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Co-creation for Success

The current frenzied public debate about Artificial Intelligence (AI) and where it is taking society is a healthy reminder for everyone in the technology sphere that we have choices.  AI is not a magic wand or a silver bullet. It is a tool that helps people gain value from data. However, it does not in itself guarantee value, or the outcomes a business wants to achieve.

This carries three important implications that I’ll be discussing in this blog. The first is we need to recognize that it is up to us to choose the future we want to create and that a sense of purpose is required to realize the full potential of technology. The second is that success will come from building around people – particularly in the mode of co-creation – as it is the creativity and imagination of people that drives innovation. And thirdly, delivering value from data requires a different approach, particularly the ability to combine data and human knowledge from different fields and industries.

Choosing the future

Since 2013, Fujitsu has published an annual perspective on the future, called the Fujitsu Technology and Service Vision. At the core of this paper is our belief that the long-term interests of people and society are fundamental to technological success. Unless the goals of technology are aligned with what people and society want and need, then they are unlikely to be successful in the long term.

Our view of the future is rooted in how we can help our customers to take the very best opportunities from technology. We passionately believe in innovation, in making great technology and providing the services to accompany this. We think deeply about how we can use technology for the benefit of wider society, and the ideas that we bring into our vision are a reflection of that. Our purpose is to realize a safer, more prosperous society, where people come first, are empowered by technology and continuously create positive social outcomes. We call this a Human Centric Intelligent Society, and this is our vision for the future.

This vision encapsulates why Fujitsu is in business. To better understand how to drive our vision forward, in the 2018 Fujitsu Technology and Service Vision we have published results of a global survey of business leaders that we commissioned. Our recent Digital Transformation Survey canvassed the views of 1,500 business leaders from around the world. Roughly 60% of them manage traditional (non-internet) companies, and 40% lead online companies. We were particularly interested to find out about what was motivating them, and the outcomes their businesses delivered.

The results of the survey show the clear dependence on people. We asked the business leaders in our survey what their major challenges were, with the biggest challenge reported by non-online companies being ‘skill shortages’, followed by ‘internal resistance to change’ and ‘lack of agility’ in their organization.

When we dug a little deeper, the fundamental importance of people in delivering positive outcomes became even clearer. We found that organizations which had delivered outcomes showed strong capabilities across six factors: Leadership, People, Agility, Business Integration, Ecosystem and Value from Data. We call these six success factors ‘digital muscles’: the stronger an organization’s digital muscles, the better the likelihood of achieving success.

Those organizations in the implementation stage of a digital project or which had not yet started posted much weaker scores across these factors. For instance, 81.8% of non-online businesses that had delivered outcomes to a greater extent said that they had the people skills needed for digital transformation. For businesses that reported they had delivered outcomes to a lesser extent, this number was 56.7%. Those who were in the implementation stage or had not started posted much weaker scores across these factors. This number further reduced to 40.7% for businesses that were transforming but had not yet delivered outcomes, and to only 19.2% for businesses that had yet to start.

In other words, we found the digital maturity of an organization is strongly correlated with the capability scores in these six areas. We conclude that these are significant success factors.

Digital is hard – you can’t do it alone

The second theme I want to highlight is how people and co-creation are key foundations of success. The theme of the 2018 Fujitsu Technology and Service Vision is ‘Co-Creation for Success’.

The importance of people skills for achieving digital maturity, combined with the difficulty reported in the survey by organizations in finding these skills, imply that the further we move into the era of digital transformation the greater the bottleneck to growth or even survival will be. Given that the World Bank predicts that if digital technology continues to disrupt traditional industries at the current rate, and 30% of total global business revenue – that’s over $60 trillion – will be redistributed by 2025 to brand new players, then the choice of the word ‘survival’ here is not hyperbolic.

The borders of existing industries are being blurred or vanishing altogether. No business will be able to assure success by acting in isolation, or even at the head of a supply chain in a vertical industry.  Existing players therefore have no choice but to pre-empt this scale of disruption by undertaking it themselves. However, delivering digital transformation quickly is non-trivial. By definition it will not have been done before and therefore no team currently exists that knows what it is, or how to do it. Innovation on this scale simply cannot be outsourced or sub-contracted and success in the era of AI requires co-creation, where innovation is delivered more openly, through the coming together of different skills, capabilities, ideas and expertise. What’s more, with the pace of change accelerating, acting alone risks falling even further behind.

