Digital transformation is an inevitable process for modern-day companies – a process of using technology to radically change your business.
Today’s fast-paced technological age has created fierce competition amongst businesses to create new products and/or services for their customers by leveraging new technologies. link
Within this inevitable transformation, we are in an era of unprecedented opportunity, and much of the growth we experience over the next decade will be driven by artificial intelligence.
Artificial intelligence is already a key driver of digital transformation across a wide range of sectors. The potential of this technology to shift businesses is huge and leaders are more than ever familiar with the term “AI-first”.
With more data at our disposal than we have ever known, and more effective technologies allowing us to make sense of it all, businesses can start to deliver better experiences for the modern consumer’s needs.
In this post, I will delve into the relationship between AI and digital transformation and explain each in depth.
*Approx 14 minute read
Who Is This Post For?
- Local business owners small to large
- Multi-unit brands such as franchise groups, dealer networks and national brands with a local presence.
- Any brand, whether you’re just starting in your digital journey or you’re advanced, this post is for you.
Commonly Asked Questions That I Will Address:
- What is Digital Transformation
- What the Steps are in Going Digital
- What Artificial Intelligence is
- What the History of AI is
- What the applications of AI are
- What is involved in an AI Transformation
What is Digital Transformation?
Digital Transformation is “the transformation of business by revamping the business strategy or digital strategy, models, operations, products, marketing approach, objectives etc., by adopting digital technologies. This accelerates sales and growth of the business from end to end.”
This process is fast becoming a competitive necessity for many businesses. Hefty and fast moving technological advances coupled with swift market and competition changes and growing customer expectations are intensifying the need for companies to evaluate their business models, internal capabilities, and customer experiences.
The larger the business, the more challenging the transition into digital will be as there are many more processes that are affected. Digital transformation is no walk in the park, it demands sizeable ideas, brave actions and most importantly – the change in the company culture. Whilst technological advances are widely accepted and somewhat understood, however often the cultural changes that are necessary to make digital transformations successful are snubbed.
Michael Gale, a recognised industry expert in integrated technology marketing said “… this is a fundamental shift in how people had to think about how they interact, how they collaborate and work and if you don’t spend time changing people’s behaviours, you don’t spend time changing culture and how people make decisions, all of this falls flat.”
That is one of the main reasons why 84% of companies fail at digital transformation.
Digital transformation can also provide insight on a much wider scale such as:
- Opportunities to examine business operations
- Organisational structure
- Operating model
- Products and services
3 Steps for Going Digital
Step #1: Embracing a culture of change
As previously mentioned, going digital, demands a change in the company culture. In such a fast paced technological world as today, businesses simply need to be in a state of constant revolution. Once any changes are made, then more follow and so on. It is important for businesses to build a momentum that is in tune with any new trends in the industry.
Having a culture of continuous change and evolution is key combined with a strategy of continuous improvement.
Step #2: Measure your KPI’s
In order to truly embrace continuous change, businesses have to analyse the methods by which they measure themselves – the key performance indicators (KPIs) as well as the analytics tools used. Establishing new KPIs that reflect fast-paced market trends, technological advances, as well as increasing amounts of data consumption and collection is vital nowadays. Likewise, reviewing any old and outdated KPI’s is just as important.
Step #3: Take action
Both of the above two steps are futile if no action is taken. It is imperative that change is embraced, measured and implemented. Furthermore, in going digital, the whole organisation needs to be in complete alignment with the changes taking place. The journey needs to become everybody’s job, everyone’s responsibility.
What is Artificial Intelligence (AI)?
According to Accenture Research, “AI is the collection of multiple technologies that allow machines to detect, understand, act and learn either on their own or to augment human activities”. They will have many of the capabilities of a human being – the ability to learn and distinguish between things. But they also have a great advantage over humans – they do not need to rest to function! The same Accenture study reveals that AI could double annual economic growth rates by 2035 by changing the nature of work and create a new relationship between Man and Machines, increasing labor productivity by up to 40%.
