Enterprise AI Transformation - Episode 8: Competitive Edge by Leveraging Organizational Capabilities

Companies can use AI to gain a competitive advantage by leveraging technology, improving processes, and putting the customer first. Netflix is an example of a company that transformed itself into a world-class organization by adopting technology, becoming product-centric, customer-focused, and agile. However, just adopting technology is not enough. Organizational capability is the missing link. Companies need to assemble their resources and capabilities in six broad categories: business, people, platform, operations, governance, and security. Different companies leverage different combinations of these capabilities to develop a competitive advantage. To leverage AI technology, companies identify business problems or opportunities and work with data scientists and engineers to translate them into machine learning problems. They use scalable cloud infrastructure to gain deep insights and create new products for personalized customer experiences. Implementing AI technology requires leader Hello everyone, this is Abhijay. Today I'm going to talk about how companies can use AI to gain a competitive advantage. We will take a look at how Netflix leveraged technology to improve their processes and cut costs and put the customer first. By doing that, they were able to transform their organization and become world-class. So in the previous article, we did look at how Netflix did that, adopted technology and just navigated through that path to become a world-class organization. They were able to use technology to improvise their processes which resulted in organizational transformation that enabled them to be product-centric, customer-focused, and because they used the cloud, they were also agile. All of this gave them that edge to become world-class by innovating products and almost creating a new business model. But here's the thing, just adopting technology won't automatically make a company world-class, right? If that was the case, every company would be great. In that case, what is that missing link? It is called organizational capability. Companies, they have the resources and capabilities in their toolkit. They have to assemble those in a manner they can achieve those business goals. We can divide these capabilities like six broad categories. We can call them perspectives or viewpoints. Basically, they are business, people, platform, operations, governance, and security. I will obviously go through each one of those in the next series of articles. But for now, just recall this. When you're in an initiative for transforming a company to AI, we have to look at those six dimensions or viewpoints, you can call it. But different companies have leveraged different combinations of these capabilities. I call them foundational capabilities to develop that competitive advantage. Obviously, there are some companies who are good at supply chain. There are some companies who are good at product innovation. Some of those are even better in personalizing the experiences to their customers. So that is how different companies build that competitive advantage. And that helps them to excel in certain domains. For example, a company succeeding in supply chain will be able to deliver products quickly and cheaper and so on and so forth. Now, so how can the companies leverage AI to build a similar competitive advantage? That is the focus of this newsletter, right? So the way they do that is they try to identify a business problem or an opportunity based on the capabilities of the AI technology. And they work with different data scientists, machine learning engineers, cloud engineers, data engineers, and many other skill sets to translate that problem into a machine learning problem. And then they run those complex machine learning algorithms on highly scalable cloud infrastructure to gain that deep insight about whatever problem they're trying to solve. And then use that insight to build those new products and provide that personalized experience to the customers. Just like what Netflix did in the previous example. Now, implementing AI technology, though, or any technology, I think, is not just about technology. The companies also need things like leadership support, change management, AI strategy, business strategy. And then they also have to align the business strategy with the technology strategy and the AI strategy so that everybody can come on board to implement this change. So that's the gist of this podcast. We know what capabilities companies need to become world class and how to use AI to gain the competitive edge. That should be the focus. But how do we bring all of those capabilities together to achieve that success? That is the question, right? So we know the path the companies are taking to get to that world class status. We also now know what are those ingredients to help that company get to that destination. But the question is, how do we actually assemble those resources to achieve the goal? That is like, you know, taking a cooking analogy. It's like we know what dish to make. We have the ingredients, but now we need the recipe, right? That is what this is, the next article is going to talk about. We're going to look at the methodology that we need to embrace to, you know, use all the strengths and weaknesses of the organization and then navigate along the way. So we can achieve this, you know, the world class status. So until then, stay tuned and thank you for spending time with me, for listening today. It's on a weekend, so I really appreciate the time you're spending with me. I also want to say this is all my personal thoughts, doesn't reflect that of my employer. With that said, have a wonderful day. Thank you.