The Struggle With Transformation Initiatives – Digital CxO Podcast EP61

Hello and welcome to the third week of our new and revamped digital CXO podcast. I'm Amanda Ani and I'm excited to be here today, today with Mike Ard. How are you doing?

I'm doing great. How are you? Doing well.

Excited to be here to share some recent surveys surrounding digital transformation initiatives. And we'll start with the one from Kaunda. Can you share a little bit about that one?

Yeah, it's interesting. They did a survey of, you know, the usual several hundred folks, but it suggested that we're kind of at some sort of way more when it comes to digital transformation. A lot of folks are clearly down the path.

A lot of them are implementing process orchestration and automation. But as, uh, the CEO of KAUNDA put it, and Jacob Front, he said, we're kind of at the end of the beginning and we're, you know, to quote a Churchill reference I think. But basically, um, we're making progress, but a lot of organizations are getting tripped up because of the complexity of the IT environments, the legacy systems are challenging to integrate.

And that comes out loud and clear in the survey as well. I feel like, um, a lot of organizations are also, uh, shall we say, come into terms with just how big a journey this really is because, um, we have lots of islands of automation and transformation, but nobody seems to be, uh, what they would describe doing things end to end. I'm not even sure it's feasible to do things end to end, but certainly we can do better than what we're currently doing.

You've been tracking this space for a long time. How, where do you feel we are in this journey? I mean, or I know there's a lot of fatigue out there, so what's your sense of, um, you know, are folks as enthusiastic as they once were?

Um, well I think, I think yes and no. I mean, there's some hesitation, but I think most of that comes from lack of clear vision and communication when it comes to the, these changes and, um, reducing the amount of silos between departments. So I think if there was better communication on the vision and the outcome, we'd have um, a lot less hesitation.

I also think how much of this is cultural versus technical issues? Uh, I wonder if a lot of it comes down and people have their fiefdoms within organizations. We've been studying of course, organizational behavior for as long as anybody can remember, but, um, do we underestimate how willing people are to drive change when they're not quite clear what that outcome means for them?

I mean, you know, there's a, a certain amount of, uh, self-interest at work here, shall we say? Yeah, definitely. And I think part of it just involves better education too when it comes, when it comes to this.

So making sure we have the right skill set in place, the right understanding of outcomes, and then just educating better. Do you think that we're ahead of pace, on pace, or are we falling behind in these efforts? And I asked the question because a lot of these organizations have competitors and a lot of times a new competitor comes along and has some sort of digital process that winds up, uh, you know, unseating them from their dominant position.

And a lot of times they may fade into history. Other times they might be forced to buy the new rival. We've seen both things occur over time.

What is your sense of, uh, where are we in terms of our piece? Well, I think someone is always behind and someone's always ahead, and we're going in a back and forth fashion with that. I mean, this technology is ever evolving very rapidly.

Everyone's trying to harness it and put initiatives into place. And I think at any given minute, there's plenty of people behind and plenty of people ahead and uh, that can change with within the week. All right.

I do feel like we are making progress in certain areas and I've seen some stuff on the digital CXL site talking about, uh, automation and retail warehouses and whatnot. But even there we're seeing some challenges with folks who are maybe not on the same page. I mean, kinda walk us through a little bit of what, what you guys saw in this survey.

Yeah, so that was a survey from Pro Glove and they surveyed, I believe, um, over a thousand business leaders in those industries. And what they found was that um, there's a lot of, uh, hesitation when it comes to investment with many of them being willing, willing to invest, but knowing that it's going to take about five to 10 years to see that return on investment. Um, so when it comes to satisfaction levels, that survey said, um, there was still a pretty low rate of satisfaction when it comes to the automation initiatives that are in place.

And um, a large part of that had to do with, um, the data and better managing and harnessing that data that, um, is being used. And so, um, I think that they need to really focus a lot on how to manage the data, which seems to come down to, when it comes down to it is a big issue. I feel like almost all these issues we encounter seem to have all come back to the same core problem.

It's called the data. Mm-Hmm. Um, whether it's AI or whether it's digital transformation or, um, and even the simple stuff, I wonder, is it your sense that the way we manage data is as big a mess as it seems because, uh, all these initiatives are held up by that one inability to streamline the management of data?

