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Asia is center stage as the world enters a new era. What challenges may the region face?
On Point
A changing world order
by "McKinsey On Point" <publishing@email.mckinsey.com> - 10:06 - 2 Oct 2023 -
Gen AI skills are in short supply. Is your organization prepared?
Brush up your skills Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
Generative AI (gen AI) has caught the public’s fancy, but not everyone may be comfortable using the technology in the workplace. Research shows that many employees believe they lack the skills to use gen AI safely and effectively—and expect their organizations to provide those skills. While initiatives to reskill and upskill workers have been on the corporate agenda for years, the advent of gen AI brings a new urgency to these efforts. Organizations may need to consider revving up their skill-building programs as both employers and employees learn to adapt to this powerful new technology.
While gen AI may not necessarily eliminate human jobs, it will make them different. “Gen AI applications will have unprecedented effects on organizations’ approaches to talent management,” observe McKinsey’s Sandra Durth, Bryan Hancock, Dana Maor, and Alex Sukharevsky in an article on how business leaders need to prepare their organizations for a gen AI-driven future. For example, deploying gen AI to take over a task could diminish the mentorship and learning opportunities that were previously inherent in that task. Leaders may need to be exceptionally hands-on when it comes to training employees—and themselves—on using gen AI in day-to-day work. “It’s not a one-and-done process,” caution the McKinsey experts. “Leaders will need to continually assess how and when tasks are performed, who is performing them, how long tasks typically take, and how critical different tasks are.”
That’s the percentage of respondents to a McKinsey survey who said their organizations had skill gaps or expected to face them in the next five years—before gen AI burst onto the scene. With gen AI, automation will likely take over tasks accounting for 30 percent of the hours worked in the US economy by 2030, up from 21.5 percent without it. Our respondents expect data analytics and mathematical skills—critical to working with smart technologies—to be in particularly short supply over the next few years. Many organizations are tackling this challenge through hiring and employee skill building, the two most common tactics to match skills to needs.
Partnerships between the federal government and educational institutions may be an effective way to build workforce skills for gen AI roles, suggests McKinsey senior partner Kweilin Ellingrud in an episode of The McKinsey Podcast. With an estimated 12 million occupational transitions potentially taking place between now and 2030—especially in lower-wage jobs—workers will need “a lot of reskilling, upskilling, and support” to adapt, she says. McKinsey partner Saurabh Sanghvi adds that “there’s a huge role that employers can play in this.” In addition to hiring for skills rather than degrees, organizations could view occupational shifts as “a real opportunity to think about pipelines and pathways,” he says. “Everybody is learning about these new technologies. Everybody needs to upskill. Companies can really think about opportunities to hire from within instead of externally for an open role.”
Gen AI can do many things, but good judgment may still be a people thing. Despite their entertainment value, gen AI’s quirks and inaccuracies may not be amusing in “real” work output. For example, a newspaper’s chatbot-written sports articles and another news outlet’s AI-generated stories have sparked outrage on social media. “The accuracy and reliability of AI-generated content will only be as good as the data sets that are used to train the gen AI algorithms,” notes McKinsey’s Michael Korn, suggesting that leaders set up knowledge management programs “for ensuring that the curated data sets upon which gen AI functionality is built are up to date and relevant.”
Lead skillfully.
— Edited by Rama Ramaswami, senior editor, New York
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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 01:06 - 2 Oct 2023 -
How are today’s CFOs navigating top threats to growth?
On Point
Our latest McKinsey Global Survey Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
•
Strengthening resilience. Businesses confront continual disruption, with some shocks yet to be imagined. To grow in this era requires resilience: the ability to respond quickly to changes in the market, anticipate problems, and balance short-term growth with longer-term objectives, according to some of India’s leading CFOs. Technology can help bolster those skills. When assessing digital platforms for use, companies should look for flexible, upgradable technology that can be widely adopted, advises one leader. [Economic Times]
•
CFOs’ balancing act. CFOs today face daunting challenges. As effective finance leaders navigate threats to their companies’ growth, they state that they toggle continually between offensive and defensive considerations while addressing priorities such as capability building, McKinsey partner Ankur Agrawal and coauthors share. While finance chiefs report having spent most of their time in the past year managing financial risks, nearly three in ten also prioritized future growth, the latest McKinsey Global Survey on the CFO role reveals.
