Innovation in the Knowledge Economy Some Key Grand Challenges - - PowerPoint PPT Presentation

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Innovation in the Knowledge Economy Some Key Grand Challenges - - PowerPoint PPT Presentation

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Innovation in the Knowledge Economy Some Key Grand Challenges Irving Wladawsky-Berger Focus on Innovation We will fight our battles not on the low road to commoditization, but on the high road of innovation. - Howard Stringer, Chairman

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Innovation in the Knowledge Economy Some Key Grand Challenges

Irving Wladawsky-Berger

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“We will fight our battles not on the low road to commoditization, but on the high road of innovation.”

  • Howard Stringer, Chairman and CEO, Sony Corporation

“Constant reinvention is the central necessity at GE... We're all just a moment away from commodity hell.”

  • Jeffrey Immelt, Chairman and CEO, GE

“We’ve committed ourselves to a business model that relies

  • n continual innovation” - Sam Palmisano, IBM CEO

“Economic competition in the flat world will be more equal and more intense... the most important attribute you can have is creative imagination.”

  • Thomas Friedman

Focus on Innovation

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What Is Innovation?

Significant value created for society or business:

  • Creates new industries and markets
  • Spurs productivity and economic growth
  • Fuels wealth creation and profits
  • Generates high-value, higher-paying jobs
  • Raises standard of living

Innovation has to be useful as well as unique Requires looking beyond today’s problems

But why is this so important now?

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Why is Innovation such a business imperative?

Our environment is constantly changing

  • Technologies: Internet, IT, bio-informatics, . . .
  • Market conditions: competition, commoditization . . .
  • Socio-economic: globalization, trade barriers . . .
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Why is Innovation such a business imperative?

Our environment is constantly changing

  • Technologies: Internet, IT, bio-informatics. . .
  • Market conditions: competition, commoditization . . .
  • Socio-economic: globalization, trade barriers . . .

Innovation is indispensable to

  • adapt to changes
  • go after new opportunities
  • ward off competitors
  • preserve leadership position
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Source: Kurzweil 1999 – Moravec 1998

Accelerating Advances in Technology

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Accelerating Advances in Technology

Driving Costs Steadily Downward

Source: Kurzweil 1999 – Moravec 1998

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The Internet: Industrial Knowledge Economy

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Global, integrated Market facing, services oriented Complex, unpredictable Evolution of Systems

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Evolution of IT Systems

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Evolution of IT Systems

1960s, ’70s and Early ’80s

Data Center

Computers, Storage, Printers, Network, . . .

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Evolution of IT Systems 1980s and Early ’90s

Data Center IT infrastructure Computers, Storage, Printers, Network, Data Center, Business Unit, Departments, WANs, LANs . . .

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Evolution of IT Systems Mid ’90s to Present

Data Center IT Infrastructure “End-to-End” Enterprise Computers Storage, Printers, Network, Data Center, Business Unit, Department, WANs, LANs . . . IT Infrastructure, Applications, Data, . . .

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Evolution of IT Systems

Into the Future . . .

Data Center IT Infrastructure “End-to-End” Enterprise Industry Eco-Systems Global Digital Economy Marketplace Solutions Computers, Storage, Printers, Network, Data Center, Business Unit, Department, WANs, LANs . . . IT Infrastructure, Applications, Data, . . . People, Processes, Information

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Evolution of Marketplace Systems

Technology Products Applications Business

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Market Facing Systems Back Office Systems

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People and Services Machines and Products

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Time / Complexity

Evolution of Emergent Systems: Accelerating Change

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Global, Integrated, Rapidly Changing Digital Economy Systems of Coupled Systems

Systemic, Emergent Risks

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Cloud Computing Global Integrated Enterprises Virtual Worlds Some Key System Grand Challenges

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Cloud Metaphor Massive Scalability, Quality of Experience

10X - 100X over the next decade 25% - 55% CGR for selected workloads

Business and Consumer Services Real-time Information People, Devices, Sensors Web N.0

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Business and Consumer Services

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Real-time Information

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Devices, Sensors, etc

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Continuing Web evolution

Level of Interaction

Early Web Access and Find Visual, Immersive Web Experience, Participate and Co-Create Web 2.0 Share and Collaborate

