Digital Transformation – more than just a technological change

Digital Transformation – more than just a technological change

19. July 2019

.Do you remember Daniel? Daniel is the guy who was tasked with calibrating a measuring point at the company he works for but who ended up submitting a cross-departmental digitalization concept to his boss when he realized exactly how complicated that would be? We’re not sure what the final outcome was. What we do know is that Daniel managed to persuade his boss to get everyone concerned sitting together at the table about seven weeks later. It cost him a good few sleepless nights in the process.

Study by Deloitte

The fact is, to be truly successful, digital transformation needs overarching concepts. And that’s something companies in Germany are still a long way off from. According to a study by Deloitte, only about a quarter of the 100 German businesses surveyed have so far implemented an enterprise-wide AI strategy. Compared with other countries this is definitely on the low side – the figure worldwide is significantly higher at 35 percent.

Okay, so using artificial intelligence may not be the same as digital transformation. However, it is a fundamentally important aspect, so that the conclusions to be drawn from the study are probably equally valid for digital transformation.

Local strategies, not global

In the majority of cases, artificial intelligence is used within individual departments, where it tends to be offered as a service or integrated in platforms like SAP S/4 HANA Cloud. The use of cloud based solutions particularly benefits smaller companies here, which often quite simply lack the capacity to implement their own AI. And even if they did have sufficient means to develop solutions of their own, they wouldn’t have the specialist personnel. This same shortcoming can also be observed in all other comparable markets (31%). Though nowhere else is it so drastic as in Germany at 36%.

Technical obstacles

There are various other obstacles which hinder the implementation of AI strategies and hence also digital transformation. However, many of them lie hidden in the current business landscapes: insufficient data quality and problems as regards integration into existing processes are frequently mentioned in this connection. Data protection and cyber security likewise play a major role. In this complex situation, the use of AI solutions has so far failed to convince, partly because it is difficult to provide added value with AI projects.

Lack of trust

The use of AI methods also requires a rethink on the part of employees. Unclear actions are aspects that must be considered, understood and overcome. Such as incorrect decisions taken on the basis of AI systems and their failure in critical situations. Any AI algorithm is characterized by a certain degree of fuzziness. And any model may make uncertain predictions, especially in areas which it covers less well. When a model is created, therefore, considerable attention should be paid to validating it and to ensuring that it complies with secure implementation limits. Even then, it is vital to be aware that wrong decisions can never be completely ruled out. And since these are new technologies, such fears are not totally unfounded. It should not be forgotten that human beings, too, can just as easily take bad decisions.

Change management is immensely important

In the meantime, businesses have started to recognize the immense importance of change management in the context of digital transformation. Rapid changes in the market have impacts not only on individual departments. But on whole ways of working and working structures, which is why it is essential to support people. And get them on board as well. This circumstance is also reflected in the study. The shortage of change management and transformation experts is perceived as being even more acute than with software developers and data scientists.

Employees get a feeling for new technologies

For this reason, it can sometimes even be helpful to restrict the first steps to within individual departments. Apart from gaining valuable experience in this way, employees also get a feeling for what the new technologies can do and what they cannot. In the long run this creates trust, which is an aspect that should not be underestimated. The experience acquired at this stage can later be bundled and incorporated into an enterprise-wide strategy.

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