The Forces Behind the Digital Transformation42 min video / 36 minute read
Jeff Winter from Microsoft joins Don Pearson for an interesting discussion on the forces that drive Digital Transformation. They will dive in and discuss the forces of consumer demand and government investment into manufacturing. Jeff and Don will also talk about the power of innovation, the ongoing impact of artificial intelligence, and how to harness the never ending stream of data. You may access the video version of the podcast here.
“I encourage companies and people, when you start thinking about Digital Transformation, think big, start small, and act fast.”
Jeff Winter is an Industry Executive for Manufacturing with Microsoft, where he acts as an industry advisor helping U.S. manufacturers digitally transform their business at scale. With over 16 years of experience working for different industrial automation product and solution providers, Jeff has a unique ability to simplify and communicate complex concepts to a wide range of audiences, educating and inspiring people from the shop floor up to the executive boardroom. As part of his experience, Jeff is also very active in the community of Industry 4.0. He currently is a part of the International Board of Directors for MESA (Manufacturing Enterprise Solutions Association), the leader of the Smart Manufacturing & IIoT Division of ISA (International Society of Automation), a U.S. registered expert for IEC (International Electrotechnical Commission) as a member of TC 65, and is on the Smart Manufacturing Advisory Board for Purdue University.
Don: Well, good morning everybody, and I'm so happy to be here with Jeff Winter and I know Jeff, we've had a lot of conversations on and off the record, so to speak, over time, and I really do appreciate the opportunity to actually talk to you in this podcast format and share some of your thoughts beyond just you and I having conversations, but since I know you and the audience, a number of them probably do, but there's probably those who don't, can you say a little bit about yourself, just a little bit about your background? And sort of set the stage for today's conversation.
Jeff: Sure, so my name is Jeff Winter, and I am an Industry Executive for Manufacturing with Microsoft, and what that basically means is it's my job to help manufacturers digitally transform and scale, but in order to do this successfully, I needed to be intimately involved with what's happening in the industry, and that's why I'm involved in quite a few different associations and academic groups and advisory panels, standards bodies and even research teams within Microsoft so that I can share the latest and greatest in the industry and how manufacturers can benefit. So most people usually end up knowing me through one of those associations or involvements.
Don: Well, I do know that our association came and all the different things you've done in the last years and Inductive Automation and our software has been something you've known about, so it's crossed paths with you and you're a professional, and you've crossed paths with us, so it's great to sit and have a little conversation. I wanna start with something that I think is, well clearly, if I look at anything that you publish, talk about, whatever, Digital Transformation is pretty important to you and your activities and Digital Transformation, clearly from the viewpoint of Inductive Automation and our Ignition platform, we're minorly biased that our platform is useful in Digital Transformation, and we intended to be so. In fact, we're internally doing a lot of evolution of our own messaging to be a little bit more appropriate for what's going on in the industry overall. But you in today's podcast, I want to go into something that you talked about and you wrote about not that long ago under what you're calling, “The Five Forces Driving Digital Transformation,” and I like the approach.
Don: I was actually looking at a number of the comments and your response to those comments through your LinkedIn activity, and I went, "Wow, this is resonating, it's resonating." So you put the rubric, the format together, the template together of those ideas, so maybe let's dig into it, okay? And I kind of wanna use it as a guideline. I'm just gonna pick a force and ask you some questions about it and see what direction it goes, if that's okay with you?
Jeff: That'd be great. And I like that you're focusing on the content of my post, those five forces instead of the picture of me dressing up as a Jedi for May the 4th Be With You.
Don: I was going to do a May the 4th Be With You late in, but I thought in the interest of maybe trying to be somewhat professional here, I would skip it, but it was appreciated, it was appreciated, that's good. So let's go, the force of consumers, what role the consumers play when you think of Digital Transformation. I have to say, oftentimes, I think about it from the industrial standpoint, but when you think about the fact that industry makes things and consumers buy things, there's a consumer drive component too, so talk about that force a little bit.
