At SAPPHIRE NOW last week, Bill McDermott invited Michael Dell on stage to talk about digital transformation. Michael offered an interesting metaphor, noting that there is a “Cambrian Explosion of opportunity” in front of companies as a result of the new digital technologies (roll to timestamp 14:30 in Bill’s keynote).
So what was the Cambrian Explosion, and why did Michael use this metaphor?
The Cambrian explosion
For the first 2 billion years of life on Earth, the only creatures were single-celled organisms floating around in the primordial soup, not doing very much at all. Then, 500 million years ago, an event occurred that still has biologists scratching their heads (Wikipedia offers five possible explanations). Single-celled organisms became multi-cellular, leading to more complex creatures, and eventually, to all of us. This singularity is called the Cambrian Explosion. Michael was referring to the same approaching singularity, but with organizations rather than organisms.
Since the start of the Industrial Revolution, companies have been essentially operating as single cells. It’s time to look beyond the cell wall and develop multi-cellular organisations. This Cambrian Explosion in the business world is possible thanks to new digital technologies that are coming to market. Let’s look at the criteria for multi-cellular life and see how it applies to today’s companies.
Specialization of cells
An organism is made up of many types of cell: blood, skin, bone, etc., each with its own speciality. No cell can be efficient at all of the tasks required for a complex organism, such as the ability to move, feed, or reproduce. An extended organisation, similarly, has value chains made up of many different groups: design, engineering, marketing, and distribution, for example. These used to be single departments in one company, but they are increasingly becoming separate companies. Companies that once had in-house catering, real estate, or IT support are increasingly turning to specialist companies that provide these services. Only digital technologies such as IoT, blockchain, and business networks can support these types of re-engineered business models.
Adaptability and evolution
Multicellular life is far more varied then single cells, because cells can be repaired or regrown. In today’s digital world, our value chains are also more flexible: Got a problem with a subcontractor in Manila? Switch to a similar company in Vietnam. Need a geologist in Chile? Don’t hire; use a subcontractor on a three-month contract. Digital technologies also give great scope for evolution of business and the re-thinking of business models. In the biological world, organisms that cannot evolve do not survive. In his remarks, Bill referred to the constant churn in Fortune 500 as companies struggle to evolve.
The rise of intelligence
Once life became multi-cellular, intelligence and conscience followed. The most successful species were the ones that could use that intelligence to shape their environment, with the prime example, of course, being our own species: homo sapiens. Bill also discussed the rise of machine intelligence, pointing out that companies need to embrace the ability to get insights from their data in real time.
DNA: The digital core
Every cell in an organism contains the same DNA code, which provides consistency and information. In an extended digital enterprise, there is a need for consistent data, policies, rules, and interfaces. S4/HANA is the Digital Core for the enterprise—without it, nothing works properly.
It’s early days in the evolution to the digital enterprise. But the Cambrian Explosion has started, and if you can’t adapt, you’re plankton.
For more insight on innovation, technology, and the future of business, see Digital Transformation Recharged.