Digital Industrial Revolution

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From a 2013 Gartner report with predictions for 2014:

"Gartner's top predictions for 2014 combine several disruptive topics. Those topics — the Digital Industrial Revolution, digital business, smart machines and the Internet of Things — can disrupt the IT function in ways both subtle and gross. More importantly, these topics have disruptive effects well beyond just the IT function. In 2014, IT leaders will have to plan what they do in a larger context that includes changes that are affecting the lives of people, businesses, entire industries and even global political realities.

Gartner's 2013 CEO survey suggests that CEOs feel that business uncertainties are declining. Yet CIOs awake each day to a world of technology uncertainty and change. Savvy CIOs will get their CEOs to recognize that the changes being brought about by disruptive shifts come at an accelerated pace and at a global level of impact. IT is no longer just about the IT function. Instead, IT has become the catalyst for the next phase of innovation in personal and competitive business ecosystems.

One place where this is evident is at the beginning of the Digital Industrial Revolution, which threatens to reshape how we create physical goods using 3D printing. 3D printing is even a technology worthy of mention by U.S. President Barack Obama in his 2013 State of the Union address: "A once-shuttered warehouse is now a state-of-the-art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything. There's no reason this can't happen in other towns." Innovations in this field cause changes that are worthy of mention by a president because 3D printing, 3D manufacturing and 3D production will change the very nature of business and/or even the structure of industries. 3D printing merges manufacturing with the supply chain by letting any business (or individual for that matter) become its own homegrown factory.

From descriptions of exciting current uses in medical, manufacturing and other industries to futuristic ideas, such as using 3D printers on asteroids and the moon to create parts for spacecraft and lunar bases, the hype leads many people to think the technology is some years away when it is actually available now and is affordable to most. More prosaic examples of current interest include Nokia allowing users to 3D print their own covers for the recently launched Lumia smartphone and consumers printing characters from games, their faces in chocolate and other novelties. And, more startling revelations can be found when considering that the political ramifications of a 3D-printed world can reshape the balance of power on a global scale.

In 2013, China continues to rise in power and position due to a large inexpensive labor force and a willingness to compete aggressively to become the "worlds' supplier" of almost anything. However, when 3D printing hits the masses, how much of China's manufacturing and distribution strength will be affected, reduced or eliminated in favor of locally printed supply? The answer is all of it. China's primary advantages, workforce and economies of scale in aggregated production, are minimized in a 3D-printed world. Those advantages cannot compete with elimination of the distribution costs associated with shipping, customization and speed of manufacturing changes — all of which are significantly more effective with 3D printing.

Our predictions on 3D printing examine the effects on intellectual property (a particularly vulnerable thing in a digital world), and on our health as bioprinting becomes more practical. Two key flags serve as indicators to look at in the next few years to validate that these predictions are on track. The global automotive aftermarket parts, toy, IT and consumer products industries will report intellectual property theft in 2016 due to 3D printing worth at least $15 billion. And, by 2015, at least one high-profile case of the use of bioprinted organs will become a global headline news story due to its success or failure. That case will most likely be centered on the Asia/Pacific region, with Western countries asking ethical questions related to the case based more on curiosity than fear.

So, that is the context in which IT leaders must plan the future of the IT function and the future of their businesses. It has long been said that IT must partner with the business or that IT is the business. Now, a more appropriate statement would be that "the business is IT." No business can afford to ignore or underplay the impact of technology-driven disruptions that are even transforming what it means to be a business in a digital world.

To that point, the "digital business" refers to business created using digital assets and/or capabilities, involving digital products, services and/or customer experiences, and/or conducted through digital channels and communities. This definition exposes a large number of challenges that await a traditional business, such as how to take advantage of digitalized assets. The term itself often poses a challenge as most people have a vision of what digital (1s and 0s) means, but not a good idea of how a business can become digital. The term digitalized might be more appropriate, because it really refers to the notion that we are accessorizing ourselves, our processes and our businesses with digital assets and capabilities. For example, digitalization has changed the book business through Web commerce, digitization of books, and delivery of books through mobile digital devices (Kindles and iPads) and audiobooks played anywhere. In this way, the book business has become a digital business.

With digital business, IT leaders must come to terms with what digital really means in the context of their work. It is bigger in scope than the typical company definition of IT, because it includes technology outside a company's control: smart mobile devices (in the hands of customers, citizens and employees), social media, technology embedded in products (such as cars), the integration of IT and operational technologies (such as telecom networks, factory networks and energy grids), and the Internet of Things (physical objects becoming electronically tractable). So, the creation of a digital business strategy may include references to how marketing is now done in a digital world. Our digital business predictions focus on four areas of interest. Particularly, they focus on the effect digital business will have on labor reductions, consumer goods revenue and use of personal data. While these do not cover the sum total of digital business, they do highlight critical areas of medium- to long-term impact.

The emergence of smart machines adds opportunity and fear as "cognizant and cognitive systems" can enhance our processes and decision making, but could also remove the need for humans in "process and decision" efforts. CIOs will see this as a means of delivering greater efficiency, but will have to balance between the active human workforce and the cold efficiency of machines that can learn.

However, as with other areas of disruption, the effect goes beyond just what the CIO might do. What happens when a business finds that smart machines make better decisions about infrastructure operations or begin to use cloud automation to create autonomic (self-healing) infrastructure? What happens when automated assistant technologies improve the safety of automotive fleets? What happens when smart decision systems shift the makeup of global workforces? The answer to all of these questions can be difficult, but a few short-term flags will indicate where we look for answers. Our predictions on smart machines address some of these probable futures.

Finally, there is the Internet of Things, which cements the connection between machines, people and business interactions in the modern era. With the advent of massively connected devices, businesses, governments and people now have access to more information about themselves and their surroundings than they can actually act on. So, the opportunity is growing to build applications and services that can use that information to create new engagement models for customers, employees and partners, as well as to foster a new set of business and marketing models that make the word "engagement" a truly valuable asset.

While all these disruptive topics might seem as if they do not have a direct impact on the IT function, we must embrace the notion that IT is now a part of everything. As the structure of businesses and industries changes, the IT systems that support it will change and so will the skills, processes and controls needed to keep them functioning. The day when a 3D-printed computer architecture exists is upon us, and the days when digital business, smart machines and the Internet of Things change what computers are may not be far off." (