On the brink of a digital collapse?
The digital transformation with all its challenges has entered a phase of a serious reconsideration about undesired consequences. This to timely prevent collapses and costly, damaging downsides.Three are dominant in their presence of today’s digital ambiguity.
It starts with cybersecurity threads spurred by the enduring ebullience of Internet of Things tech. Oceans of data are running via all the devices people trust, through servers and systems, which are activated by these data and often imbedded in a fog of insecurity. Hackers have shown the weaknesses of it all and it is only the beginning of a costly threat.
Second, systems have taken over the role of managers in data driven companies and business units. Robotic algorithms are not only controlling employees; they have become their bosses in that context. These are activated by the firm believe that customer service should not only be on the highest level of personalization but also being 24/7 predictive on the digital platforms, with the supply chain of delivery in its wake. Managing people through technology relying on metrics, apps and chatbots with autonomous decisions have got a boost by the pandemic.
Tracking employees’ activities to the minute and the impact and results of their work, have become the base on which autonomous decisions are taken. The algorithm driven robotic reviews, chatbots, automatic mails, sms’s not not only steer and correct, but also fire people, the Amazon case has learnt (NYT). Recruitment via robotic reviews is already standard in many HR departments. What should be the role and responsibility of management in this development, is one to be seriously reconsidered.
Third, in this age of algorithms tech is overloaded with investment money from investors desperately seeking for returns. High valuations are the trigger for prospects even if they are entangled in mass losses. Special Purpose Aquisition Companies (Spacs) are too attractive to be true. These funds seek for money to acquire companies. Bill Gates backed Butterfly Network startup valued at 1.5 billion dollar is one of them.
A 4 billion deal to go public for a startup is not exceptional with the aim to raise money for acquiring another startup later on. Tech investors believe apparently in the fiction of returns based on algorithm driven valuations instead of real performance. How long can they pursue their digital dreams? The abundance of debt is the pitfall the moment interests are rising, with potentially jeopardizing consequences on the financial markets.