The $1 Trillion Question: How Can Efforts to Digitally Transform Businesses Succeed?
While enormous resources are being spent on digital transformation programmes by the private sector, the results are underwhelming. Today, the World Economic Forum launched a report to help senior executives avoid common patterns of failure and ask the right questions. The Digital Enterprise: Moving from experimentation to transformation is a practical guide to envisioning, structuring and sequencing successful digital transformation efforts.
According to estimates, this year over $1.2 trillion will be spent by companies worldwide on their digital transformation efforts and yet analysis suggests that only 1% of these efforts will achieve or exceed their expectations.
Last year, the World Economic Forum launched the Digital Enterprise project in collaboration with Bain & Company to help companies understand how they can design and execute successful digital transformation programmes. The project was led by a working group of senior executives from 40 companies, including representatives from Walmart, eBay, JD.com and HPE. The report launched today is a synthesis of their discussions and learning over the course of the year.
“Executives are often so involved in their own industries and the operational details of what they do that they don’t realize that the most formidable ideas and challenges to their business model might come from outside their own industry. We help executives take a step back, broaden their peripheral vision and enter into conversations with leaders from other industries about their perspectives and experiences,” said Mehran Gul, Project Lead for Digital Enterprise at the World Economic Forum.
The working group found that, while people are all too familiar with once-revered brands that failed to stay ahead of the curve – BlackBerry, Kodak, Blockbuster – there are also examples of successful reinvention that prove that digital transformation, while hard, is not impossible. Netflix went through successive waves of evolution over two decades, transforming from a traditional DVD-by-mail service into the largest online video-streaming service in the US. The number of Netflix subscribers in the US now surpasses all cable subscribers combined, reaching 73% of all households. Dominos, founded in 1960, started making foundational investments in technology upgrades in 2001 and is now the fifth-largest e-commerce company in the United States. Since 2000, it has been the best performing stock in the S&P 500, outperforming Amazon and Google. Dominos has gone from being a pizza company to being a tech company that happens to make pizza.
“Our understanding of digital transformation and what enables it has evolved on both a personal and a company level through this work. While much of the technology is readily available, the real challenge lies in the ability to change business models and the way we work to take out the potential offered. And that makes digital success dependent on leadership, culture and capabilities,” said Åshild Hanne Larsen, Chief Information Officer and Senior Vice-President of Corporate IT at Equinor, Norway, and a member of the project’s executive working group.
According to the report, successful transformation programmes suggest that, while there is enormous diversity in individual experiences, some common themes clearly emerge. Successful companies embrace digital strategies that can thrive in uncertainty and succeed through a “test and learn” mindset. Instead of focusing on what they are selling, they focus on the needs of the customer they serve and constantly iterate their product or service to better address that need. They invest in developing systems, technology and talent that can help them achieve their digital objectives. Finally, they focus on implementation to ensure that successful experiments can reach scale.
“Things are changing so fast. It’s not just what the technology can do but how people react to the technology. It’s not just robots. It’s people willing to spend the night on a total stranger’s couch. That’s what’s changed today versus 20 years ago. It’s more than just data, technology and computing power. It’s the way people are responding to it, changing their behaviour so fast and so radically,” said Ouriel Lancry, Partner, Bain & Company.
Riyadh joins Shanghai Cooperation Organization
Saudi Arabia’s cabinet approved on Wednesday a decision to join the Shanghai Cooperation Organization (SCO), as Riyadh builds a long-term partnership with China despite U.S. security concerns.
Saudi Arabia has approved a memorandum on granting the Kingdom the status of a dialogue partner in the Shanghai Cooperation Organization, state news agency SPA said.
The SCO is a political and security union of countries spanning much of Eurasia, including China, India and Russia.
Formed in 2001 by Russia, China and former Soviet states in Central Asia, the body has been expanded to include India and Pakistan, with a view to playing a bigger role as counterweight to Western influence in the region.
Iran also signed documents for full membership last year.
Dialogue partner status will be a first step within the Organisation before granting the Kingdom full membership in the mid-term.