Jeff: Sure, so this can be looked at in two ways. First is the company side and the second is actually the consumer side, and from the company side, creating an exceptional, highly relevant customer experience is top priority for most Digital Transformation initiatives. In fact, according to HBR, I believe, it's 40% of companies listed as their top priority, and this is actually widely different though unfortunately for four different industries. For example, manufacturing is only at 26% and banking is at 52%, but PwC in 2022 actually did a similar study and found that besides the direct ROI of Digital Transformation, the biggest payoff for it was actually creating better customer experiences with three-fourths of the companies actually realizing those benefits. But Digital Transformation can mean a lot of different things to a lot of different people. And so the way I like to look at it and think about it is Digital Transformation is the integration of digital technologies into all areas of a business resulting in the fundamental or transformational change in how the business operates and the value that it delivers to customers.
Jeff: This means changing the way the business interacts with customers throughout the entire buying journey and aligning that interaction in real time with the entire product life cycle, closing the customer feedback loop and providing better customer experience, which usually results in more frequent buying, more loyal buying, and an overall higher lifetime value of each customer. Now, this leads me to the other way of answering the question, which is the customer, the consumer side, or should I say the rapidly changing consumer environment, which goes hand-in-hand with the first part that I just mentioned.
Don: Well, when you do that, I'm just curious, maybe you're jumping into the question I was gonna ask. So from a consumer's viewpoint, what kinds of things are really important to them? I mean, obviously in your answer so far, you hit a lot of those, but when... I'm a consumer. What do I want from banking, from manufacturing, and what are the things that are critical to me in this digitally transformed world?
Jeff: So it's interesting you ask it that way, and we'll see if I answer it because not all consumers necessarily know what they want. So if you look at the trends that are taking place at the macro level, you can have a better understanding of what you perceive they might want as a part of it, but very few people directly actually know exactly what they're looking for. They might know from a product, but they don't know necessarily the ways, the methods and the whole experience. So if you look at some of the consumer buying habits, they're changing and they're changing quickly, so what they are today may be different than what they are a year or two from now. So not only are sentiments and interest changing for the buyers, but the mechanisms for how people shop and how they buy are changing, and they're all pointing towards this digital consumer. So if we go over a few examples, the industry is seeing more demand for transparency about the products that are being purchased and the companies themselves. With products, people wanna know what the product is made of, or how it will be disposed if it's physical, the product, or with food, it could be about the entire traceability through the supply chain.
Jeff: People also wanna know more about the companies themselves. Sustainability and environmentally, being environmentally friendly and acting ethically have become huge decision criterias as part of the purchasing process. I mean, for example, IBM conducted a study that found that 73% of consumers consider sustainability and environmental responsibility to be at least moderately important to a brand value, and if you're thinking, "So what? How does that impact purchases?" Well, Harvard Business School ran a report and found that sustainable products actually have a 5.6 times higher average growth compared to those that aren't making sustainability as part of their marketing message. So yeah, it matters.
Don: That absolutely blows my mind, even though as a consumer, it is important to me, so I just always considered maybe I was weird and on this raw far side of a bell-shaped curve, which has been the case more than once in my life. So I thought, well, I make choices based on a company's sustainability plans and how they think and the way their culture and things like that, and it is important to me, but that 73% number, honestly, it kinda shocks me in a good way. I think that's a... I personally think it's a good thing.
Jeff: And that's an example where it's important to consumers, but they may not know exactly what they're looking for as a part of it. They just know what's factoring in and weighing into their decision, but that's just one area. If you look at, customers are also desiring a much more personalized shopping experience and according to Pitney Bowes, 73% of consumers prefer to do business with brands that personalize their shopping experience, but customers are also just demanding faster response to sales or marketing questions, and they're expecting faster delivery right even to your doorstep. Those are just a few trends, but honestly, it doesn't really matter what they are right now, 'cause without digitally transforming, it's hard to keep pace with whatever they're going to be next year.
