Building a Smarter Planet

Editor's Notes

• #2: Building a smarter planet is IBM's point of view on how interconnected technologies are changing the way the world literally works . Smarter Planet is IBM’s vision to bring a new level of smart to how the world works—how every person, business, organization, government, natural system, and man-made system interacts. Each interaction represents a chance to do something better, more efficiently, more productively. But more than that, as the systems of the planet become smarter; we have a chance to open up meaningful new possibilities for progress.
• #3: Yes, the world continues to get ”smaller." And yes, it continues to get “flatter” and more interconnected through forces such as international trade, the Internet and the arrival of globalisation. (Transition to the next slide)
• #4: The reality of living in a globally integrated world is upon us. But the meltdown of our financial markets has jolted us awake to the realities and dangers of highly complex global systems. In truth, the first decade of the 21st century has been a series of wake-up calls, with a single subject: the reality of global integration: Global integration is changing the corporate model and the nature of work itself. But we now see that the movement of information, work and capital across developed and developing nations—as profound as those are—constitute just one aspect of global integration. These collective realisations have reminded us that we are all now connected – economically, technically and socially. But we’re also learning that just being connected is not sufficient
• #5: The processes of business, government and life—which are ultimately the source of those "surprising" events, moments of widespread shock and global crisis—are not smart enough to be sustainable. We must make them better. The need for progress is clear. CONSIDER THIS FACT: £2.5 billion Wasted in energy bills by UK companies due to inefficiencies such as draughty windows and leaving lights and computers switched on Source: Carbon Trust, www. Energysavingtrust.org
• #6: The technology and know-how to make these processes and systems better is here. We can make them better. The opportunity for progress is clear. CONSIDER THIS FACT: 1/3 of the food UK consumers buy they throw away Source: www.lovefoodhatewaste.com
• #7: The need for progress is clear Consider the fact: £7-8 billion Estimated annual cost of road congestion to the UK economy year Source: Department for Transport
• #8: The opportunity for progress is clear Consider this fact: 8 months Reduction in life span for a UK citizen due to poor air quality Source: BBC, http://news.bbc.co.uk/1/hi/health/7839336.stm
• #9: The need for progress is clear Consider the fact: 76% Apples consumed in the UK that come from overseas traveling on average 3700 miles to reach us Source: The Independent 31st May 2007
• #10: In every part of our planet—from the board room to the cabinet room, from the university campus to the kitchen table—people are thinking hard about what is happening, and what to do about it. People, companies, institutions, cities… are ready, eager and anxious for real change. Which means that leaders of businesses and institutions everywhere confront a unique opportunity to transform the way the world works. In fact, CEOs and other leaders know that their companies are not prepared for what the future has in store. Last year (2008), IBM reported the results of our bi-annual survey of CEOs: More than 1,100 of them, from every region and industry around the world. We found that 8 in 10 expect significant changes to their industries, their economics and their basic business models in the near term. And yet they told us that their organizations simply aren't ready to carry out that change. In fact, in the two years since our last survey, this gap—between the need for and the ability to manage change—has tripled.
• #11: So, yes, the world continues to get flatter. And yes, it continues to get smaller and more interconnected. But something is happening that holds even greater potential. In a word, our planet is becoming smarter. This isn't just a metaphor. And I'm not talking about the Knowledge Economy—or even the fact that hundreds of millions of people from developing nations are gaining the education and skills to enter the global workforce. I mean the infusion of intelligence into the way the world literally works—the systems and processes that enable physical goods to be developed, manufactured, bought and sold… services to be delivered… everything from people and money to oil, water and electrons to move… and billions of people to work and live.
• #12: There’s a mandate for positive change among people, businesses, and institutions. And a mandate for change is a mandate for smart.
• #13: Something meaningful is happening—the infusion of intelligence into the way the world works.
