The phrase "digital nervous system" occurred to Bill Gates during preparations for Microsoft's first annual CEO summit, a carefully orchestrated extravaganza held at the firm's Redmond, Washington, campus in the spring of 1997 (Gates 1999).
In the coming years, digital technology will radically increase the speed at which business is conducted. It will change the relationship between businesses and their customers, and it will transform the roles of individual workers. How well an organization adapts to this changing business landscape will depend on the health of its internal digital processes-its "digital nervous system." Though a digital nervous system is built on a combination of hardware and software, it is not a product. Think of the role a biological nervous system plays in living organisms. It controls the basic systems-respiratory, circulatory, and digestive-that make life possible. It also receives sensory stimuli, transmits them to the brain, and instantly triggers a response.
In humans the nervous system makes it possible to think and plan with foresight and creativity.
Like a human nervous system (Bray 2001), the digital nervous system connects all differences of a corporate (or even, increasingly, a home) environment. It gathers, analyzes, tracks, controls, and transmits information between the various parts, making them interact into a seamless whole. And, in the same way a human nervous system also controls one's input and output to the world (through eyes, ears, mouth, etc.) a digital nervous system can connect a corporate whole to the world at large as well.
An effective digital nervous system performs similar functions within an organization. It allows a company's internal processes to operate smoothly and quickly, enables an organization to respond to customer feedback quickly, gives it the ability to react to its competitive environment in a timely manner, and empowers employees with critical knowledge.