Don: Yeah, it's really true. When you think about Digital Transformation, we're not talking about companies having a little piece of growth and incremental gain. We're talking about trying to empower companies to order magnitude changes, I mean significant changes to meet all those customer demands of now and the ones they don't even know they're gonna make in the future. You have to digitally transform those organizations. The way they've been operating historically in the industrial sphere just won't add more work. Alright, well listen, let's go to another force, the force of governments.
Don: Just kinda segue into that. Obviously, governments are playing a big role. Certainly in our government, in this country, we are seeing more and more dollars going to assist companies. Yeah, and speaking of environment, I mean, we've got programs in this country that are giving money over to business, and over to industry as well as the public sector to try and empower changes in how they do business. When you think of Digital Transformation, and the role of governments, what role do you think they play in advancing Digital Transformation?
Jeff: So that's... It's a good question. As you probably know, the whole idea of Industry 4.0 was prominently introduced to the world at Hannover Messe in 2011, and then it turned into the high-tech strategy 2020 action plan by the German government in the year 2012. And as far as I know, that's really the first government initiative for Industry 4.0 and this idea took hold and pretty soon dozens of other governments developed their own initiatives, similar in purpose, but different in execution and scope. I mean, China developed their Made in 2025 initiative to fully modernize their country's manufacturing industry, United Kingdom introduced their Future of Manufacturing in 2013, and even the European Union developed their Factories of the Future in 2014, Singapore came out with their REI or RIE 2020 plans, and yes, even the United States in 2014 launched Manufacturing USA initiative, and that one created a network of 16 member institutes, and each of these institutes focuses on a very specific advanced manufacturing technology, and they pull together private sector companies and academic institutions and other stakeholders in the industry to pursue collaborative research and development and even test applications, train workers and just kind of reduce the general risks associating with companies deploying new technologies.
Jeff: So we're seeing it all over the place, and the two biggest ones I am most familiar with it from the Manufacturing USA side are Seismic and MxD, but what's crazy if you look at kind of their impact, in 2021, just last year, the Manufacturing USA institutes, all of them kinda collectively, they supported over 700 major applied R&D projects that involved something like 2,300 different organizations, and they provided 90,000 people with advanced manufacturing kind of workforce development and training. I think they spent like $480 million in different state and federal funds supporting these activities. So the role, I'd say it's a pretty big one and a lot of companies are doing it.
Don: And just so our audience will know, talk a little bit about... You mentioned two organizations, Seismic and MxD. Can you just articulate a little bit? I'm familiar with Seismic, but tell us a little bit what those organizations do with whatever money or funding or support they're getting? What's their way of operating?
Jeff: Well, I'd do Seismic and MxD from the bit I know, so both of these are jointly funded entities, I guess I would say, where there's backing by MyMoney by the government and then they get participation from people in the industry. They work on projects, those projects are out for bid, so if one of them's of interest, you can contribute some of your resources and money and time along with theirs, and you get to develop something as a result of it, and that development then gets kind of shared and disseminated with others. So for example, MxD has a bid out right now that has something like... I don't know, 38 days left or whatever the days are for their digital manufacturing playbook, and this is gonna work on developing something for small to mid-size manufacturers on everything from how they digitize and automate, how they do cobots and machine monitoring and shop for data visualization and machine vision. They're gonna do all of that and they're going to be developing it.
