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TRANSCRIPT
JPK
Gro
up
Anil Inamdar – Byte Size Inc
Anil is a Technology Executive with Big Data, EDW, BI, Data Science, Analytics and MDM technologies. His strength is his ability to Bridge the Gap between Business and
Technology. He is a Business & Technology Strategist, Product Manager, Program Manager (PMO), Architect and a Delivery Expert. He has a vast knowledge of
everything in the Data Domain - DW, BI, MDM, Big Data, Governance, Tools and Databases.
Anil is also the author of a book on leadership: Avatars of Steve Jobs.
View presentation online at: https://jpkgroupsummits.com/sandiegols2019-attendee
Password: JPK
2019 Leading Strategy ForumJune 20-21, 2019 • San Diego, CA
Session: Digital Transformation Journey: From Yellow Cab to Uber!
June 20, 3:30 pm
Digital Transformations
From Yellow Cabs to Uber
By
Anil Inamdar
Consultant: Big Data, Digital TransformationAuthor: Avatars of Steve Jobs
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Index
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1. What is Digital Transformation?
2. Culture
3. Operating Model
4. Technology & Methodology
5. Conclusion
6. Questions
33
Digital Transformation Quiz
1. The field of study that gives computers the capability to learn without being explicitly programmed is called
2. The shift from mechanical and analog electronic technology to digital electronics is termed?
3. In what year was the transistor invented?4. Which year is often referred to as the
beginning of digital age?5. Which of the following is a phenomenon of
digital transformation? Drawing, Cryptocurrency, Electric, Coining
Machine Learning
Digital Revolution
1947
Cryptocurrency
2002
Sources: https://www.proprofs.com/quiz-school/quizshow.php?title=3dq-what-do-you-know-about-digital-transformation&q=9
44
What is Digital Transformation?
555
Digital Transformation
“You see things; and you say, ’Why?’But I dream things that never were;
And I say, ‘Why not?’”
George Bernard Shaw (Back to Methuselah)
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Digital Transformation
6
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Digital Transformation
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� New millennium – new type of business� New Business Model (GE – Thrust as a Service)� New Processes (Uber)� New Technology (Nest Thermostat)� New ways to interact with customers (Mobile Checks Deposits)
� Characteristics of the new business� Digitally born!� No legacy thinking, systems or processes
� Every company wants to adopt this new transformation
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Digital Transformation
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� Digital Transformation – How� Easy to adopt to technology� How to change legacy mindset?� How to change legacy operating model?� How to change legacy culture?
� Three steps to Journey to Digital Transformation1. Transforming Culture & Legacy Mindset2. New strategy and Operating Model3. Adopting new technology & methodology
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Digital Transformation –
CULTURE
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Digital Transformation: Culture
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Digital Transformation: Culture
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� What is culture / business culture?
� Social Culture: � Culture is the characteristics and knowledge of a particular group of people,
encompassing language, religion, cuisine, social habits, music and arts.
� Business Culture: � Corporate culture refers to the beliefs and behaviors that determine how a
company's employees and management interact and handle both inside and outside business transactions.
� Culture is critical to bring upon change / accelerate change
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Digital Transformation: Culture – contexts
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1. Be Data Driven
2. Eliminate Department Silos
3. Be Customer Centric
4. Results over Process
5. Calculated Risk vs Risk Averse
6. Longitude vs. Latitude
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Culture: Be Data Driven
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� Digital Transformations� Unique focus on data & analytics
� Data (1950 – 1985)� Automation of manual process� Data played secondary role – appendage of application
� Data (1985 – 2005) � Separate but equal treatment – OLTP vs OLAP� Data & Analytics practice – EDW, BI, MDM, Governance, tools� Competitive differentiator
� Data (2005 – now)� Data is the new disrupter� Changes to business models, processes, recommendation egines
� Leadership must embrace data culture� Fact based decision making� Ex-CEO Sara Lee (Barry Baracha) – “In God we trust, all others bring data”
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Culture: Eliminate Department Silos
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� Traditionally strong, independent departments / business unites –music, consumer product, computers, service etc.
