At Convergence 2015 recently, Microsoft’s CEO Satya Nadella delivered his keynote speech focused on his vision of technology in the future. He opened with, “It’s your needs, your passion for what you want to achieve in your business that is fundamentally changing how we think about technology”. Satya went on to discuss all of the key developments happening with technology and the practical application of these developments in your personal and work life. Here are the key points from his speech.
From Systems of Record and Systems of Engagement, to … Systems of Intelligence
The use of business systems and technology to drive business transformation is not new. Mainframes helped to automate accounting departments and helped to scale businesses. Mini computers bought about Manufacturing Resource Planning. Then MRP2 brought in the demand signal to begin to automate manufacturing processes. In the client server era, the real power arrived. ERP systems began to automate everything inside an organisation. It digitised HR, Finance, Accounting, and Manufacturing bringing the separate silos together into one digital fabric helping organisations to do Enterprise Resource Planning and Supply Chain Management. These Systems of Record brought about the next level of efficiency inside the enterprise.
On top of these Systems of Records, with the help of the web and then mobile, organisations were then able to digitise interactions with customers and partners. These Systems of Engagement meant that businesses could extend beyond the enterprise boundary to include all interactions and really make use of this digital information to drive decisions and boost productivity.
We are now at the dawn of a new generation of business systems. With the advent of unlimited computer capacity in the cloud, as well as these new rich data platforms that have the ability to reason over data in real time we can now build Systems of Intelligence. They build on top of the fabric that we have with Systems of Record and Systems of Engagement and build in a feedback loop. These are now being converted into learning systems, so everything you have invested in these Systems of Record and Systems of Engagement will now become intelligent.
Microsoft’s focus is on empowering you as individuals and organisations across every vertical, across every size of business in any part of the world to drive your agenda and help you to achieve more and do more in your business. It’s Microsoft’s goal to drive transformation of businesses through the power of digital technologies.
Microsoft’s 3 key ambitions
- Create new era of more personal computing – ubiquitous computing fabric surrounds us. There are more and more, and new devices, more natural interfaces that you can speak to or drive a computer with your vision or holographic output. People are interacting and moving between devices. Microsoft wants to build mobility into the experience not into the device. They want to put you in control of your data with one consistent experience for users, developers and IT administrators .
- Reinvention of productivity and business processes – the intersection between productivity and communication, and collaboration and business processes are where the most interesting things are happening in organisations. Collaboration between Marketing and HR, Finance and Manufacturing; it’s how we bring information out of these Systems of Record and Systems of Engagement to enable a new way of working.
- Build an intelligent cloud – it’s now possible to build a comprehensive cloud infrastructure, to support hybrid computing in its purest form so that it provides the flexibility that is needed, and then build a rich data platform on top of it so that you can start building the systems of engagement that you need in order to drive business transformation.
Empowering people, organisations and industries
So what does all this mean at a practical level?
Change starts with individuals getting comfortable with new forms of technology and how we are using it in our daily lives. An example is Cortana where you can enter information about your interests, your schedule and it will help to organise your day. There is also the Microsoft band, which has all sorts of sensors on it. It can track heart rate, number of steps you take, calories you burn, the amount of sleep you have. This data is all being collected and moved to the cloud. Its now possible to track this information every day or week and it will continue to collect this data over time. Eventually the data can be part of a person’s medical record with the ability to share it with doctors and healthcare providers. This is the power of these systems of record.
People’s roles are changing in organisations because of the technology that’s available.
One way that Microsoft is working to propel and encourage that intersection in organisations of communication and collaboration, productivity and business processes is by providing tools like their new Delve. Delve is available as part of the Office 365 suite of products. Based on each individuals interests, it takes all of the work that is happening in an organisation and presents it as a newsfeed in a Pinterest style dashboard. Delve will get to know what you are interested in and then show you presentations or documents that are relevant to your interests. It is what is topical and relevant to you today. Everyone can transparently look at the information and discover what is happening in the organisation without hierarchies getting in the way. You can see information and documents that have been shared with you. You can create boards like you can on Pinterest based on groupings of information that are relevant to you.
With the help of these technologies it is possible to drive changes in real time, and add capabilities that are more likely to have success in the marketplace. The ability to drive changes in real time using data product outcomes is one of the most transformative things that is happening at Microsoft.
All industries are transforming because of the way that things are being digitised in the industry, insurance, retail, manufacturing, healthcare, agriculture, financial services. Each one of these industries is being transformed today because of what you are digitising inside your organisations. The core business processes are changing. Take the insurance industry for example, it is being changed by the ability to price things based on tracking habits of their agents. Everything in manufacturing is now being tracked in real time so that now you can build a SaaS service that goes with the things that you built.
The internet of things is indicative of the transformation that is pervasive across every industry. When we think about the internet of things, we are thinking about anything that you make, any service that you provide and connecting it to the cloud. There will be 26 billion internet connected devices by 2019 – and an explosion in the number of internet connected devices means an explosion of data, there will be 44ZB of data in the cloud.
