By Rajeev Suri
Far from drawing a halt to digitalization, COVID-19 is accelerating it, says RAJEEV SURI.
Entire city centers are now essentially empty as ever more professions adopt VPNs, video conferencing and collaboration software.
And this is not limited to white-collar professions. Physical industries, such as manufacturing or logistics, have adapted too, adhering to social distancing guidelines by automating more and more systems and processes, from logistics to estate management.
But as businesses go through the gears of digitalization, it becomes even more important for their leaders to look further down the road. To know what is coming around the next corner.
The answer is 5G. Already here for the telecoms industry, approaching rapidly for everyone else.
It is going to be a big shift.
Some leadership teams might think back to the step from 3G to 4G and remember that it was relatively easy. You got new phones for your staff, dongles, a few training modules, and you’re good to go.
The shift to 5G will be significantly more complex.
That is because 5G’s speed, reliability and flexibility will have a profound impact on value chains and processes, IT and personnel, across every sector. It will allow the collection, analysis and interpretation of data that could, if handled correctly, make every corner of a business more efficient. It provides the widespread untethered connectivity that will unlock all other digital transformation ingredients – IIoT, big data, cloud computing, AI, robotics, digital twins and more.
At stake, according to KPMG, is an estimated US$4.3 trillion of added value.
Naturally, the specific nature of those efficiencies – and the products and services necessary to exploit them – will differ across sectors. A mining company and a webscale will digitalize in very different ways and reap very different rewards.
But for leaders, things are different.
Through Nokia’s work with over 100 enterprises, across multiple sectors, it has become clear that there is key foundational knowledge for 5G digitalization – knowledge that is equally applicable whatever your sector.
Enterprises in which that knowledge exists, especially at a senior level, can act quickly, decisively and successfully when it comes to new technologies. Resulting in significantly less disruption, more business opportunities, and a head-start on the competition.
I believe that it is based on three key principles – a ABC of 5G for the C-suite.
1. A CEO cannot do this alone
5G will bring transformations across every function and level of a business. It will have implications for every link in a supply chain, every employee, every market. As such, it poses serious, in some cases even existential questions about what companies do and how they do it.
That means it is not something that leadership teams can just leave to CIOs or CTOs, however competent they are.
But you cannot leave it to the CEO either. No amount of vision or energy will allow them to ask all the questions that need asking, let alone answer them.
On the contrary. Entire C-suites will need to take responsibility for determining, leveraging and exploiting 5G’s potential.
A McKinsey study showed that the best adopters of a new technology have noticeably strong executive support for that technology.
With that in mind, leadership teams should take two actions.
First, all C-suite leaders should start discussing 5G now, if they have not already done so.
And second, leadership teams should consider creating new C-level roles, such as Chief Digital Officer, and giving that person the money and the authority they need to be effective. This person can guide company-wide discussions and make it as easy as possible for other senior leaders to act in concert.
2. Be aware of your options
Like all sectors, telecoms has been hit hard by the COVID-19 pandemic.
Nokia produced analysis of network use over the past few months and found that data traffic experienced a year’s worth of growth in a matter of weeks, and that certain types of traffic – from video conferencing and online gaming in particular – increased by up to 400% essentially overnight.
Telcos have done a great job at managing this surge.
But it has not been easy. And for some, the sudden importance of upgrading and maintaining 3G and 4G networks has meant that other priorities have been put on hold.
That is the bad news. But it is balanced out by two pieces of good news.
First, telcos are still doing all they can to make 5G widely available as soon as possible. They all recognize the scale of the 5G opportunity, and even those affected by COVID-19 anticipate large-scale rollouts in the next couple of years.
And second, when it comes to 5G, there is a DIY option that means you need not wait. At all.
Private networks.
This is a huge deal for enterprises, and broadly speaking there are three big advantages.
First of all, it is far more reliable than other forms of connectivity.
Think how often you have been stopped from doing your job by devices or sensors just dropping offline. Go private and that is no longer a problem.
Second, it is more secure. With data gathered, aggregated and analyzed on-site – and an incredible record of zero security or data breaches in the history of the technology.
And third, private networks can be tailored for the specific needs of each business.
For example, while a factory might want more automation, which relies on ultra-low latencies, a mine might be more interested in predictive maintenance, which is more about data processing.
Some of this is already available in private 4G networks. But 5G will take things to the next level, with a greater focus on software as well as hardware, in the form of more analytics, AI and machine learning.
This means a quantum leap in your ability to collect, aggregate, crunch and interpret data – and opens the door to vastly increased efficiency.
3. See where the value lies
You have to speculate to accumulate, as the old saying goes. There is some truth in that for 5G.
But given the potential gains – and I refer back to that stunning US$4.3 trillion figure – it does not have to break the bank.
There are many ways to mitigate, minimize or offset the costs of adopting 5G.
The most important is the rationale behind its adoption.
C-suites have two choices.
On the one hand, they can decide on a tactical approach in which 5G test projects are decided on an ad hoc basis.
This can prove a limited success. Production lines could well become slightly more efficient, customers slightly more satisfied. But the gains do not match the investment or, perhaps more significantly, the promise of the underlying technology.
The investment ends not with a bang, but with a whimper.
On the other hand is the strategic approach.
Like all Industry 4.0 technologies, 5G works best when you have specific goals and achievements in mind and focus on those, rather than the technology itself.
Deliberate, methodical digital transformation initiatives that are intelligently architected and strategically road mapped will deliver far greater results. And critically, the strategic framework is in place to scale them up across the business.
So: a CEO cannot do it alone, be aware of your options, and see where the value lies. A, B, C.
I am delighted to say that I see many leaders getting this right.
They are enthusiastic without being egocentric, ambitious without being unrealistic. Their 5G futures are rich with promise.
But too many leaders just do not know where to start. The opportunities are so big, and the technology so new.
Nokia can help, whatever the stage of your 5G journey.
And it really will be a journey. Complex, requiring serious navigation.
But the destination is worth it.
Growth, efficiency, profit.
And the sooner C-suites set off, the sooner those things will materialize.
Suri is the CEO of Nokia.
