Kevin Benedict Ponders the Future

Profits that Kill in the Age of Digital Transformation

Presenting 40 Months of Hyper-Digital Transformation in Lisbon, PT

Digital transformation initiatives both increase revenue and decrease expenses according to our upcoming study titled Work AHEAD 2016 by Cognizant’s Center for the Future of Work. For this study we surveyed over 2,000 executives across 18 countries. The expected net business impact over the next 3 years of rapid digital transformation, i.e. hyper-transformation, is an increase in revenue of 11.4% (Revenue = 10.3%, Costs = -1.3%) amongst the companies in our study. These numbers represent the difference between success and failure in many industries.

To get the predicted revenue impact, companies expect to increase their spending on digital technologies from 11.3% of their revenue today, to 16.6% of revenue by 2020, while decreasing their non-digital investments.

In addition, our study reveals 64% of the futurists in our study, experts paid to study digital technology trends and to develop future strategies, believe digital transformation will boost revenues by 2020, 76% believe it will strengthen their competitive positioning, and 88% believe it will accelerate their speed to market. If you accept these predictions, then your organization should quickly transform itself and jettison the heavy baggage that accumulates as a result of decades of institutionalized methodologies developed and codified in an analog era - an era operating at a far slower operational tempo. The good news is that ROIs (return on investments) from digital transformation initiatives are compelling. Nearly 30% of the surveyed firms are receiving an ROI greater than 100%.

These revenue numbers have investors interested and asking about the digital transformation plans of companies they invest in, or are considering investing in today. We have all read about the list of companies that have failed this year due in part to their slow and/or inadequate response to digital technologies and changing competitive marketplaces. As a result investors today want to understand the speed and scale of their portfolio’s digital transformation initiatives, as these initiatives can be predictors of future value.

For executives, transforming an enterprise is difficult at any time, but when an enterprise is highly profitable - digital transformation is even harder. Why? The temptation to follow the maxim, “Don’t fix what isn’t broken,” is just too compelling. The challenge enterprises are faced with today, however, is that digital technologies are changing the competitive landscape faster and in different ways than executives have ever seen before.

Recently, we presented a workshop on digital transformation strategies to a highly profitable automotive parts and systems manufacturer. The company is filled with smart people using efficient long standing manufacturing systems and processes. The company is innovative in R&D, and forward thinking in the adoption of digital technologies and strategies for their products and services.

The challenge we all faced in the room is how do we justify digital transformation investments, when today the old systems and ways of thinking pay out in record profits? How do we articulate that sensors, artificial intelligence, digital platforms and real-time data are taking on a whole new level of importance? In fact, executives believe big data and business analytics will have the biggest business impact of all technologies on businesses from years 2020-2025.

We were able to demonstrate, through an intensive brainstorming workshop, how a sensor enabled digital platform connected to their physical parts and equipment, and integrated with external databases could provide enormous customer and business value. We were able to show them how their current list of physical products and services, could be expanded by adding a whole new list of new digital products and services on top of their current offerings. The data they had access to in their physical products and solutions was unique and could offer significant value and competitive advantages if they made it available on a digital platform as a service. Our mission was accomplished.

Today an enterprise’s system for collecting, analyzing, reporting and sharing data is mission critical, especially given the increasing importance of artificial intelligence, robotic process automation and machine learning to companies’ future success. The end-to-end system for managing this data we call the “optimized information logistics systems” or by its acronym, OILS. Having effective OILS is mandatory in order to become a digitally transformed enterprise (DTE). Digitally transformed enterprises place a premium on data collecting, analysis, situational awareness and real-time action and reaction. Executives see the value in OILS, as 63% believe analytics will have a very strong impact on work by 2020, and 62% predict OILS will significantly enhance decision-making over the next 5 years.

DTEs see where their resources are located, where they are needed and how best to manage them at all times to successfully and efficiently accomplish their mission. They see how customers are using their products and how they are holding up. Real-time connectivity combined with OILS enables organizations to think, act and compete in real-time, a capability never before possible. It enables products in the field to be intimately tied to R&D and the manufacturing floor. It is a whole new world, which in spite of profits today, must be anticipated and invested in for tomorrow, or the profits of today might lead to the death of them tomorrow.

