David Levine, Valerie Logan, Gokula Mishra, Salema Rice, Krishna Valluru & Todd James

(top L-R) David Levine, Valerie Logan & Gokula Mishra

(bottom L-R) Salema Rice, Krishna Valluru & Todd James

Digital Transformation

Digital Transformation

(USA and Canada) Digital transformation represents one of the greatest risks and most promising opportunities facing both companies and organizations today.   Yet, while broadly discussed, it is not consistently defined or understood.  Organizations wishing to lead in a digital and information-driven economy, must first understand what “digital transformation” means and how it relates to the 4th Industrial Revolution.

At its core, digital transformation combines cloud computing, big data, IoT, and AI to drive economic value, agility, and speed.  To be clear, it is not simply about the implementation or manufacture of data and digital technologies, it is about how these technologies are applied to realize business or societal value.

These emerging technologies are increasingly being utilized to transform business models.  For example, increasing numbers of products and customer experiences are being hyper-personalized, service interactions are being guided through intelligent agents, and unstructured data is finally being unleashed in novel ways to drive economic value.  Gartner estimates that by 2024, orgs will lower operating costs by 30% by combining hyper automation with revised business processes (Frances Karamouzis, 2020).   It is also projected that “80% of customer journeys can be digitally touchless and fully automated” (Bornet, 2020). These projections are backed by investment trends.  From 2019 to 2020, global investment in AI increased by 40% to $67.8B (Daniel Zhang, 2021).   The race is on to develop a competitive edge through the innovative use of digital capabilities to transform business models. 

New companies are being born as digital natives, leveraging innovation and emerging technologies to disrupt and transform industries.  For example, a US-based vertical farming company is utilizing AI sensors to completely control growing environments, monitoring every stage of growth to deliver pesticide free food, harvested at peak nutrition, in an ecological friendly manner.  In India, a medical device startup has developed a solution that combines low-cost thermal imaging technology with a deep learning enabled software solution to create a non-invasive screening system for breast cancer.  By using digital technologies, these companies are entering the market with novel solutions, positioned for scale and, in the process, posing a challenge to non-digital incumbents. 

Fortunately, innovation is by no-means restricted to the startup environment.  Through digital transformation, traditional companies are reinventing their business models to extend competitive advantage, while disrupting their industries.  Consider a global energy company that developed an AI-powered application to ingest large volumes of remote sensor data and predict failures of hydraulic process units across thousands of gas wells (Siebel, 2019).  Another example can be seen in a large financial services company that is utilizing natural language processing to unlock vast amounts of previously inaccessible, unstructured data allowing it to reimagine processing while also unleashing new insights.  In these cases, organizations were able to pivot and reposition their business models by harnessing AI, data, and cloud computing to drive creative disruption.

As organizations transform to compete in a digital and information-driven marketplace, several key themes are emerging:

  1. Business Value & Alignment:  As digital innovation and business models become increasingly critical, the line between technology and business is continuing to erode within organizations.  CDOs, CIOs, and CTOs are being expected to possess deep business knowledge, with accountability for tangible business outcomes.  Business leaders, on the other hand, are increasingly required to understand how AI, and cloud capabilities can be applied to drive value for their organizations. 
  2. New Organizations, Mindsets, & Approaches: In a drive to become more adaptive and customer centric, organizations are adopting new mindsets and organizational structures.  Agile is being adopted to create more nimble, cross-functional structures for working at the pace of digital business.  Additionally, design thinking approaches that put the customer first, with a relentless focus on exploring the customer’s needs, are becoming increasingly prevalent.
  3. Digital Ecosystem:  Organizations are investing in evolving their technology ecosystems to increasingly take advantage of cloud capabilities, drive competitive advantage through data assets, and target a more personalized and multi-channel user experience.
  4. Future of Work: As organizations move to digital service models, augment workflow and customer interactions with AI, and utilize massive amounts of rich and emerging data sources, the very nature of work is changing dramatically.  This shift puts stress on existing business models, as well as the workforce.  As a result, organizations are investing heavily in data literacy, digital dexterity, and change management initiatives to help their organizations successfully navigate the 4th Industrial Revolution. 

In an environment of “disrupt or be disrupted” emerging capabilities in AI, big data, IOT, and cloud computing are providing organizations with a mechanism to transform and seize competitive opportunity.  To learn more and keep abreast of how digital technologies are being applied to transform organizations, industries, and society, stay tuned to the “Digital Transformation” topic area on the CDO Magazine site.


Bornet, B. &. (2020). Intelligent Automation - Welcome to the World of Hyper Automation. Monroe, IL.

Daniel Zhang, S. M. (2021). The AI Index 2021 Annual Report. Stanford: AI Index Steering Committee, Human-Centered AI Institute, Stanford University.

Frances Karamouzis, V. B. (2020). Top 10 Strategic Technology Trends for 2020: Hyperautomation. Gartner.

Siebel, T. (2019). Digital Transformation - Survive and Thrive in an Era of Mass Extinction. New York: RosettaBooks.