Jeff: Now, one thing that makes MxD a little bit different than, for example, Seismic is MxD actually has a facility, a physical factory floor in Chicago. I've been to it several times, I'm going to in a couple of days. And so they have actually like a working mini-factory there to demonstrate some of the stuff, and all that little factories are set up by companies, showing how it all works together. But for example, something that they've already created is their Cybersecurity Assessment Tool, and that's focused on evaluating against the NIST cybersecurity framework, but Seismic is an example, one that I really like and work with. They're producing their... One of the things that they're doing very well right now working on is their Smart Manufacturing Profiles, which are kind of an innovative way of representing data in kind of like a structured informational model to move data into context, is really what it's doing to provide value to organizations for particular applications, and they have dozens of them being worked on right now as we speak, and you can see them on your website. Some of them are in progress, some of them you can still bid on. I know that one that they told me about recently that was worked on with a food manufacturer, they developed this profile and it made a 25% improvement in their yield through this, and so the results are real just through the development of this collaborative effort to advanced Smart Manufacturing.
Don: That is really... I mean, I think those initiatives are really important. And obviously, governments around the world have their own political, economic and their own motivational scale for everything they're doing, but the overall is to obviously improve the manufacturing of their country, and I'm assuming a competitive advantage in the world too to give them some sort of a leg up moving forward. But any other examples that come to mind? And if not, we'll move on to another force, but anything else you wanted to share just in the governments and how they're approaching the subject of innovation and Digital Transformation?
Jeff: There's a lot of resources there. If you look at the primary things, it's advancement of the technology, it's training, and there's some risk that is being mitigated through some funding in other mechanisms. So really, if you're a manufacturer, you should be looking at these institutes. They're there, there's resources available... Like I said, I only talked about two, there's 14 more. And they may be resonating with exactly your particular industry and what you're doing, and there's probably more there available than you realize to help you be more successful in your Digital Transformation or Industry 4.0 journey.
Don: Sure, sure. I know... It's just as an organization, we chose to be involved with Seismic just as one of those opportunities, and a number of our integrators and the people that we're working with around the world, certainly around the country in this sense, are involved with and engage in projects there, so it's glad to see that kind of stuff going on. Let's shift to another force here, the force of innovation everywhere, and I certainly know that... Certainly our company has been called a bit disruptive over the years, and that we consider that a compliment, okay? But what we've been trying to do, obviously, is be a player in this ecosystem of innovative companies, trying to address issues and think of things in new ways, and companies are challenged to try and unleash innovation. They're heavily investing in innovation and how important, if you think of the mindset of innovation versus the mindset of a more stayed, fixed culture inside a company, how important is the mindset of innovation for a company? When they're really trying to digitally transform, what role does that play?
Jeff: So if you already don't know me and don't follow me on LinkedIn, you're definitely gonna find out I love my stats.
Don: Yes, well, I do know you love your stats.
Jeff: According to McKinsey, 84% of business executives believe that innovation is essential to growth, and although innovation isn't new, its formality as part of an organizational strategy is on the rise. Unfortunately though, only 43% of corporations have what experts consider to be a well-defined process for innovation, that's according to the research firm CB Insights. But I like to make sure that we're on the same page with what innovation actually is, and my personal favorite definition of innovation is the practical implementation of ideas that result in the introduction of new goods or services, or improvements in the way goods or services are offered.
Jeff: And innovations emerging from unexpected places, and they could support both the top line and the bottom line of organizations, and those that are digitally transforming are finding newer and more ways to innovate. But how important is culture in this? Very, I mean, culture of innovation is... It's a workplace environment that encourages employees to share creative ideas and solutions, but you need senior leadership to be bought in on this, and ideally, someone at the helm, like a Chief Innovation Officer that helps develop the processes, clear the roadblocks and build that culture of innovation. But what's interesting is the role of Chief Innovation Officer, it was like first, I think, publicly introduced, and it was like 1998 in this book called Fourth Generation R&D, but like 24 years later, I guess, or whatever it would be, 24 years later, it's estimated that only around 30% of Fortune 500 companies currently have the Chief Innovation Officer as a formal role. And this may be why in 2019, IDC predicted that 40% of chief information officers or CIOs will be co-leading the innovation process in organizations by this year, 2022.
