Spanish companies are doing large financial investments in digital transformation projects and 85 percent of managers will maintain or increase these items for next year despite the crisis situation. Yet it still exists”a lot of ignorance about how to apply technology in the day to day of the company”according to Alfonso Abella, Managing Director & Senior Partner of Boston Consulting Group (BCG).
In an interview with Europa Press, Abella, who now also leads the BCG X division in Iberia, with close to a hundred professionals dedicated to accelerating and enhancing these technological capabilities of Spanish companies to achieve their business objectives, stresses that 70 percent of managers acknowledge not having achieved the goals for which they made the investments in these technological tools and solutions.
“Digital transformation is not achieved only through economic investment in technology, but a good part of the company’s focus must be placed on how digitization transforms your business model and operating model. If we forget about that, we end up having companies with very cutting-edge technologies, but that don’t achieve the necessary impact to achieve a competitive advantage in the market,” says Abella.
This is one of the mantras that the BCG executive repeats and that makes clear his vocation to help companies understand their objectives and then implement the technology that helps them achieve them. The same happens with the ‘software as a service’ sector, that grows at rates close to 200 percent and that helps companies to access cutting-edge technological tools without having to make large prior investments and hardware.
This represents a “great opportunity”, mainly for SMEs – not only for large companies, but also for SMEs that represent the majority of the Spanish business ecosystem – but Abella once again highlights the “frustration” that he and his team detect when they ask the companies they work with about the impact these developments have had. “Companies are immersed in 24-month projects in which 90 percent of their effort goes into getting the technology implemented. In the end, they realize that, after the effort, they have very cutting-edge technology but they have not spent enough time to see how they should change their way of working to get value from it“, apostille.
A “VERY RELEVANT” IMPACT OF ARTIFICIAL INTELLIGENCE
“We encourage customers to, Before deploying a technology, think about how you want to evolve the business model to choose the tools that can help that”, continues Abella. Among these tools there is no doubt that there will be Artificial Intelligence (AI), which is already generating a “very relevant” impact in many business areas. In Specifically, 90 percent of software development departments that are using AI-based techniques are seeing their productivity increase significantly.
The BCG executive explains that Artificial Intelligence has capabilities that all companies must have if they want to continue to be successful in the market. On the one hand, the ability to personalization and adaptation to customer needs and experience or, in the world of operations, the ability to improve the efficiency of the processes productive or optimize supply chains.
Consulting has changed a lot in the last two decades and BCG has accelerated this transformation. “After years developing projects with clients, we have realized that we need to have the complete capabilities to help in this transformation,” adds Abella, who assures that they are “leading” in the development of products, tools, and technological assets, which include the AI in your processes.
In this sense, he gives as an example his CO2 AI toolwhich allows companies measure the carbon footprint very precisely and identify the actions necessary to optimize it; or algorithm-based personalization products applied to the banking, telecommunications or energy sectors in order to “extract more value” from the company’s customer base.
When asked about concerns around Artificial Intelligence and data protection, following the advent of tools such as ChatGPT (the chatbot prototype developed by OpenAI), Abella indicates that while traditional and new AI wave of generative AI is generating very positive impacts, it is true that “there are certain risks that must be managed”. “We have a very marked responsible AI policy, that we apply to our own developments as well as in customer implementations”, he asserts.
This BCG responsible AI policy is based on a first pillar that is “risk mapping”, followed by “transparency in the development of models”, to prevent them from becoming “black boxes” and not knowing how they work or why they offer certain recommendations. The third pillar involves “seeking an improvement for the end customer”, which reverts to the way employees work or the company’s social impact.
THE PANDEMIC AS AN OPPORTUNITY FOR DIGITALIZATION
The confinement meant “a change in the way of working and an opportunity for digitization”. Although a good part of this change was forced by the clients themselves: “Until now we had to drag them towards digital channels and, however, now they are the ones who demand that companies adapt to these needs,” Abella details, adding that Another thing that has accelerated this path towards digitization has been the move from a policy of employee presence to a more agile and dynamic environment.
“In Spain specifically, this opportunity is more tangible for SMEs, that due to their own structure and size have had more complications when it comes to growing and leveraging resources to compete internationally”, adds the leader of BCG X for Iberia, who recalls a study carried out by the consultancy in the 2008 crisis and which It ranked small and medium-sized Spanish companies as “the most efficient in the world.” “Now digitization has arrived and that is once again an opportunity for SMEs. We are already seeing very successful examples in Spain, such as Glovo or Cabify, which have become unicorns,” he says.
SUSTAINABILITY AND TALENT RETENTION
Lastly, the BCG executive stressed that all this technological development is beginning to have a significant impact on the carbon footprint: “the digital world already has a weight of up to 5 percent of the carbon footprint, nearly double the aviation sector. For this reason, it urges responsible use and precise measurement of the CO2 consumption associated with any of these AI technologies.
This will have an impact on the company itself, not only because it has more efficient and sustainable resources, but also because of the image it projects abroad and to its own employees. “Digital profiles are groups that are especially sensitive to these things. Sustainability is not only an argument for clients, but also for the talent they want to recruit and keep. These professionals want to know that the technologies they are developing are sustainable, while helping to solve problems,” says Abella.