My work, your work, actually all work – everyone’s work, is changing dramatically and rapidly powered by a magnificent new paradigm shift underpinned by digitization and virtualization.
But, what does the digitization of work and the virtualization of work really mean? Will it harm me? Will it help me?
This paradigm shift is composed of several parts, all progressing in perfect harmony, and in utter chaos, simultaneously. It is a serious disruption to the way work is done. We are shifting from manual labour to automated processes. We no longer have one employer for life, or even any formal employer for that matter, as we are becoming a subcontractor society. A society built on ad hoc, just-in-time pieces that make-up and break-up upon demand. It is an unstoppable train of change roaring along the virtual track with such fierce force and lightning speed that it cannot be ignored.
In the past, companies owned and operated their own systems. Businesses were valued based upon their assets and their people. For example, an airline owned airplanes, sold its tickets, managed its loyalty program, ran its IT and data centres, operated gates, loaded luggage, fueled and maintained their equipment, which were piloted and supported with highly trained and qualified crew. And, much, much more… an airline was a complex business. The assets and the people were all an integral part of the company. They were the business.
It is time to rethink business. To consider new ideas, new approaches to how a business is composed, built, and operated. In the next generation airline, every aspect will be outsourced and come together under a shared banner and brand. The brand is the asset. The cash flow is the asset. The customer count is the asset. Valuation is no longer tied to material hard assets like aircraft or staff head count. The airline’s composition will change as will its revenue and profit. Yes, airlines will still be transporting passengers or moving freight, but using a highly virtualized model of business that bring the components together from a variety of service providers. Instead of owning assets and staffing the business to perform the work, the company will contract services to provide the requisite resources, performance, and complete the tasks. Do not expect that the next generation airline will own its own airplanes. A virtualized airline will contract aircraft with crews provided by third-party operators, the maintenance will be provided by a different company, the sales role may not even use any call centre agents at all, and just sell online and / or by third-party vendors electronically. Check-in may be automated terminals supported by robotic virtual presence and analytical, computation systems like IBM’s Watson driven hotel concierge named, “Connie“. Literally every aspect of the airline will be provided as a service – as an Airline as a Service or AaaS.
The XaaS transformation is significant and is changing the way that we do business in every industry. We can only achieve this transformation if we digitize every aspect of the business. We will rely heavily upon automation, distributed intelligence, and cognitive computing to perform tasks that were once labour based work. We are heading towards a world of “self-service”. Business will be driven by OpEX and not CapEX.
We are seeing many aspects of this vision already. In fact, airlines have embraced many of these business component outsources for many years, but, passengers never knew about it. Once every aspect of the business is digitized, then the XaaS will complete the transformation. The next generation airline may operate globally with just a few hundred actual staff. Most of this staff will simply administrate the contracts and project manage the vendors. The staff will be made up of lawyers for contracts, accountants for financial administration, and project managers for logistical control. This virtualized work will look, feel, act, and be one unified entity to the consumer, but under the covers, it will be a very differently constructed and structured business than we have seen for the past eight decades. It will be a composition of tightly coupled services.
You are not sure that I am right? Is this concept wishful thinking or idle daydreaming? Well consider these facts. “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.” (1.)
Business is changing dramatically and right before our eyes. Work will change. Labour will change. Unions will change. Workers like you and me will therefore need to change too. We will need to be retooled with new skills and capabilities to accommodate the demands for the next generation work at these next generation businesses. We need to become virtualized ourself with new employment arrangements and become highly digitally literate and we need to make these changes fast or risk being made obsolete. Its a brave new world, are you ready? The risk is in doing nothing, it is time to adapt or become redundant.
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About the Author:
Michael Martin has more than 35 years of experience in broadband networks, optical fibre, wireless and digital communications technologies. He is a Senior Executive Consultant with IBM Canada’s GTS Network Services Group. Over the past 11 years with IBM, he has worked in the GBS Global Center of Competency for Energy and Utilities and the GTS Global Center of Excellence for Energy and Utilities. He was previously a founding partner and President of MICAN Communications and before that was President of Comlink Systems Limited and Ensat Broadcast Services, Inc., both divisions of Cygnal Technologies Corporation (CYN:TSX). Martin currently serves on the Board of Directors for TeraGo Inc (TGO:TSX) and previously served on the Board of Directors for Avante Logixx Inc. (XX:TSX.V). He served on the Board of Governors of the University of Ontario Institute of Technology (UOIT) and on the Board of Advisers of four different Colleges in Ontario as well as for 16 years on the Board of the Society of Motion Picture and Television Engineers (SMPTE), Toronto Section. He holds three Masters level degrees, in business (MBA), communication (MA), and education (MEd). As well, he has diplomas and certifications in business, computer programming, internetworking, project management, media, photography, and communication technology.
1.) Social Techcrunch.com. (2016). Retrieved on March 23, 2016 from, https://www.facebook.com/Booyah/posts/806198119456286