Digital Leaders Blog

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According to a recent report by Capgemini Consulting, organisations are now convinced of the benefits AI can bring. The key question now is where and how they should invest.

The research, freely available here Turning AI into concrete value: the successful implementers’ toolkit, offers a pragmatic guide helping organisations in their AI investment decisions.

Based on an analysis of over 50 AI use cases, together with a survey of over 1,000 senior executives, the report presents interesting case examples of AI delivering tangible business benefits across a range of different industries. Highly practical advice is provided in terms of devleoping an AI strategy and roadmap for your own organisation.  

Implemented effectively, AI can deliver real business benefit in four main areas as summarised below:

Figure 1: How AI is Driving Business Benefits

The report also provides a useful definition of what Artificial Intelligence is.

"Artificial Intelligence encompasses a range of technologies that learn over time as they are exposed to more data. The definition we used in this report is that AI includes speech recognition, natural language, processing, semantic technology, biometrics, machine and deep learning, swarm intelligence, and chatbots or voice bots."

Figure 2: What is Artificial Intelligence

The full report can be accessed here - Turning AI into concrete value: the successful implementers’ toolkit

Jim H

 

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Digital Disruption Top Reads (No. 2)

Please find below our top ten reads on Digital Disruption and Digital Transformation published over the last month or so; together with some news type articles.

Top Ten Reads

Digital Disruption to Displace 4 in 10 Industry Incumbents by 2020

A short introduction to the recent IMD/Cisco Report. Digital disruption could overturn incumbents and reshape markets faster than any force in history. Based on a survey of 941 business leaders in 12 industries and 13 countries, the report concluded that digital disruption will displace approximately 40 percent of industry incumbents within the next five years.

The Digital Vortex

A slightly longer summary of the above. Despite the threat of being disrupted, the vast majority of companies remain unprepared for the coming digital tsunami. The Digital Vortex is the inevitable movement of industries toward a “digital center” in which business models, offerings, and value chains are digitized to the maximum extent possible. Where does your industry/company sit on the vortex?

How to Reframe Your Business Model in an Era of Digital Disruption

Five steps to turn your business model upside down via McKinsey Quarterly - outline the dominant business model in your industry; dissect the most important long-held beliefs into its supporting notions; turn an underlying belief on its head - formulate a radical new hypothesis, one that no one wants to believe—at least no one currently in your industry; sanity-test your reframe; translate the reframed belief into your industry’s new business model.  In our view, every strategy workshop should start with this. The simple framework presented should be now be core to all MBA programmes.

What 'digital' really means

Companies today are rushing headlong to become more digital. But what does digital really mean? For some executives, it’s about technology. For others, digital is a new way of engaging with customers. Such diverse perspectives often trip up leadership teams because they reflect a lack of alignment and common vision about where the business needs to go. Business leaders must have a clear and common understanding of exactly what digital means to them and what it means to their business. The article breaks digital down into three main attributes: creating value at the new frontiers of the business world, creating value in the processes that execute a vision of customer experiences, and building foundational capabilities that support the entire structure.

Transforming the Digital Enterprise

An interesting Infographic from MIT which illustrates how rethinking strategy, culture and leadership can help organizations transform digitally.

Who are the digital disruptors redefining entire industries?

Disruptive innovation is appearing across the digital sphere breaking dominant business models, but as well as famous disruptors like Uber, Skype, Spotify, WhatsApp, Netflix and Airbnb, there are many wannabes and start-ups glad for the level playing field that the humble app has created – a good read from TechRadar.

Embracing Digital Technologies in Traditional Worlds

A good pointer to the excellent work by George Westerman and Didier Bonnet on Digital Masters based on their study of more than 400 large companies around the world across a diverse range of industries – via the MIT Sloan Management Review.

