Center for Digital Transformation Selects Top Companies for Digital Innovators Award by CDT

Center for Digital Transformation Selects Top Companies for Digital Innovators Award by CDT

The Center for Digital Transformation at the UCI Paul Merage School of Business has named Target Corporation, Aetna/CVS Health and Quad/Graphics, as the first, second and third place winners in its inaugural Digital Innovator Award program.
The three companies were selected because of their prowess in reinventing themselves for the digital world. The selection is based on an analysis of responses to the Center’s annual Digital Transformation Survey, plus other publicly available information.

The assessment takes into account six dimensions that are essential to digital transformation: company-wide strategic vision, alignment of the vision to investments in digital transformation, a culture of innovation, intellectual property assets and knowledge, the digital capabilities of workers, and the actual use of digital technologies.

“Digital transformation is especially challenging for legacy companies — which we define as incorporated before 1990 — because they have to change in fundamental ways that younger, natively digital companies don’t,” said Vijay Gurbaxani, the director of the Center for Digital Transformation. “Our survey examined 150 companies, but among them, these three companies stood out.”

The three winners were honored at a dinner on March 20, 2019 and recognized at this year’s annual Road to Reinvention Conference, a one day conference for executives on leadership in the digital age, in Irvine, CA on March 21, 2019.

The Center for Digital Transformation, a research-based Center of Excellence at UCI’s Paul Merage School of Business, has been built on the belief that digital technologies are transforming the strategy and structure of business enterprises. The Center provides an independent voice and is an influential catalyst for advancing the competitiveness and productivity of businesses in the digital economy.

About The Paul Merage School of Business

The Paul Merage School of Business at UC Irvine offers four dynamic MBA programs – plus PhD, specialty masters and undergraduate business degrees – that prepare business leaders for our digitally driven world. Through our programs, students acquire the exceptional ability to grow their organizations through strategic innovation, analytical decision-making, digital information technology and collaborative execution. While the Merage School is relatively young, it has quickly grown to rank consistently among the top five percent of all business programs worldwide through exceptional student recruitment, world-class faculty, a strong alumni network and close relationships with both individual business executives and global corporations. Additional information is available at merage.uci.edu.

Leading Amidst the Techlash: How Digital Leaders Can Build a Better World For Everyone by CDT

Leading Amidst the Techlash: How Digital Leaders Can Build a Better World For Everyone by CDT

This post was written by Vijay Gurbaxani, Taco Bell professor of information systems and computer science and director of the Center for Digital Transformation.

The backlash against technology — the techlash — has started.

In the last year, society has grown more worried about the downsides of digital technologies. The ethics of artificial intelligence, threats to privacy, weakness in cybersecurity, the dominant power of platforms are all matters of concern. Society as a whole has become far more wary.

But I believe that with responsible leadership and the active involvement of the business, technology, and policy communities, we can build a better society and a digital world we all want to live in. It will take intentional strategies and a commitment to managing technology for the benefit of society, and not letting technology control us.

The Center for Digital Transformation at the UCI Paul Merage School of Business is leading the way in educating today’s business leaders. And the Road to Reinvention conference, held annually in March, is where we gather to exchange ideas and learn from each other.

The most fundamental lesson is that every company must think like a software company. I said that in 2015 at the first Road to Reinvention conference, and the same thing is even more true today. The economy is becoming far more knowledge driven. Yet, knowledge that isn’t codified in software doesn’t scale. With digital platforms forming the core foundations of business, all companies are codifying knowledge into software. As a result, software investment is a key driver of economic growth today. And research now shows that companies that invest in proprietary software — the type of software that distinguishes companies — actually allows them to compete better, allows them to win.

A useful analogy from the world of biology is DNA. DNA is what defines humans. It makes human beings who they are and guides what they do. In today’s digital economy, software code is the DNA of a company. Software is what prescribes how a company operates; it differentiates one company from another.

Who will win in today’s digital economy? Technology is abundant, but companies never win with an abundant resource. What companies actually win with is a scarce resource — and that resource is intangible, almost indescribable. It’s business vision. The vision to know how to enhance our company’s value proposition with digital technologies, the unique knowledge required to deliver on the value proposition that differentiates us from our rivals, the technologies we should invest in, the problems we should focus on, the innovation we should prioritize, the processes we can digitize so we can actually take advantage of technology.