� Departments many times compete hurting the organization� Establish culture of Organization before Department
� Sony Corporation (The Silo Effect by Gillian Tett)� Analog Walkman in 1970s� Strong brand, consumer product experience, music label� Everything under the roof for Digital Walkman or iPod
� Apple� A computer hardware company� Struggling in late 1990s � No experience in consumer products or music� Introduces first popular iPod
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Culture: Be Customer Centric
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� Traditional companies� Pride in products & services (Blockbuster late fees)� Preference changes, technology changes, market changes� Customer needs must be constantly reevaluated
� Traditional companies � Excessive focus on shareholders� Hierarchy is Shareholders then Customers� Must be changed to Customers then Shareholders� Amazon & Apple have continually ignored shareholders yet provided them
with huge returns
� Digitally born companies� Continuous innovation of their products / services� Amazon, Apple, Facebook, Google continuous improvement / features
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Culture: Results over Process
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� Traditional companies� Red tape of process, policies � Process does not keep pace with changes in customer preferences� Incentive structure rewards adherence to process � Lufthansa Airlines
� Mumbai – Frankfurt flight, wanted to upgrade to economy plus� Went on the website clicked the right option paid $230 � It changed my class – to upgradable! Now I can pay additional $350 to
upgrade� Told them I don’t want to upgrade but they won’t refund my $230
� Digital born companies� Focus on result over process� Continually invent new processes / improve existing processes – Amazon
one-click, prime membership, recommendation engines � Uber – entirely new process of hailing a taxi
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Culture: Calculated Risk vs. Risk Averse
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� Traditional companies� Success makes them risk averse – gun shy about change� Continue to hire leaders that play safe� Propagates a culture of status quo vs change� Border Book store vs Amazon
� Digital born companies� Calculated risk have paid off from the very beginning of capitalism� 1914 Henry Ford – doubled the minimum wage to $5/day� Worker turnover reduced, productivity increased and factory workers
became the customers� Tesla and Amazon continually take risks – Auto pilot, delivery in the car,
drones, etc.
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Culture: Longitude vs Latitude
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� Longitude – Imaginary half circle lines from pole to pole� Latitude – Imaginary circles in north & south directions of the equator� For navigation both latitude and longitude is necessary� In 1700s (age of exploration) – finding latitude was easy but longitude was difficult –
resulted in accidents � Board of Longitude (British Gov) – John Henry solved the longitude problem (Longitude
by Dava Sobel)� Most Organizations
� Business strategy is amorphous, elusive – “Acquire customers for life while striving for innovation”
� Statement is right, necessary but not sufficient; latitude but longitude� Most corporate strategies are not specific at all to take action
� Must focus on both latitude and longitude for strategy� Apple 2001 – “Digital Hub” � Mac will be the Hub surrounded by many digital devices� Introduced – iTunes, iPod, iPhone, iPad – many of the devices were not even conceived when
the strategy was laid out� “Digital Hub” was clear, succinct as well as uses Apple’s core competency – “the whole widget”
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Digital Transformation –
OPERATING MODEL
2020
Digital Transformation: Operating Model
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Digital Transformation: Operating Model
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� Operating Model� Bridge between strategy and operations
� Strategy is not constant due to � Changes in customer expectations� Changes in technologies� Changes in business boundaries
� Change in strategy renders operations out of sync� How to keep strategy and operations in sync?
� Operating Model � It’s components could be tweaked to keep strategy and operations
in sync
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Operating Model: Business Model Canvas
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� How to review existing strategy and identify strengths and weaknesses
� Several ways – one popular method is “Business Model Canvas” by Alexander Osterwalder
� Works with both internal and external entities and their impact to the strategy
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Operating Model: Business Model Canvas
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� Nine components� 4 External Customer components
� Customer Segments� Customer Relationships� Channels� Revenue Streams
� 4 Internal Organization components� Key Activities� Key Partners� Key Resources� Cost Structures
� 1 Common Component� Value Proposition
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Digital Transformation: Operating Model
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Business Model Canvas: Customer Segments
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� Who are the customers?
� What needs are we fulfilling?
� Can we group these customers into segments� B2B, B2C, Demographics, Socio-economical
� How do we effectively exploit these segments
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Business Model Canvas: Value Proposition
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� Define value proposition
� Why would customers pay for the product or service?
� Features of the offer� Cost benefit, additional features, ease of use, differentiation from
the competition
� Different “customer segments” may warrant different “value proposition”
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Business Model Canvas: Channels
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� Connects customer segments with value propositions
� Avenues through which products or services are sold� Social media� Word of mouth� Apps� Marketing campaigns
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Business Model Canvas: Customer Relationships
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� Defines organization’s interactions with customers� Before sale� During sale� After sale
� Relationships � Self-service through website� Customer Support� One-on-one interactions with key customers� Support customer community – conferences, meetups etc.