• #14: What all of this means is that the digital and physical infrastructures of the world are converging. Computational power is being put into things we wouldn't recognize as computers. Indeed, almost anything—any person, any object, any process or any service, for any organization, large or small—can become digitally aware and networked. With so much technology and networking abundantly available at such low cost: What wouldn't you put smart technology into? What service wouldn't you provide a customer, citizen, student or patient? What wouldn't you connect? What information wouldn't you mine for insight? A smarter planet is possible because - Our world is becoming instrumented Our world is becoming interconnected . Virtually all things, processes, and ways of working are becoming intelligent . Let me explain each to you in a bit more detail… (NEXT SLIDE)
• #15: First, our world is becoming instrumented: The transistor, invented 60 years ago, is the basic building block of the digital age. Now, consider a world in which there are a billion transistors per human, each one costing one ten-millionth of a cent. We'll have that by 2010. There will likely be 4 billion mobile phone subscribers by the end of this year… and 30 billion Radio Frequency Identification tags produced globally within two years. Sensors are being embedded across entire ecosystems—supply chains, healthcare networks, cities… even natural systems like rivers.
• #16: Second, our world is becoming interconnected: Very soon there will be 2 billion people on the Internet. But that's just the beginning. In an instrumented world, systems and objects can now "speak" to one another, too. Think about the prospect of a trillion connected and instrumented things—cars, appliances, cameras, roadways, pipelines… even pharmaceuticals and livestock. And then think about the amount of information produced by the interaction of all those things. It will be unprecedented.
• #17: Virtually all things, processes and ways of working are becoming intelligent. New computing models can handle the proliferation of end-user devices, sensors and actuators and connect them with powerful back-end systems. How powerful? This year IBM's Roadrunner supercomputer broke the "petaflop" barrier—one thousand trillion calculations per second. Roadrunner is made from the same chips that go into consumer game consoles and the no-cost operating system Linux. Combined with advanced analytics, such supercomputers—and new computing models like "clouds"—can turn mountains of data into intelligence. And that intelligence can be translated into action, making our systems, processes and infrastructures more efficient, more productive and responsive—in a word, smarter .
• #18: As the world becomes instrumented, interconnected and intelligent, we have the opportunity to think and act in new ways—economically, socially and technically.
• #19: The combination of instrumented, interconnected and intelligent holds enormous promise for progress.
• #20: Every company, organization, city, nation, and natural systems like rivers and weather are becoming instrumented, interconnected and intelligent. This is leading to new savings and efficiency—and perhaps more importantly—new possibilities for progress.
• #21: Building a smarter planet is about thinking and acting in new ways to make our systems more efficient, productive and responsive. Smarter systems can make a material difference to the health of the global economy, the health of our planet, and the health and prosperity of global society.
• #22: Volume of Digital Data: The data explosion, of course, but also shifts in the nature of data. Once virtually all the information available to be "processed" was authored by someone. Now, that kind of data is being overwhelmed by machine-generated data – spewing out of sensors, RFID, meters, microphones, surveillance systems, GPS systems and all manner of animate and inanimate objects. By 2010, the amount of digital information will grow to 988 Exabytes (equivalent to a stack of books from the sun to Pluto and back). Every day, 15 Petabytes of new information are being generated. This is 8 times more than the information in all U.S. libraries. The number of emails sent every day is estimated to be over 200 billion. By 2010, the codified information base of the world is expected to double every 11 hours. Variety of Information (diversity and heterogeneity): With this expansion of the sources of information comes large variance in the complexion of the available data -- very noisy, lots of errors -- and no time to cleanse it in a world of real-time decision making. 80% of new data growth is unstructured content, generated largely by email, with increasing contribution by documents, images, and video and audio. 38% of email archiving decisions receive input from a C-level executive and 23% from a legal/compliance professional. The average car will have 100 million lines of code by 2010; the Airbus A380 alone contains over 1 billion lines of code. Velocity of Decision Making: This is about optimizing the speed of insight generated as well as confidence that the decisions and actions taken will yield the best outcomes based on more proactive, planning around the management and use of information sources, and creating far more advanced predictive capabilities: Every week, the average information worker spends 14.5 hours reading & answering e-mail, 13.3 hours creating documents, 9.6 hours searching for information, 9.5 hours analyzing information. Not finding the right information costs an additional $5.3 million per year. 42% of managers say they inadvertently use the wrong information at least once per week. Finally, shifts in the nature of what we can analyze: Traditionally, that's been the analysis of a standalone business process or sub-processes, or activities like airline crew scheduling. More and more, enterprises and governments -- as well as biologists, life scientists and environmentalists—will have to take a broader, systems-based approach to what they examine and attempt to optimize. So crew scheduling, combined with weather patterns, combined with fuel prices, combined with marketing promotions and the status of labor negotiations, as one example; or the ability to tap into the collective intelligence of people across the value chain through social media and associated Web 2.0-3/0 technologies. Business intelligence is rated as the top IT spending category with 80% of C-level execs respondents rating it as high or medium priority Stream Computing and Event Processing capabilities are enabling the consumption and analysis of extreme volumes, speeds, and complexity of event scenarios real time (events generated from water streams, applications, news feeds, services; with technology able to analyze 5 million events per second).
