The transformative AI initiative: from process digitization to AI strategic digitalization

Abstract

Purpose Strategically focused AI transformation will almost certainly be more profound than the era of AI process optimization that has preceded it because it potentially changes the way the organizations operate and compete in the marketplace. Design/methodology/approach Potentially transformative strategic digitalization, although built on the AI technology to create process efficiencies that preceded it, will need leaders to adopt a new decision mindset first, and therefore is currently an aspirational initiative in progress. Findings Strategic digitalization shifts the focus of attention from the technical features of process digitization to the transformation of the context and of the organization itself, triggered or enabled by the advent of new technological possibilities. Practical implications Strategic digitalization has the potential to automate the decision-making in middle-management functions in order to greatly potentiate the value of their work. Contrary to the conventional organizational pyramid, strategic digitalization will likely be most effective in an hourglass form of organization, one that replaces many middle management tasks through AI and related technologies in order to create higher-value jobs for managers. Originality/value Guidelines derived from effective initiatives offer a roadmap to the ongoing experimental approach to applying AI to both organization and strategy, a transformation that will be crucial to the future success of organizations.