— Edited by Belinda Yu, editor, Atlanta
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by "McKinsey On Point" <publishing@email.mckinsey.com> - 10:07 - 1 Oct 2023 -
Adopting activist leadership, speaking with confidence, and shattering DEI misconceptions
Readers & Leaders
A new season for new ideas THIS MONTH'S PAGE-TURNERS ON BUSINESS AND BEYOND
With the onset of autumn in the Northern Hemisphere, the spirit of renewal is in the air. In this edition of Readers & Leaders, experts outline bold, new approaches to tackling familiar challenges, such as leadership, communication, inclusion, and sustainability.
In her Author Talks interview, Brunswick Group partner Lucy Parker makes the case for a new kind of leadership in business: activist leadership. To be a successful leader, she says, you must deliver financial value hand in hand with social value. In other featured interviews, Matt Abrahams, lecturer at Stanford Graduate School of Business and host of the Think Fast, Talk Smart podcast, offers tips for speaking confidently in spontaneous situations; Netta Jenkins, CEO of Aerodei, shares how misconceptions about diversity, equity, and inclusion (DEI) can reduce both employee productivity and retention; and Siddarth Shrikanth, climate investor and McKinsey alumnus, brings the biodiversity crisis to the forefront.
For more fresh perspectives, order Power to the Middle, by McKinsey partners Bryan Hancock and Emily Field and senior partner emeritus Bill Schaninger, for a new model for companies to radically alter the way they hire, train, and reward their most valuable asset: managers.IT BEARS REPEATING
“To deliver social value today, you actually need an activist mindset. That means addressing the issue in the world that you are intrinsically involved with, because of the nature of your business, the footprint of your business. It means asking yourself what are we to that issue, and what is that issue to us?”
—Lucy Parker, Brunswick Group partner, in Author Talks: How you can future-proof your business for sustainable, long-term growth.IN CASE YOU MISSED IT
Matt Abrahams on why spontaneous speaking doesn’t have to make you shake in your shoes: “One of the things that happens when we speak spontaneously is that many of us are uncovering what we want to say while we are saying it. That leads us to speak more than we need to. Being concise, clear, and focused is key.” Watch the full interview.
Netta Jenkins explains why shortfalls in inclusion efforts can impact your company’s bottom line: “Inclusion is about identifying the privilege and power that you hold, and sharing it with those around you. And if we got better at that very basic level and implemented that within the workplace—and then allowed and equipped employees with the tools to do the same—we would see a lot more change.” Watch the full interview.
Siddarth Shrikanth makes a new case for strengthening our connection to nature: “It can be as simple as creating space for nature wherever you live, getting involved in activism, and volunteering, just the things that build connection. There’s both the systemic piece that we can be a part of and the individual piece in our own lives that is increasingly powerful in a world where we feel so dislocated.” Watch the full interview.BUSINESS BESTSELLERS TOP
8
BUSINESS OVERALL
BUSINESS HARDCOVER
DECISION MAKING
ECONOMICS
ORGANIZATIONAL BEHAVIOR
WORKPLACE CULTURE
DIVERSITY & INCLUSION
SUSTAINABILITY
BOOKMARK THIS
If you’d like to propose a book or author for #McKAuthorTalks, please email us at Author_Talks@McKinsey.com. Due to the high volume of requests, we will respond only to those being considered.
— Edited by Emily Adeyanju, an editor in McKinsey’s Charlotte office
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by "McKinsey Readers & Leaders" <publishing@email.mckinsey.com> - 03:55 - 1 Oct 2023 -
The week in charts
The Week in Charts
Global disability data, trends in packaged goods, and more Share these insights
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by "McKinsey Week in Charts" <publishing@email.mckinsey.com> - 03:56 - 30 Sep 2023 -
Sessions, Tokens, JWT, SSO, and OAuth in One Diagram
Sessions, Tokens, JWT, SSO, and OAuth in One Diagram
This week’s system design refresher: Software Engineer Promo is SUPER easy - DO THIS (Youtube video) Explaining Sessions, Tokens, JWT, SSO, and OAuth in One Diagram Most Used Linux Commands Map How do we transform a system to be Cloud Native? CRUD System vs. Event Sourcing Forwarded this email? Subscribe here for moreThis week’s system design refresher:
Software Engineer Promo is SUPER easy - DO THIS (Youtube video)
Explaining Sessions, Tokens, JWT, SSO, and OAuth in One Diagram
Most Used Linux Commands Map
How do we transform a system to be Cloud Native?