• #23: A smarter planet gives organizations the vision to see without being there. Irish Life http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=CR&subtype=NA&htmlfid=0GLOS-78QLRV&appname=crmd The student loans company From UK Press office University of Edinburgh From UK Press office Swansea University Submitted by client Exec; MARK DUNHAM
• #24: Businesses have been at the center of the converging pressure to go green… The public is demanding greener practices and is putting pressure on the government to introduce tougher regulations. The customers are resisting business attempts to pass on energy-induced price hikes and are demanding greener products and policies. The environment is resonating as a critical issue affecting shareholder value across geographies. And governments are creating tough new regulatory standards to control energy use and carbon emissions, or at least threatening to do so if businesses do not act first. Private enterprises, public organizations, communities, regions and entire industries are working to develop strategies and solutions for becoming more energy and environmentally responsible that also generates new revenue opportunities and lower costs and risk. Intelligent energy and carbon management improvements are about adding intelligence to passive or “dumb” systems to create “smart” systems that are dramatically more efficient and reliable and therefore enabled to save energy and resources. Intelligent utility networks, transportation systems, and oilfields all become more efficient. These are real solutions, available today, that harness and leverage the power of built-in intelligence to: • improve energy management • make our energy have less impact to the environment and be more reliable • reduce traffic congestion and associated greenhouse gas emissions • reduce energy demand Energy demand is doubling IT is unable to keep pace - 99% of installed base of volume servers is inefficient today On average only 3 out of 100 units are used for productive computing Only 28% respondents to IBM benchmarking tool report they know the energy consumption of IT e-waste cannot be ignored – 1 billion computers potential scrap by 2010 The average power consumption per server quadrupled from 2001 to 2006, while the average number of servers doubled and is expected to grow another 50% by 2010. This rapid growth has resulted in data centers typically consuming up to 100 times more energy per square foot than a typical office building.*” The cost to power and cool servers in the data center could increase 54% by 2010, driven by the exponential growth in numbers of transactions, numbers of devices and volumes of work passing through data centers. The good news is that optimization of the delivery of power/cooling to the data center and virtualization/consolidation can help reduce the total data center footprint and associated energy use while improving the efficiency of the energy that is used. The estimated $2.6M dollars a year that a typical 25,000 square foot data center spends on energy could be easily cut in half. A large insurance company is projecting $16M in savings over the next 3 years. According to the U.S. Department of Energy, 67% of all electrical energy is lost due to inefficiencies in how the flow of power is managed. By contrast, intelligent utility networks that enable continuous automated monitoring of a utility’s assets, operations and customer electricity usage, down to the individual networked washing machine or microwave – are now starting to be built around the world. These intelligent grids can reduce energy costs by up to 25% per household. One company said “We estimate we can save as much as 80 to 90 percent on reinforcement of the existing grid by making use of the hidden grid capacity. It’s an entirely new dimension that’s been added to our planning process, and it’s transforming the way we do business.” They went on to say, “It turns out that the real key isn’t the fact that we’ve got visibility into the grid, though that was our initial goal. It’s that we now have information available on grid performance that we didn’t have before. We can do a lot with that information.” Less than 30 percent of available oil reserves are currently extracted from the world’s existing wells. Given the enormous price tag of drilling a new well, even a modest increase in the productivity of our current wells would translate into significant profits for producers and lower prices for consumers. But that’s an information-intensive task and a single oil or gas field can generate a terabyte of data a day. Using intelligent oil field technologies, oilfield workers can optimize both pump performance and well productivity by analyzing data such as rates, cuts, pressures, acoustics and temperature; they can use historical trends to predict when a well will “water out”; and finally, they can manage more wells remotely from a central location.
