future: Trust, ethics, and purpose.
The ways in which we interact in our ecosystems are changing fundamentally. We are used to building trust with people, products, and organizations because we know them by having direct interactions with them. At its most basic level, trust means nothing more than believing in the reliability and loyalty of others. In the future, basing trust only on relationships won’t be enough, since networks will become too big and dynamic.
Digital trust – the “what”
We will need technology’s help to cope with the changes related to our ecosystems. Today, for example, people are increasingly trusting blockchain-based networks, such as cryptocurrencies. With blockchain, we already trust in the reliability and loyalty of the network because it delivers digital proof for physical documents and real-life transactions and events. The advantages of this technology are so notable that, according to Gartner, by 2022, a blockchain-based business will be worth $10 billion.
According to Gartner, “digital trust emerges to establish and manage trust in the myriad digital interactions and relationships between businesses, individuals, and things.” This means that trust is and needs to be everywhere to keep businesses running. But with an absence of personal interaction in the digital world, where does this trust come from and what is required to create this “ultimate currency”? What is the relationship between data and trust? How can we design and build technology so that it is fully trustworthy to all parties?
Digital information and information flows
Today, we see an increasing decentralization of raw data. This requires us to find new ways to create value from and manage the complexity and heterogeneity of these distributed data landscapes. We see this in various fields where Big Data is key, including IoT, blockchain, and machine learning.
What all these technology areas have in common is the fact that information flows between large numbers of people, things, and systems that potentially don’t know each other and consequently, don’t (yet) trust each other. Today and in the future, we need to rely on technology to verify the authenticity of data, documents, and processes and provide us with secure and trustworthy access to digitalized information and information flows. This has itself already become an invaluable asset for companies. In the end, it is not only a company’s technology that needs to be trusted, but also the company itself in its role as a product or service provider and partner of choice.
However, technology alone is not enough. Building new digital networks, for example, does not necessarily mean that mechanisms that help keep the system and network running smoothly can be eliminated.
Blockchain as an enabling technology
Going one step further, there is another dimension of trust that technology companies in particular must take into consideration: Their ability to enable their customers to be trustworthy organizations in the digital age. This is something we take very seriously at SAP. One example that shows how digital trust can be created is the blockchain-based verification of documents.
In a co-innovation project between SAP and the autonomous region of Bozen, South Tyrol in Italy, blockchain technology is being used to digitalize and verify the paper-based documentation process flow while the documents themselves remain unchanged. This results in less bureaucracy and increased trust in public administration and, consequently, in completely new organizational models.
Future innovations will require openness and connectedness across entire ecosystems. Trust in the digital world does not only imply trustful relationships between people, but also trust in ecosystems, with the help of technology. The more open and transparent the ecosystems and networks, the more trust they can gain and create.
In the second part of my blog, I will share some thoughts about the “how” and the “why,” addressing the topics of ethics and purpose-driven organizations.
This article original appeared on Business Trends in the SAP Community and is republished by permission.