Digital Transformation: Survive and Thrive in an Era of Mass Extinction

Artificial intelligence, big data, cloud computing and the Internet of Things, as disjunctive terms, frequently permeate discussions of commerce, technology and even the operations of governments. This fascinating book explains in compelling language the currently evolved meanings of those terms, the synergism of their ever-burgeoning capabilities and the profound consequences of their confluence. Tom Siebel portrays in vivid detail how those four technologies relate to each other, the dramatic business and governmental opportunities which are presented to organizations which recognize the compound power of these developments, and the life or death risks which face those which do not recognize this challenging, onrushing step function of evolutionary change. Mr. Siebel comes to this task with unique chops, having degrees in history (with an emphasis on the history of technology), business, and computer science. In addition, he was the founder of Siebel Systems, the successful forerunner of CRM applications. He is currently CEO of C3.ai, which is at the vanguard of enterprise artificial intelligence software. While the term “digital transformation” is a loosely-used commonplace, this book imbues it with real meaning, and paints a clear path forward as to how the four technologies at issue will present large opportunities to organizations which transform as well as dictate the demise of those which do not. Digital transformation goes to the very core of how organizations operate and what they do. These technologies do not merely replace current capabilities with something familiar which is merely faster or more glittering. Rather, they present, and demand, totally different ways of doing entirely new things. Corporate management must now pose and answer major strategic questions as to the deep nature of its enterprise. What business are we really in? Do we manufacture discrete end products, or will be, and must we, be a system integrator that provides an entire platform to fulfill a need? Mr. Siebel posits that these transformative questions present the first true discontinuity in the organization of manufacturing firms in modern business history. He offers that the changes which are already underway will be of a magnitude on the order of the Industrial Revolution. He also makes it clear that governments, too, must be focused on the need to evolve. He offers the observation that nations have long competed with each other for both economic growth and the acquisition of human capital and talent. The application of these technologies to government and society as a whole will be enormous. Mr. Siebel describes elastic cloud computing as an essential foundation and driving force of digital transformation. Enterprises of any size now have universal access to immediately extensible and collapsible unlimited amounts of computing power and storage capacity, on a payment basis calibrated to the resources used. If cloud computing presents the means, big data presents the necessity for such flexible computing capability. Until now, instances of abundant data could only be sampled, with inferences then extracted from the samples. But Mr. Siebel says that the availability of powerful and increasingly inexpensive computing sources “changes everything about the computing paradigm, enabling us to address a large class of problems that were previously unsolvable.” However, these massive volumes of data have to be approached in strategic ways. He suggests that “storing large amounts of disparate data by putting it all in one infrastructure location does not reduce data complexity any more than letting data sit in siloed enterprise systems.” New approaches, not available in current open source applications, are required. The author usefully describes elastic cloud computing and big data as providing, respectively, the infrastructure and the raw material that make digital transformation possible. He then turns his attention to the remaining two technologies that “leverage” the first two in order to drive transformative change – artificial intelligence and the Internet of Things. This book is valuable, even alone, for the precis which it offers of the current state of artificial intelligence. Conveying all of those thoughts is far beyond the scope of this modest review. As one point, though, he sketches the advent of machine learning, combined with unlimited computational power, as resulting in a whole new class of algorithms to solve previously unaddressable problems. But he draws particular attention to deep learning because of its ability to bypass the intensive requirements demanded by feature engineering in generalized machine learning. The last of these technologies under consideration, the Internet of Things, is described as having “created one of the most disruptive waves we’ve ever seen in IT and business.” At the root of its growth is the ever-evolving ubiquity of small and cheap computing devices with miserly power requirements, combined with the “hyper-growth of the internet.” The volume of data that IoT systems will generate is “wholly unprecedented.” Still, Mr. Siebel states that “our Cambrian Explosion of IoT is still ahead of us.” He anticipates that the number of connected devices, whose power is compounded because of Metcalfe’s Law relating to the power of a network as being the square of its nodes, results in a computing platform with an empowered base approximating “the number of stars in our universe.” Such is a measure of this incipient wave of change. The book additionally illustrates the application of these concepts to government and public utilities. The author sounds a justified note of alarm in stating that the electricity grid is the engine that powers all mechanisms of commerce and civilization in the United States. He further describes the grid as being brittle, fragile, and highly susceptible to destructive cyberattack. Further, there is no cohesive national policy in place to deal with that palpable risk. Mr. Siebel graphically describes C3.ai’s deep involvement in predictive maintenance advances, with the United States Air Force being a prominent example. He also describes other AI initiatives of the Pentagon. After describing the landscape of this technology, the author explains that an entirely new software technology stack is needed for practical implementation of this digital future. Solutions created in-house, or attempts to use stand-alone AI platforms, will be found to be inadequate to the task. Further, integration of data into a structured programming regime is described as being unworkable for the complexity and scale of down-to-date AI and IoT applications. The author explains how a model-driven architecture will be far lighter in its coding requirements and also in the time demands required to implement and maintain it. Digital Transformation also explains how these profound and immediate changes in the core structures of business must be CEO driven, as being more far-reaching than the mere acquisition of software packages. Use cases within the enterprise must be decided upon, the economic benefit to be achieved must be identified, and a plan must be put in place to accomplish that benefit in “short, iterative cycles aimed at continuous incremental improvement.” I started reading this book on the day that Amazon announced that it would spend $700 million to retrain about 100,000 of its employees by 2025. The New York Times quotes Susan Lund of the McKinsey Global Institute as saying in response to that announcement that “the scale and pace of the changes in the work force are unprecedented.” This future, driven by this unprecedented speed of technological change, is concretely here. The working hypotheses for the near future are clearly limned. “While the threat of missing the digital transformation opportunity is existential, the rewards for embarking on a strategic, organization-wide transformation will be truly game-changing.” Studies estimate that this transformation will drive trillions of dollars of new value globally over the next decade. “Organizations that act now will position themselves to take an outsized share of that prize.” If not, as the last sentence of this essential book states, “institutions that fail to seize this moment will become footnotes in history.”

