Artificial Intelligence
Jan 07, 2019

Become a disruptor: build your company's ability to sense, decide, act, and learn

“More than one-third of businesses today will not survive in the next 10 years. The only ones that will survive will turn their companies into digital, techie versions of themselves, and many will fail trying." – John Chambers, former CEO of Cisco

Artificial Intelligence (AI) is driving the next wave of industry disruption. AI's creative destruction potential is accelerating, as evidenced by the average lifespan for S&P 500 companies shrinking from 33 years in 1964 to 24 years in 2016 and a projected 12 years by 2027. To thrive in this coming AI era, enterprises must build their ability to sense, decide, act, and learn – or risk getting pushed aside by those who do. This blog discusses considerations and provides recommendations on how to build this critical ability within your enterprise.

AI is expected to generate a total of $1.2 trillion in global business value in 2018, up 70% from 2017, with AI-derived business value forecast to reach $3.9 trillion by 2022. Beyond these remarkable market-growth projections, AI's disruption potential is profound. The Wall Street Journal has written about AI's projected impact on various industries. McKinsey has shown how AI is reshaping the future of corporate support functions.

The most valuable companies in the world today are those that have learned how to leverage data, make decisions, take actions, and continually learn. Companies such as Apple, Google, Amazon, and Microsoft are good examples of companies that are using data in this way. By leveraging AI to build these capabilities, your company can also become a disruptor like these tech leaders. That's because AI is well-suited for sensing, deciding, acting, and learning – here's how:

  • Sensing: making sense of huge (and growing) volumes of structured and unstructured data
  • Deciding: automating the decision processes, which include many weighted factors that require sophisticated analytic decision models
  • Acting: taking actions on decisions through an intelligent dispatch and orchestration process
  • Learning: continually acquiring knowledge to make better decisions through experience, study, or being taught

Gartner and Aragon Research believe a digital business technology platform is critical to helping companies build these sense, decide, act, and learn capabilities.

First, a digital business technology platform cannot be purchased; it must be built because there are no packaged solutions. CIOs must build their own in conjunction with their digital business aspirations.

A digital business platform will not replace existing systems; rather, it will integrate with legacy systems and orchestrate their capabilities. These platforms introduce new technologies and methods that enterprises need to build digital operations. They de-risk enterprise investments and provide just enough capability to incrementally support experimentation and continual advances. Digital business technology platforms enable best-in-class third-party solutions to be leveraged in a modular manner, as well as providing the ability to scale with required governance and controls.

Gartner research shows the top five benefits expected from digital business technology platforms:

  • Improving or automating current operations
  • Generating more revenue
  • Significant business cost reduction
  • Greater proportion of business through digital channels
  • Creating completely new products and services

Recommendations for next steps

  1. Do your homework: Discuss digital technology business platforms with Gartner or Aragon Research; these industry analysts have done significant research regarding best practices, strategies, and approaches. Investigate experienced service providers and their platform capabilities – who has helped others within your industry with digital transformations?
  2. Embrace a dual approach to transformation: Enterprises often make the mistake of believing that transforming their core businesses is enough. A dual approach of discovering new growth opportunities beyond the core – and govern and resource them separately – are often able to continually reinvent themselves and change faster than the market.
  3. Design for change and prepare for obstacles: Building your company's digital technology business platform is a journey that will require vision, courage, and continual adaptation. Challenges will often not be with AI technology, but rather with your organization, skills, and culture. These accompanying elements must evolve alongside your journey.
  4. Assess the costs of inaction: Leadership teams need to allocate scarce resources –including capital and talent – among current business demands and future opportunities. Rather than only looking at the cost of new actions, remember to assess the cost of inaction. Many companies exiting the S&P 500 serve as cautionary tales and examples of those who did not adequately measure the impact of lost opportunities.

In summary, disrupt or be disrupted is today's business mantra. The new normal. Along with people and processes, AI offers your company the potential to become a disruptor. It presents an opportunity for a radical rethinking of how your company can drive higher business performance. Only instinctive enterprises that have developed their ability to sense, decide, act, and learn will thrive. Start now.

About the author

Dan Glessner

Dan Glessner

Vice President, Digital

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