2017 and beyond, let’s get digital

Digital means money — that’s a no-brainer. From traditional conservative companies to progressive enterprises, all are looking to leverage ‘digital’ to compose their future.

Over the next few years, new technologies, a changing workforce, and new consumer expectations will create significant change, opportunity and threat. These highly disruptive trends will not only affect us as individuals, they will also impact the organisations we work in and our overall society.

The work that got us to the present won’t get us to the future because the digital economy requires completely different skill sets and attitudes, as well as greater expectations. As we step into 2017, it is time for leaders to understand how the future of work is already coming to life today.

Artificial intelligence (AI) isn’t coming — it’s already here. 2016 saw many consumer-facing autonomous services hit a tipping point — self-driving cars, AI-powered chatbots, etc. AI is all set to move from consumer-focused used cases to the real enterprise world in 2017 and hit us hard. Over the next few years, every aspect of our commercial world will be affected by the new machines. In short, the future of work is the mirror image of the future of AI.

If you’re not making AI your business today, AI may well put you out of business tomorrow. For instance, retailers can leverage AI to provide high degrees of relevance with image recognition and data-powered product recommendations.

AI will be the number one driver of business change in 2017 and beyond. AI-led automation will accelerate the pace of modernisation in middle- and back-office operations, thereby truly digitising the fundamental operational blocks. Big data is an enabler for AI because it provides the necessary capacity for learning algorithms to consume data and use it to make strategic decisions (where to open a branch office or whether to approve a loan, etc.)

According to IDC, IoT in Asia Pacific is set to explode to 8.6 billion devices by 2020, growing from a current annual market of $250 billion to $583 billion in 2020. Eric Schmidt, executive chairman of Alphabet, summed it up perfectly at the 2015 World Economic Forum: “There will be so many sensors, so many devices, that you won’t even sense it. They will be all around you and be part of your presence all the time.” His comments are actually turning into a reality. The proactive push from regional governments is creating the required infrastructure to support IoT initiatives.

A case in point is the Singapore government’s Smart Nation Vision aimed at improving government operations, service delivery, healthcare, the environment, and public transportation. We are at the cusp of an IoT-driven revolution as it will produce a tectonic shift in the way we live, work, and run businesses.

The IoT is still evolving when it comes to standardisation, and presents data privacy and security risks. More connected devices mean exponential growth in the amount of personal and sensitive data generated. A single security breach on one device could infect an entire network, considering that multiple devices are interconnected on a home or business network.

Cyber-attacks are estimated to cost businesses as much as $400 billion annually — larger than the GDP of roughly 160 of the 196 countries in the world. Alarm bells are already ringing with recent reports of cyber-attacks launched through connected refrigerators and malicious e-mails sent via household appliances. IT departments and CIOs/CISOs who have not kept up with security standards in the region will fall behind in ways that will be nearly impossible to make up in the dynamic digital security landscape. The IoT security role within IT departments will be a reality soon, if it isn’t already.

Automation is a disruptive force that is transforming every industry, raising profound questions about the work that people do and the future relationship between man and machine. Machines will certainly assume charge of certain rote and repeatable tasks, but in the future, as today, human skills that require constructive thinking (such as teaching, creating art, performing R&D and comforting patients) will always be in demand. Innovation, leadership and strategic thinking will also be critical and can’t be replaced with robot technology. Instead, people working in tandem with machines can enable greater efficiencies than those achieved by individuals alone.

Digital is inherently collaborative and is about equalising power structures through the democratisation of information. Collaboration is not about platforms or technology; it is really about engaging people in a shared journey that can transform the business from the bottom up and break down internal silos. Organisations need to acquire and nurture the skills that are required today and also fit tomorrow’s needs.

Companies behind the digital curve pay a big price — the “laggard penalty” or the difference in both cost and revenue performance achievable through proper use of digital technologies. The consequences of a laggard mentality are clearly visible in the music, travel, publishing and taxi industries. The slower these businesses changed their business models in response to digital forces, the larger the market gap that opened for more forward-thinking competitors. Retailers spent millions of dollars setting up physical stores, but some assumed their mobile app could be created with a tiny budget. This “spray-and-pray” approach usually produces limited or no results. Today, laggards, on average, face a total economic impact of approximately 4.9 per cent of all costs and revenue. Leaders’ impact is about 13.2 per cent. That means leaders have a 160 per cent advantage over laggards when it comes to digital.

By making wise decisions about how to embrace technology, Indian companies can expand business and increase ROI — but only if there is clarity on why the digital path was chosen in the first place. Leaders who fail to invest in digitisation due to fear of its “dark side” will inflate counterproductive perceptions and encourage decisions that are detrimental to business.

Digitisation is an enabler of more efficiency, productivity and profitability, and to master the digital world, an organisation needs to be firm in its mission, focused on the user experience, and flexible when overcoming the inevitable missteps that occur along the way. In fact, the fear around digital signals a tremendous opportunity for business leaders to innovate and change technology perceptions.

Digital’s impact on revenue growth opportunities is already changing the competitive landscape, but most individual companies have only scratched the surface of the possibilities of becoming “truly digital”. Ultimate success will require an open mind, perseverance and courage. As Bob Dylan famously said, “He not busy being born is busy dying.” This is especially true in today’s fast-changing digital world.

The writer is Senior Director at Centre for the Future of Work, Cognizant

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