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Business Model Canvas: Revenue Streams
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� Primary sources of revenue – iPhone
� Secondary source of revenue – “Apple Developer Conference”
� One time revenue
� Recurring revenue – licensing
� Dynamic pricing model – Uber, Lyft
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Business Model Canvas: Key Resources
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� Resources that organization consumes
� Physical resources � Factories, buildings, human capital
� Financial resources� Working capital, investments
� Intellectual resources� Patents
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Business Model Canvas: Key Activities
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� Activities performed to deliver its value proposition
� Factory production
� Service fulfillment
� Marketing
� R & D for cutting technology or pharmaceutical companies
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Business Model Canvas: Key Partnerships
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� Critical business partners necessary for running the business
� Suppliers providing raw materials
� Partnerships with complementary companies storage, cloud
� Strategic alliances – consulting and database companies
� Partnerships necessary – optimize cost, reduce risks, extend revenue opportunities
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Business Model Canvas: Cost Structures
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� Costs necessary to provide value propositions
� Identify major cost drivers
� Fixed costs – rent, salaries
� Variable costs – electricity, cloud usage
� Costs used to acquire “key resources” and perform “key activities”
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Digital Transformation: Operating Model
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Operating Model: Key Components
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� Once strategy is established – one can translate it into effective operation through the operating model
� Critical components of the Operating Model:� Design Principles� Business Structure & Organization� Accountability Matrix � Governance & Management Principles� Business Capabilities
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Key Components: Design Principles
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� Translates business strategy into specific, concise and clear statements
� “What matters most to our customers?”
� “What are some of our distinct capabilities”
� “What are some of our strengths?”
� “What are some of our weaknesses?”
� What can facilitate future acquisitions?”
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Key Components: Business Structure or Organization
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� Creates new structures or business units across departments, lines of business and geographic locations� Facilitate improved decision making � Cross-functional teams
� Nike Traditional Business Units around products� Footwear� Apparel
� Customers were demanding “head-to-toe” gear personalized to their sports� Soccer – Shoes, Shirts, Shorts� Golf – Polo Shirt, Shoes, Pants
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Key Components: Accountability Matrix
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� Closely linked to the structures discusses already� Describes roles and responsibilities of the entities in the
structure� Decision making abilities� P & L responsibilities� Incentive structures
� Focus: Reward customer value� Centralized to local
� Ritz-Carlton $2000 discretionary fund to front-desk to resolve customer complaints
� Local to centralized� Local Net Promoter Score (NPS) complicated for each country –
made it central and improved overall NPS
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Key Components: Governance and Management Principles
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� Establishment of principles and policies with respect to organization and accountability (how to manage them)
� Principles not Rules� Business priorities and value proposition
� Performance Metrics, KPI� Feedback mechanism between frontline & back office operations,
between different organization levels, between geographies� KPIs / Metrics cannot be rigid rules - principles� Principles promote agility, rules encourage bureaucracy
� Intel has a long established principle – “disagree & commit”� Disagree openly without fear of retaliation� Once decision is made – follow through total commitment
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Key Components: Business Capabilities
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� Business Capabilities: People, Process, & Technology
� Traditional Companies� How do we introduce new skills, processes, technology?
� Big Bang or Incremental?
� Approach� Modular architecture in an iterative fashion
� Envision overall system and architecture (Idealistic)� Implement in manageable chuck (pragmatic)
� Agile Methodology, DevOps, Cloud� Must make Critical hires and as well as focus on retraining
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Digital Transformation –
TECHNOLOGY & METHODOLOGY
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Digital Transformation: Technology & Methodology
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Digital Transformation: Technology & Methodology
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� Last two decades:� New technologies – Big Data, Cloud, Mobile, AI / ML, Blockchain � New Methodologies – Agile, DevOps
� Technology is diverse & changing constantly
� Review 6 broad categories� Cloud Adoption� Hybrid Data Management� Polyglot Storage Architecture� Analytics & Insights� Agile, DevOps Methodologies� Emerging Technologies – AI/ML, Mobile, Blockchain
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Digital Transformation: Cloud Adoption
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� “Cloud” Technology has come full circle� Mainframe (1950s) – Centralized architecture� Client Server – Distributed architecture� Cloud – Centralized architecture but nodes are powerful too
� Cloud Characteristics� Agility / Scalability� Cost (Operating expense not Capital)� Global Reach� Reliability� Performance� Focused Priorities
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Digital Transformation: Cloud Adoption
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� Types of Cloud Services� Infrastructure as a Service (IaaS)� Platform as a Service (PaaS)� Software as a Service (SaaS)
� Types of Cloud Deployments� Public Cloud� Private Cloud� Hybrid Cloud
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Digital Transformation: Hybrid Data Management
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� Historically since 1950s� Data management scope was limited� Mostly numbers and characters, structured� Remained so till the end of the millennium
� New Millennium� Data increased in – volume, variety, velocity� Rise of unstructured data – weblogs, music, photography, video� Different types of processing – batch, real time, streaming� Locations – local, international, on premise, cloud
� Emergence of Hybrid Data Management� Structured vs Unstructured� On-premise vs Cloud� Streaming vs batch
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Digital Transformation: Polyglot Storage Architecture
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Functionality Considerations Database Type
User SessionsRapid Access for reads and writes. No need to be durable. Key-Value
Financial DataNeeds transactional updates. Tabular structure fits data. RDBMS
POS Data
Depending on size and rate of ingest. Lots of writes, infrequent reads mostly for analytics.
