Start With The Problem
Today we’re diving into the world of digital and AI transformations, a realm where almost every company has dipped its toes. Yet, the real challenge isn’t starting the transformation; it’s ensuring the changes become a permanent part of the corporate fabric. For digital and AI transformations to succeed, companies must first pinpoint the problems they’re aiming to solve and then rewire their organisations for continuous innovation. This rewiring demands fundamental changes to talent, operating models, and technology and data capabilities. Executives often grapple with scaling up their tech initiatives. It’s one thing to run successful pilots, quite another to implement solutions that move the needle on company performance. The crux of the matter isn’t technology itself but rather, talent and data – how to organise these at scale to deliver transformation results. This is where the real work happens, the big surgery on organisational structure.
Starting a digital and AI transformation should always be about the business problem you aim to solve. When it’s about serving customers better or delivering more value, the ending is usually a good one. It becomes easier to develop a technology roadmap when you precisely know the problem you’re solving. With the buzz around generative AI, it’s tempting for companies to find problems to fit this new solution. But it’s crucial to return to the fundamentals— identify the pain points first, then look for the technology that addresses them. Generative AI may seem magical, but it’s not always the starting point. Take a consumer-packaged goods company, for example. They might find more value in advanced analytics for pricing and demand than in generative AI, no matter how advanced it is.
Talent is another cornerstone of successful digital transformations. There’s often a myth that traditional companies can’t attract the right talent for such initiatives. Yet, companies committed to a modern technological environment do manage to acquire the talent they need. Professionals gravitate towards workplaces where their skills remain sharp and in demand, environments committed to the latest technological frameworks and contemporary software engineering practices. In terms of developing existing talent, it’s often not the technologists who make the leap but businesspeople who understand enough about technology to envision how it can solve business problems. These individuals become the linchpins of new digital products or solutions.
The full value of technology is sometimes lost not because of the technology itself but due to operational issues. Consider, for instance, a retail chain that implements an advanced inventory management system powered by machine learning. This system is designed to optimise stock levels and predict ordering needs with high accuracy. However, if the staff responsible for restocking shelves are not adequately trained or the supply chain logistics are outdated, the store may still end up with empty shelves or excess stock in the warehouse. This underscores the need for business leaders to oversee the entire operational chain, from technological implementation to staff training and process updates, ensuring that the advantages of the new system are fully realised and integrated into the day-to-day operations. This is why holistic transformation will always win over siloed departmental efforts that are commonplace these days.
When it comes to outsourcing, the clear message is that technology development is far more productive in-house. If you want to foster rapid innovation, understanding the business context is essential. While external consultants can accelerate the process, they can’t replace the innate competitive differentiation that comes from a homegrown technological capability. In the digital era, the perception of an organisation’s identity also matters. Some companies have started to view themselves as technology companies, regardless of their industry. While not every company embraces this identity, those who see technology as a key competitive differentiator must become adept at software development, just as they are at finance or any other critical business function.
The role of IT in a digital-first organisation evolves too. IT becomes the foundation, enabling cybersecurity and distributing the tools and data needed for innovation. It’s no longer the sole engine of innovation but part of a distributed function that permeates sales, supply chain, manufacturing, and R&D. As for the C-suite’s role in a digitally transformed company, everyone has a part to play. The CIO, CFO, and heads of HR and risk management must all adapt to foster a culture of distributed digital innovation. It becomes, as they say, ‘the ultimate corporate sport,’ with every executive playing their part.
Finally, understanding the complex landscape of IT is essential. The technology field is rife with buzzwords and complexity. Demystifying this space and focusing on what truly adds value is critical. Going slow to go fast, investing in a shared understanding of technology, and visiting companies further ahead in their digital transformation can provide the confidence and alignment needed for success. That’s all for today’s episode. Thank you for joining me as we navigate the transformative world of digital and AI. Until next time, keep innovating and stay connected.