Jeff: Because in absence of a Chief Innovation Officer, the functional responsibilities, they fall on the shoulders of the CIO, and this means the CIO is no longer focusing on just managing information systems and data systems and knowledge systems, but this role is about driving innovation by accelerating all the other functions of the company through integrated technologies. But when most people think of innovation, they usually think of inventing a new product, but if that's how you think of it, you're gonna be missing so much of the opportunity here. And I always like to represent the innovation firm Doblin, 'cause they came out with this famous 10 Types of Innovation, and I remember them, it's product performance, it's a service channel, it's product system, it's brand, it's customer engagement, it's profit model, network structure and process, and that's a lot more than just inventing a new product and a Chief Innovation Officer should be evaluating all 10 of these and building them into the culture, so you look for many ways to innovate, not just one.
Don: Absolutely, and I think I probably know the answer to this question, but we've seen a lot of things come and go inside organizational trends over the years, industry hasn't always been the fastest to catch on to a new idea, and sometimes something will come and go, so this focus on innovation, these 10 approaches or 10 parts of the organization where innovation should occur, the good definition you gave us of innovation. Is this coming and going just gonna be another trend and we will go back in time to where we were before? Or is this innovation with us and gonna continue to evolve inside the cultures of more successful organizations?
Jeff: Well, I hope it's a rhetorical answer, but innovation is critical for companies to adapt to overcome the challenges of change, and right now the world is changing faster than it ever has, mostly driven by advancements in new technology. According to a Stanford study, innovation has been responsible for up to 85% of all economic growth, that's crazy. So if you think about that, but simply put, companies will have to be innovative to survive. Let's use AI, as just one example. So, World Economic Forum in 2020 said that by 2025, 85 million jobs are expected to be displaced, yet at the same time, 97 million new jobs are anticipated to be created, and one technology at the heart of most of that is AI and it's driven by a huge influx in data. And if you look at the top three growing jobs right now, they're data analysts and scientists, AI and ML specialists, and Big Data specialists, according to that report. But according to McKinsey, we actually saw a decrease in innovation during the pandemic as some companies focused more on short-term issues with the exception of pharmaceutical companies, which I think makes sense. Yet the irony is those who invest in innovation through crisis continually outperformed peers during the recovery period, which I would argue we're in right now, and we're starting to see that.
Jeff: So in short, I think we're going to re-see a, not just an emphasis on innovation, but a bigger emphasis on innovation going forward, more investment in innovation, more formality in innovation, and more inclusion inside the business processes.
Don: Now, you actually touched on two of your forces 'cause you've got artificial intelligence and infiltration of that technology across the boards, and then also you've got the innovation everywhere kind of force. So I don't know if there's anything more you wanna comment on the technologies that you think are gonna drive innovation, AI clearly, the job creation clearly, that's a critical component because we're talking about Digital Transformation, and in the digital world, AI, AR, ML, these are all evolutions that are driving a tremendous amount of innovative change. Any other comments on that subject of AI and the role it's gonna play?
Jeff: Yes, and there's a reason why I picked AI as that technology... And it's interesting 'cause I get asked the question, "Was AI critical for Digital Transformation?" And it's an interesting question, it's a tricky one to answer, because if we look at the way that I went over defining Digital Transformation, and the first questions you asked, the integration of digital technology into all areas of the business resulting in a fundamental or transformational change and how the business operates and delivers value to customers, that definition, if we use that, then I would argue AI isn't necessary for Digital Transformation to occur. You could completely transform without using AI, but that being said, I would say you would massively limit the capability and power of your transformation, if you didn't use it. So if we use the Architect Industry 4.0 maturity model as an example, they break out your maturity into six levels, alright. They have computerization, connectivity, visibility, transparency, predictive capability, and adaptability at the top. The first two, computerization and connectivity are what we really define as Industry 3.0 and the remaining four are really thought of as Industry 4.0, so at the bottom of the Industry 4.0 scale with visibility, you're answering questions like, what is happening?
