Home Latin America 2007 The digital networked economy

The digital networked economy

by david.nunes
Luis AlvarezIssue:Latin America 2007
Article no.:6
Topic:The digital networked economy
Author:Luis Alvarez
Title:President BT EMEA and responsible for BTís Global Telecommunications Market
PDF size:248KB

About author

Luis Alvarez is the President of BT EMEA; he is also responsible for BTís Global Telecommunications Market (GTM) internationally and, as part of his role in Spain, leads BTís operations in Latin America as well. Mr Alvarez joined BT as its multimedia and Internet Director. He rose to Country Manager for BTís Spanish and Portuguese operations and subsequently assumed responsibility for BTís Latin American operations as well. Mr Alvarez was Director of Electronic Banking at Banesto until he joined BT. He had previously held several IT management positions at Banco de Santander. Mr Alvarez started his professional career at Ericsson and later moved to IBM. He is a member of various business associations in Spain and is frequently called upon to speak at ICT sector conferences and forums internationally. Mr Alvarez holds a Telecommunications Engineering degree from UPM, Madrid.

Article abstract

Information and communication technologies are more than just management tools, they add value to the services companies provide to clients. This has changed the way of doing business, making way for a digital networked economy where success results from creativity and the capacity to absorb innovation. Convergence at all levels – network, application, services and devices – is the catalyst for this new scenario. Security is the biggest concern since an ever-larger share of the worldís economy depends upon digital network traffic.

Full Article

In recent years, one of the key factors for a companyís success has been the efficient use of technology to generate new business. Information and communication technologies are now permanently incorporated into corporate operations, not only as a management tool but also as a basic resource to add value to the companyís activities, particularly those related to the services it provides to clients. This development logic, which the most successful companies have fully grasped and applied, has radically changed the way of doing business, making way for the digital networked economy. The capacity for creating and absorbing innovation has grown at an ever-increasing pace. While the fixed telephone took decades to become a standard feature of the great majority of homes and companies, the mobile phone has been incorporated into the daily life of society in just a few years. The Internet has also spread very rapidly, to the point of becoming a basic tool in the corporate world. Without it, companies would come to a stop. Convergence is already an incontestable fact, so much so that we can no longer exactly define the lines between fixed and mobile communication, between an information technology company and a telecommunications company or between a television image and an Internet image. With convergence, a single network carries all the different types of communication services – voice, data, image, fixed telephone and mobile telephone. The convergence of communications and information technology created a single space for all these different sectors; the objectives are simple – have fewer problems and lower costs. Nowadays, we must memorize a great number of pin numbers and codes and learn to deal with many different types of equipment – a situation that is far from ideal. The user wants simple things, which work intuitively, and it is this that will increasingly make the difference. So far, technology has very often dictated our personal or corporate behaviour, but todayís changes will let us tell the technology how it should behave so that we can achieve our aims. For a long time technology tied our hands, but now the field is open for us to innovate and combine technologies and applications. Never, at any point in the past, has the ability to communicate and exchange information been so rich or widespread. In todayís converged world, the barriers that have kept businesses and industries apart are evaporating. Convergence is changing the way we do business, how we work as individuals; it is also accelerating social and political change. Customers and citizens are more sophisticated and demanding than in the past. They expect to interact with organisations when and how they choose and government organisations are expected to match commercial levels of choice and convenience – the rise of online banking and electronic tax return filing are just two examples. To manage convergence effectively is a crucial objective, the success of which depends on listening to and understanding the client. One can never repeat too much that knowing the clientís precise needs is indispensable for developing effective solutions. When developing converged processes, services and applications, the demand determines what the supply will have to be. Global markets, companies and networks The í90s was the decade of computing power and miniaturisation – process faster, store more, make it cheaper and make it smaller. We are now in a new age – the age of the digital networked economy. Today, harnessing the ability to compute to the ability to connect creates opportunities and new ways of working – long talked about but, until now, impossible. In the past ten years, the dramatic increases in connectivity and applications have created IT ëspaghettií – multiple legacy systems and networks, all requiring helpdesks and support staff, maintained by multiple vendors. Because so many applications are now mission-critical, many organisations find that their IT is constraining, not enhancing, performance. Recently, Gartner estimated that every hour of application downtime costs a large organisation at least US$100,000, so they are spending a disproportionate share of their budgets on service and support for existing infrastructure. So what is there to do when organisational agility is a requirement and not an option? Companies need to consolidate their networks into a single, integrated IP infrastructure capable of supporting their full range of business applications and, at the same time, focus on cost reduction. This new business environment creates a series of challenges for companies. In their growing dependence on information and telecommunications technologies, they have to ensure the security of their networks, while handing over content and applications to an increasingly dispersed work force, and all this while making cost economies. In a survey carried out recently by BT, 80 per cent of Chief Information Officers spoken to hoped to reduce the costs of their IT and communications infrastructure. This might seem paradoxical, but is the general rule in situations where there is a continuous growth in demand for technological resources. Network security is a critical issue. In the digital networked economy, the results of inadequate corporate security can be devastating – both for the individual and for the organisationís brand and reputation. Furthermore, we should consider new legislation, such as Sarbanes Oxley and Basel II, to name but a few, which require companies to provide strict control, reliability and availability of information, and their senior executives held criminally liable for their management of corporate security. The security challenge becomes greater as more organisations rely on converged IP networks and embrace remote working and wireless networking. This growing security challenge is inevitable given the trend towards more flexible working hours and workplaces, leading to a more dispersed work force. The internationalisation of the economy makes it necessary to internationalise corporate structures by establishing offices in different locations and countries, or by off shoring services to anyplace in the world that can provide high-quality services at a lower price. Work is no longer a place you go to; virtual organisation is very much a reality and time zones are no longer a barrier. Collaboration applications, web conferences, e-learning and shared workspaces unite teams in widely dispersed locations, and extranets extend the organisation beyond its physical walls. The total integration of voice, data and applications is set to take convergence to the next level. This extended convergence will affect everyone creating new ways to do things. It will change the way people work by allowing real-time collaboration through any device, and bring applications to the point of use no matter where the workers are. Companies today have a great many challenges to overcome. The new digital networked economy is a challenge that is here to stay, and there is no going back. Competitive edge comes from vision, understanding the technology trends and from companies being prepared to make early commitments for the future. Businesses that understand the need for flexibility, security, mobility and the end-to-end optimisation of applications are the businesses that will be at the leading edge of their sectors. Companies throughout the world are facing opportunities for growth. By taking advantage of convergence and the new networked systems, they can streamline their operations and make them more productive, simplifying their management, cutting costs and offering all the users – whether they are employees, partners, suppliers or clients – the benefits generated by computing on the network. In this respect, the panorama in Latin America is no different from any other part of the world, from any other member of the global economy. The challenges and opportunities of the new digital networked economy are to be found here, both within the multinational organisations established in the region and within the local companies that are now going international or providing offshore services. The companies that are operating in the region also need to innovate, to grow, to benefit from global business opportunities and guarantee their futures. For them, too, it is essential to reduce costs and manage their technology infrastructure in order to deal effectively with all the complexities involved in doing business today. Leaders in Latin America are aware that information and communication technologies are great business catalysts – that ICTs can generate significant demand for the advanced services that will sustain their companiesí future development.

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