The most interesting things start to happen once you have all this data. It is the transformation of the business models because of this data. Every company is going to become a software business where you will reason about this data and build applications, you’ll do advanced analytics and predictions, you’ll provide SaaS services that go along with your services and devices. That transformation is going to change the economics of your business because the gross margin associated with perhaps the labour inside of the service or the capital inside of the goods is going to now change to become something like software margin. This will change the economics of your business because some of the labour that was associated with the production of goods will now become software margin. That transformation is what this entire evolution of these systems of intelligence is going to really bring in.
Examples of how Microsoft products are empowering organisations
Accue Weather – The worlds biggest weather company. Their service is in more than 200 counties and they are more than 50 years old. They have built their SaaS on Azure and its consuming several different types of technologies such as Service Bus, Azure SQL, Machine Learning and Stream Analytics to name a few. Their consumer application has a rich interactive experience that allows me to see all the data I would expect in a personalised weather service, precipitation levels, wind speeds and forecast information. Their commercial application is a dashboard built on Azure. The application takes data and converts it into information that allows organisations to automate their business processes based on these predictions i.e. to help manage logistics, marketing campaigns, etc. Businesses can set alerts based on different locations and conditions to automatically set in place certain procedures such as staff to clear snow on the roads or to automate heating and cooling.
Marstons – is a UK beer and brewing company. Their beer brands are known worldwide. They use Microsoft Social Engagement, an application service built on Azure to actively listen to their customers, analyse the sentiment of those customers, and then directly engage with the customers. Information is presented on a dashboard. You can see the locational insight of where the conversations are happening in the world, you can see the types of conversations that are happening, the authors, the platforms. This is an example of a system of intelligence where you can take data, reason over it and bring insights to your organisation. It’s also about the products inside the brand. You can see the beer brands that people are talking about. You can also bring the insights gained from the data from the Social Engagement platform and then connect it to a system of engagement such as Dynamics CRM to create a marketing campaign. For example, beers that are not performing as well as others could generate a marketing campaign in which customers will receive a link via social media to a landing page with a voucher for a free beer. It’s the bringing together of these two systems that can really drive transformation in your business. You can see all the conversations happening around a particular brand and you can directly engage with the users via Twitter, or Facebook etc. Marstons use the Social Engagement platform to actively listen to their customers, analyse the conversations and then directly engage with them.
Rockwell Automation – An established company, they’ve been around for more than 100 years and they are worldwide. They make very advanced and complicated system controllers, drives and actuators. Rockwell Automation are based in several major verticals such as Automotive, Food & Beverage, Oil & Gas and Power Generation. They have an Azure powered portal which is connected to Azure IOT services. Their dashboard shows a collection of technologies that are being used by Rockwell Automation. It’s using Stream Analytics, Service Bus and Machine Learning to bring to the user information about their assets being used by their customers. This is an example of a SaaS service they have built. They are using this dashboard to monitor highly complex assets. They are measuring health and performance and customer satisfaction. For example they can see a rich wealth of information about their mines and wells which are located all over the country. Their assets have sensors that can provide real time alerts about the performance and the health of these assets. They can see, for example, when the part was last replaced and serviced. this has been a huge transformation for their business, where previously they were using hand written index cards left at the location of the asset to record this information. They weren’t getting the real time information about the performance of the asset. Sensors are used all over the asset to see information about all the different parts such as the pumps and drives. They undertake this monitoring on behalf of their customers. They can monitor barrel outputs and temperature. The system can send an alert when a fan is not working inside of the asset. Stream Analytics service allows a set of rules to be input about the asset. It outlines where the temperature should be and then shows where it is actually performing right now. The Machine Learning application shows where we are performing today and then it also shows past learning. It will use algorithm calculations to predict what will happen next. It can send a notification that suggests we might want to go and check that asset prior to the next scheduled service visit. This application is then also connected to CRM to schedule this service visit to avoid any possible outage or disruption. This has resulted in a huge transformation in their business.
These examples show you how every industry is now a Software industry where they are building systems of intelligence and you’ll be transforming their business processes because you’re digitising information that wasn’t digital before and adding value to that by adding machine learning modules that will do advanced analytics. It is the coming together of all of these technologies. From us being able to connect data available from the cloud and process them using Stream Analytics services, and Machine Learning into one comprehensive suite called the Azure IoT suite which will become a core infrastructure for you to be able to build these SaaS services like the examples above.
The culture of empowerment will drive transformation in our businesses. We now have the ability to have access to the data and the ability to gain insight from that data – the real power comes from us being able to take action from those insights. As business leaders, we must make sure that everyone in the organisation has the tools to gain these insights and then we must empower them to act on those insights.
This data culture is the journey that Microsoft is on. We are constantly learning how we are using data to make better decisions, how are we driving that data to every individual in the organisation so that they can gain those insights and take that action on their own. That level of transparency, that level of transformation is what will drive our journey together.
You can also read more about how Microsoft are driving digital transformation in businesses at: Transforming to a Digital Business.