All of this comes together to create a roadmap to the future. That’s the intangible resource.

New knowledge is no longer going to be restricted to the domain of humans conceiving of theories. New knowledge will be created by data driven models, driven by machine learning systems. It’s a matter of time before machines can outthink humans, perhaps not in all domains but certainly in many. Society will have to grapple with the question of how humans and machines can work together in such a world.

And we have to be watchful because society has increasingly gone on autopilot. The books we read, the movies we watch, the people we date, the restaurants we eat at, are all determined for us — or at least influenced by — code. Some people call this surveillance capitalism where it’s a capitalism that resides on the data that is derived by tracking people. We have to ask ourselves the question: is this the society that we want?

We’ve also learned over the last few years that many AI systems can be quite biased, depending on the input data they are given. We’re not going to get to a successful future if we don’t have trust in the platforms and we don’t have trust in the data. The really valuable progress will happen when we can trust the systems.

We can do better. We must rethink the system design. We can design a system that works for everybody.

Technology is incredibly powerful. But we must put people first. How can we help humankind? Let’s build a world we can be proud of. Let’s build a world we want to live in.

This post was written by Vijay Gurbaxani, Taco Bell professor of information systems and computer science and director of the Center for Digital Transformation. The backlash against technology — the techlash — has started. In the last year, society has grown more worried about the downsides of digital technologies. The ethics of artificial intelligence, threats to privacy, weakness in cybersecurity, the dominant power of platforms are all matters of concern. Society as a whole has become far more wary. But I believe that with responsible leadership and the active involvement of the business, technology, and policy communities, we can build a better society and a digital world we all want to live in. It will take intentional strategies and a commitment to managing technology for the benefit of society, and not letting technology control us. The Center for Digital Transformation at the UCI Paul Merage School of Business is leading the way in educating today’s business leaders. And the Road to Reinvention conference, held annually in March, is where we gather to exchange ideas and learn from each other. The most fundamental lesson is that every company must think like a software company. I said that in 2015 at the first Road to Reinvention conference, and the same thing is even more true today. The economy is becoming far more knowledge driven. Yet, knowledge that isn’t codified in software doesn’t scale. With digital platforms forming the core foundations of business, all companies are codifying knowledge into software. As a result, software investment is a key driver of economic growth today. And research now shows that companies that invest in proprietary software — the type of software that distinguishes companies — actually allows them to compete better, allows them to win. A useful analogy from the world of biology is DNA. DNA is what defines humans. It makes human beings who they are and guides what they do. In today’s digital economy, software code is the DNA of a company. Software is what prescribes how a company operates; it differentiates one company from another. Who will win in today’s digital economy? Technology is abundant, but companies never win with an abundant resource. What companies actually win with is a scarce resource — and that resource is intangible, almost indescribable. It’s business vision. The vision to know how to enhance our company’s value proposition with digital technologies, the unique knowledge required to deliver on the value proposition that differentiates us from our rivals, the technologies we should invest in, the problems we should focus on, the innovation we should prioritize, the processes we can digitize so we can actually take advantage of technology. All of this comes together to create a roadmap to the future. That’s the intangible resource. New knowledge is no longer going to be restricted to the domain of humans conceiving of theories. New knowledge will be created by data driven models, driven by machine learning systems. It’s a matter of time before machines can outthink humans, perhaps not in all domains but certainly in many. Society will have to grapple with the question of how humans and machines can work together in such a world. And we have to be watchful because society has increasingly gone on autopilot. The books we read, the movies we watch, the people we date, the restaurants we eat at, are all determined for us — or at least influenced by — code. Some people call this surveillance capitalism where it’s a capitalism that resides on the data that is derived by tracking people. We have to ask ourselves the question: is this the society that we want? We’ve also learned over the last few years that many AI systems can be quite biased, depending on the input data they are given. We’re not going to get to a successful future if we don’t have trust in the platforms and we don’t have trust in the data. The really valuable progress will happen when we can trust the systems. We can do better. We must rethink the system design. We can design a system that works for everybody. Technology is incredibly powerful. But we must put people first. How can we help humankind? Let’s build a world we can be proud of. Let’s build a world we want to live in.

