Flevy Management Insights Q&A

What emerging technologies should boards be aware of to stay ahead in digital transformation efforts?

     David Tang    |    Board of Directors


This article provides a detailed response to: What emerging technologies should boards be aware of to stay ahead in digital transformation efforts? For a comprehensive understanding of Board of Directors, we also include relevant case studies for further reading and links to Board of Directors best practice resources.

TLDR Boards must stay informed about AI and ML, Blockchain, and IoT to guide Strategic Planning, Risk Management, and Innovation, ensuring sustainable growth and Operational Excellence in the digital era.

Reading time: 5 minutes

Before we begin, let's review some important management concepts, as they relate to this question.

What does Digital Transformation mean?
What does Artificial Intelligence mean?
What does Blockchain Technology mean?
What does Internet of Things mean?


In the rapidly evolving landscape of digital transformation, boards must stay informed about emerging technologies that can significantly impact their organization's strategic direction, operational efficiencies, and competitive edge. Understanding these technologies is not just about keeping pace with advancements but about leveraging them to redefine markets, create new business models, and drive unprecedented value.

Artificial Intelligence and Machine Learning

Artificial Intelligence (AI) and Machine Learning (ML) are at the forefront of digital transformation, offering capabilities that range from predictive analytics to automated decision-making. According to Gartner, AI augmentation will create $2.9 trillion of business value and 6.2 billion hours of worker productivity globally. Organizations are leveraging AI to enhance customer experiences, optimize supply chains, and create smarter products. For example, in the retail sector, AI is used for personalized shopping experiences, predicting trends, and managing inventory more efficiently.

Boards should consider how AI can be integrated into their strategic planning to drive innovation and efficiency. This might involve investments in AI technologies, partnerships with AI-focused startups, or the development of in-house AI capabilities. Additionally, understanding the ethical implications and regulatory considerations of AI is crucial for boards to navigate potential risks and ensure responsible use of the technology.

Real-world examples of AI and ML adoption include healthcare organizations using AI for diagnostic assistance and personalized treatment plans, and financial services firms utilizing ML for fraud detection and risk management. These examples highlight the transformative potential of AI across industries, underscoring the importance for boards to actively engage in discussions around AI strategy and implementation.

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Blockchain Technology

Blockchain technology, best known for its role in cryptocurrencies, offers far more in terms of operational transparency, security, and efficiency. It provides a decentralized ledger that can revolutionize supply chain management, contract execution, and secure transactions. According to Deloitte's 2020 Global Blockchain Survey, 55% of respondents stated that blockchain is critical and in their top-five strategic priorities. This underscores the growing recognition of blockchain's potential beyond its initial financial applications to broader business impacts.

For boards, understanding blockchain's implications for their organization involves recognizing its potential to streamline operations, reduce fraud, and enhance customer trust. Boards should consider how blockchain can be applied within their industry context, whether in tracking the provenance of goods in the supply chain, enabling smart contracts, or securing sensitive data. Furthermore, exploring blockchain requires a careful assessment of the technology's maturity, regulatory environment, and integration with existing systems.

Real-world applications of blockchain technology include its use in the pharmaceutical industry to track and verify the authenticity of drugs, thereby combating counterfeiting. In the food industry, companies like Walmart have implemented blockchain to trace the origin of food products, significantly improving food safety and supply chain transparency. These examples demonstrate blockchain's potential to add value in various sectors, making it a critical area for board-level consideration.

Internet of Things (IoT)

The Internet of Things (IoT) connects physical devices to the internet, collecting and sharing data to improve efficiency, enhance safety, and create new business models. Gartner predicts that the enterprise and automotive sectors will account for 5.8 billion IoT endpoints in 2020, a 21% increase from 2019. This rapid growth highlights the expanding role of IoT in transforming business operations and customer experiences. Organizations are using IoT to monitor equipment, optimize logistics, improve workplace safety, and personalize customer interactions.

Boards should evaluate the opportunities IoT presents for creating value and achieving Operational Excellence. This involves not only understanding the technology itself but also considering the data strategy and cybersecurity implications of deploying IoT solutions. Strategic investments in IoT can enable organizations to gain insights into operations, customer behavior, and market trends, driving informed decision-making and innovation.

Examples of IoT in action include smart factories using IoT sensors to monitor and optimize manufacturing processes, reducing downtime and improving productivity. In the consumer sector, smart home devices offer users convenience and energy efficiency, while providing companies with valuable data on user preferences and behavior. These examples illustrate the diverse applications of IoT and the importance of board-level engagement in shaping an organization's IoT strategy.

Understanding these emerging technologies and their potential impact on the organization is crucial for boards to guide strategic planning, risk management, and innovation efforts effectively. By staying informed and proactive, boards can ensure their organizations not only navigate the challenges of digital transformation but also seize the opportunities it presents to create sustainable competitive advantages.

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Related Questions

Here are our additional questions you may be interested in.

How can Corporate Boards more effectively integrate ESG (Environmental, Social, and Governance) criteria into their strategic decision-making processes?
Corporate Boards can more effectively integrate ESG criteria into strategic decision-making by embedding ESG in Strategic Planning, conducting ESG Risk Assessments, engaging stakeholders, and aligning ESG with overall strategic goals to enhance long-term success and sustainability. [Read full explanation]
In what ways can Corporate Boards foster a culture of innovation and agility in rapidly changing industries?
Corporate Boards can promote innovation and agility by focusing on Strategic Planning, Digital Transformation, Operational Excellence, and cultivating Leadership and a culture of continuous learning, essential for navigating rapidly changing industries. [Read full explanation]
How can boards effectively measure and improve their impact on company performance?
Boards can improve their impact on company performance by establishing clear metrics, committing to Continuous Improvement and education, and aligning activities with the organization's Strategic Goals. [Read full explanation]
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Boards can leverage Data Analytics for Strategic Planning and Decision-Making by gaining insights into market trends, customer behavior, Operational Efficiency, and Risk Management, thereby driving growth and profitability. [Read full explanation]
What are the key considerations for boards when evaluating potential M&A opportunities to ensure alignment with long-term strategic goals?
Boards must meticulously evaluate Strategic Alignment, conduct Financial Analysis, and manage Cultural Integration and Change Management to increase M&A success likelihood. [Read full explanation]
In what ways can boards foster a culture of innovation within the organization?
Boards can foster a culture of innovation by ensuring Strategic Alignment, advocating for Structural and Process Innovations, and cultivating an Innovative Culture and Mindset, thereby driving sustainable growth and competitive advantage. [Read full explanation]

 
David Tang, New York

Strategy & Operations, Digital Transformation, Management Consulting

This Q&A article was reviewed by David Tang. David is the CEO and Founder of Flevy. Prior to Flevy, David worked as a management consultant for 8 years, where he served clients in North America, EMEA, and APAC. He graduated from Cornell with a BS in Electrical Engineering and MEng in Management.

To cite this article, please use:

Source: "What emerging technologies should boards be aware of to stay ahead in digital transformation efforts?," Flevy Management Insights, David Tang, 2025




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