Time

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The Industrial Revolution

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Evolution of Manufacturing

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Leadership in Manufacturing

Toyota Production System

  • Supply chain
  • Just-in-time production
  • Continuous improvement
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The emergence of Cloud-based services delivery data centers

The “industrialization” of the data center

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IT infrastructure growth

$0 $50 $100 $150 $200 $250 $300

1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1

Installed Base (M Units) Spending (US$B)

New server spending Server mgmt and admin costs Power and cooling costs

5 10 15 20 25 30 35 40 45 50

Source: IDC, Virtualization 2.0: The Next Phase in Customer Adoption, Doc #204904, Dec 2006

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100 200 300 2000 or earlier Current By 2011 Low High

IT energy crisis

  • During the next 5 years, most datacenters will spend as much on energy as

they do on hardware

Doesn’t include energy needed to remove heat… can increase overall power requirements by 80% to 120%

Data center watts/sq. ft.

Source: Gartner, “U.S. Data Centers: The Calm Before the Storm,” ID #G00151687, September 25, 2007

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The IT Complexity Crisis

Classic Complex Data Center

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Data Center “Ensemble” Approach To IT Simplification

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Virtualized, Federated Ensembles – SOA/Grid Protocols

Mainframe service Hybrid service Virtual Client service x86 service SAP application service WebSphere service Unix service Database service File system service Consolidation service DMZ appliance service Storage backup, archive… service

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What does it take to be world-class in services delivery?

Flexible, Adaptable Architectural Frameworks Integration Virtualization Systems Management Efficiency Security, Identity Mgmt

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Cloud Computing Globally Integrated Enterprises Virtual Worlds Some Key System Grand Challenges

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Globally Integrated Business and Organizational Systems

Processes Information People

Infrastructure Employees Suppliers Customers

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Actual Application Architecture for Consumer Electronics Company

E01-EDI Data Warehouse (Interfaces to and from the Data Warehouse are not displayed on this diagram) G02 - General Ledger A05 - AP S01 - Sales Corrections I01 PO Receiving I03 Return to Vendor I06 Warehouse Management