Open Data Initiative to Empower Companies and Revolutionize Customer Experience, Says Shantanu Narayen, CEO of Adobe by CDT

Open Data Initiative to Empower Companies and Revolutionize Customer Experience, Says Shantanu Narayen, CEO of Adobe by CDT

Too often, companies’ internal and external data exists in silos, making it impossible for them to take advantage of that data and gain a holistic view of customer interactions and operations.

But what if there was a way to move all that data to the cloud so that companies could apply data science, draw conclusions and implement solutions to better serve the needs of their customers?

That’s exactly the premise behind the Open Data Initiative, an ambitious effort from technology pioneers Adobe, Microsoft and SAP.

“The initiative will standardize data formats and create a new method of publishing by integrating the Adobe Experience Platform with Microsoft Dynamics 365,” Shantanu Narayen, CEO of Adobe, said at the Center for Digital Transformation’s Road to Reinvention conference in March.

The Open Data Initiative is predicated on the idea that companies need to be open, and recognize that the data is owned by the customers. Adobe acknowledged this idea in 2009, as the company embarked on its own digital transformation.

“We realized that we weren’t attracting new customers to the platform, and the cost of the software was an impediment,” Narayen said. “But perhaps most fundamental, we realized that we weren’t innovating at a fast enough pace.”

Therefore, Adobe moved from a 12-18 month product cycle to a continuous time cycle (and from perpetual revenue to recurring revenue), which required customer interaction and insight to be successful.

In addition, the company recognized that it wasn’t mission critical to the business of publishing. By creating a full stack of digital marketing enterprise software, the company was able to target chief revenue, digital and marketing officers for the first time.

Adobe also purchased a web analytics company, Omniture, so that the company would no longer have to wonder what type of customers they served, or what type of services their customers desired.

“We’ve become comfortable with the belief that if you can connect all the dots from where you are today to where you want to go, you’re probably not being aspirational enough,” Narayen said. “But how do you harness the ingenuity of the tens of thousands of employees that you have?”

“You plant this flag, and the truth is, you don’t know how to get there, but amazing individuals will help you figure that out.”

Too often, companies’ internal and external data exists in silos, making it impossible for them to take advantage of that data and gain a holistic view of customer interactions and operations. But what if there was a way to move all that data to the cloud so that companies could apply data science, draw conclusions and implement solutions to better serve the needs of their customers? That’s exactly the premise behind the Open Data Initiative, an ambitious effort from technology pioneers Adobe, Microsoft and SAP. “The initiative will standardize data formats and create a new method of publishing by integrating the Adobe Experience Platform with Microsoft Dynamics 365,” Shantanu Narayen, CEO of Adobe, said at the Center for Digital Transformation’s Road to Reinvention conference in March. The Open Data Initiative is predicated on the idea that companies need to be open, and recognize that the data is owned by the customers. Adobe acknowledged this idea in 2009, as the company embarked on its own digital transformation. “We realized that we weren’t attracting new customers to the platform, and the cost of the software was an impediment,” Narayen said. “But perhaps most fundamental, we realized that we weren’t innovating at a fast enough pace.” Therefore, Adobe moved from a 12-18 month product cycle to a continuous time cycle (and from perpetual revenue to recurring revenue), which required customer interaction and insight to be successful. In addition, the company recognized that it wasn’t mission critical to the business of publishing. By creating a full stack of digital marketing enterprise software, the company was able to target chief revenue, digital and marketing officers for the first time. Adobe also purchased a web analytics company, Omniture, so that the company would no longer have to wonder what type of customers they served, or what type of services their customers desired. “We’ve become comfortable with the belief that if you can connect all the dots from where you are today to where you want to go, you’re probably not being aspirational enough,” Narayen said. “But how do you harness the ingenuity of the tens of thousands of employees that you have?” “You plant this flag, and the truth is, you don’t know how to get there, but amazing individuals will help you figure that out.”