Oh, it definitely is because anytime I'm interviewing or speaking to anyone or learning, uh, from any business leader, it always seems to come up as a big issue and concern is the data. So it's definitely a key issue. And I don't know that there's any one solution because once you have bad data, if, if it's in your system, it's really hard to pinpoint and, and uh, and you know, how do you move forward with clean data and trust it?

It's, it's a very difficult issue. I think one of the reasons that it, people like digital transformation and by extension AI is against the business to pay attention to this data management problem. I feel like they've all been out talking about this in the wilderness for decades now and nobody really, uh, paid much attention to him because the business side was like, well, we got a new app and we're gonna plug some data into that and we hope it's consistent.

And the IT side was always, well, our job is to store the data and maybe process it, but they didn't look too closely at what the data was either. So, um, maybe we should just take a year off from all these efforts and focus on one thing, which is getting our data management house in order because whatever we're gonna do in the future seems to be all tied back to data. So I wonder if the organizations need to, you know, take a time out and a pause Probably.

So that's probably a great idea because at the end of the day, it really does come down to the data. So maybe everybody should focus on a solution before moving forward with, with any other kind of implementation or projects. Yeah, so maybe we need a chief data officer to kind of go in and clean house in a way that would enable the Chief digital officer or anybody else for that matter, to do something innovative.

I, I just don't know, like who owns the data in these organizations? 'cause it kinda, they didn't create it so they don't really know what the value of one piece of data is versus another. And each of the business units has its own data.

Often that data conflicts with some other business unit. I mean, do we create, I know we've seen some chief data officers, but frankly there aren't that many of 'em out there. Yeah, It's definitely a, a concern and not to mention that you can kind of finagle data to read how you want it to.

So across different departments they're not getting the same data outcome. So that's another issue. Alright.

We're also seeing on the site, the automotive industry appears to be having its variation of this similar issue with, um, folks are finding it hard to get their act together on building the software defined vehicles of the future because again, the data's a bit of a mess and um, all their systems and platforms are siloed. So this is another example where we have this promise of these, you know, next great cars that are coming down the pike, but I think we're finding out that building them is a lot harder than we thought. Yeah, most definitely.

So, um, they surveyed over a hundred, um, leaders in that industry and uh, one of the biggest things was that the electric vehicle makers seem to be a little bit better prepared and more aligned than the legacy auto providers. So, um, therein lies some issues where collaboration could be helpful, um, with the tier one suppliers and the auto manufacturers. And I think what people underestimate is it takes about five years to build a car between the designing it and what eventually rolls off an assembly line.

And if my systems and processes are not aligned, um, any kinda delay to the effort winds up in that card, either losing features for the year it's supposed to be rolled out, or in some cases, you know, it doesn't get rolled out and then they wind up delivering a minor quote unquote variation of the previous year's car. The entire revenue structure for these companies is wrapped around this whole process and I wonder if they're, you know, perhaps betting too much on something that they have not got their arms around yet. So we could see, uh, you know, some significant missteps among the leading automotive providers going forward.

What do you think? Absolutely. I feel the return on investment really needs to be looked at because it, it seems to be a competition right now.

Um, you know how much better they can make these vehicles, but are they listening to really the customer's needs and what, what the customers actually need and desire and will utilize? Or are they just trying to be innovative for the sake of being the most innovative and stand out from everyone else? So I think before racing ahead they should really understand what the customer really needs.

Yeah, it's getting a little weird because they're turning them into uh, you know, essentially large phones on wheels and I always scratch my head and go, well I get that you wanna control my entertainment system and all that great stuff, but I already have a phone in my pocket and it will tell me where I need to go and how I'm gonna get there. And by the way, uh, you know, I may have a streaming satellite service in the car, but half the time my wife plugs in her phone because she likes the music on her phone better than what's being streamed. So it's not clear to me that, um, I wanna have all those services from the automotive companies.

I may want just a better driving experience. Yeah, I feel like sometimes we just have way too many options and a more simpler, uh, I wouldn't mind going back to a little bit more simpler vehicle, I gotta say, although I'm reminded of one of my favorite all time stupid jokes, which is, you know, which is more important, your house or your car, That priorities. Right.

It depends on the person. I suppose I would, I the answer to the joke is it's your car because you can sleep in your car but you can't drive your house all. Well there was a big dunum right there.