Mainframe PC/NT apps Unix apps 3rd Party Interface

S06 - Credit App P15 EES Employee Change Notice OTHER APPS - PC AP - Collections/Credit TM - Credit Card DB ACCTS REC APPS - PC 990COR Bad Debt Beneficial Fees Beneficial Reconcile JEAXF JEBFA JEBKA JEDVA JESOA JEVSA JEVSF NSF TeleCredit Fees INVENTORY CONTROL APPS - PC Code Alarm Debit Receivings Devo Sales Display Inventory In Home Junkouts Merchandise Withdrawal Promo Credits RTV Accrual Shrink AP Research - Inv Cntrl AP Research-Addl Rpts Book to Perpetual Inventory Close Out Reporting Computer Intelligence Data Count Corrections Cross Ref for VCB Dnlds Damage Write Off Debit Receivings DFI Vendor Database Display Inventory Reconcile Display Inventory Reporting INVENTORY CONTROL APPS - PC DPI/CPI IC Batching Inventory Adj/Count Correct Inventory Control Reports Inventory Levels Inventory Roll Merchandise Withdrawal Open Receivings PI Count Results PI Time Results from Inv Price Protection Sales Flash Reporting Shrink Reporting SKU Gross Margin SKU Shrink Level Detail USM VCB Downloads Journal Entry Tool Kit Scorecard - HR L02-Resource Scheduling (Campbell) P09 - P17 Cyborg M02 - Millennium M03 - Millennium 3.0 Banks - ACH and Pos to Pay Cobra B01 - Stock Status S03-Polling P14 On-line New Hire Entry CTS Plan Administrators (401K, PCS, Life, Unicare, Solomon Smith Barney) D01 Post Load Billing I04 Home Deliveries I02 - Transfers Arthur Planning I07 Purchase Order I12 Entertainment Software I05 Inventory Info E13 E3 Interface S04 - Sales Posting V01-Price Management System I10 Cycle Physical Inventory I55 SKU Information K02 Customer Repair Tracking I35 Early Warning System B02 Merchandise Analysis I13- Auto Replenishment U18 - CTO Intercept I09 Cycle Counts E02-Employee Purchase Texlon 3.5 ACH Stock Options I17 Customer Perceived In-Stock U16-Texlon SiteSeer C02 - Capital Projects F06 - Fixed Assets US Bank Recon File Star Repair EDI Coordinator Mesa Data NEW Soundscan NPD Group AIG Warranty Guard Resumix Optika Store Budget Reporting P16 - Tally Sheet Cash Receipts/Credit S05 - House Charges Ad Expense L01-Promo Analysis V02-Price Marketing Support BMP - Bus performance Mngt Store Scorecard I11 Price Testing Valley Media P09 Bonus/HR I15 Hand Scan Apps Roadshow POS S08 - Vertex Sales Tax A04 - Cust Refund Chks Equifax ICMS Credit Cellular Rollover S09 - Digital Satellite System NPD, SoundScan Sterling VAN Mailbox (Value) I18 SKU Rep X92-X96 Host to AS400 Communication S02 - Layaways Washington, RGIS, Ntl Bus Systems V04-Sign System I14 Count Corrections NARM P01- Employee Masterfile I06 - Customer Order Frick Co UAR - Universal Account Reconciliation Depository Banks S07 - Cell Phones S11 - ISP Tracking AAS Fringe PO Cash Over/ Short L60 MDF Coop SKU Selection Tool SKU Performance Supplier Compliance 1 I35 - CEI ASIS Misc Accounting/Finance Apps - PC/NT COBA (Corp office Budget Assistant) PCBS(Profit Center Budget System) Merchandising Budget AIMS Merch Mngr Approval Batch Forcasting Ad Measurement AIMS Admin AIMS Reporting Ad Launcher V03- Mkt Reactions Spec Source CTO2.Bestbuy. com Rebate Transfer Sign System CopyWriter's Workspace ELT PowerSuite Store Monitor AIS Calendar Stores & Mrkts Due Dates Smart Plus Insertions Orders Budget Analysis Tool Print Costing Invoice App AIS Reports Broadcast Filter Smart Plus Launcher General Maintenance Printer PO Printer Maintenance Vendor Maintenance Vendor Setup Connect 3 Connect 3 Reports Connect 3 PDF Transfe Spec Source SKU Tracking S20-Sales Polling Prodigy PSP In-Home Repair Warranty Billing System Process Servers (Imaging) Prepared by Michelle Mills

Business Realities

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Evolution of Engineering Systems

Some Key Lessons

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Computer Assisted Engineering Systems

Manufacturing Operation / Maintenance Strategy Collaboration Design / Simulation

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Computer Assisted Business and Organizational Systems

Architectures, tools, processes, modeling, simulation, analysis, . . .

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Computer Assisted Business and Organizational Systems

Strategy Collaboration Business Designs and Architectures

Strategy Tactics Execution

Business Administration Finance Administration Supply Chain & Distribution Store/Channel Operations Manage Customers Merchandising

Transformation View

Planning LOB Planning Procurement Financial Planning Finance Treasury Back Office Accounting SCM Transportation Inventory Store Services

  • Perf. Mgt.

MI Process Design Legal/ Reg Alliances Market Mgt. Real Estate IT HR Distribution Logistics Distribution Ops. Supply/ Demand Customer Sat. Space Mgt. Product Directory Vendor Mgt. Item Mgt. Customer Directory Order Mgt. Store Mgt. Inventory Channels CRM Insights Vendors Customer Accts. Store/Channel Strategy Labor Store Design Promotions IPT

Strategy Tactics Execution

Business Administration Finance Administration Supply Chain & Distribution Store/Channel Operations Manage Customers Merchandising

Transformation View

Strategy Tactics Execution

Business Administration Finance Administration Supply Chain & Distribution Store/Channel Operations Manage Customers Merchandising

Strategy Tactics Execution

Business Administration Finance Administration Supply Chain & Distribution Store/Channel Operations Manage Customers Merchandising

Transformation View

Planning LOB Planning Procurement Financial Planning Finance Treasury Back Office Accounting SCM Transportation Inventory Store Services

  • Perf. Mgt.

