Five years ago, I heard Jeff Immelt, CEO of GE use the term Industrial Internet of locomotives, wind turbines, aircraft engine and MRI scanners to differentiate from the Consumer Web that Apple. Google, Microsoft, Amazon and others have made part of our daily lives. GE has since inspired many of its customers and even those of its competitors to think about “Digital” from that complex, yes even boring, enterprise lens.
Around the same time, Cognizant CEO Francisco D’Souza could see significant changes coming in his client base, and outlined plans for his “three horizons” in his 2011 Shareholder Letter.
This week, at Cognizant Community in Austin, D’Souza sounded like Immelt (he sits on GE’s board) when he told an audience of customer executives “Don’t fall into the FANG (Facebook. Amazon, Netflix, Google) trap” “Be inspired by them, but don’t copy them”. “They were born digital – you will always be hybrid”.
His EVP of Strategy, Malcolm Frank said its time to move from “Digital that’s fun” to “Digital that matters”. “Facebook is not going to run an airline, Google is not going to run an emergency room” “Systems of engagement were a head fake. We need to move to systems of intelligence”. In an excellent keynote (I will post a video shortly), he covered wide ground on the big things enterprises need to focus on.
The theme of Community this year was “Mastering Digital” (later in week I went to HPE’s Discover event and Digital Transformation was a frequently heard term there also) and I, for one, like this evolution. Way too many initial digital projects have focused on social and mobile. Important, but superficial in terms of impact. Way more important is a move to smart products, rethought business models and channels, reconfigured supply chains and manufacturing. Keynotes by Michael Porter on smart products and Peter Evans on platforms expanded on that thinking.
Interestingly, in talking to Cognizant executives, it is industries that feel most threatened by the consumer giants and startups – retail by Amazon, autos by Google and Uber, banking by several fintech startups that are showing the most urgency to undertake significant digital transformation. Others like insurance still appear to be waiting for their wake up call.
I would also be remiss if I left the impression that the consumer digital stuff is easy to deliver. In my books I have written extensively about Amazon’s highly efficient Kiva driven warehouses, postal injections and other supply chain innovations, Apple’s mind boggling quality across billions of devices via its contract manufacturing network and retail excellence, Facebook’s highly efficient data centers, Google’s sustainability initiatives and Alphabet’s wide array of R&D.
Still, as D’Souza says they were born digital and did not have to worry much about legacy. The rest of the Fortune 1000 and beyond does not have that luxury. For them, digital will be much more complex, especially when too much time and money is going into that legacy.
It is time for some Big Thinking.