Digital Transformation in the Age of Artificial Intelligence - What Companies Need to Understand Now

The digital transformation is in full swing and is also attributed enormous importance in the business world.

However, not every industry, not every company has yet found an answer in the age of AI as to what this means for their own business. Often, the focus is still primarily on existing products and business areas. Today, new technologies allow for very comprehensive and holistic solutions. This requires a significant expansion of thinking. The topic of AI has become increasingly significant in recent years. More and more concrete applications are becoming known to us, not only in the context of companies. With voice assistants, learning systems become our housemates, many applications are already part of our personal lives and daily routines. However, awareness had to grow, as the topic was long abstract and still is to some extent today. In terms of the economy, specific use cases have only in recent years shown that the use of technologies like Deep Learning can indeed lead to cost savings, such as in Google's AI-assisted optimization of energy costs in data centers. All these factors contribute to making us more aware of the importance of the topic today than a few years ago. Because it is tangible and has direct effects on us. For companies, the question always arises as to which steps should now be taken. How can AI be sensibly used for the benefit of the company, and at what points does it make sense to do so? Of course, there are already thought leaders and innovative companies that extensively utilize the possibilities. However, there is often still little momentum in this country, as it is not clear how to get started. The main hindrance is the uncertainty about the still quite unknown new aspects when making important strategic decisions. Companies are still successful in the existing market, and it is not entirely clear where the journey with AI should go. Perhaps there is no in-house expertise for future topics at all and it needs to be painstakingly built up. Therefore, it is understandable that companies first stick to what they know. In doing so, they underestimate the pace of development and the fact that now is the time to set the course for the future. Digitalization has already changed markets overall, but the use of AI will lead to an even more fundamental transformation. However, the main problem in coping with this dramatic upheaval is the fact that many companies still believe they know their respective market better than anyone else. The focus of thinking is still on existing products, which are simply being elevated to the next level of digitalization. In the age of Digital Disruption, however, outsiders, mostly tech companies, are able to anticipate customer needs better with the help of AI-supported applications and tap into significant revenue shares from established business areas with precisely tailored products and services. Companies that possess the necessary expertise in handling data and algorithms can quickly understand and target markets that have so far felt largely immune to digitalization. Therefore, every industry is obliged to take the new developments seriously and now build new competencies to keep pace with rapidly changing markets and target audience needs. Almost more important than understanding the technical aspects of AI and thus a prerequisite for successful transformation is a new "digital mindset."

The key points for such a new mindset are summarized in the book "Kollege KI" in the COSIMA principle.

This specifically means: COnvenient: In the age of AI, products must offer maximum convenience to users. SImple: At the same time, products and their selection must be simple. And even though digital transformation is a challenge for companies, the customer should not notice it. MArketsight (instead of product view): A broad interpretation of one's own market is essential if companies do not want to disappear into insignificance. What is the customer's real need? For example: Is it about driving a car with the product "automobile" itself? Or is it more about getting from A to B flexibly, conveniently, and tailored to one's own needs in the "mobility" market? All three aspects of the COSIMA principle can be pursued much more consistently with the help of highly AI-supported applications than before. However, the new "digital mindset" also means that company management must commit to it consistently. Future technologies should not be treated on the sidelines of business activities but rather be at the center of attention. Company management must declare the transformation a top priority and lead by example consistently and credibly. Mere lip service and PR brochures are not sufficient to conquer the future! Innovative approaches must not be stifled but need support, even against resistors within the company. To break down internal resistance to the new technologies, it is necessary to convey to employees the central importance of Artificial Intelligence for the survival of their own company. Employees often fear being left behind. Such concerns even affect the high performers of a company: The fear of losing status inhibits innovation. And there is often concern about the threat to one's own job. A new focus on selecting future employees can help here. Especially in the age of AI, not only IT specialists are needed. Rather, young, creative employees are necessary to generate new ideas and break away from familiar paths. They may also be more willing to embrace new thinking, break down old structures, silo mentalities, and competition, and work across departments and companies to drive innovations forward. Therefore, in the future, employees who are able to see the big picture and connect the opportunities of the data-driven world with the human factor will become increasingly important. Because crucial for success in the age of Artificial Intelligence is a mix of interdisciplinary, entrepreneurial thinking, technological understanding, and interpersonal skills. About the author: Our Top 100 speaker Professor Dr. Stefan Gröner is one of the most renowned strategy consultants, futurists, and executive trainers in the German-speaking world. He has held top leadership positions at Gruner+Jahr and the Bauer Media Group and is a Professor and Study Dean for "Digital Management" at Hochschule Fresenius. The new book "Kollege KI - Understanding Artificial Intelligence and Using it Meaningfully in Companies". Available now in bookstores or order here: https://www.amazon.de/Kollege-K%C3%BCnstliche-Intelligenz-verstehen-Unternehmen/dp/3868817492