The broad rollout of AI in digital transformation further harms the flailing success rate of projects, according to Partha Gopalakrishnan, previously Senior Vice President and Global Head of Insurance Europe at Tech Mahindra. Hinging digital transformation projects on emerging technology like AI will lead to more failed projects due to the pace of technological evolution.

Up to 70% of digital transformations fail, and the price of these projects not meeting their objectives is estimated to be around $2 trillion globally by 2026. Gopalakrishnan believes these figures will increase if companies continue to prioritise emerging technology like AI without a clear understanding of the retained organisation, recruitment and AI governance.

Partha Gopalakrishnan said: “Many consultancies point to the combination of artificial intelligence, cloud computing and the Internet of Things as the silver bullet for driving successful digital transformation. While these emerging models provide the bedrock for vital digital infrastructure, relying on them alone only sets you up for failure in the long term.

“This is because AI technologies evolve faster than digital transformation lifecycles. This tempts companies to change paths mid-way through a project. Technology used to be developed in five-to-six-year cycles; now, it takes five-to-six months.

“AI should not be seen as a standalone toolkit. It’s embedded into everything, and you need people across the board to understand it. You need to build a culture of un-learning and re-learning, upskilling and re-skilling. A company’s governance and culture are far more important than the new technology it adopts, and failing to develop the right mindset will accelerate the failure rate of transformation initiatives.

With 59% of decision-makers in tech saying that technology is advancing so quickly that they worry about the future of their business (source), Gopalakrishnan stresses the need for companies to approach digital transformation with a long-term strategic mindset.

Gopalakrishnan continued: “Digital transformation takes three-to-five years, and the focus needs to shift from short-term results to long-term strategies of adapting and rolling out new technology successfully and sustainably.

“Talent acquisition, as well as learning and development, are crucial to this, and companies should designate more time and investment into their talent strategies and training programmes than for their tech rollouts. Specifically, they should employ a skills-first approach instead of assessments based on whether or not candidates have past experience. A candidate’s ability to un-learn and re-learn is far more important than their knowledge about today’s tech landscape.

“It’s also essential to have a diversity of graduates – not just those from science and tech backgrounds. For example, graduates with a background in arts and humanities will play a more significant role in digital transformation as they can offer solutions about the ethics of AI implementation.

“Training and retaining your graduates and investing in them for at least five years will be far more beneficial than investing in the latest tech. This equips your team to implement new technology and adapt to new global frameworks and regulations.”