CRUD System vs. Event Sourcing
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Software Engineer Promo is SUPER easy - DO THIS
Explaining Sessions, Tokens, JWT, SSO, and OAuth in One Diagram
Understanding these backstage maneuvers helps us build secure, seamless experiences.
How do you see the evolution of web session management impacting the future of web applications and user experiences?
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Most Used Linux Commands Map
File and Directory Management
File Viewing and Editing
Process Management
System Information
User and Group Management
Network Configuration and Monitoring
Package Management
Over to you: Which command category did you use the most in your daily Linux tasks?
Guest post by Govardhana Miriyala Kannaiah
How do we transform a system to be Cloud Native?
The diagram below shows the action spectrum and adoption roadmap. You can use it as a blueprint for adopting cloud-native in your organization.
For a company to adopt cloud native architecture, there are 6 aspects in the spectrum:
Application definition development
Orchestration and management
Runtime
Provisioning
Observability
Serverless
Over to you: Where does your system stand in the adoption roadmap?
Reference: Cloud & DevOps: Continuous Transformation by MIT
Redrawn by ByteByteGoWhat is Event Sourcing?
The diagram below shows a comparison of normal CRUD system design and event sourcing system design. We use an order service as an example.
The event sourcing paradigm is used to design a system with determinism. This changes the philosophy of normal system designs.
How does this work? Instead of recording the order states in the database, the event sourcing design persists the events that lead to the state changes in the event store. The event store is an append-only log. The events must be sequenced with incremental numbers to guarantee their ordering. The order states can be rebuilt from the events and maintained in OrderView. If the OrderView is down, we can always rely on the event store which is the source of truth to recover the order states.
Let's look at the detailed steps.
Non-Event Sourcing
Steps 1 and 2: Bob wants to buy a product. The order is created and inserted into the database.
Steps 3 and 4: Bob wants to change the quantity from 5 to 6. The order is modified with a new state.Event Sourcing
Steps 1 and 2: Bob wants to buy a product. A NewOrderEvent is created, sequenced, and stored in the event store with eventID=321.
Steps 3 and 4: Bob wants to change the quantity from 5 to 6. A ModifyOrderEvent is created, sequenced, and persisted in the event store with eventID=322.
Step 5: The order view is rebuilt from the order events, showing the latest state of an order.
Over to you: Which type of system is suitable for event sourcing design? Have you used this paradigm in your work?
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by "ByteByteGo" <bytebytego@substack.com> - 11:37 - 30 Sep 2023 -
Top 10 articles this quarter
McKinsey&Company
At #1: McKinsey Technology Trends Outlook 2023 Our top ten insights this quarter look at the rapid adoption of gen AI tools, a new approach to measuring software developer productivity, and more. At No. 1, an interactive from Michael Chui, Mena Issler, Roger Roberts, and Lareina Yee presents analysis by the McKinsey Technology Council on the most significant technology trends unfolding today.
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Copyright © 2023 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007
by "McKinsey Top Ten" <publishing@email.mckinsey.com> - 10:15 - 30 Sep 2023 -
Redefining the frontline manager
Bring your frontline leaders to the forefront Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
Redefining the frontline manager
Frontline managers are responsible for an outsize proportion of companies’ workforces—nearly two-thirds—yet they are often hobbled under the weight of administrative work, endless meetings, and various nonmanagerial tasks such as traveling or training. All this has them operating like cogs in a machine and keeps them from their most crucial role: managing the front line. And that comes at a cost to companies, including low employee morale and a working environment where there’s not much encouragement to make improvements.
Best-practice companies are redefining the role of the frontline manager, empowering these leaders with more decision-making ability, greater flexibility to address problems and implement solutions, and more time devoted to coaching their workers.
“In difficult economic times,” the authors of this McKinsey classic wrote, “making employees more productive is even more crucial than it is ordinarily.” Nearly a decade and a half later, today’s frontline managers are finding themselves in similarly volatile times, with ever-shifting hybrid work environments and ever-demanding omnichannel operations. To learn more about how to turn your frontline managers into winning leaders and your front line into winning workers, read our 2009 classic “Unlocking the potential of frontline managers.”From cog to coach Share these insights
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by "McKinsey Classics" <publishing@email.mckinsey.com> - 07:15 - 30 Sep 2023 -
Sustainable and inclusive growth: What today's global disruption means for Asia
Get updated This email contains information about McKinsey's research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy.
