What happens when more than half of the people and 99 percent of the things on the planet that are unconnected get connected? It is hard to really define what happens but whenever more “people and things” get connected a lot of value gets discovered which creates even more value. About $14.4 trillion worth…read on.
Much of today’s undiscovered value rests in poor utilization of human capital, operational inefficiencies because of a lack of structural capital, terrible customer experiences because of a lack of attention to relationship capital and low productivity because employees see no purpose without the necessary strategic capital. All of this undiscovered value is the result of two major constraints left over from the industrial era. These are:
- Organizational designs and economic systems based on disconnected silos of people, processes and data
- Accounting systems and subsequently all measures that primarily tracked and reported tangible assets while ignoring the identification, measurement and subsequent optimization of the intangible assets.
The above constraints are being overrun by the network effect of the Internet of Everything. For those who continue to operate in the constraints of 1 & 2 above the stakes are high because they are investing in the past and not the future.
There is A Lot of Value at Stake
In a CNet News article titled “What’s the Internet of Everything Worth”? Dan Farber writes: “In other words, the companies that invest in the “connections economy” and harness the network effects of the Internet of Everything — which is people, process, data and things — will reap more of the profits.”
“Beyond stating the obvious — companies leading the next wave of commercialized technology innovation will reap profits — Cisco calculated that the Internet of Everything will create $14.4 trillion of “value at stake,” defined as the potential bottom-line value derived from harnessing the Internet of Everything, over the next 10 years. That figure includes $613 billion in potential global corporate profits this year.
“This study shows us that success won’t be based on geography or company size but on who can adapt fastest,” said Rob Lloyd, Cisco president of development and sales.
Most of the value generation will come from improvements in utilization, employee productivity, operational efficiency, customer experience and innovation, Cisco said, with retail, manufacturing, finance and information services providing more upside than other industry sectors.
Productivity, efficiency, experience and innovation are all the results of intangible assets. Unless an organization can identify, measure and subsequent optimize the intangible assets then productivity, efficiency, improved experiences and innovation are not likely to be generated. Note that Cisco says “Most of the value generation will come from these things” and all of these things will become tangible to those who know how to transform the intangibles.