Authors: Tim Hillison, Senior Director, Cognizant Digital Works, and Kevin Benedict, Senior Analyst, Cognizant's Center for the Future of Work

*Source The Work Ahead, 2016, Cognizant Center for the Future of Work

Follow Kevin Benedict on Twitter @krbenedict, or read more of his articles on digital transformation strategies here:

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Kevin Benedict

Senior Analyst, Center for the Future of Work, Cognizant Writer, Speaker and World Traveler

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Follow me on Twitter @krbenedict

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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.

In Defense of the Human Experience in Digital Transformation

Discussing Digital Strategies in Lisbon, PT

Last week, I was a keynote speaker at the Mobile Edge '16 conference in Lisbon, Portugal. Following the conference I met individually with many different companies. These companies represented a variety of industries, sizes and digital maturity levels. I was sharing my latest digital strategy report findings, and then answering questions and brainstorming about what the data meant to each of them.

At the hotel, following a long day of meetings, it occurred to me that the biggest value I was bringing to these businesses was the breadth of my experience - the kind of experience that has turned my hair gray.

The report I was sharing was titled, “40-Months of Hyper-Digital Transformation.” This report was the result of surveying 2,000 global executives across 18 countries on the current impact of digital technologies on their business, and their expectations for future impact. In this report I wrote a lot about artificial intelligence and software robots. I wrote about how robotic process automation will change the role of processes, employees and managers.

While pondering my day over a hot drink, it occurred to me that the report and the data I shared could have been presented by a junior employee with good communication skills. The value my gray hair brought to the table was the ability to understand the back-story, the history, how today is different, and analyze what needs to be done today to prepare for tomorrow. It was perspective, experience and wisdom gained from many years of accumulated successes and failures. It was my human baggage that was so valuable. It allowed me to listen to many disparate situations and challenges, understand them, and then see a unique path to success for each. It allowed me to see their challenges in abstraction and define steps to follow. I chuckled and sipped my coffee. Just try to do that, I challenged all the bots and artificial intelligence engines I had been writing and speaking about. Just try to do that.

Follow Kevin Benedict on Twitter @krbenedict, or read more of his articles on digital transformation strategies here:

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Kevin Benedict

Senior Analyst, Center for the Future of Work, Cognizant Writer, Speaker and World Traveler

View my profile on LinkedIn

Follow me on Twitter @krbenedict

Subscribe to Kevin'sYouTube Channel

Join the Linkedin Group Strategic Enterprise Mobility

Join the Google+ Community Mobile Enterprise Strategies

Competing in Future Time and Digital Transformation

Digital Transformation is the process of transforming a business from one state to another - from a state where businesses operate in Human time, to a state that operates in Digital time and finally to Future time. Businesses today must digitally transform in order to compete in all three of these time continuums simultaneously.

Let’s first identify these different time continuums:

Human time – time governed by our physical, biological and mental limitations as humans
Digital time – time governed by computing, networking and data transmission speeds
Future time – time governed by predictive analytics, algorithms and artificial intelligence

Human time cannot compete with Digital time in a mobile and always connected world. Human time cannot deliver the real-time mobile and online commerce speeds that digital consumers require. For example, you can’t have a human responding to mobile search queries, or mobile payments, rather you need optimized information logistics systems (OILS) that are integrated with artificial intelligence (AI) enabled bots responding automatically in digital time.

Digital time refers to the speeds at which computer systems and networks operate. The goal being to reach speeds as close to real-time as possible by optimizing each connected system, component and process that touch data.

Future time is faster than real-time. It is the ability to anticipate needs, take actions and deliver content even before it is requested. It is the ability to automatically prepare for the future in a manner that adds value.

An OILS running in Future time, utilizes predictive analytics, algorithms and AI to provide an experience that anticipates the needs of the user in a manner that makes it nearly invisible to the user. For example turn-by-turn navigation supported by real-time traffic updates that route you around obstacles and problem areas. An OILS, running in Future time, can prepare personalized and contextually relevant experiences in advance.

I had the opportunity to work with a large global automotive system manufacturer this year. We explored extending traditional automotive systems to operate in Future time. They would integrate multiple external databases including traffic accident and insurance information, plus real-time weather and traffic information to automatically prepare the vehicle and driver for the road ahead. We were reaching into the future to provide additional value and a competitive advantage.

Future time delivers value from the future. It works in a time beyond “real-time.” This is the evolutionary nirvana for human to digital interactions. Businesses that have not digitally transformed in a manner that can harvest value from the future have no possibility of competing there.