Our survey backs this up: the companies that had already delivered outcomes in their digital transformation programs placed the highest importance on technology partners, followed by their customers. It is also interesting that online companies place a much higher value on ecosystem partners, including start-ups, companies from different industries or consortiums, than do the traditional companies.

This emphasis on the combined power of technology partners, customers and a wider ecosystem is fundamental to digital co-creation, which we believe is the best way of achieving digital transformation. It enables you to focus more strongly on creating value for your customers, to bring out the best in your people, and leverage the skills and capabilities that exist outside your organization.

By taking this approach we have been able to work more closely than ever with our customers to deliver outcomes that are meaningful for their businesses. For instance, co-creating innovation that enabled a major financial services customer to attract 1,000 new mobile customers a day, or that enabled a major manufacturer assure production quality of wind turbine blades at fraction of the cost.

Fujitsu is totally committed to co-creation and to enable this we are undergoing transformation ourselves. Last year in Japan, Fujitsu created a new Digital Transformation Business Group to add to our existing industry business groups. Creating a new organization split from existing parts of the business allows us to set up new ways of working, new workplaces, as well as training and incentives that target digital business. We are increasing the number of our ‘Digital Innovators’ – a role that drives co-creation initiatives with our customers.

Our talent program has given a special focus to developing three types of roles. The first are ‘developers’ specialized in digital technology. The second are ‘designers’ who can help create new business. And the third are ‘producers’, skilled at leading co-creation with customers. These people work with customers under a new service framework for co-creation.

And we are rolling out a global network of Digital Transformation Centers, most recently in Munich, where we, our customers and ecosystem partners can come together to work collaboratively on transformation projects using methodologies and technologies specifically developed by Fujitsu.

Creating value from data

The third and final implication of the choices we need to make is how to create value from data. Deep learning and other AI technologies are evolving remarkably, but exploiting data is not just a technology challenge. To generate not just business outcomes but outcomes for wider society, it is crucial to apply the most appropriate AI technologies across different types of data. To do this requires a coming together of business experience and technology know-how.

At its heart, digital is about creating business outcomes from data and creating value from data is one of the six digital muscles we looked at earlier. There are many different types of data. Operational data, data about your supply chain, your products, your employees, your finances, your customers, and your R&D. And different businesses use data in different ways. Mostly this business-related data is structured. Structured data is any data that is organized. For instance, logs, databases or spreadsheets. However, structured data is only a small fragment of the data universe. Most data is unstructured, and the volume of such data is exploding. Text, speech, video, images, and sensor data, these sources all contain data that is not organized. It is not easy to deal with unstructured data. But developments in AI are delivering some breakthroughs. For example, deep learning has enabled autonomous recognition of images with extremely high precision, often even better than people can achieve.

But exploiting these different types of data is not just a technology challenge. First, business domain knowledge is needed to understand which data is important and what combinations of data might be the most useful. Second, different types of data require different types of technology. Many people might perceive deep learning can be applied to any data. But in reality it is only good at handling specific types of data, for example, images and voice. Third, even if insights are identified from data, you need to decide what you do with them. To monetize the insight may require a new business model, which needs business skills and an entrepreneurial mindset.

The whole process, from curation of data to delivery of a new business model, is a continuous learning process. Using data, many of our customers have already achieved marked successes, from improving operational efficiency to delivering brilliant customer experience.

Towards the Learning Enterprise

It is clear that success in the era of AI requires co-creation, where innovation is delivered more openly, the coming together of different skills, capabilities, ideas and expertise. Fujitsu believes that to accomplish all of the above requires a different sort of organization – a ‘Learning Enterprise’. Learning Enterprises are forward looking and curious to explore and develop new ways to deliver value. They of course recognize the importance of traditional business practices, but they are not wedded to only exploiting their historical capabilities and markets. Learning enterprises continuously learn from data to create knowledge and innovation. They are value-creating, agile, responsive and dynamic. They are human centric.

If you want to understand how to become a Learning Enterprise, and how Fujitsu can help you to realize the future that you want for your enterprise and your customers, download the 2018 Fujitsu Technology and Service Vision here.

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