A survey of over 1,200 executives has just revealed that despite massive and increasing investments in digital transformation and technologies such as artificial intelligence and big data, companies are struggling to turn those investments into real business results.
A survey unveiled today by Deloitte has found that the number of companies investing heavily in digital transformation has almost doubled in the past year.
The accounting and services giant questioned 1,200 executives at organizations of at least 500 people with above $250 million in revenue, finding that 19% planned to invest $20 million or more during 2019. When asked the same question at the start of 2018, 10% gave that answer.
Despite Massive Investments In AI And Digital Transformation, Survey Finds Poor Results And 7 Enabling Capabilities
The term “digital transformation” has come to mean steps that move an organization towards adopting data-driven business models, typically involving artificial intelligence (AI), big data and predictive analytics technology.
The survey also found that budgets dedicated to this transformation at medium to large-sized companies increased from an average of $11 million to $13.5 million this year.
However, it also highlighted the finding that most organizations still report a gap between their investment in this technology and the impact it is having on key performance indicators such as profits, revenues and customer satisfaction.
In an effort to understand this, it identifies 7 “pivots” - capabilities that, when developed, contribute towards a business successfully bringing about positive growth through a technology initiative.
It found that "higher maturity" organizations – those who had progressed their digital transformation to the point where they are driving positive growth - deploy an average of 40 initiatives targeting these pivots capabilities, suggesting they are indeed a contributing factor.
Data mastery is about aggregating, activating and monetizing data that is still often siloed and underutilized in order to generate better products, services and business operations that will drive business success.
“Those are the enabling pivots that allow us to begin thinking about transformation.”
Data mastery involves generating value from data to increase the efficiency and effectiveness of business processes.
“I would say that 90% of the corporate world is not going to capture value through naked monetization of their data assets the way Google or Amazon does. For the most part, they will capture data to increase the efficiency and effectiveness of their company.”
That could mean finding better ways of targeting customers and understanding their behavior and optimizing marketing and retail channels based on the data they collect. In other words, the majority of companies approaching levels of digital maturity where their data becomes a valuable asset is doing so by creating growth for existing, core products and services, rather than creating new ones from their "data exhaust."
The next key pivot – talent – revolves around the way data is used to understand and nurture a business’s most vital asset – it’s employees.
“This is actually the hardest thing to do,” explains Gurumurthy. “One can figure out cloud migration strategies, one can figure out how to collect and store data, and how to run analytics on it, but its harder to manage change around talent.
“If you ask people what their biggest challenges are in digital transformation they will say it is the talent deficit – there's often resistance to cultural change and a deficiency in the kind of talent that's needed.”
This is challenging because of the different mindset which becomes necessary when transitioning to data-driven business models, particularly when human staff are being asked to put their faith in technology like artificial intelligence and advanced analytics which may result in insights and observations which seem counter-intuitive to many of us.
"It's often about retraining the talent – another phrase we use is the ‘digital mindset,'" explains Gurumurthy.
So, what is holding businesses back from unlocking the full potential of digital transformation? Well, aside from the talent deficiency already mentioned (cited by 36% as a barrier), challenges posed by existing, legacy operating models, and a lack of a strategy for clearly prioritizing adoption of transformative technology were cited by 49% and 45% of respondents, respectively.
This makes it clear that whatever industry you’re in, the rewards of driving growth through digital transformation are there for the taking.
INTERNATIONAL FALLS, Minn. – After more than 30 years of doing business in this longtime mill town, Optum Health plans to close its health care claims office this summer.
The good news is the company’s 90 workers can keep their jobs. The bad news is that offer is good only if they’re able to work remotely. And those who live outside the city limits may not have access to the high-speed internet service they’d need to keep earning a company paycheck.
Optum says its intention is to keep all of its workers on the job, and it will do what it can to help those in need of technical upgrades. City and county leaders are looking at setting up a business center where people lacking broadband — whether Optum employees or not — could get their work done.
Such predicaments have Minnesota politicians taking a new look at rural broadband. U.S. Sen. Amy Klobuchar has made the issue a major talking point as she begins her campaign for the Democratic presidential nomination.
Gov. Tim Walz has promised he’d attack the problem like a “moonshot.” Meanwhile, a Republican-sponsored bill with bipartisan support is making its way through the Legislature, promising $35 million a year in each of the next two years for rural broadband upgrades.
All the talk about addressing the issue is encouraging, broadband advocates say. But with one in five rural Minnesota households still lacking access to high-speed, wired internet service, there’s a long way to go.
