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Digital transformation: the finger on the pulse?

By Sid Shah, managing director and partner, BCG Digital Ventures

I’ve been working on digital transformation and scaling at Boston Consulting Group’s Digital Ventures for more than five years now, but in fact I’ve been active in this kind of enterprise for two decades. I have been working side by side with people to re-imagine their businesses using the latest technology or business models, whether that’s launching a celebrity fitness brand in India or a gas station in South East Asia.

Sid Shah
Sid Shah

For me, there are two key aspects to digital transformation. At its core, it uses technology to drive improvements in a business, harnessing the possibilities of new developments and innovations and adapting to more efficient ways of working. No surprises there. The pace of technological change is staggering. We are now seeing a second generation of digital transformation: for many companies, even email seems arcane as they move onto new internal messaging services like Slack. These in turn have changed the way companies conduct meetings, manage tasks and communicate externally. Likewise, use of previously integral spreadsheets may now begin to wane when it comes to financial planning. Businesses now have the ability to clone themselves digitally and test financial outcomes, predictions and business plans which can give results far beyond the Excel cell.

Entrepreneurs and CTOs have to be nimble, as there is less and less time to assess new technologies to decide whether they are likely to prosper or fall by the wayside. Whether you’re seeding a digital startup or installing a new digital management system, there is a premium on adoption speed and scaling. The pressure is on: not not just to get digital, but to get digital right.

This is the other facet of digital transformation. If it’s going to be truly successful, and offer genuine improvements to your business model, it needs to be fully integrated into your operation. Technology needs to run through what you do like a silicon thread. It can’t be a kind of bolt-on supercharger for added growth; the whole engine needs to work more effectively and efficiently.

One way to do this is through recruitment and deployment of the appropriate staff. It’s no use having a separate “digital” department, off in a digital corner by themselves. Digital natives need to be integrated throughout the company and represented at all levels, including the board. There’s just no substitute for that expertise, that intimate familiarity with cutting-edge technology. If you have a board of directors who are only comfortable with traditional emails and standard forms of advertising, say, you’re not going to get the best out of the opportunities technology can offer you. Think of it like this: if you had a significant footprint in Mexico, wouldn’t you want someone on the board who spoke Spanish?

In a way, it’s a form of diversity. Technological expertise can be thought of as a sort of identity as well as a skill – that’s a sign of how deeply ingrained in people’s psyches interaction with the digital world is. You’re much more likely to know your friend’s Twitter handle than their middle name. And like any other characteristic which you’d value, monitor and aspire to spread throughout your workforce, it’s one which you need from the top to the bottom of your organization.

As we face a new decade, the future face of digital transformation will be artificial intelligence. More than all previous digital transformation this is a game changer. Bringing in machine learning will significantly alter the human experience. Reflecting this paradigm shift in your business approach is the best way – no, the only way – to use AI and machine learning as a competitive proposition.

A case in point is how marketing is being transformed by the access advertising firms have to vast swathes of information about their products, their strategies and their audience, and this can be analysed and made meaningful by AI. Some companies can even offer real-time analysis of ads and how viewers or listeners respond to them: this is the nascence of outsourcing intelligence to computers.

It’s easy to think of AI as something which exists in the world of big tech firms like Google and Microsoft, but it will impact more traditional manufacturing too. As companies look around to reinvent their product, acquire new markets and fundamentally reimaging themselves in the digital age, AI will be the agent that allows them to eliminate risk when it comes to decision making and business modelling. That’s something every CEO would kill for.

From, driving to defence, AI will revolutionise our lives – and business lies at the heart of that revolution. As ever, I can only give broad pointers to a subject like digital transformation. The integration of technology will vary from industry to industry, even from company to company. But the direction of travel is clear: integration in depth, wholesale cultural adoption, and always, always, a careful eye on the competition. Are you the quick, or the dead? It may be as binary a choice as that.