Responsibility, Artificial Intelligence, Cost-effectiveness: Checklist for Digital Development in 2024
The year 2023 has been exceptional in many ways in the fields of digitalization and technological development. On one hand, artificial intelligence, for example, has blasted itself into everyone's awareness, and companies are now fervently contemplating how to leverage it. On the other hand, for many organizations, 2023 has been a time of uncertainty, adaptation, and change. As 2024 arrives, what can we learn from the current situation, and what should companies focus on in their digital development?
Cost savings aren’t about the price only
First off, it's essential to note that digital transformation is only accelerating, and decisions made now impact long-term competitiveness. Many organizations are under pressure for cost savings. If that is executed poorly, it will hinder competitiveness in the future. If price is the sole determining factor in digital development demanding extensive experience, you will end up with subpar results sooner or later. Quality issues in the level of development, the use of technological tools, and deteriorating user experience in the services customers use will hit you within a few years. Top experts in your organization won't tolerate poorly functioning digital tools or decreasing investments in the long run.
Artificial Intelligence is also about the people
Secondly, the potential of data and artificial intelligence for companies is enormous, but stumbling occurs early on if AI is approached only from a technological perspective. It's about a broader, guided change from the perspectives of different systems, culture, leadership, and ways of working. AI won't help at all if your data isn't organized correctly, and AI can't access it. Therefore, data integration, building data models, collecting data into, for example, data lakes, and refining data are increasingly crucial if you truly want to benefit from AI. It's not enough to get systems to talk to each other; collaboration between people and your organization must also work.
Sustainability from the get-go
Thirdly, the role of digitalization and technology in responsible business is growing. Significant sustainability benefits can be achieved merely by digitizing and developing business processes. Additionally, the CRSD sustainability reporting directive and the CSDD directive on due diligence for sustainable business conduct will significantly increase the obligations related to sustainability and its reporting in the coming years.
The identification and collection of sustainability data become even more crucial, and digital solutions are key to collecting data and automating it to a great extent—not to mention the development of business sustainability. Furthermore, the old truth of cutting unnecessary things also applies to developing sustainability. If a phase of the process, a feature of the service, or the service itself is unnecessary or sustainability hasn't been taken into account in the planning phase, then green code or anything else won’t make it sustainable.
Your organization must be in the driver’s seat in digital development
Fourthly, in an increasing number of companies, a growing portion of revenue comes from digital services, and this development needs to be led by the organization itself. For instance, fragmented software development often leads to an uncontrolled, expensive, and poorly functioning whole. In massive outsourced IT deliveries, on the other hand, IT expertise isn’t built within the organization itself.
All companies will become technology companies. Therefore, areas of development, capabilities, and expertise securing future competitiveness need to be invested in and led by the organization itself, and they cannot be simply outsourced to others.
This op-ed was originally published in Finnish in Talouselämä Tebatti on December 15, 2023. The author is the CEO of Witted Finland.