After watching big companies like Blockbuster and Borders go out of business because they couldn’t adapt to changing conditions, Siebel thinks we are in an era of mass corporate extinction with mass speciation of new kinds of companies. Siebel is a gifted writer, and with over 40 years in the industry, often spent talking with other CEOs, he has plenty of stories and insight about the impact of new technology. KEY POINTS FROM THE BOOK • The combination of four disruptive technologies: cloud computing, big data, the internet of things, and artificial intelligence is dramatically changing the way businesses compete. • The smooth rate of change implied by Moore’s law doesn’t capture today’s upheaval. Since 2000, 52% of the Fortune 500 companies have been acquired or gone out of business. • To survive, most companies will have to make revolutionary changes to key corporate processes. • The CEO has to lead this change. • The competitive landscape for governments is also changing. China has declared it intends to be the leader in AI and plans to invest $60 billion per year by 2025 to get there. • Most companies struggle to move beyond AI experiments and prototypes. Perhaps the most valuable parts of the book are Siebel’s tips, like using a model-driven architecture, to increase the odds of success. • Large companies can turn their existing data into a competitive advantage to deter new entrants. • The productivity improvements can be huge. John Deere estimates it will save over $100 million per year using AI to optimize its inventory. 3M hopes to save over $500 million per year from its AI applications. The U.S. Air Force has significantly increased mission-capable readiness by applying AI to predict the need for unscheduled aircraft maintenance. • Siebel gives a CEO action plan with 10 principles. Moreover, he includes a reading list of six general books (from James Gleick’s “The Information,” to Brynjolfsson and McAfee’s “The Second Machine Age.”) And if you want more, he gives a list of Coursera online courses that teach you how to code.

I have the Kindle version. The book is a fairly quick read. I was wary when the author started with a review of various extinction events involving early life forms. How did this affect digital transformation? The author does tie these events into the book's subject, but it still seems to me to be a stretch and, consequently, 4 stars. Once we got away from pre-historical events, the book moves well and I felt that the author made a good faith effort to educate the reader on the complexities of digital transformation and to give the reader useful advice. One takeaway for me is that the subject is complex. He clearly admonishes business leaders to take digital services seriously and to adopt a hands-on approach to digital matters. This requires the leader to study digital transformation carefully. Just buying a software program or programs is not enough. You must study how the digital undertaking may compel changes in the way you do business, your organization's culture and business model. It's all encompassing. I thought the author added value with the advice in the book. He recommends some other books to read. He discusses some actions that he would avoid taking. Absorbing the book's lessons will take focused effort. I plan to read it a second time. The topic is timely and serious. If you have an interest in digital transformation, I recommend the book.

Siebel provides and insightful analysis into the impact that the confluence of 4 key technology trends: Elactic Cloud Computing, Ai, Big Data and IoT is having on business evolution and the need for CEOs to take ownership of this evolution or risk the extinction of their businesses

Very informative and top class book. Mr. Thomas, I am really impressed the way you linked things with each other and explained it in a very cohesive way! Appreciate your excellent contribution!!! - Tarun Sharma

Great book!

Un libro denso di informazioni importanti che non si trovano in internet e tanto meno in tv

Very understandable and interesting