I recently had the privilege of speaking at the 6 Degrees AI: Future of Tech, Innovation and Work conference, where I engaged with nearly 200 technology executives in Brisbane.
It was an inspiring event that sparked insightful discussions on the potential for AI-enabled business transformation. Below are my top 7 takeaways, which I believe are imperative for all business leaders to consider as they embark on this journey:
1. Of all the disruptive technologies, AI is the hardest to implement: “…the AI/machine learning revolution is the first time that an apparent general-purpose technology is actually harder to use, and requires a higher – and rarer – set of skills to operate” (Luci Ellis, Reserve Bank’s Chief Economist)
AI presents both the greatest opportunity and implementation challenge, given its powerful ability to mimic various human-like capabilities at scale and reliably develop and implement these capabilities in the real world. Quite opposite from the transition from faxes to emails, AI requires unique skills and stretches the boundaries of what a business can or should do.
2. To fully take advantage of AI, it’s not about streamlining your current business. It’s about the growth and reinvention of the underlying business model: Truly capturing the value of AI requires organisations to fundamentally transform their underlying cost structures, using technology to provide powerful capabilities at near-zero marginal cost, or to create new services that were previously impossible. It's not just about doing things differently; it's about doing different things.
3. Cut through the AI-noise and focus on the core business change: Amidst the hype surrounding AI, it's crucial to navigate through the lofty promises, to practical, value-adding changes you can implement in your organisation. While investors tout AI as a game-changer, the real challenge lies in both finding and successfully executing on these changes. Consequently, we must consider factors such as existing process and operating model challenges, realistic capital investment slates and existing technological debt, when designing a realistic and implementable transformation strategy. This requires a much more thoughtful investment of management’s time and attention across the entire organisation.
4. The expected economic impact is HUGE: There has been US$160 billion of economic contribution in AI and related technologies across APAC with a staggering 28% YoY increase in investment, as modelled by Deloitte Access Economics. Unfortunately, when surveyed, a staggering 90% of leaders say they are not ready to take advantage of these technologies. The key question is: How can we build pragmatism and confidence in our ability to invest and transform using AI & Cloud technology?
5. AI alone isn’t a differentiator: In fact, algorithms are increasingly easily and cheaply accessible via Cloud PaaS solutions and are commoditising the industry. This increases the imperative to transform, but if all you’re doing is applying base technology don’t expect any competitive advantage. It’s all about how you use these capabilities in combination with your non-technology capabilities, to “do different things” in combination with “doing things differently”.
6. Reframing the business – a guiding principle: One powerful concept to consider is reframing the core focus of your business in the context of data and insights, i.e. what you do for your customers and how information and insights are a core part of solving that problem. This concept acts as a guiding principle, helping identify where and how disruptive technology can create benefit. Easily accessible technologies can help predict, segment, add structure to unstructured data (e.g. text, images, video), and even generate content. As we strive for growth and reinvention, the reframed business model can add focus to how AI can help solve customer problems in a way that aligns with the core principles of the business.
7. There is a framework for the critical success factors: Together with The University of Melbourne we have developed a framework that identifies critical success factors for AI-driven transformations. In our study, each organisation that was able to successfully transform itself demonstrated each of these capabilities. This framework assesses the external conditions, internal behaviours and internal capabilities that need to be present to take advantage of these technologies and successfully transform:
Deloitte Access Economics, The cloud imperative: Asia Pacific’s unmissable opportunity (July 2021)
 Deloitte Access Economics, The cloud imperative: Asia Pacific’s unmissable opportunity (July 2021)
Image Source: Joint research, The University of Melbourne and Deloitte, 2022
In addition to the takeaways above, we believe there are three critical priorities for all businesses seeking to undertake AI-enabled business model transformation:
1. Stress-test your business model in this new world: Examine the assumptions that underpin your current business model and determine which ones may no longer hold true. Identify potential areas where your current business model may be disrupted, and conversely, where you can be the disruptor. By evaluating your business model through this lens, you can proactively adapt to the changing landscape.
2. Raise the business prioritisation for transformation: Transforming the core of a business requires the use of these technologies to be a critical priority for the organisation as a whole. This is not a task to be relegated to a handful of individuals working on the side. It demands focus and involvement from the Board, C-suite and top management team. The core of the business must recognise themselves as integral participants in this transformation journey, otherwise it's unrealistic to expect the core of the business to be transformed.
3. Align views across the business – this is not just a technology conversation: To reiterate a crucial point: AI implementation is not solely a technology conversation. It encompasses the application of new capabilities, such as prediction, segmentation, structuring of unstructured data and content generation using AI. The goal is not only to do things differently but to do different things. Achieving this objective requires perspectives to be aligned across the entire business, fostering a shared understanding of the transformative potential and benefits of AI adoption.
If you're looking to harness the power of AI to help solve your organisation's wicked problems, find out more about our Deloitte AI Greenhouse experience.