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The Beginning of the End of AI and Digital Transformation

Now that we are well into 2022, I want to take this opportunity to share with you the reality of the post-digital transformation era, which is not moving in the direction that you might expect. But, more importantly, what strategies you must consider in dealing with the unprecedented changes the world has witnessed since 2020.

Without a doubt, we are living through arguably the most critical historical moment of this century. The pandemic fully exposed many problems that took citizens, startups, enterprises and governments completely off-guard. Many historians and academics will write a plethora of books analysing all facets of the COVID-19 world. But my focus here is on the meaning of the post-COVID digital transformation. In fact, as of now, we need to stop using the term “Digital Transformation” altogether because this ship has sailed.

Digital Transformation as we know it is dead. It is so “pre-COVID” that the entire strategy has today become irrelevant in many areas. We are now accelerating beyond digital transformation, and 2022 will be the year we will start seeing the growth of the post-digital transformation era. How will this change impact your business in 2022 and the future?

Emerging Problems Before The Pandemic (2019 – Early 2020)

During our pre-launch in early 2018, our team detected several problems from direct experiences working on several projects. We discussed the reasoning behind our focus on Augmented Intelligence rather than Artificial Intelligence here and here. But interestingly, we started seeing more scathing reports emerging from some of the key players in this space. For example, numerous reports published in 2019 highlighted the significant challenges in the artificial intelligence (AI) space and how many AI initiatives failed. Even some of the more prominent VCs reported that only 40% of EU-based startups applied any AI, despite their claim to be “AI-focused” in most cases.

Specifically, one report from MIT Sloan highlighted that seven out of 10 companies surveyed noted minimal or no impact from AI. Furthermore, among the 90% of companies invested in AI, fewer than 2 out of 5 reported business gains from AI. Accordingly, they confirmed that only 40% of organisations making significant investments in AI did not report business gains from AI.

Twelve months later (i.e. at the height of the pandemic), a detailed report released by MIT Sloan and BCG Group highlighted that only 10% of businesses have seen “significant financial benefits” from increased revenue or cost savings. This is a 90% failure rate in my books, the typical percentage I witnessed across many projects. But the report also highlighted, and quite rightly, that most successful AI adopters create a virtuous circle of learning between human workers and AI systems. Each provides valuable insights into the other. This is the model that Nebuli has been promoting since 2018 through our Human-centric Augmented Intelligence models. This is not your “usual” technology-first AI or digital transformation strategy that has been conventionally adopted since the early 2000s. We have now entered the Human-centric future, and it is very different indeed. It is about putting people first.

The New Era of Post-Digital Transformation

From our point of view at Nebuli, AI and any digital experience are about building a healthy and productive human-machine symbiosis. While the reports above (amongst many more) suggested good strategies for achieving changes in processes and technical approaches to adopting AI, I would like to emphasise that such changes must involve a fundamental shift in the business culture of an organisation, starting from the top management. I discussed this specific point in my contribution to The AI Journal.

In simple terms, if you are running on the “business as usual” digital mode today, you will fast become irrelevant in the very near future. Considering that we witnessed some of our customers accelerating their digital transformation and data-driven strategies in 2020 by executing and delivering most of their 2025-2030 plans by the end of 2020, I would suggest that those who did not follow suit are already several years behind. The ship has sailed, disappearing into the horizon remarkably fast.

So, suppose you are still considering and planning whether or not you should adopt AI solutions or data strategies, whether you need to adopt business analytics or predictive analytics, or looking at automation and digitisation ideas. In this case, there is a high possibility that at least one of your direct competitors has already sprinted passed you on the post-digital transformation track and is gaining a significant competitive advantage over your organisation. If you are lucky enough and none of your competitors is moving forward yet, you need to start immediately.

Post-Digital Transformation is More About Creativity and Innovation, not Acceleration.

As we might be reaching the ending phase of this pandemic, the central talking point we see around us today is this: “once it’s over, do we just go back to normal? You know, the way things were?”

I will not get into the debate about what this “normal” actually means. But I can tell you with 100% certainty: Whatever life, habits, work or indeed your outlook on life that you had pre-COVID will never be the same. It is a hard fact for many, but it is a fact that we must accept in order to rebuild successfully. A pivot, if you will. As a tech entrepreneur, pivoting comes naturally in the science and tech world because it is all about embracing change and innovating around this change and achieving successful outcomes.

Similarly, businesses and governments must accept that consumer habits have changed, employment models have changed, markets have changed, and, above all, technology has changed accordingly. Thus, whatever strategies or plans that you may have committed to before this pandemic, it is highly likely that this strategy will no longer be relevant or, at best, will not deliver most of your planned outcomes.

In other words, the world is figuring out the meaning of the “new normal”, how we build it and which “new” innovations can play a role in this new normal? Metaverse anyone?

Another critical question concerning innovations is, can we ever build and deploy them successfully? Does your team have the research and development (R&D) budgets, facilities and skills to deliver them quickly?

Yes, it is a much more significant change than we may have anticipated, and we humans are not very good at change, and the coming decade will, indeed, be challenging, difficult, painful and even scary. But most of it is related to our habits and how we adapt to this unprecedented change. Our CDO, Simon Jack, wrote an excellent post about our habits as humans and how habits dictate our lives and working practices. Above all, he highlights the strategy of altering your habits to adapt to disruptive changes today, which is the core part of our BehaviorLink framework.

As an independent, deep-tech company, we focus on embracing change, and we would strongly advise that you do the same. You may need to consider dropping or amending many of your corporate policies that may prohibit your organisation from pivoting fast in order to ride the tides of unpredictable global problems.

Change is what we always must prepare for, especially in the accelerating field of artificial and augmented intelligence. Since we focus on human-centred AI, we closely analyse the fundamental changes we see in the world around us from the economic, technological, cultural and societal points of view. These four elements are more closely intertwined today than ever before and form the foundation of the post-digital transformation era.

Corporate innovation and R&D are vital for organisations to get ahead of the competition. Research has found that 87% of senior business leaders say digitalisation is a priority, and 97% of businesses are engaged in some form of digital initiative. However, not all organisations can quickly move ahead with their innovation initiatives in today’s post-digital transformation era. This is why we launched ClientLab to provide organisations with access to expertise, including panels of scientists, business development experts, designers, and engineers. This new service provides our partners with the innovation support needed to establish and deploy innovations that shift the mindset of their customers, leading to a strong market impact.

The pandemic has fully uncovered many weak links in this foundation that are undoubtedly life-changing for many. But market forces have now defined the direction in which businesses and innovators must move to fix these weak links. It is an era of fresh new ideas, creativity and human-centric design thinking. And, this must be powered by a people-first strategy, behavioural modelling and data ethics. Get in touch, and we will work with your team to support you during these challenging times of unprecedented change.