By Stephen DeAngelis
“One-third of business leaders believe digital transformation is now ‘continuous reinvention’,” reports Tash Moore, Global Transformation Leader at KPMG International.”[1] The only surprise there is that the number of believers is so low. I agree with Udi Dorner, Cofounder and Chief Operations Officer at SetSchedule, who writes, “There’s a saying that if you’re not moving forward, you’re moving backward, but as I see it, it’s not just drifting backward, it’s that you are literally choosing to move backward by not taking every opportunity you have to move forward. Will Rogers, an early twentieth-century actor, is often credited with saying, ‘Even if you’re on the right track, you’ll get run over if you just sit there.’ I strongly believe this idea is not just a catchy saying but a fundamental truth that applies to all areas of life. Whether you’re a business owner, a student or simply someone looking to improve your life, the key to success lies in constantly moving forward and seizing every opportunity to grow and learn.”[2] Businesses, like people, need to constantly learn and adapt if they are going to keep up with the competition.
It’s a Digital World
Moore notes, “Enterprises are scrambling to keep up. For the vast majority of enterprises transformation is no longer episodic, but a state of continuous reinvention.” That’s also a very uncomfortable state to be in. Centuries ago, Niccolò Machiavelli, in his classic The Prince, wrote, “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.” And the digital world does represent a new order of things. A few years ago, Tricia Wang, a self-described Tech Ethnographer & Sociologist, explained, “A lot of companies treat digital as if they are ‘doing digital’ — this is ‘digitization’ at its worst — as if it’s some checklist of things to do. It’s very transactional, and people are so busy doing digital they don’t even know WHY they are doing it in the first place! Whereas [some companies] embrace ‘being digital’ — this is ‘digital transformation’ at its best — it’s a total paradigm shift in the culture and operations — it’s not just about buying the latest digital tool, but about creating a new system, new cadence, new mindset.”[3] Gartner defines digital transformation as “the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements.”[4]
Echoing the sentiments of Machiavelli, journalist Helen Atkinson writes, “Change is hard, and harder still when you’re not listening to those tasked with making it.”[5] Discussing results from a survey conducted by Gartner, Inc., Atkinson reports that transformation efforts often fail because leaders don’t take team resistance seriously. She explains, “The survey findings show that effectively responding to team resistance, and incorporating feedback increased the odds of transformation success by 62%. … Instead of doubling down, deploying a ‘get with the program’ attitude, leaders should engage their teams from the start of the process, embrace the areas of resistance as a resource, not a problem, and act on feedback in order to fine-tune transformation plans and how they are implemented.” Today, a major part of most digital transformations is leveraging artificial intelligence (AI). At the same time, the introduction of artificial intelligence solutions is one area where resistance is often encountered. Since most experts believe AI is critical to the future of most businesses, overcoming AI resistance is important to the future of the business.
Journalist Mark Law reports, “The rapid advancement of machine learning algorithms, coupled with the exponential growth in computing power and data availability, has catapulted AI from a niche technology to a mainstream business tool. Organizations are increasingly recognizing AI’s potential to drive efficiency, unlock new insights, and create innovative products and services.”[6] He goes on to report that research conducted by the Cloud Industry Forum (CIF) found, “A staggering 42% of businesses now consider AI their most critical IT project, surpassing traditional priorities such as security and cost control. This shift in focus underscores the growing recognition of AI’s potential to drive business value and transformation.”
Continuous Adaptation is Essential to Survival
Science has confirmed what the naturalist Charles Darwin first observed — the key to survivability is being adaptable to changing conditions. This observation is as true for businesses as it is for species. Futurist Mark van Rijmenam bluntly states, “Embrace AI or risk irrelevance in the digital age. In today’s fast-paced digital landscape, businesses must integrate AI or risk falling behind. AI isn’t just an add-on; it’s a transformative force reshaping how companies operate.”[7] He adds, “By 2030, AI could contribute up to $15 trillion to the global GDP, a transformation comparable to the revolutionary effects of the printing press, the steam engine, electricity, and the internet. To stay ahead in this rapidly evolving landscape, businesses must educate themselves about emerging technologies, experiment with new tools, and integrate AI into their operations. The choice is clear: embrace AI or risk becoming obsolete in the digital age. How will your organization adapt to harness AI’s full potential?”
Of course, in the digital age, you can’t talk about digital transformation, or leveraging AI, without discussing data. McKinsey & Company analysts explain, “Organizations are looking to seize a range of opportunities, from creating new medicines to enabling intelligent agents that run entire processes to increasing productivity for all workers. A raft of new risks and considerations, of course, go hand in hand with these developments. At the center of it all is data. Without access to good and relevant data, this new world of possibilities and value will remain out of reach.”[8] They add, “By 2030, many companies will be approaching ‘data ubiquity.’ Not only will employees have the latest data at their fingertips, … but data will also be embedded in systems, processes, channels, interactions, and decision points that drive automated actions (with sufficient human oversight).”
Boston Consulting Group (BCG) analysts insist that digital transformation leaders are creating a gap between themselves and lagging competition. They explain, “Leading companies are wasting no time leveraging their edge and pulling away from their peers. They are using their capabilities to better ideate, prioritize, and ensure adoption of more differentiating and transformational uses of data and AI. As a result, they have four times more use cases scaled and adopted across their business than laggards in data and AI, and for each use case they implement, the average financial impact is five times greater.”[9]
Concluding Thoughts
It would be foolish to believe that digital transformation comes risk-free. There are myriad risks associated with digital transformation. Nevertheless, the benefits far outweigh the risks. McKinsey analysts conclude, “As technology permeates businesses and society, the importance of data will continue to increase — as will the accompanying challenges. The levels of uncertainty and the rapidly changing dynamics of technology mean that there are few clear answers today. But by sticking to the most important priorities and understanding the essence of the issues facing them, data leaders can navigate a path to a data-driven enterprise.” Moore adds, “We’re at a real inflection point in the digital revolution. Enterprises can capitalize on this to create and unlock greater value and achieve competitive advantage. … Transformation is now a continuous journey. … Enterprises that effectively integrate advanced technologies and complement with digital literacy, strong leadership, and sound judgment are well-positioned to thrive.”
Footnotes
[1] Tash Moore, “Transforming the enterprise of the future,” KPMG Blog, June 2024.
[2] Udi Dorner, “If You’re Not Moving Forward, You’re Moving Backward: What This Means For Business,” Forbes, 10 April 2023.
[3] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.
[4] Helen Atkinson, “Attempting Digital Transformation? Try Embracing Team Resistance,” SupplyChainBrain, 14 August 2024.
[5] Ibid.
[6] Mark Law, “The AI Revolution: Transforming Business in the Digital Age,” Technology Magazine, 6 August 2024.
[7] Mark van Rijmenam, “Adapt or Become Obsolete: AI’s Unstoppable Business Revolution,” Datafloq, 30 July 2024.
[8] Asin Tavakoli, Holger Harreis, Kayvaun Rowshankish, and Michael Bogobowicz, “Charting a path to the data- and AI-driven enterprise of 2030,” McKinsey Digital, 5 September 2024.
[9] Elias Baltassis, Lucas Quarta, Yassine Khendek, Marcos Fernández, Miguel Monedero Rubio, Sylvain Duranton, Vladimir Lukic, and Marc Schuuring, “Leaders in Data and AI Are Racing Away from the Pack,” Boston Consulting Group, 16 September 2024.
