At Davos, everyone with a mic in their hand is considered the smartest guy in the room. So when global business executives speaking at the World Economic Forum recently said that one of their main growth concerns is technology, the ears of CEOs at IT consultancies start to burn. Of course, this is music to their ears.
Call it “hyper-connectivity” or Web 3.0, one thing is clear: a company’s computer system is no longer an issue relegated to chief information officers. Technology is now a CEO level agenda item. “CEOs have a dual mandate of improving current business performance and investing in the technology that will get them there,” says Francisco d’Souza, CEO of Cognizant Technology Solutions, a $27.4 billion multinational IT outsourcer from Teaneck, NJ.
Technology drives corporate growth. It also drives entire economies. The best paying jobs in the U.S., and the companies that are hiring, are the Apple's of this world. Cognizant added around 5,000 people to its global payroll last quarter alone.
Companies from Target to Bank of America recognize the importance of social media, online banking transactions, mobile and cloud computing. Google spent $3.2 billion to acquire Nest Labs, a company that allows you to control your home’s heating system remotely. Hyper-connectivity. This is the song that gets guys like d’Souza out on the dance floor.
“Today we have about seven billion things connected to the internet and in the next decade you’ll go from 50 to 100 billion things,” Cognizant CEO told FORBES in a post-earnings calls on Wednesday. That connectivity includes Nest Labs’ thermostats, to medical machinery operating across platforms and oceans.
Known as the IoT, or the “internet of things”, the smart phone connected to your Thermador stove and your washer/dryer is just one possibility of products and machines being connected through broadband. The current IoT market is around 4.5 billion euros, expected to hit around 4.5 billion euros this year and 8 billion euros in the next six years.
“Not since the dot com boom have CEOs been talking about the implication of these new technologies on their businesses,” d’Souza said. “Depending on what business you were in, you might have thought that the internet was only disruptive for media companies and not industrial machinery manufacturers. Today, people see new technology as being disruptive for the vast majority if not all industries.”
Last year, in the company’s biannual journal called Cognizanti, researchers did what Cognizant researchers love to do: coin phrases. SMAC was the acronym they used to define social, mobile, analytics and cloud. Their latest beyond-internet tech term is “code halos”.
Think about your personal mobile and computing gadgets, and all the things you do with them: connect with friends, play games, manage money, read books, work, watch movies, listen to music, get directions and shop. Consider also all the digital information flowing daily between every computing device – tablets, mobile phones, gaming consoles and things like cars, televisions and airplanes. Each is surrounded by a blanket of invisible energy. But it’s not electricity; it’s a halo of digital information connecting people, organizations, processes and devices, the reports authors led by Malcolm Frank wrote last year. Frank and his colleagues put a book together on the topic of the same name. Code Halos: How the Digital Lives of People, Things, and Organizations are Changing the Rules of Business comes out by J. Wiley & Sons in April.
It used to be that companies that made the best product for the money or provided the best customer service, would succeed. But that’s no longer the case. ”Future-ready businesses understand that it’s the digital information that customers, products, partners and employees build and share that can create unprecedented levels of insight and business value,” report authors wrote.
Web 3.0, hyper-connectivity, code halos, whatever it gets called, broadband interconnectivity is on every CEOs mind. “The job of the IT consultancy is to understand where the value from these technologies will come from for their particular client, not just for the outsourcer who will benefit from these changes,” said d’Souza. ”Business leaders want to be able to use these new technologies of interconnectivity to either gain parity with their competitors,” he said, “or beat them.”