• #25: A smarter planet empowers organizations to do more, using less. Natural England https://www-304.ibm.com/jct03004c/easyaccess/fileserve?contentid=139210 Dundee City Council https://www-304.ibm.com/jct03004c/easyaccess/fileserve?contentid=154597 Manchester Co-operative Group http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=CR&subtype=NA&htmlfid=0GLOS-7DBNQZ&appname=crmd Centrinet http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=CR&subtype=NA&htmlfid=0GLOS-7MGPV2&appname=crmd
• #26: The assumptions and methods that have proven successful in business up to this point are no longer sufficient for this new world. Those who dig their heels in and hold fast to the same business model they have used for a decade will find themselves unable to cope with the accelerating barrage of change mandates coming at them from all directions. More responsive competitors will spring up and eat away at legacy heavyweights’ market share bit by bit. In this era of change, size cannot protect you, history cannot protect you, and even great ideas cannot protect you if you lack the ability to quickly and effectively act upon them. The only way to sustainably build business advantage is to cultivate the ability to foresee and respond to marketplace shifts ahead of competitors trying to reach the same goals. This is the hallmark of what IBM calls Smart Work.   When examining the enterprise of the past, the following undesirable traits stand out: Inflexible, outdated business model – A reactive versus a proactive approach to change in the marketplace. Poor collaboration and planning across business units and geographies, with many duplicate initiatives. Lack of a holistic view of customer-level information due to disparate and disconnected sources of information. The inability to staff and manage workflow to where it can be done best. Disconnected customers – Brittle, point to point connections; one-way broadcasting at customers; manual monitoring of resources. Collaboration and co-creation with customers, employees and partners, while highly desired, is limited or even non-existent. Rigid business processes – Manual processes; poor visibility; difficult, expensive, and risky to change. Business processes are not flexible and have not been designed to support a change-environment. Poorly Aligned, Siloed Applications – Exacerbating these issues is the fact that the enterprise of the past had siloed, redundant applications and systems and little to no success in aligning business and IT. This led to a lack of business agility.   Looking forward, organizations supported by agile business models and dynamic business processes are uniquely positioned to win. Reaching the new connected customers takes personalization, collaboration, and co-creation. This includes providing a rich user experience to customers, suppliers, employees and partners. In today’s fluctuating economy, the ability to adapt to changing economic conditions is a critical factor to mitigate risk and drive profit. Is your business model dynamic and optimized to Work Smarter , Empower People , and Drive Profit ? This strategy, implemented across the business, will revolutionize not just the way applications, technologies and assets work with each other but the way people interact with processes and information. Smart Work emphasizes Business and IT alignment in taking a smarter, new and different approach via four imperatives: Agile Business Model : Developing a dynamic business model is the only way to not just survive but thrive in this business climate. Sustainable advantage and differentiation comes to those with a strategic plan for developing capabilities via internal competency, partnering or acquisition. Taking a pragmatic approach to business model innovation is essential. This is done by systematically defining new paradigms that will implicitly support your dynamic need for change as well as by watching other industries for concepts and models that could transform your market. Connected Customers : Businesses benefit from the connectedness, collaboration and co-creation with industry ecosystems including employees, partners, and customers and the “internet of things”. An estimated 2 billion people will be on the web in 2011 along with a trillion connected objects – cars, appliances, cameras, roadways, pipelines. The new customer is increasingly connected, mobile, and informed. Their perception of value includes not only high quality products but unique personalized experiences - for them the experience is the brand. Dynamic Business Processes : Business processes that are flexible, responsive, streamlined, and continuously optimized that access trusted information and leverage re-usable service-based components. Business users can be empowered to make process changes, directly deploy new capabilities, and rapidly implement new business models to capitalize on new opportunities and outmaneuver competitors Smart SOA : IBM’s Smart SOA™ approach frees you from siloed, inefficient applications by turning applications into reusable services – giving you greater agility across your business which is proven to increase profit & lower costs. Leading companies have leveraged SOA to transform business processes and operations while reducing their environmental impact.