Blockchain Promises to Make Markets Auditable and Accessible, Says Brian Behlendorf, Executive Director of Hyperledger by CDT

Blockchain Promises to Make Markets Auditable and Accessible, Says Brian Behlendorf, Executive Director of Hyperledger by CDT

Distrust between consumers and providers is at record levels, in industries as diverse as medicine, law and consumer goods, according to the Edelman Trust Barometer.

And digitization doesn’t automatically bolster trust, especially since digital technologies don’t necessarily lead to more ethical or trustworthy behavior.

“I discovered that as land titles in emerging markets were being digitized, it inadvertently made it easier for corrupt politicians to apply pressure and redirect land titles to someone else, like a prince or dignitary,” Brian Behlendorf, Executive Director of Hyperledger, said at the Road to Reinvention conference in March. “The realization that centralization is a real penalty was eye-opening.”

But at least one technology appears to have the potential to increase trust: blockchain.

Blockchain technology has the ability to make markets auditable and accessible, Behlendorf, said at the conference, which is hosted by the Center for Digital Transformation at the UCI Paul Merage School of Business. Blockchain grants transparency and confidence by distributing records so that they can be seen by all.

Behlendorf left his job at the Office of Science and Technology Policy under the Obama administration to join Hyperledger, an open source collaborative created to advance open source industry blockchain technologies.

At its core, Behlendorf said, blockchain technology functions as a distributed ledger, creating a service of record for transparency and efficiency.

Walmart is one example of a company that is utilizing blockchain under the Hyperledger. The company has asked all of its first tier suppliers to be a part of blockchain by the end of the year. This will allow products to be traced through the supply chain, so that if an E. coli outbreak occurs, all leafy greens don’t have to be discarded for the remainder of the year.

Centralization of data is common in technology industry companies, such as those in social media, Behlendorf said — and in many cases that’s fine. Not so for sensitive records like financial transactions.

“For bank records, it’s not acceptable to have a central party that owns all the data and could change it in imperceptible ways — that’s what this technology is designed to avoid,” Behlendorf said.

Distrust between consumers and providers is at record levels, in industries as diverse as medicine, law and consumer goods, according to the Edelman Trust Barometer. And digitization doesn’t automatically bolster trust, especially since digital technologies don’t necessarily lead to more ethical or trustworthy behavior. “I discovered that as land titles in emerging markets were being digitized, it inadvertently made it easier for corrupt politicians to apply pressure and redirect land titles to someone else, like a prince or dignitary,” Brian Behlendorf, Executive Director of Hyperledger, said at the Road to Reinvention conference in March. “The realization that centralization is a real penalty was eye-opening.” But at least one technology appears to have the potential to increase trust: blockchain. Blockchain technology has the ability to make markets auditable and accessible, Behlendorf, said at the conference, which is hosted by the Center for Digital Transformation at the UCI Paul Merage School of Business. Blockchain grants transparency and confidence by distributing records so that they can be seen by all. Behlendorf left his job at the Office of Science and Technology Policy under the Obama administration to join Hyperledger, an open source collaborative created to advance open source industry blockchain technologies. At its core, Behlendorf said, blockchain technology functions as a distributed ledger, creating a service of record for transparency and efficiency. Walmart is one example of a company that is utilizing blockchain under the Hyperledger. The company has asked all of its first tier suppliers to be a part of blockchain by the end of the year. This will allow products to be traced through the supply chain, so that if an E. coli outbreak occurs, all leafy greens don’t have to be discarded for the remainder of the year. Centralization of data is common in technology industry companies, such as those in social media, Behlendorf said — and in many cases that’s fine. Not so for sensitive records like financial transactions. “For bank records, it’s not acceptable to have a central party that owns all the data and could change it in imperceptible ways — that’s what this technology is designed to avoid,” Behlendorf said.

Machine Learning is Transforming the Healthcare Industry, Says Philip Nelson, Engineering Director at Google by CDT

Machine Learning is Transforming the Healthcare Industry, Says Philip Nelson, Engineering Director at Google by CDT

Today, 10 percent of the world has diabetes, and about a third of diabetics deal with diabetic retinopathy. It’s a slow-moving degenerative disease, and the fastest growing cause of blindness.

