Discusses the concept of a digital nervous system, in which a well-integrated flow of information is provided to the right part of an organization at the right time, and shows how this approach can radically improve processes and results.
Business @ Speed of Thought Abridged
By Bill GatesTime Warner AudioBooks
Copyright © 1999 Bill Gates
All right reserved.ISBN: 9781570427527
Introduction
Business is going to change more in the next ten years than it has in the lastfifty.
As I was preparing my speech for our first CEO summit in the spring of 1997, Iwas pondering how the digital age will fundamentally alter business. I wanted togo beyond a speech on dazzling technology advances and address questions thatbusiness leaders wrestle with all the time. How can technology help you run yourbusiness better? How will technology transform business? How can technology helpmake you a winner five or ten years from now?
If the 1980s were about quality and the 1990s were about reengineering, then the2000s will be about velocity. About how quickly the nature of business willchange. About how quickly business itself will be transacted. About howinformation access will alter the lifestyle of consumers and their expectationsof business. Quality improvements and business process improvements will occurfar faster. When the increase in velocity of business is great enough, the verynature of business changes. A manufacturer or retailer that responds to changesin sales in hours instead of weeks is no longer at heart a product company, buta service company that has a product offering.
These changes will occur because of a disarmingly simple idea: the flow ofdigital information. We've been in the Information Age for about thirty years,but because most of the information moving among businesses has remained inpaper form, the process of buyers finding sellers remains unchanged. Mostcompanies are using digital tools to monitor their basic operations: to runtheir production systems; to generate customer invoices; to handle theiraccounting; to do their tax work. But these uses just automate old processes.
Very few companies are using digital technology for new processes that radicallyimprove how they function, that give them the full benefit of all theiremployees' capabilities, and that give them the speed of response they will needto compete in the emerging high-speed business world. Most companies don'trealize that the tools to accomplish these changes are now available toeveryone. Though at heart most business problems are information problems,almost no one is using information well.
Too many senior managers seem to take the absence of timely information as agiven. People have lived for so long without information at their fingertipsthat they don't realize what they're missing. One of the goals in my speech tothe CEOs was to raise their expectations. I wanted them to be appalled by howlittle they got in the way of actionable information from their current ITinvestments. I wanted CEOs to demand a flow of information that would give themquick, tangible knowledge about what was really happening with their customers.
Even companies that have made significant investments in information technologyare not getting the results they could be. What's interesting is that the gap isnot the result of a lack of technology spending. In fact, most companies haveinvested in the basic building blocks: PCs for productivity applications;networks and electronic mail (e-mail) for communications; basic businessapplications. The typical company has made 80 percent of the investment in thetechnology that can give it a healthy flow of information yet is typicallygetting only 20 percent of the benefits that are now possible. The gap betweenwhat companies are spending and what they're getting stems from the combinationof not understanding what is possible and not seeing the potential when you usetechnology to move the right information quickly to everyone in the company.
CHANGING TECHNOLOGY AND EXPECTATIONS
The job that most companies are doing with information today would have beenfine several years ago. Getting rich information was prohibitively expensive,and the tools for analyzing and disseminating it weren't available in the 1980sand even the early 1990s. But here on the edge of the twenty-first century, thetools and connectivity of the digital age now give us a way to easily obtain,share, and act on information in new and remarkable ways.
For the first time, all kinds of information—numbers, text, sound,video—can be put into a digital form that any computer can store, process,and forward. For the first time, standard hardware combined with a standardsoftware platform has created economies of scale that make powerful computingsolutions available inexpensively to companies of all sizes. And the "personal"in personal computer means that individual knowledge workers have a powerfultool for analyzing and using the information delivered by these solutions. Themicroprocessor revolution not only is giving PCs an exponential rise in power,but is on the verge of creating a whole new generation of personal digitalcompanions—handhelds, Auto PCs, smart cards, and others on the way—thatwill make the use of digital information pervasive. A key to this pervasivenessis the improvement in Internet technologies that are giving us worldwideconnectivity.
In the digital age, "connectivity" takes on a broader meaning than simplyputting two or more people in touch. The Internet creates a new universal spacefor information sharing, collaboration, and commerce. It provides a new mediumthat takes the immediacy and spontaneity of technologies such as the TV and thephone and combines them with the depth and breadth inherent in papercommunications. In addition, the ability to find information and match peoplewith common interests is completely new.
These emerging hardware, software, and communications standards will reshapebusiness and consumer behavior. Within a decade most people will regularly usePCs at work and at home, they'll use e-mail routinely, they'll be connected tothe Internet, they'll carry digital devices containing their personal andbusiness information. New consumer devices will emerge that handle almost everykind of data—text, numbers, voice, photos, videos—in digital form. I usethe phrases "Web workstyle" and "Web lifestyle" to emphasize the impact ofemployees and consumers taking advantage of these digital connections. Today,we're usually linked to information only when we are at our desks, connected tothe Internet by a physical wire. In the future, portable digital devices willkeep us constantly in touch with other systems and other people. And everydaydevices such as water and electrical meters, security systems, and automobileswill be connected as well, reporting on their usage and status. Each of theseapplications of digital information is approaching an inflection point—themoment at which change in consumer use becomes sudden and massive. Together theywill radically transform our lifestyles and the world of business.
Already, the Web workstyle is changing business processes at Microsoft and othercompanies. Replacing paper processes with collaborative digital processes hascut weeks out of our budgeting and other operational processes. Groups of peopleare using electronic tools to act together almost as fast as a single personcould act, but with the insights of the entire team. Highly motivated teams aregetting the benefit of everyone's thinking. With faster access to informationabout our sales, our partner activities, and, most important, our customers, weare able to react faster to problems and opportunities. Other pioneeringcompanies going digital are achieving similar breakthroughs.
We have infused our organization with a new level of electronic-basedintelligence....