“They did it in the ’30s with electricity. They did it in the ’50s with telephones. This is the electricity of the 21st century,” said Anne Schwagerl, an organic farmer in Browns Valley on the South Dakota border.
Schwagerl and her husband grow grain and raise pigs. And in her view, internet access is as essential to farming today as a good tractor.
Schwagerl got high-speed internet on her Prairie Point Farm in 2017, after Big Stone County sold about $4 million worth of bonds on behalf of Federated Telephone Cooperative. The co-op, which had been unable to get funding through traditional channels, used the money to install high-speed broadband for its customers and will repay the county over 20 years. The project also received a $3.9 million grant from the state’s Border-to-Border Broadband Development program.
“It made a huge difference in our ability to be efficient in our operations,” said Schwagerl, who is secretary of the Minnesota Farmers Union. “We can access up-to-the-minute market data and make good decisions.” Schwagerl also sells her hogs direct to consumers, something that wouldn’t be possible without good internet service.
Some 140 miles north, in Ada, Minn., Edie Ramstad had been trying to run a worldwide internet company on dial-up service.
Ramstad owns Weave Got Maille, which makes rings, tools and other supplies for chainmaille jewelry. Her dial-up service was so slow, Ramstad said, that her employees sometimes had to drive to Fargo, 45 miles away, to upload product images to the company website.
“We could always tell when the kids got out of school,” she said, “because we’d get booted off [the web].” It was so frustrating that several times Ramstad considered shutting down the business with its 16 employees.
Last year, Ramstad found an internet provider willing to run lines to her business. But at $800 a month, it’s expensive — and even at that, she said, the service isn’t as good as a typical city-dweller would have in his or her home.
“It used to be that broadband was a competitive advantage. Now, it’s a cost of doing business,” said Bernadine Joselyn, director of public policy and engagement for the Blandin Foundation of Grand Rapids, Minn. “We believe that broadband and the skills to use it are fundamental to healthy communities.”
Blandin has worked with almost 100 Minnesota communities and invested more than $10 million in broadband initiatives. The current proposal for state broadband funding, Joselyn said, “is really a victory in Minnesota in that it has gotten a lot of bipartisan support.”
Still, the governor’s “moonshot” would simply return annual broadband spending to its 2016 level of $35 million. That number dropped to $20 million in 2017 and to zero in 2018 after then-Gov. Mark Dayton vetoed the Legislature’s omnibus spending bill. In the budget negotiations that followed, broadband was left on the cutting-room floor.
The key difference is that the current proposal runs for two years, said Margaret Anderson Kelliher, commissioner of the state Department of Transportation. Anderson Kelliher chaired the Governor’s Task Force on Broadband under Dayton and was also CEO of the Minnesota High Tech Association.
“It really is important to remember that all the money that has been appropriated in the past was one-time funding,” she said. “It is a good spot for one-time dollars, but it really does need a commitment.
“I think what the governor is doing is making a real commitment to reaching these goals,” she said. “It’s a show of, ‘We’re really going to do this, we’re going to make this happen.’ ”
No e-learning on snow days
In International Falls, where the economy has been based on timber and tourism, officials are hopeful about what a higher-tech future could bring.
But they’re cautious about painting too rosy a scenario in a town where generations of residents have gone to work at the paper mill.
“We don’t have a real strong entrepreneurial culture here, that people are going to look to create their own realities,” said Paul Nevanen, director of the Koochiching County Economic Development Authority. “That’s a long-term shift.”
It’s a shift that can’t come too soon for Jackie Edwards, who lives on a family farm in rural Renville County near Hector, Minn., some 80 miles west of the Twin Cities.
“My husband works in agriculture and is obviously in need of broadband for that, as well as for our four children,” she said. The family has satellite internet service, but it’s expensive — about $90 a month — and unreliable.
“Our internet just gets really slow and everybody’s frustrated,” she said. “When you talk about e-learning, it becomes an issue. In a snowstorm, it’s likely we don’t have internet.”
Neighbors just 2 miles away have fast fiber internet, “but we fell just short,” Edwards said.
And that’s the problem, Anderson Kelliher said. “A lot of the places that are left to build broadband in Minnesota are more challenged — more physically challenging to deploy the broadband, and therefore more expensive,” she said.
State broadband investments, she added, are “really for the hardest portions of the state. We don’t want people left behind,” she said. “It is a tool that people expect nowadays.”