Jeff: Which a lot of companies still can't answer this question at scale yet, and you don't need AI to help answer this question, but if you move up the levels to like level four, you're at transparency, which you're answering the question, why is it happening? And then when you get to levels five and six, you're answering what will happen in the future, and how can autonomous kind of response be achieved? You can't do those without AI.
Jeff: So I would describe AI, if utilized correctly, as like the pinnacle or epitome of Industry 4.0. It's the technology that's able to take advantage of all the other technologies out there like IoT, that generates the data cloud that stores and processes at digital twins to create virtual representations you name it, AI is what helps all those be far more useful than they ever could be on their own, and that's because as core, AI is really a decision-making tool that can either help augment or automate decisions. But what makes AI so interesting and powerful and fascinating to me is because compared to most other technologies out there, it's extremely ubiquitous in its application, it impacts nearly every industry, nearly every department, nearly every job function from the shop floor all the way up to the CEO, and I can't think of many other technologies that have that big or that wide of an impact. Two I can think of would be like the Internet and electricity. So I view it as critical if you're trying to really truly transform your company at scale to the maximum level.
Don: Sure, no, it totally makes sense, it totally makes sense, Jeff. So in the process of our discussion here, we have hit on, and you're talking about connectivity, you're talking about anything from... When we look at it, we say, we're trying to go from center to cloud and back again, when we're trying to empower the ability to get data from everywhere, and I've certainly said over the years in conversations I've had, you can't have Big Data without Big Data access. And again, because as a company, we are very much engaged in the bottom-up viewpoint, OT to IT convergence rather than an IT down to OT, we say you can't have... IT can have all the greatest solutions in the world, all the AI capabilities you can possibly... You are not gonna digitally transform if you don't have access, and if that guy out on that oil well, doesn't feel that you're giving them a better operation system, so you gotta basically satisfy customers all the way, and you gotta have access to data, and access is big in industry when you have 40-year-old equipment still in operation and people not planning on changing it, in some cases. You live in a brownfield world, so on data as a force, you talk about the forces of data, talk about that from the viewpoint of Digital Transformation.
Jeff: Sure, so whenever we talk about Industry 4.0, I really like to kinda simplify this way of describing it, I like to describe Industry 3.0 is about automation, the reduction of human intervention and processes, Industry 4.0 is about cognition or the process of acquiring knowledge and understanding, and these two are separated by your ability to properly capture and harness the power of data, data is often considered to be the lifeblood of Digital Transformation, so without a data strategy, you're gonna be running wild trying to capture and harness this power as you kind of approach Industry 4.0.
Jeff: And I would argue that the development of a data strategy is one of the first things you should be doing as you start to kind of set up your company's digital core, and if you aren't familiar, a digital core is like the basic operational data infrastructure of an organization that takes advantage of fully integrated, flexible, and scalable platforms centralized around a common data model, and this digital core, it empowers companies with real-time visibility into all mission-critical business processes from suppliers all the way to customers to help thrive in this digital economy and to help provide better collaboration between functions within the company to just better predict and simulate and plan and even anticipate future business outcome. But there's many components to a digital strategy, the big three that I recommend that you at least should have as part of your overall data strategy is three components, I would say is you should have your data governance strategy, this is about your people and processes, decision rights, policy standards, then you should have your data management strategy, which is all about the data itself and the technology, this includes data storage, data architecture, data quality reference, and master data.
Jeff: And then third, you should have your data analytics strategy, and this is about data and technology, what about how you use the data, the tools and methods, and how they link it to support business decisions, and if you don't have that, you're just gonna be collecting a boatload of data, and you're not even really gonna be using it. But according to research done by University of Texas Austin, a 10% increase in data usability increases the average fortune 1,000 company's revenue by over two billion dollars, which is crazy.
