The CIO’s guide to driving digital transformation

Digital is already reshaping industries, says Val Sribar, senior vice president at Gartner.

But there is a certain point where affected industries drastically need to take action.

Once digital revenues for a sector hit 20 per cent of total revenue, the shakeout begins, he says.

This happened to the retail sector in 2005, when traditional stores were in denial about online shopping.

They thought everybody wanted to buy clothes in the stores, but customers flocked to online stores like Amazon.

Today, Amazon is the largest clothing retailer in the United States.

For the clothing industry, disruption is the new black, says Sribar, speaking at the keynote this week at the Gartner Symposium/ITxpo in the Gold Coast.

“This lesson in retail applies to every industry everywhere,” says Sribar. “Twenty per cent is the point of no return.”

He says winners are alreading emerging, but some organisations will not make it through the digital shift.

Sribar is joined on stage by Gartner executives Michele Caminos and Leigh McMullen, as they talk about tackling the digital transformation challenges ahead for both public and private sectors.

The new competitors and disruptors

Sribar says disruptors are finding new opportunities and are attacking the weaknesses of incumbent businesses.

They are serving unmet customer demands, finding ways to use excess capacity in the supply chain, employ new platforms for awareness and marketing and capitalise on new distribution channels.

Digitalisation also exposes the weakness of the incumbents, as new entrants offer more choices, and better customer experience and price.

Sribar points out incumbents who are not standing still amidst this disruption, are using new digital KPIs for the business, such as the Gartner Digital IQ Index to analyse their brand’s presence in social media, e-commerce, digital marketing and mobile.

Sribar says these organisations measure how many ecosystems they participate in, and the conversion rates in each.

Digital asks for deeper outcome-driven measures and this applies to all industries, including government, he says.

“If you don’t create new efficiencies, new value or new ways to engage with customers and constituents, you are destined to fall behind.”

He proffers three ways organisations can scale in the digital era.

First is to scale up by gaining efficiencies. Second is to scale across by taking capabilities learned from one nit to another, while creating a culture that rapidly learns and adapts. Third is to scale out by combining growth and speed that comes with digitalisation.

He says in this new environment, there will be high demand for skills in three areas - artificial intelligence (AI), digital security and Internet of Things.

Find alternative ways to fill the need by contracting, crowdsource, lease skills, or develop from within for these skills, particularly on AI, he advises.

'You are never done building your digital platform, your enterprise is never done building your digital ecosystem'

Build digital dexterity

“The secret to digital is analogue,” says Michele Caminos, Gartner managing vice president.

By this, we mean people, she explains. “Augmenting the people you already have and modernising your workforce to scale digital value.”

“To scale, we need people with digital dexterity, people who are collaborative, agile, innovative and creative, who have the ability to desire and capability to exploit existing and emerging technology for better business outcomes.”

“If you want to grow your sphere of influence, unleash digital dexterity across your entire workforce,” says Caminos.

Diversity of viewpoints counteracts the dark side of AILeigh McMullen, Gartner

Tacking the ‘dark side’ of AI

Leigh McMullen, research vice president at Gartner, says organisations can look at what is happening in the consumer space, where smartphones are designed around the users.

It is time to build technology based on user experience, double down on design thinking and exploit virtual personal assistants to free everyone from low value tasks, says McMullen.

As Caminos puts it, “what will Steve Jobs do to make your employee apps irresistible?”

McMullen also stresses the importance of ensuring diversity in all forms - data, talents, backgrounds, cultures - as organisations embark on digital transformation.

Diversity of viewpoints counteracts the “dark side” of AI, which is bias. Diversity will allow us to overcome this bias and to harness the power of the crowd, says McMullen.

There is a business case for diversity, he states, as research shows the more diverse a company is the more it is profitable.

The world is at a pivotal point, says Caminos. “Certain jobs have been lost in every technology revolution and AI will be no different.”

“Unfortunately some people will be AI’d out of a job but Gartner believes the real value is augmentation of people,” says Caminos.

“AI is here to help, not replace us. The best use today of AI is to augment human capability, a person plus a machine is smarter either by themselves.”

“You have to be a machine-learning learning machine.”

She concludes: “You are never done building your digital platform, your enterprise is never done building your digital ecosystem.”

Copyright © 2017 IDG Communications, Inc.

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