The pressing need to deliver digital transformation over fibre optical networks

As noted in a McKinsey report digital transformation has accelerated by three to four years over the last year. Meanwhile, "smart" technologies are rapidly transforming how cities and entire business sectors are operating. Industry 4.0 – a "new industrial revolution," where digital technologies increasingly underpin every aspect of work, has been on the horizon for a few years now, but events over the past year is proving to be the big catalyst, or "inflection point," for it. All this transformation means that enterprises are better able to serve their customers, work rapidly, and build digital services for efficiency and better productivity.

Underpinning all of this innovation is a new wave of innovation in connectivity infrastructure: fibre optical networks.

According to the EY report, it is fibre optical networks that will provide the foundation for society to take this next step into a digitally-driven future. "The fibre-connected era can connect everything, achieving massive data transmission breaking its own limitations," the report states, before highlighting three areas in particular that are "upgraded" when operating over fibre:

1. Technical upgrade – the improved bandwidth, stability, latency and reliability allows consumers and businesses to rely on the connections more.
2. Application upgrade – fibre enables ultra-HD media, VR/AR, the IoT and smart services that allow all parties to do more with their Internet.
3. Infrastructure upgrade – fibre allows data-driven organisations the capacity and bandwidth to upgrade their network architecture and drive even deeper into data.

Meanwhile, according to IDC, there is a long way for organisations to go before they are fully transformed; 63.2 per cent of enterprises have only just begun their transformation journey (or have yet to start at all), and only 8.4 per cent of enterprises are fully transformed. The opportunity is there for the bulk of enterprises to gain an early mover advantage and competitive differentiation by leveraging the opportunities of fibre optical networks to accelerate their transformation now.

Everything is becoming smart

Fudan University in China is one such organisation that has an aggressive digital transformation strategy, built on the back of a fibre optical network. The goal for the university is to leverage this "Internet+ Smart Campus" strategy as its pathway to building a world-class university. Fudan University engaged with Huawei to deliver a fibre optical network solution (Huawei Campus OptiX), which enabled a raft of digital applications across the university experience that benefitted both students and educations. These benefits included: eHall, eLearning, unified payment, smart meal ordering, self-service smart library, and simulated medical operations using technologies including facial recognition, virtual reality (VR), and augmented reality (AR). (Read more about the solution and the benefits it provided to Fudan University here).

This fibre optical network platform that the university rolled out is also highly upgradable, and can be seamlessly upgraded to 10G/20G and 50G down the track. It can also satisfy the requirements for Wi-Fi 6 connectivity, and, as a final benefit, in comparison to traditional ethernet, the fibre optic network minimises the need for weak-current rooms, cooling devices, and cabling, resulting in a 30 per cent decline in energy consumption.

Education is just one example of a vertical that benefits from fibre optic cabling. Across all sectors this technology has relevance – it enables more efficient logistics in retail, telehealth applications, smart cities and advanced manufacturing. For example, in Germany, manufacturing – which accounts for around 20 per cent of the GDP - has benefitted greatly from the Industry 4.0 innovation that fibre optical networks have unlocked. Through these networks, German manufactures have been able to lead the world in "smart manufacturing," through data collection, remote monitoring and precise control – all of which require the kind of high bandwidth, low latency and jitter that fibre optical networks enable (see table below). This allows the German manufacturing industry to invest in targeted technology upgrades, adopting network slicing, edge computing, converged network architecture, industrial security systems, industrial network monitoring and industrial network standardization as applicable to their Industry 4.0 goals.

For CIOs the considerations that fibre optic networks enable include:

1. Data density and modularity – CIOs can leverage larger data pools in real time, across the entire network.
2. Edge computing – The edge has always relied on low latency and stable connections for those processes that can't be handled on-site, across an expansive range of endpoint devices. Fibre optic networks unlock that potential.
3. Automation – The bandwidth capabilities of fibre optic networks means that wide-scale automation can be deployed across the organisation, freeing up employees to focus on higher-end tasks.

Transformation is still a challenge – but one that can be overcome

As the IDC report shows, only 8.4 per cent of enterprises are fully digitally transformed, and only 28.4 per cent more consider themselves substantially down the path of transformation. For nearly two thirds of enterprises, digital transformation remains a long-term goal.

The reason for this is simple – CIOs understand that transformation is challenging, and over 70 per cent of transformation exercises fail to deliver on their expected value. However, at the same time there is an understanding that transformation is increasingly a "do or die" mission, with spending on transformation lifting 10.4 per cent to $1.3 trillion in 2020.

Fibre optical networks are providing the platform and foundation that enable transformation solutions to deliver on their promise. By minimising latency and maximising bandwidth and scalability, enterprises can deliver the kind of real-time processing and insights that are needed for transformation activities.

The question that the technology then asks is: what can organisations do to deliver the best possible chance that a DX activity will return value? Part of the solution is to partner with companies that have proven expertise in architecting and delivering transformation, and can help their customers to break down the silos within the organisation and architect digital transformation with a whole-of-enterprise approach. Ultimately one of the most significant reasons that digital transformation fails is that businesses don't look at it as a whole-of-environment solution, and it takes an experienced partner to help break down those silos and resistances within the organisation.

Enterprises are experiencing a historic development opportunity, with favorable policies and markets propelling the development of optical communications. Fiber optic network, as a foundation for the new approach to technology, is providing the intelligence for digital economies, and empowering enterprises across all verticals to take advantage of the opportunity.

For more information on fibre optical networks, and how Huawei can assist in transformation, click here.