As we noted at the beginning of this series on the AI bank of the future, disruptive AI technologies can dramatically improve banks' performance in four key areas: higher profits, at-scale personalization, smart omnichannel experiences, and rapid innovation cycles. The stakes could not be higher, and success requires a holistic transformation spanning all layers of the organization's capability stack. Our previous articles have focused on the capability stack's technology layers: reimagined engagement, 1 1. Leveraging these capabilities to create value requires an operating model combining structure, talent, culture, and ways of working to synchronize all layers of the stack. Synchronizing these layers is not easy. Any organization undertaking an AI-bank transformation must determine how to structure the organization so that its people interact and leverage tools and capabilities to deliver value for each customer at scale. In this article, we take a closer look at the need for a platform operating model, the categories and scope of operating models, and the building blocks of effective models.

What story will people tell about your organization over the next ten years? Will they celebrate an enthusiastic innovator that thrived by adapting workforce skills and ways of working to the demands of the new economy? Or will they blame poor financial or operational results, unhappy employees, and community disruption on a short-sighted or delayed talent strategy? Our modeling shows that by 2030, up to 30 to 40 percent of all workers in developed countries may need to move into new occupations or at least upgrade their skill sets significantly. Research further suggests that skilled workers in short supply will become even scarcer. Some major organizations are already out front on this issue. Amazon recently pledged $700 million to retrain 100,000 employees for higher-skilled jobs in technology (for example, training warehouse employees to become basic data analysts).

Digital transformation is not new, and most companies have been on a digital journey since the 1990s. The digital transformation came in many forms -- Web, Web 2.0, SaaS, cloud, mobile, business intelligence, and big data for starters. Digital touches every operational aspect of a business in a similar way that the CFO role does. Eating this new digital elephant is a massive undertaking for any business. In the next two years, the CFO may well be the driver of this evolution of digital -- analytics, automation, and artificial intelligence (AI).

Every organization seeks to build its digital wherewithal, but the challenges often boil down to where, with what. For even the most digitally-savvy enterprises (or maybe because they're so digitally advanced), it comes down to finding or developing people with the right skills to move things forward. An innovation culture can be very attractive.Photo: Joe McKendrick If anything, lack of skills is now the single greatest impediment to digital efforts, a recent study by Constellation Research of 81 organizations concludes. The study, co-authored by Courtney Sato and R. "Ray" Wang, identified digital transformation as focused on two technology initiatives: artificial intelligence and the Internet of Things. AI investment surged in 2018, with 58 percent of respondents reporting they'll spend money on the technology -- up from 25 percent in the previous years survey.

While manufacturers have traditionally been hesitant to invest in their operations due to cost, a recent National Association of Manufacturers (NAM) survey of more than 500 manufacturers reveals that 65 percent plan to increase capital spending during the coming years. Where is the money going to go? Experts predict most manufacturers will look toward revamping their facilities to adapt to the demands of today's digital world. This adjustment, which many call the "fourth industrial revolution" or smart manufacturing, will move manufacturers from mass production to customized production via a digital supply network. The digital transformation, a melding of new technologies such as the internet of things (IoT), advanced robotics, artificial intelligence (AI), and 3D printing, is expected to generate more than $370 billion in net global value during the next four years. While digitization is helping to get more out of manufacturers' materials and machines, what are the driving forces behind transformation?

Transformation may be the most frequently used word or concept in the entire insurance business today. It is commonly viewed as a program of significant changes to a business that is enabled by new technologies like analytics, robotics and the cloud. Typically, these tools replace or extend legacy systems with the goal of making operations more digitally enabled, agile and cost effective. The powerful technologies get all the hype, but their role is often overestimated. In fact, human and organizational factors are usually the most important in successful transformations, because without the right talent, culture and mindset, as well as the right operating model, transformation simply won't happen.

Many executives in all branches of insurance underestimate the disruption that will occur -- and the new talent that is needed. The disruptive power of digital technologies has spread more slowly across the insurance industry than other financial services. This will not last much longer, and many insurance executives risk being caught by surprise by the drastic changes these advanced technologies will inspire. What kind of change is coming? In life insurance, a U.S. company says it can help companies accept or reject new policies by analyzing selfies to determine an applicant's health. In other examples, advanced analytics can help fine-tune prices and segment customers more accurately; machine learning can present precise cross-selling opportunities; and digital interfaces can support single-event policies and purchases without any interaction with human agents. Indeed, the first waves of disruption have already hit automotive insurance, where claims are being processed using smartphone apps and where online aggregators are leading buyers to the lowest-priced offers from a range of companies.

Digital technologies are changing the world of work – the internet of things, artificial intelligence, cloud storage, cloud computing, cognitive computing, and robotics are creating new business needs, opportunities, and challenges never before imagined. Such developments are disrupting the enterprise world and transforming employee experiences. The growing reliance upon'everything digital' has placed massive demands on training and development, with companies competing to get the best digital talent. Lack of education and skills in key technologies is holding back companies that need to grow, and change. A new research study, the Digital Disruption Index by Deloitte, shows three-quarters of UK executives say they face challenges in recruiting the right digital skills. Only two in ten leaders think there are enough school leavers and graduates with the appropriate digital skills.