Don: That's amazing, that's amazing. You said something in passing that I wanna go back to because you used the word “cognition,” and I really like that it actually reminds me of a concept that I got from... I can't even remember what... It was one of these... It was in search of the killer app book, I think, which came up many, many, many years ago, and they had a concept in there of data and a pyramid, and you had data, information, knowledge, and wisdom. Data, information, knowledge, wisdom. And when you use that word “cognition,” it's always struck me as interesting that for a long time people would just kick data up to a data lake, let's just get data, get data, but quantity of data does not equate quality of thinking or quality of work, and I think there's a process here that's involved where, yes, there's quantity of data and then there's... And yes, you wanna complete data sets and then there's some sort of context, you turn it into information, people get more knowledge and then they're able to create, innovate, and apply that knowledge effectively to expand and improve their organizations. So I think I've often in this whole process of data acquisition when, wanting say, we need to continue to emphasize on how you integrate that into your organization and how you get that to turn into wise decision-making for better organizational operation.
Don: And you're talking about that as you're discussing the evolution of how one integrates a data strategy into your organization. So I think it's really an interesting area, that the world of data quantity... And you even had some statistics, I think I saw it on your post, that talked about how much data we have now. You are gonna repeat it, how many terabyte... Or what's the petabytes of data we have now, compared to history?
Jeff: No, yeah, I remember it. Eric Schmidt famously said in 2010, the former CEO of Google, that it’s estimated that five exabytes worth of data were made in all of civilization up until the year 2003. In the year 2020, we created 64 zettabytes worth of information, which is 13,000 times the amount of information in all of history combined up until 2003. And so, we're making a tremendous amount of data out there, and according to Splunk, 55% of enterprise data is either unknown or unused by anyone in the company, anyone. So that's just wasted, generated data that no one either knows exists or is using. So there's a tremendous amount of opportunity here without even spending money to collect new data, just use the data that you have.
Don: It's amazing when you think about that, Jeff, just the potential. So here's a, maybe a devil's advocate question, maybe not, but so what should we be... We got these technologies. We're gathering tons of data. AI is certainly influencing us in terms of job generation and the change of how businesses operate. Should we be cautious about this? Should we be worried about some of these technologies? Should we have reservations about it? What are the things that an organization should be thinking about as they expand their Digital Transformation strategies and innovate and use more of these newer technologies?
Jeff: It's an interesting question, because in general... This is just my opinion, that most of the risks that people take around the project itself, the funding, the ROI, we're gonna call it the risks of adoption of any new technology. AI is one I'm gonna kinda push aside here and that's what we're gonna talk about, 'cause that's the one that has potential concerns, threats, and risks by the technology itself, that you don't really have with IoT, as an example, you have this with AI. There are concerns with this technology, 'cause you have to remember the very purpose of AI is to help augment or automate decisions. As soon as you do that, you open up a whole slew of questions about things that you've never had to think of with any other technology.
Jeff: There are concerns with privacy, transparency, bias, inequality, safety, security. Now, as far as I know, all the big, major companies that develop and advanced AI, as a fundamental technology, have addressed this concern and have focused on helping to educate everyone who uses AI. Now, I know that Microsoft, in particular, uses the term “responsible AI” that encapsulates their commitment to the advancement of AI driven by ethical principles, that put people first. And they've created guidelines, management tools, technology tools, checklists, playbooks, and even developed an AI business school, which I recommend 'cause I took it, just to help you with all of this and understanding it. All designed to help you assess, design, and deploy AI responsibly, so you don't do any of those things either intentionally or unintentionally with it, because it is a decision-making tool.
Jeff: So I actually think that they're doing a fantastic job of helping to educate the community on this. Just to put in perspective, I just recently passed my Azure AI Fundamentals Exam, and a good chunk of the training and testing was on responsible use of AI. So, yeah, it's important. And the first step is education. Be aware of what the technology can do and how biases and unethical decisions can be made, if they're not checked and caught.
