It is in Norwegian, It will be posted in English later.
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In May we received the answers from our survey towards CEO’s, Board Members and Chairs in Norway. What does CEO’s need from their Board under the markets demand for changed business models?
The survey shows that there exist a gap between the competence in the Board room and the support requested.
CEO’s express that they need competence and support from the Board to set strategic direction – but does not get it. CEO’s miss sparring in industry expertise, as the possibilities within digitalization and artificial intelligence.
The Boards sees the situation differently and needs the CEO’s to be clearer.
The survey shows an undisputable correlation between the CEO’s that perceive their Board as relevant sparring partners and their focus on the key parameters that creates values. A value creating Board is in the interest of the owners.
Attached a small taster of the survey in Norwegian, for your light conversations during summer.
Wish you all a nice summer!
Artificial intelligence change business models. Most Boards have set digital road maps. But do Boards use enough time on where the company should be in 3-5 years, and who might be their biggest competitors?
The potential for increased margins is substantial as a consequence of automation, digitalization and robotics. But the most important factor for change is not digitizing the existing business – but customer demands accelerated by the fast growing a) all things get’s connected to internet, and b) the development of artificial intelligence.
In 5 years it is expected that artificial intelligence will lay on top of every business process. At that time it will become clear that “the lucky early movers” were not just lucky, they were more strategic. Artificial intelligence enables new and better business and enables change in the way we work with customers, employees and vendors.
Two futuristic examples within “smart cities”:
Example 1 – Building and health sector
Hospital buildings will be delivered with roof top solar panels and a flexible and dynamic connection to – and exchange between – the best suitable energy source measured in real time (water, sun, wind, wave, nuclear, nano, oil, gas). Innovative battery storage secure environmentally friendly load balancing of excess energy at the right time during the day and night. The building is delivered with data infrastructure that meets the usage planned for the building. This includes data storage locally, centrally and in the cloud, wireless communication and intelligent sensors. The specifications (API’s etc.) for the building enables vendors of patient solutions and equipment to easily deliver public tenders on the contrary as of today.
The data gets aggregated according to the GDPR regulation and the system get’s authorized to deliver data on standards that makes it easy for 3rd party vendors to deliver solutions for artificial intelligence. The goal for the learning algorithms of artificial intelligence could be: more accurate patient treatment, preventive treatment of risk groups, predictability of hospital competence and capacity, asset/equipment management and energy efficiency – as some examples.
Example 2 – Transportation industry in smart city’s including value added services
The car/transportation industry has become software, sensors and internet of things, the-intelligent-vehicle. Let’s imagine a scenario were the transportation sector apply for, or source, 5G mobile licenses to handle the smart city’s requirements to need based transportation. The algorithms will collect from sensors and other sources making predictive, consumption and experience based analysis as detailed sales volumes and cargo needs in shops, weather and road conditions. The only transportation allowed in urban areas is demand based public transportation, cargo and waste handling. In 1-2 year time the data collected and the adaption to intelligent sensors, solutions for authentication, biometric sensors and 2-ways communication is sufficient to deliver insurance and security solutions.
The transport industry moves towards electrification,
with considerable requirements to grid capacity, energy balancing and battery
storage, disruptive-vehicle-will-drive-innovation-in-electricity-grids. Requirements to data processing, storage, security
and artificial intelligence is considerable.
For some this might seem a bit distant, but many of the solutions are already in place. For the transportation industry, car industry, building, bank, retail, insurance and telecom/IT they will have no choice than to take active decision towards their strategy for the future.
The decisions will require the right competence on Board that understands the future business models, the ownership of information and artificial intelligence.
Artificial Intelligence will change the way companies are doing business. AI will change the operational models, the traditional business models enabling cross border data ownership, the landscape of risk and opportunities, and the requirements to culture and people.
AI might be an enabler for tremendous impact for innovation within “good”, enabling it in a financial sustainable way.
What is a value creating Board in times of change – delivering business value.
In a series of 5-7 I will outline what AI must be for Boards and how it must change how Boards are governed.
MIT gave beginning of this year a briefing of a coming white paper by
Peter Weill, Stephanie L. Woerner, Tom Apel, and Jennifer S. Banner that shows that companies with a digitally savvy Board perform better.
One of the most important issues company boards of directors face today is the role of digital technology as both an opportunity and a threat to the future success of the company. The board best equipped to meet these challenges has digital savvy, defined as an understanding, tested by experience, of how digital technologies such as social, mobile, analytics, cloud, and the Internet of Things will impact how companies will succeed in the next decade.
In research done over the last five years, MIT found that only 24% of the boards of companies that were listed in the US with over $1 billion in revenues were digitally savvy, and that companies with savvy boards outperformed the others in the research on key metrics including ROA, revenue growth, and market cap growth.
At the same time in Davos PwC presented their CEO Survey 2019 that outline that 85 % of CEO’s agree AI will significantly change the way they do business in the next 5 years. 63 % believe AI will have larger impact than the internet revolution. (How does IoT fit into this?). Yet, 25 % have NO plan to pursue AI, 35 % have plans in next 3 years, 33 % use AI in limited ways and less than 10 % have implemented AI on a wider scale.
AI will lay on top of each digital business model in the next 3-5 years, enabling huge business opportunities cross industries and dramatic risks. Board of Directors needs to adapt to the future model of governance to stay relevant and act as needed support to the CEO’s.
I wish I did go to #CES in Vegas as originally planned. I get amazed about opportunities, risks, financial outcome and global challenges that lies within the internet of things #IoT and all parts of that value chain, the revolutionary innovation that face us, and the impact of strategy for companies and #Boards.
It all starts with infrastructure and wireless technologies, with 5G mobile communication as one of the innovations. The quantum leap from 4G; the vast capacity, high throughput, energy efficiency and low latency. The latest generation of wireless technology is about more than phones (which are “out”). The machine-to-machine impact of 5G as part of the huge growth of internet of things generates huge business opportunities cross sectors.
Ericsson (mobile equipment giant) predicts there will be 19.8 billion IoT devices in existence in 2023, up from just seven billion in 2017. Of those 19.8 billion devices, 15.7 billion are expected to consist of “short-range” products that connect via Bluetooth, Wi-Fi and other short-distance radio technologies to obtain web connectivity — everything from game consoles and Bluetooth headsets to smart speakers and industrial Wi-Fi devices — up from 6.2 billion. And 4.1 billion are expected to consist of “wide-area” products that connect via 4G/5G modems or other long-range radio technologies.
The development of numbers of industry devices coupled to internet #IoT gives huge business opportunities within the chipmaking industry. The industry players have during the years bumped up or down. AMD had a gain of nearly 80 %, Nvidia nearly 50 % off last 3 months mostly due to cryptocurrency collapse. The industry is packed with radio technologies, gaming, crypto as well as AI.
Qualcomm got more than 30 design wins for their processor combined with a 5G modem. The graphical chipmakers battle for beat (and need to disrupt themselves every year going forward). Development of strong #AI puts great pressure on innovation and many of the players go for the #autonomous car industry.
This combined with the political battle between US and China increases the stress factor. Huawei keeps a low profile, given the trade tension between us US/China and controvercy over security. The Nordics backs out, telling that the future of telecom operators will be challenging in the world of #IoT #AI #cybersecurity.