Follow Kevin Benedict on Twitter @krbenedict, or read more of his articles on digital transformation strategies here:

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Kevin Benedict

Senior Analyst, Center for the Future of Work, Cognizant Writer, Speaker and World Traveler

View my profile on LinkedIn

Follow me on Twitter @krbenedict

Subscribe to Kevin'sYouTube Channel

Join the Linkedin Group Strategic Enterprise Mobility

Join the Google+ Community Mobile Enterprise Strategies

Digital Hope and Redemption in the Digital Age

“You have a memory like an elephant,” is truly a compliment. Researchers document all kinds of remarkable examples of the recall power of elephants, and this is credited with their ability to survive harsh environments as noted in this Scientific American article http://www.scientificamerican.com/article/elephants-never-forget/.

Our human memory also helps us learn from past experiences and mistakes, avoid recognizable hazards and keep track of our very busy lives. Our memories for the most part have served us well, but the same might not always be said about digital memory in an always connected, real-time world.

One of the most valuable concepts known to man is hope. Hope is the belief that things can change and get better. It is the belief that one can turn the page and start a new life. It is the motivation that draws many to get out of bed each morning, recover from past mistakes, and go to work.

Bankruptcy laws were designed, in part, to give hope. The Supreme Court in 1934 describes it this way, “It gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” It gives debtors hope for a better future. Source: http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/process-bankruptcy-basics

Today our second brains, the digital memory banks in the cloud controlled by programmed algorithms, don’t forget. Algorithms are programmed not to forget our histories, our bankruptcies, our youthful indiscretions, our convictions, DUIs, our vices, our former lives. They make it difficult to forget, transform into a better version and start fresh.

The more our lives, through digital interactions, are driven by and influenced by digital algorithms and second brains, the more important it becomes to consider the issue of digital forgiveness, digital redemption and digital hope. Hope that in the physical and digital world, you have the opportunity to start fresh, and change your life for the better, unencumbered by your plethora of mistakes, digitally remembered, biasing the future. Few of us, with the exception of Uncle Rico in Napoleon Dynamite, are the same person we were in our youth.

I can think of many scenarios where a person may want to change his/her life and leave the past behind, but algorithms and second brains won’t let them, unless somebody programs them to forget. If they are not programmed to forget, our digital interactions with websites, businesses, governments, police, search engines and match-making sites will hang-on to our past and use it to judge our present and future. Where is digital forgiveness in the digital era? Where is the ability to hope for a different and better life free from our past if algorithms are programmed to always reference, remember and judge based on our past?

Just because something is technically possible, does not automatically make it good or worthy. We as humans must define how we want digital technologies to support the world and society we desire. The Supreme Court in 1934 thought it was good and worthy to forgive and forget, to give people the “right to be forgotten,” in order to let a person start fresh. I believe it is time to let people be digitally redeemed in a similar manner.

The “right to be forgotten” concept has now been made into law in the EU, and variations of it have been implemented in other regions around the world. It was motivated by the desire for people to "determine the development of their own life in an autonomous way, without being perpetually or periodically stigmatized as a consequence of a specific action performed in the past.” Read more herehttps://en.wikipedia.org/wiki/Right_to_be_forgotten.

In Germany they have implemented a law titled the Federal Data Protection Act, or Bundesdatenschutzgesetz (BDSG). The law is designed to protect individuals' personal rights from being injured through the handling or mishandling of their personal information.

I believe the “right to be forgotten” is an important consideration and discussions. In a digital world fueled by data, capitalism is not a sufficient safeguard for our personal privacy and future. We must imagine the world as we want it, and make it so as a society.

Hope is a critically important concept to humanity, and it must not be allowed to be stamped out by unbridled digital algorithms and second brains. We must all recognize, in a digital age – that hope matters.

Follow Kevin Benedict on Twitter @krbenedict, or read more of his articles on digital transformation strategies here:

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Kevin Benedict

Senior Analyst, Center for the Future of Work, Cognizant Writer, Speaker and World Traveler

View my profile on LinkedIn

Follow me on Twitter @krbenedict

Subscribe to Kevin'sYouTube Channel

Join the Linkedin Group Strategic Enterprise Mobility

Join the Google+ Community Mobile Enterprise Strategies

The Role of Faster in Digital Transformation

Digital transformation is too big and important for our future success to not understand the rules that apply to it. The first three rules for winning in this age of hyper-digital transformation are:

Advantages in speed, analytics and operational tempos must be captured by implementing an optimized information logistics system (OILS)
Real-time operational tempos (IT, people and business processes) must be achieved
Businesses that can “analyze data and act and with speed” will dominate those that are slower.