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by "McKinsey & Company" <publishing@email.mckinsey.com> - 12:39 - 29 Sep 2023 -
Would you give up the perks of a permanent job?
On Point
Why people choose independent work Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
•
Contractual obligations. From the rise of the gig economy to the proliferation of flexible work models, there’s no end to the evolution of the world of work. One consequential change in the workplace is the growing use of contracts to govern relationships between employers and workers, according to a Wharton Business School professor. Roughly a third of the workforce in the average US company—including, perhaps, staffers who empty the bins, fix broken computers, and serve lunch—are now contract workers. [WaPo]
•
Freelance nation. Beyond the traditional 9-to-5 job, there’s a bustling workforce of people engaged in freelance and side-hustle work. McKinsey’s American Opportunity Survey recently found that 36% of employed respondents—the equivalent of 58 million Americans—identify as independent workers, McKinsey Global Institute director Kweilin Ellingrud and colleagues explain. People pursue freelance work for a number of reasons, including out of necessity, for the flexibility and autonomy it offers, and because they enjoy the work.
•
Income and identity. A third of employed respondents report earning more than $150,000 per year, a category that may include accountants, lawyers, and other specialists. Most respondents, however, indicate that they earn less. Although independent work cuts across all ages, education levels, and incomes, freelance work tends to skew toward younger workers and those with lower incomes. See our McKinsey Explainer on the gig economy to understand what the shift toward independent work means for employers.
—Edited by Belinda Yu, editor, Atlanta
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by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:06 - 29 Sep 2023 -
เข้าร่วมการสัมมนาผ่านเว็บเรื่องนวัตกรรมแนวทางสู่ความยั่งยืน
Schneider Electric
Addressing the Green Action Gapโซลูชันความยั่งยืนที่ปฏิบัติได้จริงเพื่อ
ความสำเร็จทางธุรกิจของคุณเรียนAbul
ในขณะที่ธุรกิจต่างๆ มุ่งมั่นที่จะบรรลุเป้าหมายการปล่อยก๊าซสุทธิเป็นศูนย์ภายในปี 2050
พบว่าความกดดันในการลดการปล่อยก๊าซเรือนกระจก (GHG) ที่พวกเขาต้องเผชิญเพิ่มขึ้นอย่างมีนัยสำคัญ แบบ
สำรวจความยั่งยืนของชไนเดอร์ อิเล็คทริคปี 2023 เน้นย้ำว่าบริษัทต่างๆ ในเอเชียตระหนักถึง
ความสำคัญของเป้าหมายด้านความยั่งยืน แต่ยังเผชิญกับอุปสรรคในการดำเนินการ เข้าร่วมการสัมมนา
ผ่านเว็บของเราเพื่อค้นพบโซลูชันที่สามารถนำไปปฏิบัติได้ซึ่งช่วยลดช่องว่างนี้ อำนวยความสะดวกใน
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- เชื่อมช่องว่างระหว่างเป้าหมายด้านความยั่งยืนและการดำเนินการ
- รับข้อมูลเชิงลึกจากความเชี่ยวชาญของ Schneider Electric ในด้านการลดการปล่อยคาร์บอน
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เข้าร่วมกับเราและเสริมพลังให้ธุรกิจของคุณเติบโตอย่างยั่งยืนพร้อมทั้งมีส่วนร่วมในการบรรเทาการ
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A Crash Course in DNS (Domain Name System)
A Crash Course in DNS (Domain Name System)
What if you woke up tomorrow and could no longer access websites by typing names like google.com or espn.com? Instead, you had to memorize and type a series of numbers just to get online - 172.217.16.206 to check Gmail or 199.181.132.250 to read sports news. Internet browsing would become extremely tedious overnight! Forwarded this email? Subscribe here for moreThis is a sneak peek of today’s paid newsletter for our premium subscribers. Get access to this issue and all future issues - by subscribing today.
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What if you woke up tomorrow and could no longer access websites by typing names like google.com or espn.com? Instead, you had to memorize and type a series of numbers just to get online - 172.217.16.206 to check Gmail or 199.181.132.250 to read sports news. Internet browsing would become extremely tedious overnight!
