Last century’s “roaring twenties” were characterized by economic growth and widespread prosperity, driven primarily by recovery from wartime devastation and deferred spending. Today, we are just starting the recovery from our war with the coronavirus. A war that wreaked economic devastation and also deferred spending. A century ago, the roaring twenties saw a boom in construction. Today, America may finally be addressing its infrastructure shortfalls. A century ago, rural U.S. areas were finally getting electricity. Today, America is looking to invest in green energy and broadband connectivity. Between 1920 and 1929, the nation’s total wealth more than doubled. Recovery from the pandemic may not be that dramatic; however, the nation’s wealth is poised to grow. What really made the 1920s roar was the widespread introduction of mass production which made new technologies more affordable to the middle class. Industries that took off a century ago included the automotive industry, the film industry, the radio industry, and the chemical industry. We are now living in a post-industrial age often referred to as the Digital Age. Companies that prospered during the Industrial Age are finding they are not as competitive as companies created for the new age. These new age companies are often referred to as digital enterprises. Many business analysts believe the only way for companies to survive in the Digital Age is for them to transform into digital enterprises. For example, Aaron De Smet and Chris Gagnon (@ChrisGagnon33), partners at McKinsey & Company, write, “Technology is changing everything. As digitization, advanced analytics, and artificial intelligence (AI) sweep across industries and geographies, they aren’t just reshaping the competitive landscape; they’re redefining the organizational imperative: adapt or die.”[1]
Cognitive Technologies are Driving Today’s Roaring Twenties
In order to transform into digital enterprises, companies need to understand the technologies driving today’s roaring twenties and how they can be usefully implemented. The lifeblood of the Digital Age is data. Yossi Sheffi (@YossiSheffi), the Elisha Gray II Professor of Engineering Systems at MIT, asserts, “The well-worn adage that a company’s most valuable asset is its people needs an update. Today, it’s not people but data that tops the asset value list for companies.”[2] In order to extract the value from corporate data, advanced analytics are essential. Many executives are finding that cognitive technologies, like the Enterra Cognitive Core™ — a system that can Sense, Think, Act, and Learn® — are providing them with the analytics, insights, and capabilities they need to function effectively in today’s ambiguous business environment. Falon Fatemi (@falonfatemi), CEO & Founder of Node.io, observes, “Today’s business landscape is demanding that companies spearhead large-scale changes in order to survive and remain competitive. In an ever-changing political, social, and economic climate, constant organizational change is the new normal. Few advancements promise to help organizations cross critical business chasms more profoundly than artificial intelligence.”[3]
Keith Strier (@kbsdigital), Vice President of worldwide AI Initiatives at NVIDIA, and Nitin Mittal (@nmittalanalytic), a principal at Deloitte Consulting, suggest companies need to ask a few questions before embarking on any AI project: “What AI use cases matter to our business? Do we have the right talent to pursue them? Are there risks to consider?”[4] They also insist that a good deal of study should precede any AI project. They explain, “Understanding, selecting, deploying, and optimizing AI infrastructure — including where and how best to harness it across the public cloud, a corporate data center, and at the network’s edge — is a deceptively complex analysis that, if done poorly, can undermine the ROI of AI investments.”
Rise of Digital Enterprises
Rahul Vishwakarma (@curious_rv), CEO & Founder of Mate Labs, notes, “Digital transformation is a business transformation and can be defined as a step up in the evolution of how businesses are run and how businesses get connected with their customers. Data is helping to reshape and optimize existing business processes, capabilities, and business models. [Artificial intelligence/machine learning] will be the key technologies that will propel enterprises through Digital Transformation enabling them to collect and exploit data in ways never experienced before.”[5] Vishwakarma, like many advocates of digital transformation, stress technology. Successful leaders know equal emphasis must be placed on people, processes, and technology.
Jeanne Wenzel Ross (@jrossCISR), principal research scientist at MIT Sloan School of Management, insists the people side of digital transformation is too often overlooked. She explains, “AI inserted into businesses drives value by improving processes through automation. But eventually, the outputs of most automated processes require people to do something. As most managers have learned the hard way, computers can process data just fine, but that processing isn’t worth much if people are feeding them bad data in the first place or don’t know what to do with information or analysis once it’s provided.”[6] Research conducted by Ross and her colleagues found, “Most machine learning applications augment, rather than replace, human efforts. In doing so, they demand changes in what people are doing. And in the case of AI … those changes eliminate many nonspecialized tasks and create skilled tasks that require good judgment and domain expertise.” Strier and Mittal conclude, “To be sure, we are still in the early days of AI, but human-machine collaboration is the new normal.”
When it comes to processes, De Smet and Gagnon note, “[Companies that get it right] create adaptive, fast-moving organizations that can respond quickly and flexibly to new opportunities and challenges as they arise. In doing so, they’re moving intelligent decision making to the front lines. That’s in sharp contrast to the standard, ‘safer’ modus operandi of capturing data, sending it up a hierarchal chain, centrally analyzing it, and sending guidance back. Several of these forward-thinking organizations now starkly describe their decision making as being pushed to the ‘edges’ — to and beyond employees, past the organization’s four walls, and out to consumers and partners. The process functions more like a network and less like a chain of command.”
Concluding Thoughts
A survey conducted by Unit4 found, “84% of global decision makers are accelerating their digital transformation plans.”[7] The survey also concludes, “There are challenges ahead, as 34% of global decision makers say they must break down silos of information across their organizations and 31% of users are reluctant to change.” These structural and cultural challenges must be addressed if digital transformation is going to succeed. Tricia Wang (@triciawang), a self-described Tech Ethnographer & Sociologist, explains, “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.”[8]
Itamar Ben Hemo, CEO and Co-Founder of Rivery, concludes, “Once again, technology is likely to become one of the key catalysts for economic growth this decade. The pandemic has expedited the way people use tech platforms and devices as essential tools to work, shop, learn and interact. The world of business is changing fast, and many organizations must undergo significant digital transformations if they want to ride the upcoming wave of consumerism. … In a similar way that in the 1920s America’s economy grew by over 40% in great part thanks to the technology that enabled businesses to mass produce, the 2020s are bringing us another technological revolution to grow within via unprecedented visibility into consumer behavior, user analytics and product demand. The best part is that these sophisticated data and agile insights have never been cheaper or easier to acquire. Those organizations that leverage the right data stack for their business today will have a real edge over the next decade of consumerism.”[9]
Footnotes
[1] Aaron De Smet and Chris Gagnon, “Organizing for the age of urgency,” McKinsey Quarterly, 18 January 2018.
[2] Yossi Sheffi, “What is a Company’s Most Valuable Asset? Not People,” Supply Chain @ MIT, 20 December 2018.
[3] Falon Fatemi, “3 Ways Artificial Intelligence Is Transforming Business Operations,” Forbes, 29 May 2019.
[4] Keith Strier and Nitin Mittal, “The Complex Truth About AI Computing and Value,” The Wall Street Journal, 2 March 2021.
[5] Rahul Vishwakarma, “Why AI can Help Achieve Complete Digital Transformation for Enterprises,” Entrepreneur India, 30 May 2019.
[6] Jeanne Wenzel Ross, “The Fundamental Flaw in AI Implementation,” MIT Sloan Management Review, 14 July 2017.
[7] Staff, “84% of global decision makers accelerating digital transformation plans,” Help Net Security, 20 November 2020.
[8] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.
[9] Itamar Ben Hemo, “Accelerating Digital Transformation And Data Processes In The New ‘Roaring Twenties’,” Forbes, 4 February 2021.
