Digital Transformation: The Cost Of Not Evolving Part I
Data The Real Digital Asset
At the core, and the heart, of the 4th Industrial Revolution — 4IR — and all its disruptions across economic systems worldwide, there’s the oil that fuels it and expands at an exponential rate: Data. Data is the basis of Ai, Cloud Computing, Blockchain, and IoT. They wrangle it, process it, store it, structure it. It is truly all about Data. Data has placed us at the doorsteps of a new era, one where the world has actually changed and we can’t ever go back to the way things were yesterday.
Corporations have increasingly raised Data’s status to a critical corporate asset. Many large organizations have become Data-centric. However, the corporate view of Data-centricity is only an adaptation to the disruptive wave that is upon us. Corporations will need to evolve towards Data and its capabilities and change their focus to it. Corporate leadership needs to lead this charge as a corporate mandate. But also as a leadership tool. The CEO and senior leadership should know what their data and the information therein is worth, and where they can obtain the data relevant for their company’s future success.
The C-Suite needs to ensure their Data, including the Data that is not available in a relational format or that can’t be analyzed with traditional methodologies, is usable and carries to the corporation all the value it has within. And this is not a small feat, as estimates show that from all the data produced in the manufacturing context, 90% of it is flat data without relational structure[1]. Making this Data usable requires new approaches that can efficiently handle both Data volume and types. Without innovation and creativity to Data needs and its formats tailored to a specific approach to Ai and machine learning, it will be challenging to survive in this century. Data is a digital asset, redefining society, business, how we are going to live, and how wealth will be created. The most concerning part about its disruption is how little the world and corporations are prepared for it.
Mass Extinction In The Corporate World
We are in corporate existential times. The advancement of technological methods, the new technologies of the 4IR — Big Data, Ai, Cloud, Blockchain, IoT — are putting the world in a Darwinian state. It is not just us, the individuals that are placed to learn new ways of doing things. All of our systems, economies, and corporate processes are being placed in a dire punctuated equilibrium — bursts and rapid rates of evolutionary change punctuating an equilibrium which in the macro is quite stable. Punctuated equilibrium theory is not only used to model and explain social change, but also to describe organizational theory, corporate behavior, and technological change. We are placed in the midst of a textbook real-life expression of a theoretical model, which we will be used as a learning example of social groups’ and corporate systems’ extinctions for generations to come. There’s clear evidentiary support that the corporate world is in this critical evolutionary place, whereas Tom Siebel says “merely following the trends of change is not enough. Just like organisms facing the Great Oxidation Event, organizations need to reinvent the way they interact with the changing world. They must recognize when an existing model has run its course, and evolve … They must build something that will establish a clear existential advantage in order to survive into the new stasis and prosper”[2].
As the data indicates from all sources, the corporate world is in a do-or-die moment. Either, corporations evolve (not just adapt) to embrace Ai and a new way of doing business, permeating the entire fabric of their organization, or they will perish. Additionally, almost in textbook Network Theory with power-law distribution behavior, the first-movers will win the market share and profit pie. In this critical mass extinction, the companies that lead will not only be able to set industry standards while blurring industry lines, but they will also be positioned to capture a share of the trillions of dollars these new frontier technologies will produce. Those laggards will not be able to compete. It is genuinely that existential. In its essence, digital transformation is a disruptive evolution into an entirely new way of working and thinking, a process requiring a full transformation of business units for new ways of functioning. This is precisely the causality prompting so many legacy businesses to fail and already become extinct, as their reliance on current processes impedes them to engineer radical new ones. Which in turn, makes this evolutionary digital transformation so difficult for the corporate world, as they must shift and invest in new technologies viewed as unproven. Quoting Siebel once more: “Many companies simply refuse to believe they are facing a life-or-death situation”[3].
Will Your Firm Ride The Tide Of Prosperity Or Be Crushed By The Wave?
REF — [1] Jacques Bughin, James Manyika, and Tanguy Catlin. “Twenty-five Years of Digitization: Ten Insights into How to Play It Right”. DES-MADRID, May 2019.
[2] Thomas Siebel, “Digital Transformation: Survive and Thrive in the Era ofMass Extinction”, pp 8. Rosetta Books, New York, 2019.
[3] Ibid., pp 17.