But new technologies offer hope for increasing diagnostic accuracy and potentially improving care, according to Philip Nelson, director of engineering at Google Accelerated Science. Nelson spoke at the Center for Digital Transformation’s Road to Reinvention Conference in March.

Technology is opening up new possibilities in healthcare, especially in the developing world. Greater medical expertise is becoming available to understaffed parts of the world, such as India and China. House visits, not from doctors, but from clinical workers with machines able to detect a medical crisis and send patients to the nearest clinic, are becoming a possibility.

Google has gathered enough images of the retina from patients at risk for retinopathy to feed those images into a neural network and train a machine to detect the red and orange spots that indicate the disease. In turn, this has allowed Google to improve diagnostic accuracy from 80 percent to more than 90 percent.

This development hinges on the study of the retina fundus –– the only place in the body where you can visualize vasculature and neurons, which provides a tremendous window into what’s going on in the body.

“Just by looking at your retina, we can also determine your cardiac risk, blood pressure, if you smoke, and even your born gender,” Nelson said. “Machines are quite accurate, and they’re helping us discover things that we never knew before.”

Of course, machine learning comes with its complications, too.

For instance, you could mount a camera over a billiard table, and the moment the cue hits a ball, you would be able to learn where the ball is going. But you wouldn’t be able to understand the physics behind it –– the laws of friction or the elasticity of bumpers.

In other words, machines are great at making observations, but not so great at communicating underlying mechanisms, and perhaps most important, determining how scientists and engineers can act on the data.

“Machines are gigantic correlation engines. Correlation doesn’t equal causation, but correlation is highly correlated with causation,” Nelson laughed. “So it’s an exciting time, but there are also ways to use machine learning in the wrong way.”

Today, 10 percent of the world has diabetes, and about a third of diabetics deal with diabetic retinopathy. It’s a slow-moving degenerative disease, and the fastest growing cause of blindness. But new technologies offer hope for increasing diagnostic accuracy and potentially improving care, according to Philip Nelson, director of engineering at Google Accelerated Science. Nelson spoke at the Center for Digital Transformation’s Road to Reinvention Conference in March. Technology is opening up new possibilities in healthcare, especially in the developing world. Greater medical expertise is becoming available to understaffed parts of the world, such as India and China. House visits, not from doctors, but from clinical workers with machines able to detect a medical crisis and send patients to the nearest clinic, are becoming a possibility. Google has gathered enough images of the retina from patients at risk for retinopathy to feed those images into a neural network and train a machine to detect the red and orange spots that indicate the disease. In turn, this has allowed Google to improve diagnostic accuracy from 80 percent to more than 90 percent. This development hinges on the study of the retina fundus –– the only place in the body where you can visualize vasculature and neurons, which provides a tremendous window into what’s going on in the body. “Just by looking at your retina, we can also determine your cardiac risk, blood pressure, if you smoke, and even your born gender,” Nelson said. “Machines are quite accurate, and they’re helping us discover things that we never knew before.” Of course, machine learning comes with its complications, too. For instance, you could mount a camera over a billiard table, and the moment the cue hits a ball, you would be able to learn where the ball is going. But you wouldn’t be able to understand the physics behind it –– the laws of friction or the elasticity of bumpers. In other words, machines are great at making observations, but not so great at communicating underlying mechanisms, and perhaps most important, determining how scientists and engineers can act on the data. “Machines are gigantic correlation engines. Correlation doesn’t equal causation, but correlation is highly correlated with causation,” Nelson laughed. “So it’s an exciting time, but there are also ways to use machine learning in the wrong way.”

Taco Bell is Just Getting Started in the Digital Space, Says Marisa Thalberg, Global Chief Brand Officer by CDT

Taco Bell is Just Getting Started in the Digital Space, Says Marisa Thalberg, Global Chief Brand Officer by CDT

A series of highly accomplished athletes, professionals and artists speak their dreams at the beginning of the Taco Bell commercial.

I dream of reaching my highest peak, says a mountain climber. I dream of expressing my inner most passion, says a ballerina. I dream of robotics that improve quality of life for humans, says a scientist.

