Looking back at how we arrived at the future of business
Knowing where you are is good. Knowing where you are going is much more important.
Understanding the future was often pure speculation or even guesswork if we are truly honest. Sure, data on what had happened in the past was looked at in quite some detail and combined with hypothesis and assumptions to give a view of what may happen in the future. The problem was the data was not that detailed. And it took so long to process it, that to have any purpose to the exercise, the prediction had to be quite a long way ahead. Otherwise by the time you’d finished modelling that future, it would already be upon you !
This all had uncertainty and risk, especially the further ahead you went, and so every prediction would be caveated with the phrase, “Past performance is no guarantee of future performance”. Worse, you had to think really hard about the question you wanted to ask. Because you knew it was going to be quite difficult and painful to answer, you wanted to be sure you asked the right question. You know, the one you expected ( or hoped ) would have the most beneficial answer.
This situation has changed, and it is changing ever-faster in to what many call the “digital transformation”. Certainly the world has had digital for a long time, witnessed by the fact that SAP has been helping business run better for over 40 years. What is so different now ?
As described above, until recently, due to limitations in processing capability, we could only look back a short way and then had to predict a long way forward. But now we have enormous processing capability. We can look much further back, in much greater detail then apply and execute many highly complex models with many more realistic parameters. We can ask many more questions and since the answers can now be delivered quickly, we no longer have to force our predictions to be so far ahead.
Don’t get me wrong, people will always want to look far, far into the future. My point is that until recently, there was not much use predicting tomorrow because by the time you’d figured it out, tomorrow had arrived – and the opportunity was gone.
Now we can predict tomorrow and the days after with increasing levels of confidence. What is more, we can capture and process data about what is unfolding as it happens to further improve our understanding of what will happen in the coming days, and what can be done to affect best outcomes. We can even delegate immediate execution of the appropriate actions to steer towards those outcomes. And if external events start to push us off course, the incoming data will indicate this and the “analyse – predict – execute” cycle will continue.
This is a fundamental shift. Instead of having to anticipate the right questions to ask, figure out some possible answers ( slowly ) and then make painstaking preparations ( and contingencies ) for a heavily-caveated vision of the future, now things can pretty much run themselves, more aware of what is likely to happen and continually adjusting to deliver what is best.
I have to give credit to IDC who have more succinctly summarised the digital transformation using 3 Ds:
- [D]emand-oriented ( something is happening right now, or very soon, that needs action )
- [D]ata-Driven ( this demand was made apparent with data, and the data may also reveal the possible outcomes )
- [D]igitally executed ( the required actions are proposed by the system, and potentially executed by the system )
Professor Hasso Plattner was visionary enough to anticipate the potential from step changes in processing capability and what this could mean for business. The digital transformation is now becoming a reality for many SAP customers – in no small part due to the revolutionary capability demonstrated by SAP HANA which emerged from that vision.
If you are looking for predictive maintenance to improve safety and efficiency across your fleet of aircraft, or move from week-old reports to understanding detailed buying behaviour of millions of customers in the moment, or help fight cancer by delivering personalised patient treatments in seconds not days … all this is now possible.
Whatever journey you may take towards this brave new world, whether you call this real-time business or the digital transformation, there is one thing you will always require. DATA.
In my next blog I will emphasise how data is the major force driving such profound economic ( and social ) change and discuss ways where its value can be properly recognised and leveraged within your organisation.