Digital First or AI First?
- Subbu Iyer
- Mar 11
- 4 min read
By Subbu Iyer & Siddharth Patel
This inquiry about whether organizations should adopt a “Digital First” or “AI First” approach emerged during our interactions with several organizations worldwide, leaving us perplexed. We felt compelled to address this topic due to the potentially negative implications of such a confusing narrative. To begin, it’s essential to clarify what Digital is as illustrated in Exhibit 1.
Digital technology serves as the framework that provides independence across devices, channels, and media within the Data Continuum. It is essential for every enterprise to adopt a Digital First approach. AI and GI are components of the digital landscape, not the other way around. In our previous article, we highlighted the necessity for every organization to establish a digital core (https://bit.ly/3Dfpje6). As evident from Exhibit 1, the primary technological shifts introduced by digital include Fusing over Integrating, Pairing over Transferring / Exchanging, and Computing over Processing, which together enable Systems to evolve from Information to Intelligent Systems.
Devices represent not just computers, notebooks, mobiles, surfaces and Kiosks but also IOT / Objects, Sensors, Scanners and Wearables.
Channels is represented by the Seven Stations of Life through which every living being survives / thrives including Environment, Education, Health, Wealth, Mobility, Technology and Governance.
Medium is represented by the data in all four forms of Audio, Video, Text and Graphics that serves the computing in real time from Creation to Consumption in a Continuum.
The Essence of Digital
Data is the essence of Digital with its ability to improve the quality captured at source from almost every aspect of life and the ability to Compute large quantities in real time. With the advancement of Cloud and Computing Infrastructure including NVidia’s GPU’s, Google’s TPU’s, AMD’ s MI Series, Amazon’s Trainium, Microsoft’s Athena, Intel’s Gaudi, Graphcore Intelligent Processing Units (IPU’s), Cerebras’ wafer-scale engines and Tenstorrent’s AI Acceleration Engine are all contributing to the seven elements of Digital including Pervasive Computing, Machine Learning / Artificial Intelligence / Generative Intelligence / Virtual Reality / Augmented Reality, Biotech, Nanotech, Robotics, 3D / 4D Printing and Enmeshed Networks.
The global digital transformation market, valued at USD 1.55 trillion in 2024, is projected to reach USD 13.75 trillion by 2033, exhibiting a CAGR of 27.40% from 2024 to 2033. However the initiatives undertaken in the Industry have not yielded significant results so far:
70% of initiatives fail to reach stated goals (HBR)
$900B wasted on failed digital transformations in 2021 alone (HBR)
40% of Fortune 500 companies will disappear by 2025 due to digital disruption (Gartner)
$3.1T being invested in digital transformation with only 30% success rate (IDC).
74% of companies fail to complete their app modernization initiatives (Fortinet / Business Wire).
One common factor that can be tracked across all the dismal statistics surrounding Digital is the inability to define digital accurately and therefore Capitalize it with the relevant Intent and Impact that captures the right Inferences for Implementation. While it has only been a loss of cash so far for the incumbents, it could soon turn to loss of revenue and potentially a wipe out. Unfortunately, Startups are not blazing the trail of digital either. But something has got to give way sooner than later.
The two most significant causes for the poor outcomes with Digital Transformation is Technical Debt and the lack of collaboration between Business and Technology Divisions in Enterprises.
While Technology has found comfort in developing Mobile applications and experimenting half heartedly with Machine Learning, Algorithms and a very misguided approach to UX - Customer Engagement & Experience, businesses have been clamoring for more form than substance in the way customers can be attracted and interacted with to sustain their interests in the Products and Services offered. There should be a firm understanding that Digital offers an opportunity to organize Work, Workplaces and Workforces while their Orchestration to Innovate and Operate must be driven by Intelligence. This needs a Unified Visualization across the enterprise with the realization that it is not a project bit rather a Program that will need to sustain the transformation over a considerable period of time in the future. Hence we recommended the Design Playbook to choreograph the Dance of Strategy with Design (https://bit.ly/designplaybookbygiggrtech).
According to PwC's 28th Annual Global CEO Survey, 42% of CEOs believe their companies will not remain viable for more than ten years if they continue on their current trajectory. Digital Transformation involves reimagining business models, while AI and GI serve as the tools to shift these models from the Industrial age to an Intelligent era, where the heart of the enterprise can perform real-time digital computing.
Data - The Common Factor
As highlighted in the aforementioned previous article, the realization that Process and Roles generate data must shape how the new hypothesis with a digital core can serve the enterprise. It is not enough for enterprises to use graphical database models. They need to design it with the right nodes and create effective UX (Customer Engagement & Experience) in real time.
In today’s hyper-competitive business landscape, enterprises are drowning in data yet starving for actionable insights. 85% of business leaders fear being disrupted by AI-driven competitors, but struggle to translate AI’s potential into tangible operational improvements.
This innovative UX strategy should integrate Conversational Interaction with Intuitive Interfaces, as well as an API Pipeline that continuously enhances personalized connections among Roles in a Ecosystem. Requiring role-based contextualization and algorithms to support and maintain both current and new operational processes. Essentially, data should enable the configuration of Products and Services, necessitating a Governance system that fluidly translates Logic into Rules in real time. The clarity on Digital UX and Intelligent Governance should satisfy the argument on what comes first.
Your Takeaway
Viewing digital solely as a marketing tool can be detrimental, as it restricts the understanding of the broader capabilities that digital technologies offer. Enterprises must cultivate a digitally intelligent infrastructure that compels the corresponding public digital infrastructure and accelerates a Glocal (Globally Local) Trade Environment. Therefore, the interdependent relationship between Digital Infrastructure and data generation should facilitate the seamless flow of Solutions to Applications, fostering sustainable growth in our societies. It's important to note that the emerging trend of Agentic Computing will only be effective when there is a harmonious connection between Processes, Roles (including both Humans and Technology Agents), and Data.
‘It is in [the] collaboration between people and algorithms that incredible scientific progress lies over the next few decades.’ – Demis Hassabis, Cofounder and CEO of Google DeepMind
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