AI tools are becoming an integral part of many organizations, both in the public and private sectors. It is being applied to help in the improvement of performance of Government agencies, in their service levels and accountability and develop solutions focused on the well-being of Citizens.
History of AI
It may be surprising to learn that AI has been around for about 60 years. During the Second World War, famous British computer scientist Alan Turing created the Enigma Machine, which could decipher German code. The Enigma Machine laid the foundations for Machine Learning.
He went on by suggesting that the task of creating a machine that could play the imitation game is one that involves programming. Turing postulated that by the end of the century humans will have the technology required to program a machine to play the imitation game. He also mentions that in process of the machine trying to imitate the human mind, it becomes essential to fort understand the processes that lead the human mind to be in its present state.
Applications of AI
Today, a vast majority of AI processes are applied in real systems in a wide variety of sectors. These include:
This sector sees the most AI action than any other. This is because it has proven to be an effective way of catching out fraud of any kind. In a survey conducted by Tata Consultancy Services of 835 companies, the following statistics were uncovered:
- 44% are utilising AI to detect and prevent violations.
- 41% use it to solve technical problems of users.
- 34% use it to reduce the workload and automate their processes.
- Gartner predicts that, by 2020, at least 75% of security software tools will include predictive and prescriptive analytics.
Customer service is a crucial area in business because of its power to affect a brand. And yet, some companies still make mistakes. The Microsoft State of Global Service 2016, found that 60% of customers went to a competitor, simply because of a negative experience with customer service. Customers want to be served in a timely manner by a helpful operative and if they are made to wait or ignored, they will switch companies in a heartbeat. This is where “AI Chatbots” come into play. This technology has the impresive ability to process and analyse consumer data from the very first call and transfer them to the correct place super fast, resulting in a happy customer.
AI technology is able to coordinate various processes in everyday business operations, such as scheduling conferences, team meetings and business trips. Very soon, AI will be able to aid us in decision making. IBM estimates that by 2025, data-based decision making tools market will be $2 trillion.
Many businesses fail to see AI is a valuable transformative tool. Its main job is to solve problems within a business, and it has the potential to assist with everything from promotional campaigns to productivity. However, this is where businesses get most stuck: AI is not a quick fix. It takes time and effort to implement and execute. Companies must align their business culture towards an AI positive approach. This can be done via the following:
At first, it may seem easy just to pique people’s interest in AI, however for true transformation to take place, there must be a cultural shift as well. Companies will need to invest in technology and products that will aid in this process. Creating an AI-first culture demands validity and opportunity of AI as a growth driver and a business benefit. The rest of the business, too, need to make AI a part of their everyday thinking. If they have process problems more than once, the culture should be to report that as an area of potential improvement.
If you Google “AI” there is an overwhelming amount of information available at the fingertips, and the common misconception is that robots will replace humans in the futire. This is why leaders must take initiative and educate all staff on what AI is, what are it’s benefits to the business and why it needs to be implemented. Getting staff educated and excited is key. AI is an ongoing investment: without leadership and education from the top level, an AI transformation is doomed.
Vital to the success of any AI initiative is data. Companies need to get to grips with the sheer amount of data they hold and structure it in a uniform way. AI is only as good as the data it uses, and if you can’t provide quality data, it won’t work. Part of the culture of the business should be understanding of the importance of data and an agreement on how this data should be collected and stored. If you need an AI in two years, you’ll need to start collecting data now.
People and AI
The relationship between people and technology can be a hugely fruitful one, but we must define where the responsibilities for certain tasks lie. AI technologies can analyse data at a scale we can barely even conceptualise, and they can learn from real-time feedback to adjust how they function. This can liberate employees to focus on the strategic aspects of their campaigns.
Artificial intelligence is a key driver of digital transformation and in order to maximise the potential of this symbiotic relationship, companies must take the above key elemts into consideration. Digital transformation through AI needs cultural shifts, new processes, new technologies and efficient use of resources to succeed.
To discuss how artificial intelligence and digital transformation can be applied to your business model as well as specific solutions I have developed for Franchise groups and multi-unit organisations, contact me today for a confidential discussion.