The first two rules prepare for the third, which focuses on action. The first rule is about implementing an IT infrastructure capable of competing and winning. The second rule expands beyond IT to encompass business and people processes that must be optimized to support a real-time and mobile business world. The third rule says the first two rules are meaningless unless they result in right actions that are implemented faster than competitors can respond.

The role and importance of being faster is critical to understand. Faster means you must implement an OILS (optimized information logistics systems) to move beyond human-time, which is dominated by the sun, and our biology, to the digital-time measured by computer processing and data transmission speeds, and then fast-forward into the future through predictive analytics. Faster means you can pack more punch, in the form of features and capabilities, into digital time that happens faster than humans can comprehend.

Our research shows there will be a dramatic increase in the application of artificial intelligence (AI) in the next 40-months. It will be the codified brains of all kinds of applications, bots and processes. It will cross reference data, validate answers, execute decision-trees and take actions. We humans, however, are not willing to wait for these extra steps, layers and processes to happen in human-time, so the multitude of new AI applications must be pushed to operate in digital-time.

How big is AI going to be? We surveyed 2,000 executives across 18 countries for our Work Ahead report series and they predict AI will bethe digital technology having the largest impact on their work by 2020. Even though only 15% of the respondents think artificial intelligence is having a large impact on their business today. Forty-six percent believe AI will be critical to them within the next 40 months – that’s a 207% predicted increase in business impact.

AI is also a critical component of bots. Bots are software robots that apply AI to automatically execute their designed tasks. Only 18% of digital leaders in our survey report bots are having a “large to very large” impact on their businesses today, but by year 2020, it jumps to 41%. That represents a huge increase of 128% in predicted business impact in just 40 months

Without the implementation of an OILS, your IT infrastructure will be too slow to operate today in an increasingly mobile world, and too slow to add the additional layers of AI, bot and predictive functionality for tomorrow. It’s time to get faster!

Follow Kevin Benedict on Twitter @krbenedict, or read more of his articles on digital transformation strategies here:

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Kevin Benedict

Senior Analyst, Center for the Future of Work, Cognizant Writer, Speaker and World Traveler

View my profile on LinkedIn

Follow me on Twitter @krbenedict

Subscribe to Kevin'sYouTube Channel

Join the Linkedin Group Strategic Enterprise Mobility

Join the Google+ Community Mobile Enterprise Strategies

Rwanda: Mobile and Digital Strategies on Display

Ten bags! That is what we carried back from Rwanda, a small mountainous country in east equatorial Africa last night. Why? The short answer is we have friends in Boise, Idaho with family and friends in Rwanda. We took 7 bags to Rwanda, but unexpectedly returned with 10. Our refugee friends that have been resettled in the USA miss many familiar things from the region of their birth. Now that they have jobs and money in the USA, they put in orders with their family and friends for the things they miss most. We were surprised when we delivered a suitcase full of clothes to family members in a refugee camp high in the mountains of Northern Rwanda, and they gave us three in return. We experienced that more than once. So much for traveling light!

While in Kigali, Rwanda I had the honor of speaking to a number of government ministries and most of the large banks about digital strategies. Not so much digital transformation though. How do you talk about digital transformation when digital is so new to Rwanda? That is the question Professor Michel Bezy challenged me with, when I was the guest lecturer at the Master of Computer Science program at Carnegie Mellon University Rwanda. Professor Bezy continued, here in Rwanda we are implementing digital for the first time. We have no legacy IT systems to hinder our progress. Wow! I think many IT departments in western industrialized countries right now would envy that situation. Most of the biggest problems in the west now are digitally transforming legacy systems. It’s like running a race while dragging an anchor. It is their biggest obstacles to future success among many we work with.

Put yourself in a Rwandan's shoes. How would you design and develop an IT environment differently if you started from a blank sheet, a white canvas like they are doing? It is a fun thought exercise.

