At SAPPHIRE NOW last week, Bill McDermott invited Michael Dell on stage to talk about Digital transformation. Michael used an interesting expression, saying that there was 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, 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 gives 5 possibilities why). Single cellular organisms became multi-cellular, leading to complex creatures and eventually to all of us. This singularity is called The Cambrian Explosion. Michael was referring to the same approaching singularity, but not with organisms but organisations.
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 because of the 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.
Specialisation 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 likewise has Value Chains made up of many different groups: design, engineering, marketing, distribution. These used to be single departments in one company, but they are increasingly becoming separate companies. Companies that used to have in-house catering, real estate or IT support are increasingly turning to specialist companies who 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 more flexible: got a problem with a subcontractor in Manila? Switch in 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 will not survive. Earlier in his Sapphire remarks, Bill referred to the constant churn in the 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 of course the prime example being us, homo sapiens. In the rest of his Sapphire remarks Bill talked about the rise of machine intelligence and how 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 Enterprises. But the Cambrian Explosion has started, and if you can’t adapt, you’re plankton.