MI Process Design Legal/ Reg Alliances Market Mgt. Real Estate IT HR Distribution Logistics Distribution Ops. Supply/ Demand Customer Sat. Space Mgt. Product Directory Vendor Mgt. Item Mgt. Customer Directory Order Mgt. Store Mgt. Inventory Channels CRM Insights Vendors Customer Accts. Store/Channel Strategy Labor Store Design Promotions IPT Planning LOB Planning Procurement Financial Planning Finance Treasury Back Office Accounting SCM Transportation Inventory Store Services

  • Perf. Mgt.

MI Process Design Legal/ Reg Alliances Market Mgt. Real Estate IT HR Distribution Logistics Distribution Ops. Supply/ Demand Customer Sat. Space Mgt. Product Directory Vendor Mgt. Item Mgt. Customer Directory Order Mgt. Store Mgt. Inventory Channels CRM Insights Vendors Customer Accts. Store/Channel Strategy Labor Store Design Promotions IPT Planning LOB Planning Procurement Financial Planning Finance Treasury Back Office Accounting SCM Transportation Inventory Store Services

  • Perf. Mgt.

MI Process Design Legal/ Reg Alliances Market Mgt. Real Estate IT HR Distribution Logistics Distribution Ops. Supply/ Demand Customer Sat. Space Mgt. Product Directory Vendor Mgt. Item Mgt. Customer Directory Order Mgt. Store Mgt. Inventory Channels CRM Insights Vendors Customer Accts. Store/Channel Strategy Labor Store Design Promotions IPT

Operation / Feedback-loop Implementation (SOA)

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The Spectrum of Complex Systems

Biological Systems Human, Organizational Systems Physically Engineered Systems

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Cloud Computing Globally Integrated Enterprises Virtual Worlds Some Key System Grand Challenges

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Human – Machine Interactions

Early Days – Machine Oriented Interfaces

Computer Human

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Human – Machine Interactions

Graphical User Interfaces (GUI) – Xerox PARC (late 1970s)

Graphical View Human

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Human – Machine Interactions

Web Browser – GUI based

The Web Human

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Highly Visual, Interactive, Immersive Interfaces

Is this the future of Human – Machine interactions?

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Human – Machine Interactions

Highly Visual, Real Time, Immersive

Virtual/Hybrid World Human

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e-mail IM Web voicemail video audio voicemail

Broadband into the Mind

Struggling to Survive Information Overload

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Early Adopters

Marketing & Sales Collaboration and Events Education and Training Process Management, Rehearsal, and Operations

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Early Adopters – Education & Training

Connect with experts and teachers from around the world Train, rehearse, role play, and certify as individuals and teams in virtual world Simulation of real world environments for more effective learning and retention

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Early Adopters – Collaboration & Events

Recreate real world destinations and events to stimulate awareness and sales Provide a new perspective to immerse spectators in action Provide new collaboration capabilities to enhance and increase effectiveness Provide forums to support innovation

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Process Rehearsal, Management, and Operations

Use rehearsals to optimize business and technical processes - especially where equipment is costly/complex and risk is great Use virtual environment Product Life Cycle management to speed time to market and to reduce cost and errors. Manage real-world operations more effectively with 3D cues in virtual environment

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Early Adopters – Marketing & Sales

Test market with low cost prototype – gain feedback Support complex product sales – especially where 3D matters Provide entertaining sales and brand experiences – link virtual and real sales

Starfruit

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Knowledge Economy Industrial Economy

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Transition to the Knowledge Economy

Business, Societal and Lifestyle Innovation

Deepening Integration of IT into all aspects of Business and Society Accelerating Advances in Technology

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Value of education increases during times of change Challenges and opportunities reside at the intersection of business and technology Curricula must transform to reflect the realities of today and tomorrow

Talent: Critical Requirement for Innovation Leadership

The 21st Century Demands Uniquely-Skilled People

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21st Century Skills

Science & Technology, Business & Management, Social & Communication Skills

“Classic” Skills

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Overriding Educational Objective

Develop or Enhance the Leadership Skills for Dealing With:

Technical Skills Business Skills People Skills Complex Systems Complex Markets Complex Organizations

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Web 2.0 Virtual Worlds SOA Mashups iPods Game players Cloud Computing Petaflop supercomputers Offshoring Software as a Service Flat World GIE Services Sciences

A Stream of Disruptive Innovations

Into the Future . . .

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Innovation in the Knowledge Economy Some Key Grand Challenges

Irving Wladawsky-Berger