• #27: A smarter planet puts organizations in position to be first and be right. Cheshire County Council https://www-304.ibm.com/jct03004c/easyaccess/fileserve?contentid=74742 British Airways http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?infotype=CR&subtype=NA&htmlfid=0GLOS-78QLRV&appname=crmd Southwest One mms://ms.groovygecko.net/groovyg/clients/gbtv/egov/200804/IBMCSAlt_hb.wmv
• #28: A whole host of rapidly accelerating changes are unfolding: mergers of hundred year old companies, creation of new industries and the demise of others, the emergence of new economies, the opening of long isolated markets, the imposition of new government regulations and the relaxation of others . . . and so on. Organizations are driven to change and become more dynamic by these identified evolving forces: Rising Cost Pressures – Business and IT assets are underutilized and difficult to manage; operational cost and complexity are reaching unsustainable and uncompetitive levels. Higher Service Expectations – Increasingly savvy customers demand continuous service availability and high-quality experience across an expanding range of assets, applications, and services New Risks and Threats – Unprecedented security, resiliency, and compliance challenges are created by the accelerating pace of business change, traditional infrastructure boundaries blurring and the proliferation of operating, IT, and “smart” assets that comprise the underlying infrastructure. Emerging Technologies – Smarter and more adaptive technologies, such as cloud computing, virtualization, and Web 2.0, must be harnessed effectively to drive business innovation, efficiency, and responsiveness.   The operating models and assumptions of the past are inadequate to address the opportunities, challenges, and risks posed by our smarter planet. As customer and competitor pressures squeeze margins, organizations must wring more efficiency out of their assets than ever before. Our instrumented, interconnected world demands a dynamic, responsive infrastructure that can embrace and leverage rapid change. Size, stability, and strong historical performance are insufficient attributes – and may even be inhibitors – for organizations that must now cultivate an unprecedented level of responsiveness. The attribute that will distinguish successful organizations in a smarter planet is the willingness and ability to become highly dynamic and embrace change.
• #29: A smarter planet enables organizations to solve the problem before the problem. Scotmid From UK Press office RAF From UK Press office http://www-935.ibm.com/services/uk/igs/pdf/ucmp_raf_case_study_final.pdf British Banks WW presentation – speak with Bill Sulivan for further detail
• #30: (PAUSE…engage the client with a question to start a conversation before moving forward) What smart things are happening in your industry today? Where are the greatest opportunities for progress?
• #31: Today’s economic environment will bring disruption and transformation around the world. Yet, this period of discontinuity is, for those with courage and vision, a period of opportunity. To make these changes possible, leaders will need to do something big. And we won’t have this opportunity forever.
• #32: To realise the potential of a smarter planet, organisations need to do three things. Focus on value Exploit the opportunities Act with speed – we wont have this chance forever
• #33: We won't have this opportunity forever. One thing is clear: The world will continue to become smaller, flatter and smarter. We are moving into the age of the globally integrated and intelligent economy, society and planet. The question is, what will we do with it?