RDBMS (if modest), Key Value or Document (if ingest very high) or Column if analytics is key.
Shopping Cart
High availability across multiple locations. Can merge inconsistent writes. Document, (Key Value maybe)
RecommendationsRapidly traverse links between friends, product purchases, and ratings. Graph, (Column if simple)
Product CatalogLots of reads, infrequent writes. Products make natural aggregates. Document
Reporting SQL interfaces well with reporting tools RDBMS, Column
Analytics Large scale analytics on large cluster Column
User activity logs,CSR logs, Social Media analysis High volume of writes on multiple nodes Key Value or Document
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Digital Transformation: Analytics & Insights
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Digital Transformation: Analytics & Insights
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� Types of Analytics� Descriptive Analytics
� What happened – sales were down last month
� Diagnostic Analytics� Why it happened – drills down into data
� Predictive Analytics� What will happen – sales would be down next month
� Prescriptive Analytics� What should happen – takes actions to address challenges,
recommendation engines
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Digital Transformation: Agile, DevOps
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� Traditional development process� Long time to market� Waterfall methodology – requirements, design, development etc.� Waterfall developed for manufacturing systems (Ford 1913) – adopted for
software development in 1970� Both manufacturing and initial software was large, complex and
changes very slowly� New Millennium
� Internet era� Teams were smaller� Applications were divided into independent components (microservices) � Customers demanded rapid changes� Platforms & Tools changed continuously � Waterfall became a bottleneck
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Digital Transformation: Agile Development
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� Collaboration over documentation� Self-organization over rigid management� Continuous changes vs waterfall� Concept of Customer, Product Owner and Development
Team� Many Agile frameworks – most popular is SCRUM
� Creates backlog of product features� Sprint planning� Individual sprints – 2/3 weeks� Sprint backlog from “in progress” to “done”� Daily Stand Up Meetings� Sprint ends with Retrospective
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Digital Transformation: DevOps
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� Change in IT culture� Collaboration between development and operations team� Traditionally development and operations are at odds
� Development focuses on functionality, speed & agility� Operations focuses on maintenance, performance, support,
security and management of applications
� DevOps� Collaboration� Automation (Jenkins)� Continuous delivery� Rapid deployment – daily, weekly, monthly� Amazon deploys something every 11.6 seconds
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Digital Transformation: Emerging Technologies
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� Emergence of several new technologies – AI, ML, Blockchain, IoT, Mobile etc.
� Transformation leaders must monitor this space, will focus on few
� AI, ML & Blockchain – adept at handling scale, complexity and continuous learning
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Digital Transformation: Artificial Intelligence (AI)
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� AI – Bringing human features to technology
� Consumer World� Comprehending speech, vision, daily integrations � SIRI, Alexa
� Business World� Improving enterprise functions like logistics, marketing, finance,
operations� Recommendation engines
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Digital Transformation: Machine Learning (ML)
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� Subset of AI
� Traditional computer algorithms� Step by step instructions
� Machine Learning� Learns from data iteratively� Becomes more and more intelligent as data grows� Many ML algorithms that can predict skin cancers better than
radiologists
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Digital Transformation: Blockchain
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� Distributed ledger that stores and validates transactions cross multiple locations
� Validation mechanism that prevents anyone from making unvalidated changes
� Most prevent application is cryptocurrency
� Also used in creating contracts, storing patient prescriptions and medications
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Questions
5858
https://www.youtube.com/watch?v=V1eYniJ0Rnk
https://www.youtube.com/watch?v=Q70ulPJW3Gk