Rural internetification is essential for the economic health of rural communities
Background: Electronic health (eHealth) may improve health outcomes, but many people remain digitally excluded. Personal readiness to use the internet for health may be limited by lack of internet infrastructure, personal skills, social support, service provision, and cost. The impact of interventions to reduce these barriers is unknown. From 2011, the British Government supported the implementation of “superfast” broadband (Superfast) across the rural county of Cornwall. This provided the opportunity to assess the impact of interventions at regional, practice, and household levels. Objective: This study aimed to assess the impact of 3 interventions on personal eHealth readiness: (1) regional-level implementation of Superfast, (2) practice-level discussions with general practitioners to encourage greater internet use in health service provision, and (3) household-level tailored booklets providing information to help improve personal skills in eHealth.
Methods: This was a cluster quasi-randomized factorial controlled trial. Implementation of Superfastwas monitored, and postcodes were classified as having early or late availability. An algorithm selected 78 from 16,385 eligible postcodes to minimize the possibility of overlap between general practices and ensure a balance of urban and rural areas; 1388 households were randomly selected from the 78 postcodes and allocated to the 8 (2 × 2 × 2) study arms. A modified version of the Personal eHealth Readiness Questionnaire was used to compare scores (0 to 10) and 4 components (personal, provision, support, and economic) from baseline (August 2013) to the 18-month follow-up between the 8 arms, to assess the impact of interventions. We compared SDs of scores to assess changes in eHealth inequalities.
Results: eHealth readiness improved over 18 months from 4.36 out of 10 to 4.59 out of 10 (t235=4.18; P<.001; CI=0.13 to 0.35), resulting from increases in personal and provision components of the score (t255=3.191; P=.002 and t258=3.410; P=.001). However, there were no significant differences between the 3 interventions, either singly or in combination using intention-to-treat analysis. The proportion of internet users did not significantly increase (79.2%, 205/259 to 81.5%, 211/259) and mobile use was significantly greater (50.5%, 101/199 to 64.8%, 129/199). There was no change in eHealth inequality.
Conclusions: People in Cornwall became more ready to adopt eHealth services, increasing both their personal ability to use eHealth and their methods of access. The implementation of Superfastmay have contributed to this; we are certain that our other 2 interventions did not. This increased eHealth readiness did not cause a larger digital divide. The study illustrates the complexity of conducting a randomized controlled trial to assess the impact of interventions at regional, practice, and household levels. Our method may be of use to others.
Trial Registration: ClinicalTrials.gov NCT00102401; https://clinicaltrials.gov/ct2/show/NCT02355808 (Archived by WebCite at http://www.webcitation.org/75oEz0E1x)
WHO unveils plans to create a Department of Digital Health
The new suite of reforms announced also include the development of a new role of chief scientist and a Data, Analytics and Delivery division.
WHO has revealed this week plans to create a Department of Digital Health overseen by the division of the chief scientist, a new role, along with a raft of reforms that it says are the “most wide-ranging in the organization’s history”.
The Department of Digital Health will, according to WHO, harness “the power of digital health and innovation by supporting countries to assess, integrate, regulate and maximize the opportunities of digital technologies and artificial intelligence”.
The announcement follows a recent event organised in February this year by the WHO regional office for Europe, which brought together a suite of stakeholders to create a network that would advance the digitisation of healthcare systems in the region.
Former WHO regional director for Europe Zsuzsanna Jakab warned at the time at European countries should “move beyond an understanding of the promise of digital health” and speed up implementation. It was announced earlier this week that Jakab had been appointed as WHO deputy director general in the new changes.
Other reforms include the development of a new Data, Analytics and Delivery division to “significantly enhance the collection, storage, analysis and usage of data to drive policy change in countries”.
WHO said the measures were drafted by its Global Policy Group after an “extensive period of consultation” with staff.
“This is a historic moment for WHO. For the first time, the heads of the 7 major offices have worked together to identify the changes we need to make at all three levels of WHO – headquarters, regional offices and country offices – to transform this great organization and make us more effective and efficient,” director general Dr Tedros Adhanom Ghebreyesus said in a speech.
Dr Takeshi Kasai, WHO regional director for the Western Pacific, added that there was a need to build a “stronger, more systematic” method to help countries leverage the use of digital technologies and innovation to “support their national priorities”.
“Around the world, artificial intelligence and digital health are changing the way health care is delivered right across the continuum of care, for promotion, prevention, treatment, rehabilitation and palliative care. There are many opportunities to take, challenges to overcome and policy decisions to make, to maximize the incredible opportunity of digital tools for health.
“WHO has a unique role to play in advising countries on how to maximize the opportunities of digital technologies, while avoiding the pitfalls with appropriate regulation," Dr Kasai added.