The decision followed an announcement by Saudi Aramco, which raised its multi-billion dollar investment in China, by finalising a planned joint venture in northeast China and acquiring a stake in a privately controlled petrochemical group.
Explainer: Commission proposes to expand digital tools in EU company law
What are the objectives of the Commission’s proposal?
This proposal aims to cut red-tape and improve transparency and trust in the business environment in the single market. It will achieve more digitalised and connected cross-border public services for companies and reduce the administrative burden for companies carrying out cross-border activities, in particular for SMEs.
How will it help companies?
The proposal will significantly reduce administrative barriers when companies use company information from business registers in cross-border situations, including in administrative or court procedures:
- When companies set up subsidiaries or branches in another Member State, the proposal will ensure the application of the “once-only principle”. This means that companies will not need to re-submit the information already available in their business register, and business registers will exchange that information through BRIS.
- Companies will be able to use a multilingual EU Company Certificate to provide essential information about their company, e.g., when taking part in public tenders, in the context of tax or authorisation procedures or when applying for funding in another Member State.
- Companies may use a multilingual model for a digital EU power of attorney to authorise a person to represent the company in another Member State.
- Companies do not need to obtain an apostille on certified documents or information from business registers, and on certain notarial documents, when such documents are presented in another Member State.
- The proposal reduces the need for certified translations of company documents or information provided by business registers.
How much will the proposal reduce the administrative burden on companies?
By making more company data publicly available in business registers and at EU level through BRIS, and by improving the reliability of such information, the proposal will reduce the overall administrative burden on companies and in turn facilitate access to finance and the creation of businesses. It will apply to around 16 million limited liability companies and 2 million partnerships in the EU.
Companies planning to engage in cross-border business activities, or to create cross-border subsidiaries or branches, will benefit from recurrent annual savings (administrative burden reduction) of around €437 million per year thanks to administrative simplification, including the application of “once-only principle”, abolishing the apostille, and introducing an EU Company Certificate.
How will it help small and medium enterprises (SMEs)?
SMEs account for 98-99% of limited liability companies in the EU, and around 40% of SMEs are engaged in cross-border activities and operations or cross-border investments. SMEs in particular will benefit from the reduction in administrative burden and increased legal certainty, and also from easier access to company information, as they have less financial and administrative resources than large companies.
This proposal helps to make it easier for SMEs and start-ups to expand and scale-up cross-border in line with the 2020 SME Strategy for a sustainable and digital Europe and the EU Start-up Nations Standard.
How will it improve transparency in the business environment?
The proposal will make more information about companies publicly available in particular at EU level through the Business Registers Interconnection System (BRIS). It covers important information for investors, creditors, consumers and authorities about:
- groups of companies,
- single shareholders of single-member companies,
- the place of central administration and the principal place of business of companies,
- EU branches of non-EU companies.
It will also make searches for information about companies in the EU easier by allowing a search through BRIS and, at the same time, through two other EU systems interconnecting national beneficial ownership registers and insolvency registers, while respecting the existing rules for access to each system.
How will it improve trust in the business environment?
First, the proposal will improve reliability of company information in business registers across the EU and thus ensure that such information can be trusted in cross-border situations. In particular, the proposal requires Member States to ensure that:
- administrative or judicial control, as well as a legality check, of the instruments of constitution takes place when new companies are created and in case of any changes to those documents;
- uniform checks of company information (e.g., checking legality of the company’s name, object) are carried out before the information is entered in business registers.
Second, the proposal will ensure that company information in business registers is up-to-date by:
- asking companies to make timely updates of their information in business registers, and to confirm once a year that the information is up-to-date;
- asking business registers to make new information received from companies publicly available as soon as possible;
- ensuring that sanctions are applied where companies do not file information or file it late to business registers.
How does this proposal relate to the existing company law framework?
The proposal respects the different legal traditions and systems in Member States, including the possible involvement of notaries in company law procedures, and does not aim to modify them.
