Enterprise 5.0: The quantum leap business must make after COVID-19
By Tertius Zitzke and Willie Ackerman
To leverage fourth industrial revolution technologies to the fullest, companies have to look beyond technology to include the human element. First, though, they need to stabilise their core.
There’s a lot of noise out there about the fourth industrial revolution (4IR), but too often the discussion remains focused on the technology. The brutal truth is that the technology’s huge potential will never be realised if it is not deployed in a way that incorporates the human dimension.
How often have we seen great technology being deployed and activated very well, only to fail to be adopted within the organisation? A good example of this “failure to launch” became evident during the current COVID-19 emergency, when companies had to move to remote working in a big hurry.
Digital collaboration platforms like Microsoft Teams became critical business tools, but we found that our clients needed to mount intensive training programmes first to teach their people how to use them. In many cases, they had deployed the software years before, and been paying the licence fees, but clearly it had never actually been used.
In order to realise the true value of 4IR technologies, organisations will need to evolve so that users and technology converge.
This convergence of 4IR technologies and users will give rise to a new kind of business organisation, Enterprise 5.0.
To begin with, let’s first remind ourselves of what the 4IR actually is, and why it's important. Introduced by the World Economic Forum’s Klaus Schwab, broadly speaking, 4IR refers to the morphing of the digital revolution into a new environment in which the lines between the physical, digital and biological spheres blur. Key technologies include the Internet of things, artificial intelligence, robotics, virtual and augmented reality, autonomous vehicles, 3D printing and more.
We believe that the key characteristic of the 4IR is the intelligent use of this data to support better decision-making in near-real-time. This is critically important in today’s hypercompetitive digital economy in which the ability to pivot rapidly in response to changing market conditions or customer demand is vital. But, as we've argued, this can only be achieved when the technology and its users are brought together within the Enterprise 5.0 framework.
Again, we have seen the truth of this in the mad scramble to deal with the impact of COVID-19. The more digitalised a company is, the further towards becoming an Enterprise 5.0 entity, the better able it is to understand the impact of the new environment and how to respond to it.
The quantum leap
Our view is that companies cannot adopt the conventional approach to new technology and roll it out piecemeal. A more decisive (but carefully structured) approach is required in order to achieve the desired benefits as soon as possible or, as the jargon has it, at the speed of the market.
An important precondition for Enterprise 5.0 is that information and operations technology (OT) can no longer exist as largely separate systems. Much of what we call the 4IR occurs on OT, and to make its data useful it needs to be accessible by the IT systems where it is processed into actionable insights. The data is hosted within the third dimension of Enterprise 5.0, the business environment (BE), where it will provide the C-suite with the near-real-time information it needs to support rapid and effective decision-making.
Each of these make use of different technologies: OT looks at things like supply chain optimisation, manufacturing execution systems, production and maintenance scheduling, while IT provides enterprise resource management, CRM, HR, finance, business intelligence systems and the like. The business environment relies on business intelligence dashboards and reports, enterprise artificial intelligence and big data analytics to drive innovation, and allow executives to interact with investors and the market as a whole.
To achieve the shift to Enterprise 5.0, CIOs and/or chief digital officers (CDOs) will have to shake off their traditional back-office orientation and assume a frontline role. Converging IT and OT has now become mission-critical, and must happen much more quickly than originally planned in order to position the organisation for success in the post-COVID-19 world.
A technological and organisational shift of this magnitude can create instability. It is therefore vital that a strong common core is developed first. The core comprises data integration, cyber security and hybrid-cloud migration. Once the core is stable, the 4IR technologies relevant to the business environment, IT and OT areas can be deployed safely and rapidly.
At the beginning of this article, we argued that technology is only part of the story — it will not realise its potential unless it is adopted by a proficient workforce. Technology deployments are typically successful technically, but fail to be used regularly unless people change their way of working and become proficient.
It’s no use having fantastic 4IR technology deployed if it is not being used to its full extent to deliver the desired benefits. The ability to identify new trends and respond to them instantly — a key characteristic of Enterprise 5.0 — is thus reliant on a marriage of the technology and those who are supposed to be using it. One needs to look at the full life cycle right up to adoption and proficiency.
4IR technologies have the potential to support new and profitable businesses and business models, but only if they are implemented correctly — that is to say, within a human context. Companies that achieve this can expect to be more successful on a sustained basis, even in today’s volatile, uncertain, complex and ambiguous environment.