Alright. Um, so I also wanna talk about another story that's sitting up on digital CXO that's kind, um, different from uh, some of the other topics that we've covered in the past, but it's a piece by John Willis and he's talking about the rise of vector databases to process, uh, vector data that's being used to drive all kinds of new analytics apps. And a lot of that is, uh, driven by, uh, large language models and AI and the concept of a vector has been around for uh, I don't know, 50 years or so, but it seems like we're now really focusing on these databases as the mechanism we're going to use to uh, leverage these large language models.

And I wonder if the vector database is gonna be wind up being more important than the large language models and, and all the hype around the AI itself? Well I think so because again, it all comes back to today like we were just discussing, but most of the data out there is unstructured data. So figuring out the best way to harness the data.

And what's great about vector databases is they do not have to be trained once they're, um, entered. So it reduces a lot of time and um, effort and speeds up processes. So I think we will see vector databases being a solution, um, in a lot of cases.

And um, you know, whether or not more important than large language models, um, I'm not sure 'cause it probably depends on the project and the need, but it does have a lot less training involved with it than large language models. Yeah, I feel like it's the, uh, gold rush equivalent of what we saw with the people who were selling dungarees and pickaxes made all the money and very few of the miners actually struck gold. So the people who got rich were the people selling dre.

I think that vector databases might be the DRE of the AI gold rush Maybe. So, I mean definitely more companies and business leaders are looking to vector databases as solutions. I'm just not entirely sure that everybody knows what a Vector database is because it's kind of been sitting on the periphery of, um, almost an esoteric technology and now we're seeing everybody stumble over themselves and some people are saying you need to have a dedicated vector database.

And other people are saying it's just an extension of your existing database and it's another data type that you can just add to that. I think each individual organization will need to figure out which of those models makes the most sense for them. But I wonder if, um, the database administrator may be cool again because these are the typically the people that understand how to manage these things.

Yeah, I think it does come down to to skillset and as you said, many of them need the education or the skill up training to really understand, um, and having someone dedicated towards it would be good. So what is your sense of what ultimately is gonna be the relationship between digital transformation and ai? Are these two things joined at the hip now joined?

Um, is one an enabler of the other? How do, how should we be thinking about these two things together? Well, I think they definitely, AI definitely plays a role in digital transformation.

I mean, it it is digital transformation. So, uh, most people in their initiatives are looking to ai, but there's a lot of digital transformation and innovation that does not require ai, that it has nothing to do with ai, but it's certainly a key concern right now amongst most business leaders. All right, well we have a video interview that's up on the site that may at the end of the day sum all this up in a way that it could be interesting to folks, but Drew Yancy, he's a CEO for Telio strategy.

I was having a chat with him and he said, ultimately it just comes down to execution. And part of the problem, whether it's AI or digital transformation and whatever it is, is we overlook how much effort is required to ensure that something is executed properly. I think there's a lot of senior leaders out there who are drawing up plans and writing things down on paper and then they're looking around for somebody to go implement that.

And I think that maybe they need to get their own hands a little bit dirtier and drive these initiatives further in their organizations. 'cause ultimately people, it's not that they're gonna resist, but if they don't know what the game plan is and it wasn't their idea in the first place, they're not gonna embrace it as aggressively as, uh, they might otherwise. So my question then becomes, you know, how do we get people motivated to kind of drive something that they don't always know what the outcome's gonna be?

Well, and I think that's where it's a good idea to have. I know in your interview it was discussed about having innovation meetings or innovation departments. Um, and so I think that would be helpful and just communicating the overall goals and visions.

Um, so everyone's on board and then being very strategic and um, you know, the step process, you know, one step at a time, making sure it's achieved before moving forward and making sure that it can be sustained is the other issue. All right. Since uh, I found the one joke, I'm gonna go for a second joke, which is, uh, a reference to an interview from an old head coach of the Tampa Bay Buccaneers when they were an expansion team and somebody asked him and said, what'd you think of your team's execution today?

And he's, his response was, I think it's a good idea. So hopefully that's not the outcome for digital transformation, but that's where we are at the moment, folks. It's the end of the beginning.

Let's hope it all comes out right at the end. Absolutely. Well, I wanna thank our audience for staying with us and stay tuned next week to hear more about digital transformation.

Thanks, Mike. See you guys. Bye.