Dr. Reger, the concept of the digital transformation is well known, but who and what can trigger it?
Joseph Reger: We are in the fortunate position that the topic of the digital transformation has reached the executive board level, which means that it is finally being recognized and acknowledged accordingly. This also creates the required level of pressure on organizations.
But what triggers the transformation?
Reger: The digital transformation – and I have actually observed this in many companies – should be triggered by an insight and the understanding at the management level. C-level management now sees that it is facing not just a technology trend but a fundamental change in the entire value chain. The operative B2B2C model of every company – and yes, in some cases the entire business model – changes because the digital transformation is a comprehensive, holistic and sustained trend.
What drives the transformation process?
Reger: That depends on what one understands by “drive”. The digital transformation is not a technical term. It is primarily a transformation of the business. But implementation projects are often based on the technical feasibility of the innovation ideas. Maybe we should say: The digital transformation is triggered by a desire for business innovation and driven by ICT projects.
What is the aspect of the desire for business innovation?
Reger: This almost always involves aspects related to IoT and also increasingly machine learning, which is often – and not very precisely – referred to as artificial intelligence. A systematic approach and the establishment of a common platform (which can subsequently become a standard), a country, a region or even an industry segment, as in the case of Industry 4.0 in Germany, could be a great advantage – even a competitive advantage. Whether this innovation and reorganization puts humans in front and center depends both on the client as well as the contractor in the ICT industry.
So this requires cooperation between client and contractor?
Reger: At Fujitsu, we are convinced that this aspect is very important. This is why we developed our “Human Centric Innovation” business model and the “co-creation” methodology. This approach emphasizes the idea that added value can only be created together with the customer and user.
“Enabling Digital” also stands for the automation of business processes. Are humans not a hindrance in this context, and will artificial intelligence soon be able to do everything better than humans?
Reger: AI will be better at doing a lot of things that are done by an employee today. But we are far away from a time in which AI can assume the task of innovation. Machines are already able to work more efficiently and complete routine tasks in many areas. A new feature is that AI is gradually making its way into areas that no longer have anything to do with manual and mechanical activities.
So what is left for humans in that case?
Reger: Innovations, in particular the introduction of innovations, are not activities that can be done by AI. Humans are in the way if they are supposed to perform a task that could be automated. Since this will happen in any case, our task is to upgrade existing positions by changing the occupational profile and to create new positions that cannot be performed by AI.
How do humans create innovations and solutions?
Reger: They are definitely not created automatically. From our point of view, the best projects come about when the business side – represented by the customer and in particular the customer‘s employees – works closely with the technical side. This co-creation accelerates innovation, delivers better and more in-depth – one could also say more radical – results.
What can co-creation do?
Reger: It brings about the integration of techniques for company management, operational management and information technology, i.e. business technology, operations technology, information technology. With respect to these dimensions and in particular the consolidation of these dimensions, creativity knows virtually no bounds. The best results come about almost like a by-product.
Who can and should be responsible for enabling a digital transformation?
Reger: That is a hot topic here in Germany – and interestingly a topic that is not considered quite as important in other countries. The challenge: The will to action must be anchored in management – and the same is true for responsibility.
Reger: IT is also a part of that. During the implementation phase, many things should happen as they do in start-ups, which are often admired by C-level executives. But these work mostly without hierarchies, are flexible and project-oriented. Many companies create the position of CDO (Chief Digital Officer), while others give this task to the existing CIO. Both solutions have advantages and disadvantages. It seems to me that success or failure has rather more to do with the individuals than the system.
“Enabling Digital Transformation” – a revolution or evolution?
Reger: Evolution can also bring about revolutions, if we look at history. But seriously: More technology, and more efficiency, by itself does not make a digital transformation; we merely have more technology. As I said at the beginning, the digital transformation is primarily a transformation of the business – and possibly the business model. It is achieved by a hitherto unknown expansion of the value chains. In this way, a manufacturer can become a service provider and live off the monthly service income instead of sales revenues. For many, this will probably feel like a revolution.