What digital transformation means for business
There is a lot of buzz about digital transformation - most mid-sized and large companies have initiatives on the topic, and yet it seems that there is not enough alignment on what it really is, and why should the business strive for it.
I was recently interviewed by a Flemish network of Chambers of Commerce & Industry for their special issue on digital transformation. The interview was published in Dutch. We hope the short Q&A can be helpful for an English-speaking audience.
What is digital transformation really?
Digital transformation is a journey for a business aiming at developing radically new revenue streams, market differentiation, and new products and services with the help of data, analytics, and new digital technologies. Examples of such a transformation are selling digital assets (e.g. selling data), new digital products and services, renting out a product instead of selling it (car sharing, light as a service (Philips provides light as a service at Schiphol Airport, digital recorders for your TV), or moving to adjacent industries (e.g. tesla going from selling cars to selling batteries and powerhouses ).
Is digital transformation important for every business?
I believe the journey to truly transform your business model and revenue streams is not necessary for every business, - only for businesses in industries which are being disrupted. Examples would be banking, insurance, notaries, lawyers, financial services, retail, transportation. Businesses which operate in stable segments may not need to transform themselves, but should focus on digital optimisation - radical improvements of productivity, profitability and customer satisfaction.
Often the company starts with digital optimisation and then only is ready for transformation as the digital maturity, data literacy and internal analytics capabilities increase. A third group of companies are called digital natives - companies which are created using transformative new technologies. Many modern startups and scaleups in the technology sectors are like this. Including DataStories.
What can you, as A.I. software company, do for businesses who are currently digitalising?
We help companies who already started the digitisation initiatives, (collect and manage their information digitally) to see where the value in data is lying. Our software helps them quantify the consequences of their actions or in-actions, and run interactive what-if scenarios to see what are the best changes to make.
For example what are the optimal changes to the parameters to your production process to reduce waste or increase yield or improve product consistency, or which customer segments to focus on in your marketing campaigns, or which employees to pay attention to because they may leave soon.
What is augmented intelligence?
Augmented intelligence (or in short A.I.) is a result of augmenting (expanding) a human expert with powerful predictive analytics tools (or artificial intelligence, also A.I.) to solve hard business problems using data. It usually needs data from the past and the present to predict the future and understand why the trends we see are happening. It is a better term to use instead of artificial intelligence as it emphasizes the need of the human expert needed to validate the hypotheses using knowledge and context and take final decisions. READ MORE
If data has more than a handful parameters, and it is very difficult for a human to discover and understand deep relationships between them. That’s why we need powerful analytics tools like DataStories.
Which companies would benefit the most from augmented analytics?
We help businesses which already collect data and need to improve their complex production or assembly process, or complex product development & innovation process which requires a lot of trial and error to get to optimal products.
Our software helps the company understand deep relationships in all parameters of the process and identify drivers of the outcomes.
How can you help businesses use A.I. now in the midst of the COVID19 crisis?
Indeed, a part of our projects has been focused on cost reduction for production and product innovation. Both have become critical after the corona crisis. Businesses in the maakindustrie had to stop production and revenues dropped, so cost saving became critical.
In consumer goods sector kept working all these months, but innovation on reducing the cost of their product has become important because the buying budget of consumers has also dropped with the crisis. Our technology helps for both problems, that’s why we are having a busy year.
One additional application is budgeting and cost forecasting after the corona crisis.
From about July 2020 (five months into the crisis) it became possible to automatically adjust forecasts using new post-crisis data and build reliable predictions for demand, and revenue for the coming months.