Business Impacts

IACT 302

Corporate Network Planning

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Main Themes

• “Connectivity is shrinking our world and, in the process, transforming business.”

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Main Themes

• “As communication between people becomes more fluid and pervasive, it is creating what looks like a global brain, in which ideas procreate freely, and we collaborate to filter an ever-expanding universe of information.”

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Main Themes

• “However, just a small proportion of the planet's population is connected. It is critical that we extend participation as broadly as we can.”

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What the Changing Flow Means for Businesses• The coming of hyper-connectivity and the

living networks has implications for almost every aspect of business

• Five key issues – How companies create value with their customers,

suppliers, and partners.

– How people work within organizations

– Innovation and intellectual property

– Strategy and positioning

– How individuals provide leadership and create personal success

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What the Changing Flow Means for Businesses• How companies create value with their

customers, suppliers, and partners

– The rapidly increasing ease and speed of information flow is blurring the boundaries of organizations

– To survive and thrive,

• Companies must create new kinds of relationships with their customers, suppliers, and partners

• Based on transparency, collaboration, and sharing value

– This requires new ways of working.

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What the Changing Flow Means for Businesses• How people work within organizations

– Work today is based on people's networks within and across organizations

– Knowledge needs to flow by connecting the right people, and diverse groups working in different locations and often different companies need to collaborate effectively to do their work

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What the Changing Flow Means for Businesses• Innovation and intellectual property

– Economy is increasingly dominated by innovation and intellectual property

– Increasing complexity of technology means that collaboration is becoming essential to develop valuable ideas

– Need for new models to share in the value of intellectual property

– At the same time, an ever-larger proportion of intellectual property can be captured in digital form and can thus flow freely between consumers, requiring a shift to new business models for content

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What the Changing Flow Means for Businesses• Strategy and positioning

– economic activity converging to a model based on the flow of information and ideas

– This emerging flow economy comprises a vast array of industries, including

• Telecoms

• Technology

• Media

• Entertainment

• Publishing

• Financial services

• Professional services

– New competitive threats

– Massive new opportunities open up

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What the Changing Flow Means for Businesses• How individuals provide leadership and create

personal success

– In this world of connectivity, collaboration, and blurring, executives no longer have control over most things that matter, sometimes even including their own business processes

– They must provide true leadership inside and outside the organization to successfully implement new ways of working, while skirting the associated risks

– Free agents also need to develop new approaches to create success in a networked world

• Positioning themselves effectively within networks

• Fully exploiting the intellectual property they create

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How Connectivity Shrinks Our World

• It is a big world when you only know your immediate neighbours

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How Connectivity Shrinks Our World

• Adding just a few more diverse connections can create a small world for everyone

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How Connectivity Shrinks Our World• The formation of these diverse bridges

between people describes what is happening in our hyper-connected world

• Increased mobility and migration mean that, even in a small community, you are likely to know people born in many different countries

• New forms of communication are giving us new ways to interact socially

– Mobiles Phones

– Email

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Micromessages Make Communication Fluid• When you call a fixed telephone, you

call a place; when you call a mobile phone, you call a person

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Micromessages Make Communication Fluid• In 2001, around 40 billion text messages were sent on

mobile phones, with a forecast of close to 50 percent annual growth in the subsequent years – 47% of Swedes

– 39% Of Italians

– 2% of Americans

– Finland • Vending machines

– Scandinavia• Parking

– Survey: Peering round the corner The Economist. London:  Oct 13, 2001. Vol. 360, Iss. 8235;  pg. 6

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Micromessages Make Communication Fluid• Instant messaging has paralleled the SMS

boom – Buddy list

– Are they online???

– Real-time

– From its roots as a social tool, instant messaging is shifting to become extensively used in organizations

• RE/MAX real estate

• U.S. Navy

• IBM (two million instant messages sent daily in 2001)

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Micromessages Make Communication Fluid• These types of communication allow for

fluidity

– Less formal

– Less intrusive???

• Micromessages allow smaller things to be communicated

– They have become a means of sharing daily experiences and thoughts

• SMS and instant messaging can be powerful marketing tools, if treated appropriately

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The Global Brain• Communication Technology allows a rich flow of ideas

and information• All of these connections are giving rise to a global

brain• Using these new technologies human ideas are

gaining a life of their own– desire to produce and consume mass media

– engage more richly with others

– Immortality• Filtering

– essential survival skill

– Now a determinant of success

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Town Limits

• It's easy to forget quite how starkly different life is for the majority of the world's population

– Population of over six billion people

– Of those, probably close to half have never made a telephone call

– Less than one in ten has access to the Internet

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What does the ITU say?- Land Lines• 689 million land lines at the beginning of

1995

• Over 1 billion by the end of 2000

• 1.2 billion by the end of 2003

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What does the ITU say? - Land Lines• Average annual growth rate of just over 7% • Cumulative improvement in that period of over

50%

– First two-thirds of the world's phone lines were run between 1876 and 1994

– Remaining third were run between 1995 and 2000

– Half again as many land lines were run in the last 6 years of the 20th century as were run in the whole previous history of telephony

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What does the ITU say? - Land Lines• From 1995 to the end of 2000, 8 countries achieved compound average

growth rates of 25% or more for land lines per 100 people (against a world average of 7% )

• These included– Sudan (which improved six-fold)

– Albania

– China• Went from 41 million land lines to 179 million in those 6 years

– Sri Lanka

– Vietnam

– Ghana

– Nepal

– Cambodia

– 35 additional countries, including India, Indonesia, and Brazil, with annual growth of between 10 and 20% from 1995 to 2000, meaning they at least doubled the number of land lines in that period

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What does the ITU say? - Mobile Telephony • Mobile Telephony offers a way for a

country to increase its telephone penetration extremely quickly

– 1995, there were roughly 91 million cellular subscribers

– By 2000, the number had risen to 946 million

– In 2003 mobile phone subscribers exceeded land lines

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What does the ITU say? - Mobile Telephony • Twenty-seven countries had growth rates of

over 100% annually– Meaning that, at a minimum, they doubled and

doubled again, 6 times, achieving better than sixty-fold cumulative growth

– 22 of those had better than hundred-fold growth • By the end of 2000, there were 25 countries

where cell phone users made up between two-thirds and nine-tenths of the connected populace – New telecommunications infrastructure was

deployed from scratch in these countries

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What does the ITU say?Growth Statistics

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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

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Main telephone lines (millions) Mobile cellular subscribers (millions)

Personal computers (millions) Internet users (millions)

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What does the ITU say?

• Half the World by Clay Shirky– http://www.shirky.com/writings/half_the_world.html

• ITU Statistics

– http://www.itu.int/ITU-D/ict/statistics/

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Globalization

• Of the multiplicity of themes encompassed by the term "globalization," two are especially relevant to the emergence of the living networks

– The increasingly borderless nature of the global economy, especially when the majority of economic activity is comprised of information-based services

– The second is the apparent cultural integration of the world

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Globalization

• For a very large and increasing proportion of work, it doesn't matter where in the world it's done

– This creates many opportunities for developing countries

– Developed world workers must upskill themselves and do the higher level work that differentiates them