Don: I appreciate you making some comments on that and also the comments about Microsoft's approach to it, because... I, maybe, that's just a personal bias I have, I think as I've seen technologies advance, and since my background was really on the people side of the business for a long period of time, even before coming to Inductive Automation, beginning to work with the team over here, was just how do things affect people? And what are the concerns we do, that are going to basically be using technologies to enhance the evolution of a company and the people's experience in the company and the people consuming it. These are critical issues as one looks at the advancements of technology.
Don: Now, listen we have covered a lot of ground, but I don't know... And I've been just pelting you with questions, but I appreciate your willingness to just expand on those too. Other thoughts you may wanna cover. We don't really time these podcasts, we just talk until we're done and then, we're done, but I just wanna give a few more minutes, maybe, to anything you can see, that you would like to just share in the work you're doing now, as it affects Digital Transformation, and the world of industry?
Jeff: Sure. I love the structure and framework of this being around those five forces of Digital Transformation. One of the things that I like to encourage people... It's more of a motto, a mindset, if you wanna call it, is how to think about Digital Transformation, when you're starting it, when you're in the middle of it and how you approach it. I encourage companies and people, when you start thinking about Digital Transformation, think big, start small, and act fast. I think that that's great advice to give people who are trying to figure out what they're doing, getting stuck or tried and failed, as a part of it. You need to be thinking big, continually, starting small and acting fast.
Jeff: And the big one, I think, most people actually overlook is actually the acting fast. They get too caught up, or they think about this as a traditional, large single-entity monolithic project or initiative, instead of a whole bunch of small, iterative, flexible, agile approaches to transforming the company. And if you can do that, if you can start to act fast, start small, but to have the big-picture vision in mind, you're gonna be far more successful, than trying to bite off this giant elephant in one bite and go, "We are going to digitally transform. Here's our perfect master plan." 'Cause I've not found a company yet that's had that.
Don: I don't think they do. And it's interesting that you say it that way, because I couldn't agree more. I think the iterative process of pieces that come together, but yes, have the bigger vision in mind. I know many, many years ago, there was a book called 7 Habits of Highly Effective People written by a guy named, Stephen Covey, and one of his seven habits of highly effective people was, begin with the end in mind, begin with the end in mind. And I think that's critical. When you take a look at Digital Transformation, at least, have the big picture there, but realize, don't take on too big a piece. You gotta be able to then iterate, move fast, but those pieces are part of a bigger process. And each piece on its own brings value, but the whole process is critical too, and I think you've emphasized that really well, and just even many of the forces you're talking about.
Jeff: Well, one thing I'd like to add that most people don't think about, if your Digital Transformation is truly successful, at the level I'm talking about, level six, the highest on the Industry 4.0, you realize that everyone's job in the company changes. How many people and companies are prepared for that level of change? So to perfectly plan it all out the first time is nearly impossible. You gotta have these small changes that you're making along the way towards your big-picture transformation, but everyone's job changes, if you achieve the fundamental transformational goal that you seek to do.
Don: Oh, that's so true. I'm talking about now. I serve as Chief Strategy Officer with Inductive Automation, and I will tell you that when I think about us, when we started out... And we're in the business of a technology to help people with Digital Transformation, be part of that ecosystem, right? But I think about our company, and I think about what's happened as we have scaled over the last 18 years. And yes, everybody's job has changed and there's continual change. So, very critical point for people to be aware of. Well, listen, Jeff, we could chat for a long time here, I'm sure we have in the past. So what do you think as a concluding? Anything you wanna leave our audience with as we wrap up here today?
Jeff: There's a bright future ahead for Digital Transformation. You don't have to feel like you're behind the curve, when it comes to this. There is still so much to do and there is a lot changing and exciting for the future. So I hope that people are just inspired by this and eager no matter where you are in your phase, to continue to transform and achieve the vision of Industry 4.0.
Don: Well, thank you very much for joining today. And I do always appreciate your voice out there in the process, that's going on and helping companies along. So continue to do it, and we will probably end up coming around to this kind of a conversation again at some point, in the future.
Jeff: Looking forward to it.
Don: Good, thanks.
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