2018 is the year when companies started to take data seriously. Historically, it’s been consumers who have created the bulk of the world’s data, but that’s changing fast, and by 2025 it’s predicted that enterprises will become the world’s biggest data creators. From fitness-trackers to connected fridges, from purchasing habits to travel plans - big data is here to stay, and it’s helping companies to transform their businesses. But why is this data revolution happening now, what does it have to do with Artificial Intelligence, and how can your business take advantage of it?
If you’ve followed any news about AlphaGo, self-driving cars, chatbots, or voice assistants then you’re probably aware of the recent renaissance in the field of Artificial Intelligence. So what has changed to cause this recent growth spurt?
Increased processing power
In 1975 Gordon Moore, the co-founder of Intel, predicted that the number of transistors in integrated circuits would double every second year. That sounds like a boring fact, but it’s exactly this doubling that has given us the exponential growth in processing power that has led us from room-sized computers to smartphones in our pockets. And from a business perspective this has given us doubled calculation power to half the cost, every second year.
Increased sophistication of AI techniques
Alan Turing imagined the possibility of thinking machines as early as the 1940s. In the 1950s, the first AI programming languages were invented. However, it’s only in the past two decades that the field has started to make significant progress. Recent advances in machine learning techniques, especially with “deep learning”, have enabled new AI applications such as facial, gesture, and voice recognition, video analytics, natural language processing, as well as automated driving.
Increased volumes of data
90% of all the data ever created, has been created during the past two years. Read that sentence again, and take a second to try and imagine its implications. It’s not just the volume of data that’s been accelerating, but also the variety. This new treasure trove of data is giving companies new sources for insights, and even allowing for completely data-driven companies to emerge.
The key point to notice is the connection between these three factors: more data requires more processing power, which allows for more sophisticated algorithms, which need to be fed with more data. This creates a self-perpetuating feedback loop, with no current end in sight.
So what does more data and increasingly sophisticated Artificial Intelligence mean for businesses and society?
Let’s examine that question through three potential paradigm shifts:
It’s been predicted that fashion models and influencers will be some of the first professions to be replaced by AI. Take a look at @lilmiquela, a completely virtual 'influencer' with 1.5 million Instagram followers. Of course, job automation will have a much wider impact than just the fashion industry. Over time, more roles in more industries will become automated, and the type of work humans will be doing will start to shift. This change doesn’t have to be all “doom and gloom” though, as it has been predicted that 65% of the jobs that will exist in 2030 haven’t even been invented yet!
If you work with insurance, banking, or energy services then you need to prepare yourself for the bot-to-bot customer process. Even though these services are important to customers, the purchasing process usually isn’t. Once we all have digital assistants, it’s highly likely that we’ll just give Alexa or Siri the instruction to go out and find the best insurance or mortgage rate. And she’ll be indefatigable doing it, tirelessly negotiating with the companies’ bots to get us the best deals.
Democratisation of education
AI in education aims to improve learning outcomes on an unprecedented scale, with global access, personalised learning journeys, and optimised course content. The accelerated change that’s happening in all aspects of our lives means that we’ll all probably need these new approaches to learning, just to have a hope of keeping up.
So with these changes, and more, in the pipeline - how should you and your company prepare?
Create an organisation ready for change
It’s predicted that our society will change more in the next coming 10 years, than it has during the past 50 years. As humans we have a built-in resistance towards change. Put it like this - if you come home to your partner with the words “Darling, I think something needs to change!”, the following conversation probably won’t be relaxed and joyful. It might be better to start the conversation with “Let’s try something new!”
Most digital transformation projects focus on the system solution, but forget about the people. We’d suggest creating a capability program, and letting the employees define how to best reach the vision. Equally important is to ensure that top management is connected to the customer reality. After a number of years in management positions, it is easy to lose connection and miss out on fast changes in the market. Reverse mentorship, participation in customer surveys, or just regularly taking customer phone calls will create an important reality check.
Capture all relevant data for your business and digitize everything
So what data is relevant? It’s of course hard to say, in a changing climate, but start with your central customer journey. If you define your customer journey from a data perspective, it will create a good understanding of what data you have, and what data you will need, and what data that can be captured, bought, or created.
Don’t underestimate the pace of change. Exponential growth can catch everybody off guard!
But it won’t be enough to just have people onboard that embrace change. Other important success factors are creating a framework to measure the pace of change, and to be open minded. The Nordics were at one point driving digitization globally, but now digital evolution is happening much faster in China. Define which drivers that most likely will affect your business and focus on the leaders in those areas in order to make sure that you develop in line with the market expectations.
Equally important is to drive innovation and embrace creativity. At an extreme rate of change, it won’t work to only follow the market, you have to invent the future. And that will cost money, and a budget for constant development is best created with high-flexibility, which can be reached with a strong focus on minimizing fixed costs in the company.
Hopefully this gives some guidance to your way to become data driven. The conclusion are that competence, courage, and creativity will all be equally important to harness the future. Like Eleanor Roosevelt once said “The future belongs to those who believe in the beauty of their dreams.”
About us - T(w)o digital immigrants figuring out how to thrive in an accelerating world
We met less than a year ago, and realised the potential synergies from our different, but overlapping, backgrounds. We’re both independent business advisors, who help companies to align and implement their technology strategies. We have both driven business change at the highest level, and share a passion for technology, agility, transformation, and sustainability.
Recently we’ve been growing concerned about many big European companies falling behind in digitalisation. Connected with that, we’ve noticed several companies falling to spot threats to their customer value proposition. This blog is the result of our discussions on these topics, and is our attempt to help companies realise and react to the threat and potential of an accelerated future.
Swedish entrepreneur and co-founder of CMO goes Tech, an international network for the CMOs of the future. With almost 20 years of extensive experience within digitalization, Cecilia serves as board member and senior business advisor to a number of large companies in their digital transformation. Cecilia is a frequent keynote speaker on marketing innovation and consumer trends, in international leading forums, and co-author to a book about the Gig Economy. Cecilia’s past experiences include working in leading marketing positions, as well as co-founding a successful Martech Management Agency.
An immigrant from the UK, who’s now a Swedish citizen. James is a technology advisor, with almost 20 years of experience building successful digital products and high performing teams. James started his career as a software developer and eventually became a CTO. Now he works with investment banking, where he helps companies to align their business and technology strategies, and secure funding to optimise their growth. James recently co-developed an exciting new approach to software architecture called Polylith, and occasionally finds the time to teach programming on YouTube.