Luckily, this internet nightmare scenario will never happen as long as DNS keeps running smoothly in the background. DNS, short for Domain Name System, is the essential service that saves us from the huge hassle of memorizing numeric IP addresses. It efficiently matches easy-to-remember domain names with their corresponding IP addresses so we can browse seamlessly.
In this article, we explore the intricate workings of this crucial internet backbone.
DNS: The Internet’s Address Book
DNS is a distributed and hierarchical system that acts as the internet's address book. It translates domain names into IP addresses to facilitate efficient communication between devices across the globe. The primary purpose of DNS is to provide a convenient way for users to access websites and resources using easily memorable domain names, while computers and servers use IP addresses for communication behind the scenes.
The DNS is implemented as an Application layer service. It is implemented by the servers that sit at the network edge rather than routers and switches inside the network. This reflects the internet design philosophy of keeping the network core simple and putting complexity at the network’s edge.
Key Services Provided by DNS
DNS provides a number of different services to facilitate the functioning of the Internet. Here is a mind map of the services provided by DNS.
We are going to describe some of the most vital services of DNS below:
Host-to-IP address mapping
DNS maintains a database of domain names and their corresponding IP addresses. This mapping is essential for devices to locate each other on the internet.
For instance, consider the domain name "www.bytebytego.com." Host-to-IP address mapping involves determining the IP address associated with this domain, such as "172.67.21.11".
Host aliasing
DNS supports a feature commonly known as host aliasing, enabled through CNAME (Canonical Name) records. This allows a single IP address or primary domain name to be associated with multiple domain name aliases.
For example, let's consider the primary domain "bytebytego.com". You might want your website to be accessible not just via "bytebytego.com", but also through various aliases like "www.bytebytego.com", "web.bytebytego.com", and "blog.bytebytego.com". By setting up appropriate CNAME records in DNS, all these aliases can point to the primary domain "bytebytego.com". As a result, users can access your website using any of these domain names, all leading to the same destination IP address.
Email Routing
DNS plays a crucial role in email routing through MX records. These records allow a domain to specify which mail servers are responsible for receiving email messages on its behalf. This mechanism enables flexibility in email configurations.
For example, let's say the primary mail server designated to receive emails for the "bytebytego.com" domain is "mail.bytebytego.com". You might want to have specific email addresses, such as those ending in "@sales.bytebytego.com" or "@support.bytebytego.com", yet still direct all incoming mail for these addresses to the "mail.bytebytego.com" server. By configuring MX records appropriately, emails sent to any of these addresses will route to the designated primary mail server.
IP-to-host address mapping
While DNS is primarily used for translating domain names to IP addresses, it can also perform reverse lookups, translating IP addresses back to domain names. This is useful for security and logging purposes.
Load balancing
DNS can distribute incoming network traffic across multiple servers by returning different IP addresses in response to the same domain name query. This helps balance the load and improve the performance and reliability of online services.
DNS Hierarchy
DNS operates as a distributed hierarchical database. The following illustration shows a high-level view of the DNS hierarchy.
Root DNS Servers
At the top of the DNS hierarchy are the root servers. The root servers are contacted when a server is not actually able to resolve a name. You can think of it as a first point of contact to get the resolution started.
Root servers act like the central nervous system of the internet, and as such, security is going to be very important. Much of the infrastructure associated with the root servers is the responsibility of ICANN (Internet Corporation for Assigned Names and Numbers). There are 13 logical root servers around the world, but each of these logical root servers is actually replicated, so corresponding to these 13 logical servers are actually close to a thousand physical servers around the world.
Top-Level Domain (TLD) DNS servers
Moving down a level from the root servers, we find the TLD (Top-Level Domain) servers and each of the servers in the TLD layer is responsible for resolving one of the addresses that have an ending like .com, .edu, .net, and .org.
The Internet Corporation for Assigned Names and Numbers (ICANN) has authority over all TLDs used on the Internet, and it delegates the responsibility of these TLDs to various organizations. For individuals or entities looking to register a new domain under these TLDs, they typically approach Domain Name Registrars, which are accredited entities interfacing with the registries to handle the registration process.
Authoritative DNS servers
Authoritative servers are the definitive source for domain name resolutions within their specific domain. They store the actual name-to-IP address mappings for a given domain. While various caching mechanisms exist across the internet to speed up domain name resolutions, it's the authoritative servers that provide the correct and final answer when queried. Domain owners or administrators configure their domain's records, but the actual infrastructure—the DNS servers—is often maintained and operated by DNS hosting providers or registrars like Cloudflare, Namecheap, GoDaddy, and others.
