The theme “going digital” or digitalisation dominated this week’s Gitex, the Middle East region’s largest technology show.
The hype around this topic is reminiscent of those that surrounded dot.com, B2B and e-commerce one or two decades ago; or in more recent times, cloud and big data.
The hype vanished once successful businesses such as Amazon and Google were established and the services they provide such as free email or online shopping became part of our everyday life.
Digitalisation is a natural progression in the broad information technology ecosystem that sees manual processes, which previously relied heavily on paper-based documents such as accounting, invoicing, drafting, and machine scheduling and maintenance, converted into a digital or computer-based process.
This conversion of business processes, accompanied by the rapid growth and declining cost of computing capacity, resulted in an unprecedented explosion of data.
Until now, however, only a very insignificant portion of these data, estimated at between 1 to 5 per cent, are analysed and used meaningfully to further improve processes and, to borrow a very pervasive marketing phrase, deliver value to businesses and their customers.
The main problem lies in the lack of standard formats that would allow different systems – accounting, CRM, enterprise resource planning, productivity software, graphics and computer-aided design, business intelligence – and the data they produce to be easily accessible, referenced, updated and visualised.
Indeed new technologies such as analytics, machine learning, cloud services, artificial intelligence and blockchain, among others, are being developed and explored with the aim of making that data, and the ones produced every minute, more productive.
These new technologies comprise the building blocks for digitalisation, whose exact meaning and scope are still open to debate.
Essentially, digitalisation comprises processes, software and services designed to make data produced by sensors installed in "things" like CCTV, traffic lights or turbines, or those produced by partners, customers, suppliers and employees more productive leading to safer or more sustainable processes, lower costs, higher customer retention, longer asset’s lifecycle, and new products and services.
As in previous technology waves, the main caveat in developing the whole digitalisation ecosystem is the availability of expertise. For instance, as Kai Chan, distinguished Insead fellow and AI expert, has cited, there are only so many AI experts across the globe today. Yet the majority of them are located in Silicon Valley or other technology development centres in Europe or Canada, certainly not in the Middle East. The same is true for data scientists and machine learning experts.
This global shortage in expertise drives the education initiatives of technology companies who are at the forefront of "going digital" such as Siemens, Microsoft, Huawei, GE, SAP, Cisco and Bentley Systems, as well as younger firms like Consensys. In most cases, they have been building their own training centres and laboratories or work with the academe in the regions they operate in to develop curriculums that cater to these highly niche disciplines. Others pursue both approaches to expedite the deployment of enough skills to support their products and deliver the outcomes they promise to their customers.
What can be guaranteed, if previous new technologies are anything to go by, is that there will be many failures before they can succeed.
The good news is there are new concepts like digital twins, or having a comprehensive and up-to-date computer model mirroring a system or assets and their environment, which could potentially help organisations avoid very expensive failures and mistakes.
By enabling numerous simulations and tests digitally using live data before building an actual system, product or infrastructure, and using the same discipline to maintain them once they are built, digital twins promise to minimise much of the risks that come with implementing new technologies and processes. This highlights their eventual inevitability, as recently described by John Armitt, chairman of the UK's National Infrastructure Commission.
However, realising this promise will be more difficult than it first appears: digital twins will require dozens if not hundreds of suppliers to agree on standards, to comply with regulations, and to share risks with their customers.
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