- Published in: "Cinco Días" (spanish economic newspaper)
- Authors: Pedro Tellería, Phil O´Donovan
- Date: November 30, 1993
Several technologies are currently being developed that will increase the efficiency of people and organizations at work. As a result, it is foreseeable that existing ways of doing things will evolve, giving rise to new business opportunities. This evolution will be based on technologies such as variable bandwidth, wireless communications, intelligent networks, and user-oriented product design.
Products like the fax machine, video, and the stereo system are the result of countless technological developments. Our ability to forecast what and when such innovations will occur is good, though predictions rarely reach beyond seven years. However, what we cannot predict so accurately are qualitative leaps — breakthroughs that require major scientific discoveries. Examples from the past include the transistor and the laser. In the future, we may speak of brain implants for electronic communications or household robot animals.
Even without radical scientific discoveries, by the year 2000 there will be a wide range of new telecommunications technologies. These will not only improve the efficiency of existing businesses but will also enable the creation of entirely new ones. The challenge will be to acquire and exploit these technologies for the benefit of companies (higher revenues and profits), their employees (new jobs, attractive compensation, better quality of working life), and other stakeholders (suppliers, subcontractors, public administrations, user associations, etc.).
During the 1980s, most companies used telecommunications primarily to improve their internal operations. In the next decade, these same companies will use these technologies to connect their internal systems with those of clients and suppliers. It is worth remembering that during the first Industrial Revolution, it took some time for people to realize that machines could do more than replace workers. That realization led to a complete rethinking of how business was done and even to the creation of entirely new industries.
In the future, products will not only be better and easier to use but will also be able to communicate and integrate with other devices — something not yet possible today. For example, pocket organizers will be able to connect directly to the office, allowing meetings to be scheduled more conveniently. However, unless access restrictions are established, the result could be disastrous, since some problems in the year 2000 will not differ much from those of today — and may even worsen.
Just as we are now flooded with junk mail, tomorrow we may be equally tired of unsolicited “meeting requests” or intrusive promotional sessions. Therefore, it will be essential to develop products that allow users to enjoy the benefits of new technologies without losing control. People want to be able to receive calls from anyone, at any time or place, as long as they can decide which calls to accept.
After-sales service will become a significant part of the overall product offering. In the case of mobile telephony, service will be an integral component of the product itself. Thus, companies will be able to differentiate their products based on the quality of service — delivery time, maintenance, and repair — reinforcing the concept of a comprehensive service.
Four telecommunications technologies — all currently evolving — will introduce significant changes in the products offered so far in this field. These technologies are:
- Variable bandwidth on demand
- Wireless communications
- Intelligent network management
- User-oriented product design
Variable Bandwidth
By the year 2000, companies will be able to adjust their communication networks to specific needs at any given time, without being limited by network operators or distance. With variable-bandwidth telecommunications technology and virtual reality software, companies will be able to serve clients in Paris from Madrid or even downtown Berlin. In this process, telephone operators will become mere providers of bandwidth capacity — unless they learn to exploit network intelligence for their customers’ benefit.
The current availability of 64 kilobit-per-second (kbit/s) cables means that users no longer need to be restricted by operators and their networks. For example, operators have long used voice compression to increase transmission bandwidth capacity while maintaining standard voice quality (3 kHz of bandwidth). Over a 64 kbit/s channel, using similar techniques, it is possible to transmit hi-fi quality voice (7 kHz bandwidth).
By the year 2000, user communities — such as manufacturers or radio broadcasters — will have access to bandwidths of millions of bits per second. They will use both the public switched network and leased lines to transmit news and advertisements. Each user or group will be able to utilize communication networks and pay only for the amount of bandwidth actually used.
The availability of variable bandwidth will reduce product development time for companies and allow them to hold client demonstrations through virtual reality. These same manufacturers will be able to source the technologies they need through international technology brokers who will use communication networks to advertise and distribute new innovations. Moreover, the fact that clients can interact more closely with suppliers will foster stronger, more loyal relationships between them.
Wireless Communication
Over the past ten years, many products that previously required a wired connection have been redesigned to eliminate that limitation — and successfully introduced into the market. Examples include portable computers and cordless phones. In the future, the same will happen with other devices.
In the next century, many office telephones will connect to their PBX systems via radio or other forms of wireless communication, as will computer terminals. The key parameters here are flexibility, convenience, and reduced installation and reconfiguration costs, along with the elimination of cabling expenses. However, existing communication protocols — such as Ethernet or Token Ring — are not well suited for wireless interconnection, and the proliferation of these wired protocols has delayed the adoption of wireless technologies.
To address this, the IEEE has formed a working group to create — by the end of 1993 — a standard wireless communication protocol for local area networks. These protocols are being developed so that, in the near future, users will be able to dictate directly to a printer without first passing through a processor that converts voice to text.
As information becomes increasingly distributed across networks accessed by multiple user groups, protecting it from intrusion attempts will be essential to preserve confidentiality. This will require close attention to the development of secure wireless communication systems that allow access only to authorized individuals.
Wireless communication will lead to the creation of new businesses, as it connects equipment that was previously isolated. For example, vending machines could be fitted with systems linking them to a service center, allowing for immediate maintenance or restocking requests. The speed of such systems would eliminate the need for traditional service and repair agreements.
This enhanced service quality will facilitate and expand the diversity of product distribution channels. Imagine being able to request a news summary from a subway station while paying for both services with your credit card.
The adoption of wireless communications in offices will make work easier and more flexible. Manufacturers of office modules and furniture will need to account for the fact that people will work wherever necessary, influencing office design and layout. The ability to relocate printers or coffee machines easily will result in more dynamic, adaptable workplaces.
The possibility that intelligent, wireless-equipped machines might accompany users — collecting data on their preferences and habits — will be highly valuable to product designers. They will have access to databases on customer behavior, enabling them to create improved versions of previous products. This information will shorten and refine the design process.
The bandwidth available for wireless communication is limited and must be shared among many users. Therefore, managing the electromagnetic spectrum efficiently will be essential. This involves both technical and political issues: there will be ongoing pressure to reduce the transmission power of cellular phones while introducing more efficient modulation techniques. However, the greatest obstacle to proper bandwidth use will likely be political rather than technical.
- Pedro Tellería is a Senior Consultant, responsible for the "Telecommunications & Information Industry" Practice for Spain and Portugal at the management consulting firm Arthur D. Little.
- Phil O´Donovan is head of telecommunications at CCL, a subsidiary of Arthur D. Little.