Many companies struggle to reap the benefits of investments in digital transformation, while others see enormous gains. What do successful firms do differently?
Copyright: hbr.org – “Democratizing Transformation”
Over the past decade, Novartis has invested heavily in digital transformation. As the Swiss pharmaceutical giant moved its technology infrastructure to the cloud and invested in data platforms and data integration, it recruited AI specialists and data scientists to build machine-learning models and deploy them throughout the firm. But even as the technical teams grew, managers from across the business—sales, supply chain, HR, finance, and marketing—weren’t embracing the newly available information, nor were they thinking much about how data could enhance their teams’ work. At the same time, the data scientists had little visibility into the business units and could not easily integrate data into day-to-day operations. As a result, the investments resulted in only occasional successes (in some aspects of the R&D process, for example) while many pilots and projects sputtered.
More recently, however, pilots targeting both R&D and marketing personalization started showing business value and captured the attention and imagination of some of Novartis’s more creative business executives. They became increasingly excited about opportunities to deploy AI in various parts of the company and began to earnestly champion the efforts. (Disclosure: We have both worked with Novartis and other companies mentioned in this article in a variety of ways, including board membership, research, and consulting.) They realized that technologists and data scientists alone couldn’t bring about the kind of wholesale innovation the business needed, so they began pairing data scientists with business employees who had insight into where improvements in efficiency and performance were needed.
Novartis also invested in training frontline business employees to use data themselves to drive innovation. A growing number of teams adopted agile methods to address all kinds of opportunities. The intensity and impact of transformation thus accelerated rapidly, driving a range of innovation initiatives, including digitally enabling sales and sales forecasting, reconceiving the order and replenishment system for health-care-services customers, and revamping prescription-fulfillment systems and processes.[…]
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