MR. GATES: Now, when we think about an organisation, we can talk about how information moves inside that organization. For example, say somebody wants to know the relationship you have with a particular customer. How do they find out? Well, if you're doing that in a digital way so that you can go in and get it all on one screen, that's far more effective than trying to move paperwork around or simply not having that information available.

And so if we see that the nervous system of an organization is all the ways that inform a company ... all the ways that information moves - paper, meetings, phone calls - and we simply say the digital part is using technology to do that in new ways. I I think it's clear that doing the digital nervous system right can have a very pervasive effect, it can improve product design, it can lower costs, it can make you more responsive to new things that take place. So having your basic operations in digital form so you can look at sales; having your planned events, like human resource management, project reviews, having that all in digital form, and being able to deal with surprises - a customer who is unhappy, a competitor who does something.

By pulling together all the people who care, having all the information there, no matter if those people are in the same location or even if those people who need to be involved or any partner of yours, that can make a big difference. And a digital approach is how that can be done most effectively.

The building blocks are very simple. It's the PC connected up to the Internet. But even though most companies are making that investment, there's an incredible variation in how much value they're getting out of it. One key issue is, are people using electronic mail? Are they using that as a way of moving the information around? And unless you get the entire company involved in electronic mail, you don't get the pay-off.

And so here I have all the different elements of a successful digital nervous system. The one that's most interesting here is that the Internet standards are coming in and defining the way that the information moves between the different machines. It's a wonderful development because it means for the first time the networking standards that you deploy internally are identical to the ones that every other company has, and the wide-area networks will let you connect these things together.

And so the new work that's being done on Internet security, the new work that's being done on Internet quality of service to allow guaranteed delivery so that you can drop dedicated connections and simply count on the Internet, not only for data but also for audio and video, those will make a very big difference.

A company has to really step back and think about this in a broad way. If you just charge individual projects with trying to do their piece, they can't drive the infrastructure, the reliable network, the use of electronic mail. So, if you say to your human resource department, why don't you get rid of all the paper forms, why don't you just have people use screens to see their status and change things, they aren't going to be able to change behavior so that that becomes the accepted fashion of doing things. It's got to be the company looking at all of these things and driving towards that common approach.

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