Digital transformation is driven by strategy not by technology

Digital transformation should be driven by strategy as opposed to technology. Strategy drives digital maturity through leadership that has the ability to conceptualise digital technologies into business value. The power of a digital transformation strategy lies in its scope and objectives; less digitally mature organisations tend to focus on individual technologies and have strategies that are decidedly operational in focus. Digital strategies in the most mature organisations are developed with an eye on transforming the business as opposed to transforming a process – via Deloitte.

Digital manufacturing: The revolution will be virtualized

The digital revolution is now breaching the walls of manufacturing in the same way that it continues to disrupt media, finance, consumer products, healthcare, and other sectors. Indeed, the explosion in data and new computing capabilities—along with advances in other areas such as artificial intelligence, automation and robotics, additive technology, and human-machine interaction—are unleashing innovations that will change the nature of manufacturing itself. Industry and academic leaders agree that digital-manufacturing technologies will transform every link in the manufacturing value chain, from research and development, supply chain, and factory operations to marketing, sales, and service. Digital connectivity will unlock enormous value and change the manufacturing landscape forever – via McKinsey.

Digital Transformation - the need to integrate SMAC 

Some organizations call it SCAM, some even add an extra S for security – but whichever way you rearrange those four letters, it essentially involves – Social, Analytics, Mobility and Cloud! The true ‘digirattis’ are the ones that can actually integrate and coalesce each of these four levers into solutions that offer a true digital customer experience – via CapGemini.

News Updates

The death of B2B salesmen – surviving in a digital world

Digital Dinosaurs - of the future. The world’s first robot-operated hotel now open

Retail Banks to Spend $16.6 Billion on Digital Transformation Initiatives 

Digital disruption driving revenues at professional service firms  

Uber France Leaders Arrested For Running Illegal Taxi Company 

Take care.

Digital Disruption News No. 1 can be found here.

Jim H 

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Leading Digital Transformation

One of the best and most recent books on digital transformation is Leading Digital: Turning Technology into Business Transformation by Westerman, Bonnet and McAfee (2014).

Over a four year period, the authors studied a large number of ‘Digital Masters’ - defined as companies who were proactively using digital technologies to drive significantly higher levels of profit, productivity and performance - across a diverse range of industries. ‘Digital Masters’ were 26 percent more profitable than their average industry competitor; generating 9 percent more revenue with their existing capacity and driving more efficiency in their existing products and processes.

While evidence of the innovative use of digital technology exists in most industries, the majority of organisations fall short in terms of digital mastery; threatening their survival and growth in the new digital era. 

According to the authors, companies that struggle with becoming truly digital fail in two main areas - they fail to develop the required digital capabilities to work differently and the leadership capabilities required to set a digital vision and execute it. ‘Digital Masters’, on the other hand, excel in these two capabilities. They build digital capabilities by rethinking and improving in three main areas - internal business processes, external customer engagements and their overall business model. They also build strong leadership capabilities to envision and drive transformation.

In terms of digital leadership, the authors argue that large companies are prone to inertia and entropy, especially in terms of their use of new technology.  This makes it difficult to get started and to drive change.  Based on the extensive case research undertaken, they argue that the only effective way to drive digital transformation is top-down, through strong senior executive direction coupled with methods that engage workers in making things happen.

Digital leadership involves creating a transformation vision, engaging and energising employees to make the vision a reality and digital governance providing the guardrails and steering wheel to keep transformation on the right track.  It requires strong technology leadership capabilities to power transformation forward, especially the need to build strong relationships between IT and business leaders. ‘Digital Masters’ use this relationship to drive change in their internal platforms and digital skills.

To support the successful implementation of digital change programmes, very practical advice is presented in the authors’ ‘Digital Transformation Compass’ shown in the header image of this article (please click to enlarge).

The four main coordinates of the compass are:

  • Framing the digital challenge
  • Focus investments
  • Mobilize the organization
  • Sustaining the transformation

There is a very useful slidshare presentation accompanying the book which you can find here.

The video below is also well worth watching.

As usual, all comments and feedback are very welcome.

Is your organisation a 'Digital Master' or a laggard? What are the main barriers to digital transformation that need to be overcome?

Take care.

Jim H

 

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