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Democratizing Transformation

Here is an excerpt from an article written by Marco Iansiti and Satya Nadella for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

Credit:  Núria Madrid 

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The Next Great Digital Advantage
Over the past decade, Novartis has invested heavily in digital transformation. As the Swiss pharmaceutical giant moved its technology infrastructure to the cloud and invested in data platforms and data integration, it recruited AI specialists and data scientists to build machine-learning models and deploy them throughout the firm. But even as the technical teams grew, managers from across the business—sales, supply chain, HR, finance, and marketing—weren’t embracing the newly available information, nor were they thinking much about how data could enhance their teams’ work. At the same time, the data scientists had little visibility into the business units and could not easily integrate data into day-to-day operations. As a result, the investments resulted in only occasional successes (in some aspects of the R&D process, for example) while many pilots and projects sputtered.

More recently, however, pilots targeting both R&D and marketing personalization started showing business value and captured the attention and imagination of some of Novartis’s more creative business executives. They became increasingly excited about opportunities to deploy AI in various parts of the company and began to earnestly champion the efforts. (Disclosure: We have both worked with Novartis and other companies mentioned in this article in a variety of ways, including board membership, research, and consulting.) They realized that technologists and data scientists alone couldn’t bring about the kind of wholesale innovation the business needed, so they began pairing data scientists with business employees who had insight into where improvements in efficiency and performance were needed.

Novartis also invested in training frontline business employees to use data themselves to drive innovation. A growing number of teams adopted agile methods to address all kinds of opportunities. The intensity and impact of transformation thus accelerated rapidly, driving a range of innovation initiatives, including digitally enabling sales and sales forecasting, reconceiving the order and replenishment system for health-care-services customers, and revamping prescription-fulfillment systems and processes.

The progress in digital transformation became invaluable as the company dealt with the initial chaos of the pandemic. Novartis business teams partnered with data scientists to devise models to manage supply-chain disruptions, predict shortages of critical supplies, and enable quick changes to product mix and pricing policies. They also developed analytics to identify patients who were at risk because they were putting off doctor visits. As the Covid crisis wore on, the value of AI became obvious to managers companywide.

Before this wave of AI adoption, Novartis’s investments in technology consisted almost entirely of packaged enterprise applications, usually implemented by the IT department with the guidance of external consultants, vendors, or systems integrators. But to build companywide digital capability, under the leadership of then chief digital officer Bertrand Bodson, Novartis not only developed new capabilities in data science but also started to democratize access to data and technology well outside traditional tech silos. The company is now training employees at all levels and in all functions to identify and capitalize on opportunities for incorporating data and technology to improve their work. In 2021, the Novartis yearly AI summit was attended by thousands of employees.

The Success Drivers

When we started our research, we wanted to understand why many companies struggle to reap the benefits of investments in digital transformation while others see enormous gains. What do successful companies do differently?

We looked at 150 companies in manufacturing, health care, consumer products, financial services, aerospace, and pharma/biotech, including a representative sample of the largest firms in each sector. Some were failing to move the needle, but many had made dramatic progress. Perhaps surprisingly, we found that outcomes did not depend on the relative size of IT budgets. Nor were the success stories confined to “born digital” organizations. Legacy giants such as Unilever, Fidelity, and Starbucks (where one of us, Satya, is on the board)—not to mention Novartis—had managed to create a digital innovation mindset and culture.

Digital transformation requires that executives, managers, and frontline employees work together to rethink how every aspect of the business should operate.

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Here is a direct link to the complete article.

Marco Iansiti is the David Sarnoff Professor of Business Administration at Harvard Business School, where he heads the Technology and Operations Management Unit and the Digital Initiative. He has advised many companies in the technology sector, including Microsoft, Facebook, and Amazon. He is a coauthor (with Karim Lakhani) of the book Competing in the Age of AI (Harvard Business Review Press, 2020).
Satya Nadella is the chairman and CEO of Microsoft.


Here is an excerpt from an article written by XXXXXX for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

Credit:  XXXXX

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Here is a direct link to the complete article.


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