The theme: “Celebrating the Power of Connection.” The venue: the historic Beverly Hilton in Beverly Hills, California, site of the 25th Milken Institute Global Conference, May 1- 4, to bring together leading influencers and thought leaders from finance, academia, government, and industry.
One of the great powers that connectivity enabled during the global pandemic of the past two years was acceleration of digital transformation to enable the way we live, work, and play, and help sustain our businesses and societies.
The Milken Institute Global Conference provided neXt Curve a unique opportunity to engage with a diverse community of leaders and thinkers across industries and domains of expertise to contemplate the essential role of connectivity, computing technologies, and digital transformation to help societies, economies, and individuals adapt and thrive through crises of humanity and nature as they look ahead and create a more connected, resilient world.
Digital transformation--accelerated by the pandemic
Digital transformation has become and may have always been a nebulous thing that gets folks in the so-called tech industry excited but is a difficult term and topic for those not used to speaking digital lingo. It’s not an easy conversation to have, period.
What is digital transformation? In simple terms, it is the application of connectivity, increasingly efficient and powerful AI-infused compute technologies, and data to realize new capabilities and modes of business that improve lives, industries, and societies. For businesses, digital transformation has yielded a slew of novel connected and intelligent services that have and continue to improve visibility to operations, foster intelligent automation, and enable new business models.
It has also enabled models of work that have given organizations the ability to persevere during extremely challenging and uncertain times. Digital transformation has, as Darius Adamczyk, CEO of Honeywell, would put it, driven value. Part of that value is the realization of enhanced resiliency.
During the panel, “Harnessing the Power of Digital Transformation,” Cristiano Amon, CEO of Qualcomm, provided an example of the acceleration of digital transformation and its benefits during the pandemic. He explained how retailers were compelled to accelerate the implementation of a wide range of connectivity and intelligent technologies to adapt and sustain their businesses as lockdowns took hold at the outset of the coronavirus pandemic.
Under distress, many retailers urgently built out their online channels. This allowed retailers who traditionally ran brick n’ mortar operations to make in-store inventory available for their online channel sales. Indeed, at the peak of the pandemic one out of three businesses needed digital tools to survive according to Ruth Porat, CFO of Alphabet. Digital transformation not only kept these businesses alive, but it also made them
resilient and able to continue their enterprise through subsequent pandemic waves and lockdowns. Of equal importance, it has enabled many retail businesses to realize new growth opportunities that were previously not there when they operated singularly as a brick n’ mortar business.
A residual outcome of this pandemic-driven digital transformation has been the ability for traditional retailers to provide seamless omnichannel experiences to their customers. It has brought about a hybrid mode of commerce referenced by Marvin Ellison, CEO of Lowes during the panel, “Retail’s New Reality: Technology, Innovation, and Consumer Behavior.” Thanks to its investment in “hybrid commerce,” Lowes is now able to support personalized customer shopping journeys that are a blend of online and in-store modalities reflective of new customer behaviors and preferences.
The digital transformation of retail is just one of many examples of innovations enabled by digital technologies that surfaced across panel discussions at the Global Conference that have allowed businesses, economies, and societies to survive amid crisis while putting them in strong competitive positions for the future.
The undercurrent of excitement for digital transformation is in a future that seamlessly blends the physical with the digital creating new augmented and immersive experiences that will revolutionize the way we interact and share with each other, our environment, and things. Connectivity and efficient compute are and will continue to be essential drivers that will shape the next frontier of digital transformation.
The future of digital transformation
Because of all this connectivity and computing at the edge, Gartner estimates that 75% of enterprise data will be generated outside of central data centers and the cloud by 2025. The edge will also continue to be where data, content and application services will be consumed. This means that the edge is fast becoming the new frontier of digital transformation.
Companies like Qualcomm are accelerating this trend with its mission to intelligently connect everything at the edge, with the help of 5G and AI. This might sound farfetched, but it is an eventuality that Mr. Amon and his company are catalyzing facilitated by its One Technology Roadmap strategy and its rapid diversification beyond the smartphone it has historically been known for. The company has been most vocal about its foray into automotive but its sights and opportunity on consumer and industrial IoT are the biggest, according to Cristiano.
Thankfully, Moore’s Law continues its mysterious ways and advances despite presumed physical limits. This means that the economics of the chip will continue to favor the proliferation of intelligence across the edge. Edge AI technologies such as TinyML and power efficient, AI-optimized processors are bringing about new categories of intelligent devices that are expected to put computing power and AI where they were not possible technically and economically to go before.
From a connectivity perspective, 5G is bringing exciting new features such as NR-REDCAP (New Radio-Reduced Capability), which will enable a new class of mid-powered intelligent devices that will expand the way we think of the Internet of Things. 5G applications such as FWA (Fixed Wireless Access), also known as wireless fiber, will provide an access technology that can help bridge the digital divide provided a broadband policy is instituted that supports its optimal use.
Regardless, the perpetual advancement of digital technologies will continue to broaden and deepen the possibility frontier of digital transformation. Moreover, with everything and everyone becoming connected, we can expect a network effect that will force multiply the power of AI and data and hopefully broaden access to underserved and unserved communities.
But where are all these digital technologies taking us? Ruth Porat suggested that the future of digital transformation promises to be predictive. AI technologies and capabilities deployed in the cloud and increasingly across the billions of endpoint devices that populate the edge will bring about unprecedented analytical capabilities that will inch us away from our retrospective and reactive mode of operating toward one that is anticipatory and proactive.
Indeed, this transition toward a predictive enterprise is something that Honeywell is undergoing today according to Darius Adamczyk. His organization is phasing out scorecards and implementing alarms that notify managers when events or incidents are occurring or about to occur through data-driven insights and automations.
Much of the transition toward a predictive enterprise is not possible at scale and impact without what Cristiano Amon referred to as federated learning, where AI learning and model training is distributed across intelligent devices across the edge, the edge cloud, and the central cloud or data center.
This next level of digital transformation that fosters predictive capabilities will open new opportunities for business and organizational resiliency, operational efficiency, and competitive differentiation.
Leonard Lee is the founder and managing director of neXt Curve, a research advisory firm focused on Information and Communication industry and technology research. He has worked as an executive consultant and industry analyst at Gartner, IBM, PwC and EY and has advised leading companies globally on competitive strategy, product and service innovation and business transformation. Follow Leonard on LinkedIn: linkedin.com/in/leonard-lee-nextcurve