International Jazz Day.
Everything is digital these days, from the way you run your business to the way you design your products and services to your market presence. None of this is new. It’s been that way for at least a decade, although there are still companies that refuse to believe they’re technology companies, which in 2024 – and forever – every company is.
In fact, far too many executives still believe that their companies can be run as a set of distributed functions shared with a variety of external partners. Imagine how many partners there often are and how difficult it is to manage multiple contracts? Not to mention the number of dependencies between vendors. Just think of how a single update to a configuration file recently brought half the world down. Can AI help reduce IT chaos? And give you a strategic advantage? Yes, it can.
AI (machine learning and generative AI) completes the merger of business and technology – even if some companies don’t realize it. The tactical due diligence around the next big data analytics project or your next foray into multi-cloud based solutions completely misses the point. This is all strategic now. Operational technology has become completely commoditized. It provides no competitive advantage. Competitive advantage only comes with strategic technology, and the clear winner here is AI.
AI Jazz
AI is the strategic shift that analysts, vendors, consultants, CIOs, CTOs and CEOs Despite it often don’t recognize it. (We collected some data in 2023 and 2024 that – incredibly – describes lukewarm commitment to AI.) This isn’t an incremental process. It’s one of those inflection points – like we saw with the internet – that companies either recognize or don’t recognize, the kind of inflection points that have allowed companies like Uber, Airbnb, VRBO, PayPal, and Stripe to come into play as major players in vertical industries and as essential infrastructure providers for all transactions. OpenAI Nvidia is here now, along with old-school technology providers like Microsoft, Meta, and Google, all trying to change before their customers go elsewhere. Yes, the war has begun.
Note that the lane that the Internet opened also opened for AI – and then AI opened its own lane. But this one is much broader and more influential than the Internet ever was. While the Internet was a key technology that led to all sorts of new business models, AI is both an infrastructure and an application platform that rides on top of the Internet. And its own large language models (and simpler models supported by everyday algorithms such as regression).
The sounds of music
Imagine the journey of a musician from classical to jazz. There was once a time when technology, when done well, was classical music, just as finance, accounting and HR, when done well, were classical. We thought of “IT” that way for years. We compared it to other business functions and processes that had evolved in the 20th Century was appropriate. But while accounting, finance, and human resources have obviously changed, they are still more classical than jazzy. Technology, on the other hand, has morphed into something that bears no resemblance to its 20th century counterpart.th Century itself. It moved from the back office to the front office, took over the building, connected the world and then stood up and looked around for further tasks. The journey from classical to jazz turns old classical music fans into jazz fans – the complete and lasting integration of business and technology.
Listen to this:
“Classical performances are traditionally based on pre-composed material, revitalizing scores from years past; jazz, on the other hand, becomes fresh with each performance as the musicians compose anew spontaneously and in real time through improvisation.”
The shift from classical to jazz assumes that business technology is a concert of very different music than the concerts you’ve probably attended. Digital technology – powered by AI – is the latest – and ongoing – improvisation. As more and more operational technology becomes commoditized in the cloud, the benefit lies in strategically applying new technologies to current and future business processes and models, prioritized by their impact on current and future products, services and markets. AI is the maestro.
Business processes and entire business models need to change, not just adapt: incrementalism per se is the enemy, no matter how much safe political capital it generates. You need to improve them, automate them, or just do away with them altogether. But what do you replace them with? What technologies make that possible? Which ones are irrelevant to your primary and adjacent markets – and markets you don’t even see today? Do you know how it all works together? Or how it will work next year? AI will change pretty much everything. We’ve just hit the normal “trough” in AI ROI, but be careful not to be dissuaded by the unlimited potential of machine learning and generative AI. It’s all jazz now. You have no choice but to adapt, even if you’ve had a classical education – which was the case for most companies for decades. It’s not like learning to play golf left-handed. It’s about learning a whole new sport whose movements and rules bear no resemblance to the sports you play. It’s like learning how to play the French horn in a month – not the bongos you’ve already outsourced. AI is a French horn. It’s complicated, but can produce some of the most beautiful music you’ve ever heard.
Lessons – and commitment
Let’s say you have no choice, you’re told you need to learn to read music – and then play the French horn. Where do you start? You first need to assess how musical your team is. Then you need to hire good teachers. You need a few instruments. You need everything. But most of all you need commitment – and according to some data we recently collected, most companies suggest that they not Full commitment to AI: Only 20% of companies gave “AI” initiatives a high priority and over 47% described them as insufficient or unknown. In line with this finding, only 25% adequately fund their AI initiatives and 37% believe they do so “sometimes”. 37% said their AI initiatives are insufficiently funded or they simply don’t know! If there is no engagement, you have to somehow motivate your team to appreciate the complexity of AI jazz. Without engagement, you are stuck with the same old beautiful classical music you have been listening to for decades. Nice, calm and complacent – and that’s how it ends.
