In my experience with digital transformation and its impact on individuals, business, and society, I’ve seen a lot of amazing things that will soon be commonplace. (I even know a whole lot more about fast-food fryers and how they’re going to change the world than I really should!) More than a digital economy “a-ha moment,” my work has brought a cumulative series of insights that continue to expand my awareness of the remarkable transformation happening right now in this moment of history. A lot of things I see going on in the background are business-related, but they will ultimately have a huge impact on the way we live.
The world will be different for our kids
I was in the car with my daughter last year, and she asked me about driving. “Ten years from now, you’ll be driving…” I started, but then and I said to her, “You know what, sweetie? I think it’s quite possible you may never need to drive.”
My kids are eight and five. They don’t know what network TV is. When they want to watch something, it’s right there for them. In the next 15 years, we’re going to see hyperconnectivity redefine how we live. We’ll no longer have to think about things we always had to take care of and interact with, like cars.
By 2020, it will be legal for us to take our hands off the steering wheel. Just think about that. The car was an enormous part of everyone’s life. It was a rite of passage for my father, and he passed on to me the idea that owning a car was a big deal. Verizon conducted a survey that gave young adults under the age of 25 a choice between losing their car or losing their data plan. Ninety-two percent said they would rather lose their car. That’s the society that we’re moving into.
Networks of networks
One thing we’re seeing now is potentially radical shifts in the boundaries between one industry and another. Take air travel, for example. This industry is already providing dynamic pricing. But imagine when your flight is delayed, and you’re a premium passenger with a particular airline. Wouldn’t you want that airline to have a full understanding of your travel itinerary? Networks of networks will communicate information to one another, and you’ll be able to adjust your corresponding shuttle and hotel reservations. And it will all just happen for you.
A lot of people go to Starbucks every single morning and stand in line. So what happens when they have beacon technology inside a Starbucks telling you that you’re standing in line longer than normal? As you get up to the counter, you see a $2 credit on your Starbucks account. And it’s all done seamlessly, all to foster customer loyalty and all in the background. A lot of people might quibble about invasion of privacy – but when you get something for something, that privacy discussion tends to go out the window.
About those fryers
McDonald’s has a signature taste for their fries, right? But no one works at McDonald’s for 35 years and becomes a master fryer . They want to eliminate that variability and make the product exactly what you expect every single time.
What they want to do is put a sensor inside the packet that connects to sensors inside the fryer. It knows exactly how many times the oil has been used, the constitution of the oil, and the temperature of the French fries. It can actually compute the exact, optimal time when the load of fries should be taken out.
Long term, that translates to our homes – eliminating controls on ovens, stoves, and more. No longer will be set our cooking appliances to 350 degrees for 45 minutes. It’s done when it’s done. My kids might never have to know how to set something on an oven ever again because they just put the thing in and it cooks perfectly.
What happens to companies that don’t respond?
The dangerous thing about the digital economy is that the pace of change is much greater than any other major industrial transition. The Industrial Revolution lasted 100 years, if not longer. The IT economy of the ’60s and ’70s (essentially the birth of software) took 15–20 years. The Internet has taken more than 15 years to get to where we are today. But the digital economy has changed everything in less than five years .
With all these transitions, there are going to be big winners – and big losers. John Chambers from Cisco once said that 40% of companies will be out of business in the next 10 years. Pretty scary stuff . Some of these industries get it. Some of them don’t. The winners are going to be the ones that pick up a digital transformation strategy ahead of their competitors.
To find out more about what your organization can do to stay ahead of the digital economy visit http://fm.sap.com/digitaleconomy.