For a small landlocked country like Rwanda, digital changes everything. The disadvantages of moving physical products in a landlocked country disappear with digital products and services. The recent completion of 5,000 kilometers of fiber optics cable now makes mobile and Internet services available across much of Rwanda. Now to get electricity! Electricity is not yet available to 74 percent of the households, but that number is also improving fast. I am fascinated by the fact that more households have mobile phones (approximately 70%) than electricity (less than 30%). In fact, households with Internet nearly equal households with electricity. I watched as school children lined up at a school office to retrieve their parent’s mobile phones after school. They were all being charged in the school office because they had no electricity at home.

While traveling back and forth across beautiful Rwanda visiting schools, refugee camps and kids that we sponsor through Africa New Life, http://www.africanewlife.org/, I was keenly watching and pondering the challenges of living in a developing country where over 80% of the population are rural farmers. I observed the work. I spoke to farmers. It is a MASSIVE amount of work to feed a family. Basic tasks like getting water for your family to cook and clean often require herculean efforts in a country of a thousand hills that has made vertical farming an art form.

Northern Rwanda Farms

It occurred to me while watching how much work living can be, that digital transformation and productivity improvements can significantly impact individuals as well as industry. The Financial Times’ David White gives this example, “Registering a land transfer in an outlying village in Rwanda requires a number of journeys — to the nearest subdistrict office to get forms to fill in, which then have to be notarised, to a bank to pay the notary’s fees, then back to the government office, probably returning later to check the status of the process. Now registration can be done online. For people with no internet-capable device of their own, this could be done at a government centre, or a cyber café, or the place perhaps where they already buy phone airtime and do their mobile banking.” Rwanda’s Vision of an ICT-Enabled Economy,http://www.ft.com/cms/s/0/fc318106-deda-11e4-b9ec-00144feab7de.html#axzz4K8LMqocP.

Rwanda 2016

Just feeding a family takes all day. Getting water can take a half a day. Walking to town can take half a day. Walking to and from school can take half a day. It is life draining work to survive in the mountains far from town and markets. This point was burned into my consciousness over and over on this trip.

While speaking at a gathering of banks and financial services companies at the beautiful Serena Hotel in Kigali, a senior official of the Rwandan Tax Authority demonstrated to me how SMEs (small to medium size enterprises) can now register and pay their quarterly taxes all on basic mobile phones. It was very impressive. We don’t even have that capability in the USA! It can save hardworking entrepreneursthe need for endless travel.

Another innovation that I read about, but did not yet see at work, is the simple idea of the Hippo Roller, https://www.hipporoller.org/. Using a simple design and elementary physics to roll water instead of carrying it (often on your head) saves so much energy and pain - https://youtu.be/YUsKjleOopk. Everyday I saw men, women and children excerting great effort carrying heavy loads of water miles to their homes. Making this easier and faster could free up calories and time for more economically productive activities. I hope these are widely and quickly adopted universally.

I left Rwanda pondering how hard it is to live as a rural farmer. I was impressed by the skills, ingenuity and innovation I witnessed just to feed, educate and house a family on the sides of these breath-taking mountains. Mountains, mountains everywhere!

Rwanda is looking at all solutions. They are pushing for farmers to seek economy of scales in agriculture. They are organizing small subsistence farmers into cooperatives so they can share the work and costs of farm equipment to improve their overall productivity and incomes.

With a population of 12 million, Rwanda is the mostly densely packed country in Africa, but in the past 5 years they have lifted over 1 million of their people out of poverty. They are one of the fastest developing nations in the world, and all of this is happening just 22 years after their peoples, economy and nation was devastated by genocide where 1 million of their people were murdered in a 90-day period. Ideas, both good and bad can have a big impact on a small country and economy like Rwanda.

More on Rwanda’s Development

World Bank http://www.worldbank.org/en/country/rwanda/overview

Forbes: The Surprising Story Behind The Worlds Fastest Developing Countries, by Robin Meyerhoff, Senior Director, Corporate Affairs, SAP, http://www.forbes.com/sites/sap/2016/06/27/the-surprising-story-behind-the-worlds-fastest-developing-country/#238628b372d6

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Kevin Benedict

Senior Analyst, Center for the Future of Work, Cognizant Writer, Speaker and World Traveler

Kevin Benedict Ponders the Future

Profits that Kill in the Age of Digital Transformation

In Defense of the Human Experience in Digital Transformation

Competing in Future Time and Digital Transformation

Digital Hope and Redemption in the Digital Age

The Role of Faster in Digital Transformation

Rwanda: Mobile and Digital Strategies on Display

Interviews with Kevin Benedict

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