Recursive DNS Servers (Resolver)
Recursive servers handle DNS queries from client devices like computers and smartphones. When a device wants to resolve a domain name, it contacts these servers. Acting on behalf of the client, recursive servers traverse the DNS hierarchy, consulting various DNS servers to determine the IP address associated with a domain name. Once they obtain the answer, they return it to the client. For efficiency, recursive servers often cache responses to avoid repeatedly querying the same information.
Check out the illustration below, it shows the placement of some of the main DNS servers inside the pipeline of a DNS query.
How DNS Resolution Works
There are two main methods of query resolution in DNS:
Iterative query resolution
Recursive query resolution
These methods define how DNS servers interact with each other to find the IP address associated with a given domain name. Here’s a brief overview of each method.
Iterative Query Resolution
In iterative query resolution, the DNS server receiving the query provides referrals to the querying server, guiding it through the DNS hierarchy. The querying server actively participates in the process by sending subsequent queries based on the referrals received.
Let's try to understand the workings of iterative query resolution with the help of an example shown in the illustration below.
Suppose the requesting host is making a request to resolve the name bytebytego.com. Here’s how this is going to unfold:
The host first sends a query message to the local DNS resolver. The query message contains the hostname to be translated bytebytego.com
If the resolver doesn't have the IP address in its cache, it sends a query to a root DNS server.
The root DNS server, recognizing the .com suffix, provides a referral to TLD servers responsible for .com
The resolver then sends a new query to one of these TLD servers.
The TLD server provides a referral to the authoritative DNS server responsible for bytebytego.com.
The resolver sends another query to the authoritative DNS server.
The authoritative DNS server responds with the IP address of bytebytego.com
The DNS resolver caches this IP address and then returns it to the requesting host.
Now, the requesting host makes an HTTP request to the IP address of the http://www.bytebytego.com web server.
The web server returns the webpage for www.bytebytego.com
Recursive Query Resolution
In recursive query resolution, the DNS server receiving the query takes on the responsibility of finding the IP address on behalf of the client. It may itself use iterative queries to navigate through the DNS hierarchy until it reaches the authoritative DNS server for the requested domain.
Let’s use the previous example and try to resolve the IP address of bytebytego.com using the recursive query resolution as shown in the illustration below:
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Implementing digital and becoming digital aren’t the same. Here’s how to tell the difference.
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How successful companies become digital Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
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Online (and offline) skills in demand. More than half of 3,000 C-suite leaders polled think that implementing AI may require reskilling as much as 40% of the workforce, a recent survey of global executives reveals. While AI-skill-related keywords like “prompt engineering” are increasingly showing up in job postings and résumés, the effects of AI won’t be evenly distributed across industries. Organizations with business functions like customer service, marketing, and software engineering are more likely than others to be altered by AI. At the same time, demand for people skills and soft skills, such as ethics, is growing. [Axios]
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Strategies for Asian business navigating a new era
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China has become a tougher market. How do global companies strengthen supply chains?
On Point
Determining where to locate production Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
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Shrinking factory production. An official survey has found that manufacturing activity in China shrank for the fifth consecutive month in August, putting pressure on the country’s leaders to take steps to bolster the economy. China’s purchasing managers’ index averaged 49.7 in August, signaling that the sector contracted from the prior month. Slumping property values, softer demand for exports, and slower consumer spending have generated apprehension about the Chinese economy. [FT]
•
China or bust. For global companies, China’s skilled labor force, extensive supplier ecosystem, and fast-growing domestic markets have long acted as a magnet for manufacturers. As a result, complex, tightly integrated supply networks now link China with the rest of the world. But now, some of those companies are asking themselves whether the attractions that made so much strategic sense over the past 20 years still do—and what might come next, explain McKinsey senior partner Franck Le Deu and colleagues.
•
Supply chain strategies. Expert interviews and McKinsey analysis indicate that multinationals have evolved four basic archetypes for manufacturing in China. Each type can consider different strategies to enhance supply chain resilience. For companies that produce in China for China, increasing local sourcing and manufacturing could alleviate risks of supplier concentration. For others, it may make more sense to explore diversification. To see five key criteria to objectively assess the suitability of China—or any location—for manufacturing, visit our Operations Blog.
— Edited by Belinda Yu, editor, Atlanta
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