I dream of getting my Taco Bell delivered, like, to my house, says actor and comedian Adam Devine.

At the end, the professionals are left to express profuse devotion to their craft. Meanwhile, Devine’s dreams are met with a happy ending. His phone dings, alerting him to a notification from GrubHub that reads: Your Taco Bell delivery has arrived.

We’re doing it guys, DeVine says triumphantly. Achieving our dreams!

The commercial helped inform consumers that Taco Bell’s parent company, Yum! Brands, had recently entered a strategic partnership with Grubhub to ensure a seamless delivery experience, Marisa Thalberg, Global Chief Brand Officer at Taco Bell, said at the Road to Reinvention conference in March. The conference is hosted by the Center for Digital Transformation at the UCI Paul Merage School of Business.

The quick service restaurant industry is just beginning to enter the digital landscape, Thalberg said.

“E-commerce solves convenience, access and speed, but those are already the fundamentals of Taco Bell and the fast food service industry,” Thalberg explained. “But e-commerce can make an impact by allowing customers to save preferences and customize their meal more easily.”

In fact, one of Thalberg’s earliest contributions to Taco Bell was defining a strategy and vision for the digital age. She came to the conclusion that Taco Bell needed to be more than a cravable, Mexican-style food brand. In order to survive, it needed to be a culture-centric brand, generating a lifestyle for its followers.

To that end, Taco Bell recently collaborated with Forever 21 to create clothing that represents the brand. In addition, the brand built a wedding venue at their Vegas location, where more than 160 weddings have since taken place.

Those actions offer insight into Taco Bell’s branding strategy. The company treats itself like a mass brand, honoring the fundamentals of affordability, convenience, speed, value and ubiquity, but shows up and behaves in a way that reflects a cult, indie brand.

“There’s a difference between having fun with something, having a twinkle, versus making a joke out of it,” Thalberg said. “For example, the Grubhub commercial is executed with the recognition that we believe our customers are smart, and they’re in on the joke with us.”

A series of highly accomplished athletes, professionals and artists speak their dreams at the beginning of the Taco Bell commercial. I dream of reaching my highest peak, says a mountain climber. I dream of expressing my inner most passion, says a ballerina. I dream of robotics that improve quality of life for humans, says a scientist. I dream of getting my Taco Bell delivered, like, to my house, says actor and comedian Adam Devine. At the end, the professionals are left to express profuse devotion to their craft. Meanwhile, Devine’s dreams are met with a happy ending. His phone dings, alerting him to a notification from GrubHub that reads: Your Taco Bell delivery has arrived. We’re doing it guys, DeVine says triumphantly. Achieving our dreams! The commercial helped inform consumers that Taco Bell’s parent company, Yum! Brands, had recently entered a strategic partnership with Grubhub to ensure a seamless delivery experience, Marisa Thalberg, Global Chief Brand Officer at Taco Bell, said at the Road to Reinvention conference in March. The conference is hosted by the Center for Digital Transformation at the UCI Paul Merage School of Business. The quick service restaurant industry is just beginning to enter the digital landscape, Thalberg said. “E-commerce solves convenience, access and speed, but those are already the fundamentals of Taco Bell and the fast food service industry,” Thalberg explained. “But e-commerce can make an impact by allowing customers to save preferences and customize their meal more easily.” In fact, one of Thalberg’s earliest contributions to Taco Bell was defining a strategy and vision for the digital age. She came to the conclusion that Taco Bell needed to be more than a cravable, Mexican-style food brand. In order to survive, it needed to be a culture-centric brand, generating a lifestyle for its followers. To that end, Taco Bell recently collaborated with Forever 21 to create clothing that represents the brand. In addition, the brand built a wedding venue at their Vegas location, where more than 160 weddings have since taken place. Those actions offer insight into Taco Bell’s branding strategy. The company treats itself like a mass brand, honoring the fundamentals of affordability, convenience, speed, value and ubiquity, but shows up and behaves in a way that reflects a cult, indie brand. “There’s a difference between having fun with something, having a twinkle, versus making a joke out of it,” Thalberg said. “For example, the Grubhub commercial is executed with the recognition that we believe our customers are smart, and they’re in on the joke with us.”