DIGITAL

TRANSFORMATION
AND ARTIFICIAL
INTELLIGENCE
Lecturer: Nguyễn Thế Đại Nghĩa
Email: nghiantd@uel.edu.vn
Phone/Zalo/Viber: 0936385487
 CHAPTER 4:
ORGANIZATIONAL CAPACITIES
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CONTENTS
• THE THREE PILLARS OF DIGITAL
TRANSFORMATION
• THE ROLE OF TECHNOLOGY IN DIGITAL
TRANSFORMATION
• AI & BIG DATA: OPPORTUNITIES AND
CHALLENGES FOR FIRM PERFORMANCE
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THE THREE PILLARS OF DIGITAL TRANSFORMATION

1. Improving the core

2. Building new business models
3. Developing digital capabilities
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IMPROVING THE CORE

Use digital technologies to enhance the core products/services

and improve the current processes.
• Introduce new features
• Enhance customer experience
• Redesign business processes to improve the effectiveness
and save resources
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IMPROVING THE CORE

• Digital technologies enable the collection of large datasets

▫ Understand customer preferences
▫ Optimize revenue management
▫ Utilize capacities and profits

 Improve business performance and customer satisfaction

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BUILDING NEW BUSINESS MODELS

• New technology competitors enter to the market while current

competitors are developing new services.
• New business models can be built in two ways:
▫ Build a new company adopting the new technology and platform
▫ Invest in start-ups or other companies like a venture capital fund
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BUILDING NEW BUSINESS MODELS

• New business models offer a variety of services and connect
these new services to the core business of the firm.
▫ Example: Deutsche Bahn, the German railway company, offers
customers high-speed train service to cover long distances and
ride pooling service for the first or the last mile.
• Must have a clear investment map to focus only on related
markets.
• Expect that new business models will cannibalize core
business.
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DEVELOPING DIGITAL CAPABILITIES

IT Innovation New work-

Data
Infrastructure ecosystem styles
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DEVELOPING DIGITAL CAPABILITIES

Data
• Data platform helps improve products/services and processes.
• All business units can access a data platform easily and use it
seamlessly.
• Leverage AI & machine learning to actually make use of data
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DEVELOPING DIGITAL CAPABILITIES

IT Infrastructure – Hardware & Software
• Build your own requires a team with diverse skill set; choice of
software tools; both risks and possible benefits
• Outsourcing: Hiring vendors to provide services involved in
building your system and site
• Take advantage of cloud computing services  Rapidly scale
and adapt data via standardization
• Combine public and private cloud computing
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DEVELOPING DIGITAL CAPABILITIES

Innovation ecosystem
• Develop programs to bring innovation inside
▫ Build prototypes and scale them
▫ Cooperate with start-ups or large tech companies to improve
processes and develop new products or services
▫ Hold a entrepreneurship program to create entrepreneurs within a
company
▫ Create products in a dev-ops environment as tech firms do
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DEVELOPING DIGITAL CAPABILITIES

New work-style
• Work-style: the collection of behaviors and attitudes that you
apply to your tasks and relationships in the workplace
• Work in teams: cross-functional, agile teams
• Not only IT or business teams  Integrated teams that have
much more ownership in the final product.
• Eliminate silos effect
• Leverage external forces
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DEVELOPING DIGITAL CAPABILITIES

Agile methodology
• Manage a project by breaking it up into
several phases
• Constantly collaborate with stakeholders and
continuously improve at every stage
• Teams cycle through a process of planning,
executing, and evaluating
• Continuous collaboration with team
members and project stakeholders
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ROLE OF TECHNOLOGY
• Technology is not the same as digital transformation
• Technology is just the first step, the engine, the solution that is
nowadays necessary in the process of the digital
transformation of an organization.
• Technology as a driver of digital transformation:
▫ The customer requires immediate and fast communication.
▫ The need of disintermediation has emerged.
▫ The development of supplier technology infrastructures requires
the alignment between the supplier and the firm
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ROLE OF TECHNOLOGY
• Technology as an enabler of digital transformation:
▫ Digital technologies allows organizations to easily adapt business
processes and drive higher levels of innovation.
▫ The use of technologies requires an IT strategy in full compliance
with business objectives.
• Technology gives us the means. It’s what we want to do with it
that matters. Changing business processes and corporate
culture are just as vital to your success.
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IMPACT OF AI ON FIRM PERFORMANCE

Opportunities
• Monitor and analyze marketing data across all the media
channels (Acquisio)
• Track competitors over different channels like websites, social
media, and apps (Crayon) to provide detailed analysis of
competitors’ changes in marketing planning like price changes,
PR activities.
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IMPACT OF AI ON FIRM PERFORMANCE

Opportunities
• Make use of Big Data by providing tools for business that can
be fitted in every data producing workflow and provide close
insights.
• Integrate to CRM platforms to analyze real-time data in order
to provide predictions as well as recommendations based on
business processes and customer data.
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IMPACT OF AI ON FIRM PERFORMANCE

Challenges
• Computing is not that Advanced: AI techniques utilize a lot of
processing power due to increasingly complex algorithms and
large data volumes.
• AI has not been able to create trust among people because
they don’t understand how the decision was made by AI. Do all
AI’s decisions are perfect?
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IMPACT OF AI ON FIRM PERFORMANCE

Challenges
• Lost of data privacy and security: Machine learning systems
depend on the data which is often sensitive and personal. These
systems can become prone to data breach and identity theft.
• Algorithm bias: AI’s level of goodness or badness depends on
the much data they are trained on. Bad data is often associated
with, ethnic, communal, gender or racial biases.
• Data scarcity
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IMPACT OF BIG DATA ON FIRM PERFORMANCE

Opportunities
• Better insight into customer preferences, buying behavior and
sentiment
• Increased intelligence on market trends, products and competitors
• Agile supply chain operations that can react quickly to problems
and new business needs
• Recommendation engines that are better tuned to the interests of
customers
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IMPACT OF BIG DATA ON FIRM PERFORMANCE

Opportunities
• Data-driven innovation in product development and other business
functions
• Support diverse analytics use cases with the same data sets
• Operational improvements, such as lower costs and proactive
equipment maintenance
• Ensure data and analytics platforms can meet future business
needs.
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IMPACT OF BIG DATA ON FIRM PERFORMANCE

Challenges
• Technical challenges: selecting the right big data tools and
technologies and designing big data systems so they can be
scaled as needed
• Data management challenges: from processing and storing large
amounts of data to cleansing, integrating, preparing and governing
them
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IMPACT OF BIG DATA ON FIRM PERFORMANCE

Challenges
• Analytics challenges: ensuring that business needs are
understood and that analytics results are relevant to an
organization's business strategy
• Program management challenges: keeping costs under control
and finding workers with the required big data skills