Irecently read an interesting comment by Thomas Friedman, foreign affairs correspondent at the New York Times. Talking about the 2004 US presidential election, he said: 'We had an election at a time when the world went from vertical to horizontal and nobody talked about it. What I am trying to say is that something really important is happening. The value-creation model is moving away from a vertical silo model to an increasingly collaborative horizontal model, from command and control to collaborate and connect, and that is going to change everything.'
I couldn't agree more. This new environment, which we at BT are calling the digital networked economy, is a big change that many companies are still struggling to understand. We need to start talking about it urgently so we can surf the wave rather than be swept under.
The elements involved in this new era, such as convergence and globalisation, offer us a new world that is both exciting and challenging. The days of slow change are over: we are now all members of the worldwide, borderless 'information society', where everything can be 'local' and every business has access to every customer. But it also means that we all face extreme competition - particularly in the English-speaking world, where the hurdle of language is lowest.
When I say all, I do not just mean all of us in the West. As McKinsey says of China: 'Everyone knows how it consumes a huge percentage of global resources - 25% of the world's steel and 50% of the world's cement, for example; how it is home to some of the largest companies on earth, four of which cracked the most recent Fortune Global 500 list ...' In short, the move to the connected world is happening whether we like it or not.
So how to make the most of it? There must be a clear vision for enterprises to work to. We know, for example, that barriers are being swept away as broadband networks become readily affordable in ever more countries, offering pervasive access to IP networks, web services and utility computing.
We must all ensure that we are at the forefront of secure IP networking, able to meet the stringent demands of clients such as NATO and the European Central Bank, which rightly demand top-grade security and assurance.
I foresee a future of more connectivity, combined with closer partnerships.
Customers require fast and reliable IP networking wherever a company is and whenever it needs it, making it possible to manage whole value chains securely and, ultimately, to create more efficient markets and stronger economies.
With this in mind, we are currently investing heavily in a single converged IP network - one that will eventually carry all of our services for every customer worldwide, replacing even our existing telephony network in the UK.
It is the biggest transformation project that the telecoms industry has ever seen. We're calling it the 21st-century network. Customers will be able to design applications that enhance their current offerings, with everything they need being available through a self-service interface, in many cases delivered automatically and instantly. It will be just as straightforward for companies to add new offices, new applications and new individuals to their virtual corporate networks as their businesses evolve.
I believe the killer opportunity in this new world is collaboration and the creation of shared services. Take an early example. For more than 10 years now, people in the UK have been able to eat fruit imported from countries around the world within 24 hours of its being picked. This has been underpinned by a system called CCS-UK, which has streamlined the handling of goods through customs, allowing them to be taken straight to supermarkets rather than having to be stored in airport and dockside warehouses while the paperwork is being checked. This system has supported a 100% growth in UK airfreight traffic and operates at 99.99% reliability.
It is important that businesses constantly look at technologies with the potential to transform the way we do business for the better. Imagine you are travelling with a colleague but you can't get seats next to each other on the plane. You're too far away from each other to exchange notes via laptops but, if the drinks trolley was fitted with Bluetooth, it would be able to act as a conduit between the two, carrying packages of data from seat to seat. The point is that we have a wealth of devices around us that communicate and this, in the future, will open up whole new routes for connecting people and applications.
The emergence of the digital networked economy has transformed the way we work and live, forcing some dramatic changes in the way companies market and sell to their customers, be they consumers or other businesses. The organisation that embraces the nature of this latest revolution can reap the benefits of - and profits in - being a leader in the brave new world.
- CV Andy Green is chief executive officer of BT Global Services and has been a member of BT's executive group board since November 2001. He was previously CEO of BTopenworld. Green is a board member of e-skills UK, the Sector Skills Council for IT, and was appointed a director on the NAVTEQ Board in March 2006.