The 2019 Digitalisation Directive ensured that company law procedures can be carried out online, and in particular that companies can be set up online. This proposal is complementary and provides for the second step of digitalisation of EU company law. It focuses on increasing the availability of company information, in particular at EU level, and on removing administrative barriers when companies and public authorities use such information in cross-border situations, through the use of digital tools and processes.
It does not introduce new systems but builds on existing ones, for example on BRIS that is operational since 2017 and connects all Member State registers. It is also in line with EU rules on electronic identification and trust services (the eIDAS Regulation and its ongoing revision to establish a framework for a European Digital Identity).
Russia will deploy nuclear weapons in Belarus – EU and NATO went ballistic
Baroness Goldie, who is an experienced Scottish politician and life peer who served as Leader of the Scottish Conservative Party from 2005 to 2011 and as the UK’s Minister of State for Defence since 2019, said to the Parliament: “Alongside our granting of a squadron of Challenger 2 main battle tanks to Ukraine, we will be providing ammunition including armour piercing rounds which contain depleted uranium. Such rounds are highly effective in defeating modern tanks and armoured vehicles.”
The Anglo-Saxon clique’s core objective is a calculated escalation of the proxy war that is certain to draw forth a robust reaction from Moscow, as predictable as night follows day, writes M.K. Bhadrakumar, Indian Ambassador and prominent international observer.
Indeed, that is precisely what happened when Russian President Vladimir Putin announced that Russia will deploy its tactical nuclear weapons in Belarus. Putin linked this to a request from Belarus in reaction to Baroness Goldie’s statement in London a week ago.
More importantly, Putin also drew the analogy of the US placing its nuclear weapons on the territories of the allied NATO countries for decades.
The EU and NATO went ballistic after Putin’s disclosure. EU’s chief diplomat Josep Borrell said Moscow’s decision was “an irresponsible escalation and threat to European security.” He promised to impose “further sanctions” against Belarus!
A NATO spokeswoman called Moscow’s decision “dangerous and irresponsible.” Interestingly, though, the Biden administration neatly side-stepped the issue, focusing instead that the US has not seen any signs that Russia has moved nuclear weapons to Belarus or anywhere else!
What is the game plan? First, the Anglo-Saxon clique would hope that the issue will create further disquiet and insecurity in Europe vis-a-vis Russia and would rally European countries behind the Biden administration at a time when fault lines were appearing within the transatlantic alliance over a protracted war in Ukraine that might be catastrophic for European economies.
However, Washington is hard-pressed to respond to Putin’s remark that Russia is only doing something that the US has been doing for decades.
The crux of the matter is, as with the Cuban missile crisis of 1962, the Russian decision on tactical nuclear weapons in Belarus is retaliatory, drawing attention to the US missiles stationed close to its borders. (An estimated 100 nuclear weapons are stored in vaults in five European countries — Belgium, Germany, Italy, Netherlands and Turkey.)
Worse still, the US practices a controversial arrangement known as “nuclear sharing”, under which it installs nuclear equipment on fighter jets of select non-nuclear NATO countries and train their pilots to carry out nuclear strike with US nuclear bombs. This is happening when the US, being a party to the nuclear Non-Proliferation Treaty (NPT), has promised not to hand over nuclear weapons to other countries, and the non-nuclear countries in the NATO’s sharing arrangement have themselves promised not to receive nuclear weapons from the nuclear weapon states!
The NATO declared last year that seven NATO countries contributed dual-capable aircraft to the nuclear sharing mission. These countries are believed to be the US, Belgium, Germany, Italy, Netherlands, Turkey and Greece. And all are signatories to the NPT!
There is no question that depleted uranium munitions are radioactive and toxic and their heavy use in the Yugoslavia and Iraq wars has been linked to birth defects and cancers. It has been tied to “the highest rate of genetic damage in any population ever studied” in Fallujah, the city subjected to two brutal US sieges during the invasion of Iraq.
Britain appears to be creating conditions in Europe to justify the basing of nuclear-armed US bombers at Lakenheath in Suffolk, which were removed in 1991 in line with the Intermediate Nuclear Forces treaty, stresses M.K. Bhadrakumar.
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