Are we living in digital and AI washing days?

This article has the only purpose of making me go deeper in my researches and studies for MIT Sloan & MIT CSAIL. They reflect my opinion alone, and they do not have any relation with my current employer.

Most of the publications, talkings, shares, and comments, we see in LinkedIn today are in some form related to digital transformation and AI. Well, this is one more, but let's try to escape the hype, and take a different perspective — a real one.

Since the rise of the digital platforms, we have emerged in an era where organizations and professionals who are not going big in digital and more recently AI, are at risk of being disrupted. And, in some cases, that turned out to be real. Yet, in the short-term, disruption won't happen to most of the organizations, it created a gold rush effect, and many jumped head to create innovation departments, throwing tons of money in new tech and bringing new people onboard. As a result, we have seen a few good results coming out of hype but possibly more lessons than positive ROI.

This context puts the CIOs in the middle of the storm because, yet they have to be protagonists, there is not a clear understanding by the professionals in general what it takes to lead the venture and what the technology is really capable of. The real world is that most of the organizations don't have tons of money to throw in the learning curve and are still trying to understand what it means to become digital-first, mainly in terms of:

- Their investment portfolios;

- How to take advantage of technology to reinforce its Porter positioning;

- New organizational structures;

- The customer experience (a real digital one and not just a facelift as we have seen in many cases - digital washing);

- The necessary technologies;

- And especially what it takes in terms of effort.

For instance, many of the companies are still not ready for AI, and they won't be for a while because there is no data governance. AI resources, such as infrastructure, are essential but the majority of the time and costs will be to cleanse and integrate data. It tends to be a considerable effort.

There are several priorities to the CIO throughout a real digitalization. They are core systems automation, data governance as said earlier, and using technology to create a 'wow' customer experience. That is all meant to translate into customer value.

A significant amount of real results that we have seen so far are, what I call, friction digital interfaces. They are mobile apps built on top of legacy systems and, legacy organizations, to address the pressure to seem digital. Some of them lack the basics, such as the ability to consult, under the same app, multiple contracts, that a customer has with different units of the same institution. This very basic feature links back to organizational and data integration issues. Others models claim to have AI but without a real use case, it merely takes the customer nowhere.

I believe that companies should focus on the foundations of digital transformation; they are the essential parts that need to be addressed before we reach the right customer facing experience. Back-office digitalization and core tech automation are critical due to their ability to drive processes agility, which will turn out to shorter time-to-market, customer response, higher productivity, costs reductions, and most of all enable the other components of transformation. Not all needs to be done at the same time, even inside back-office and core tech automation there is an incredible amount of work.

Finally, pragmatism can be a good thing at this stage of the digital transformation. Forrester reports that 50% of digital transformation efforts stalled in 2018. Small steps can help companies to gain positive ROI momentum and executive buy-in.