From digital transformation to GDPR, we simplify popular business buzzwords for 2018.
Should you be afraid of big or dark data? How do you connect to the Internet of Things (IoT)? How painful is it to undergo a digital transformation? And how close is artificial intelligence (AI) to overthrowing the human race?
Technology is constantly changing and so too are the words the industry uses to try and explain it all. At times, it can seem like you’ve stumbled into a conversation where everybody else seems to know what they’re talking about.
Sometimes a short explanation is all you need to get your head around a new concept…
Artificial Intelligence (AI)
Very few subjects within the tech industry cause as much excitement as artificial intelligence, yet it’s also the topic that is the most misunderstood, with general assumptions being that it’s designed to replace all jobs and eventually take over the human race. While it’s certainly true that AI systems can typically demonstrate some of the behaviours associated with human intelligence, (language, knowledge and learning), it’s actually a technology that provides great opportunities rather than a cause for concern.
At its highest level, AI can be split into two broad types: narrow AI and general AI. As yet, there doesn’t appear to be one single agreed-upon definition of general AI, but in essence, it’s “what people do”.
Narrow AI uses logic-driven processes that replicate human actions, typically sifting through massive amounts of information and accurately extracting what is needed. Essentially, narrow AI is what many of us use in computers today; virtual assistant (VA) systems that have been taught how to carry out specific tasks such as Apple’s Siri and Amazon’s Alexa. The benefit of a VA is that you can get a lot of the work done that you might previously have needed a live person for, so you can reduce costs in the payroll and also use the energy of a human employees more efficiently.
Artificial Intelligence in simple terms: computers performing tasks that normally require human intelligence.
Internet of Things (IoT)
The term “Internet of Things” encompasses any device that can be connected to the internet, however it’s also increasingly being used to define devices that “talk” to each other. The most common example of this, in the UK at least, is home heating and energy use. But now also extends to lighting, heating, media and security systems.
But the IoT is much more than connected appliances and smarter homes. It scales up to include smart cities – – and industries, with connected sensors for everything from monitoring crops on our field to tracking empty wheelchairs in hospitals.
Internet of Things in simple terms: a network of devices, appliance and other items connected to the internet and able to exchange data.
First invented in 2008 to power cryptocurrency Bitcoin, Blockchain is a restricted database that operates as a digital ledger of transactions. Just as regular businesses keep records of the monies coming in and going out, users of cryptocurrencies also need to record all of their own transactions.
The key difference is that blockchain is a decentralised, open-access ledger that has records which are permanent and verifiable by the network of users meaning that everyone can view past transactions.
One of the smartest things about blockchain technology is that it comes with trust built-in. If cryptocurrencies come into common usage, then a supermarket, for example, doesn’t need to ask the like of Visa to check the transaction; the money is sent directly to the supermarket, just like with cash, ensuring a transfer can only happen if there is money in the account.
Blockchain in simple terms: a continuously growing list of records or ‘blocks’ that are linked and secured by cryptography coding.
The General Data Protection Regulation (GDPR) is the result of four years’ work by the EU in an attempt to bring data protection legislation into line with new, previously unforeseen ways that data is now used.
Its inception date is set for May 25, 2018, thus replacing the UK’s current 1998 Data Protection Act. The main intent of the GDPR is to give individuals more control over their personal data; impose stricter rules on the companies that handle it and make sure effectively and safely process the influx of data that is being produced.
GDPR’s biggest stipulations surround tougher penalties for non-compliance. Fines of up to 4% of annual revenue or 20 million euros (whichever is greater) and for smaller businesses this could mean the difference between make or break.
GDPR in simple terms: a regulation by which European Parliament intends to unite and strengthen data protection for EU residents.
The Markets in Financial Instruments Directive (MiFID II) was actually implemented on January 3 this year and affects businesses operating within the financial services sector.
Building on the foundation of the original MiFID regulation which was introduced in 2004, MiFID II is designed to take account of changes that have occurred within the trading environment since. It also aims to improve the functioning of financial markets by making them more efficient, more resilient and more transparent in the aftermath of the 2009 global financial crisis.
MiFID II’s biggest change surrounds the requirement for the recording of all telephone calls and SMS messages between advisors and clients. This means that businesses within the financial sector were required to more competently manage risk, regulation and compliance changes through the investment in call recording technologies.
MiFID II in simple terms: a regulatory reform in for financial markets in the EU which came into effect January 2, 2018.
Big Data and Dark Data
You’d be forgiven for thinking that these were two names for the same thing given their rather imposing adjectives. But there is a difference. You can think of “Big Data” as a relatively new term for a relatively old thing; the act of gathering and storing larger amounts of information for its eventual analysis.
Big data is essentially sets of data that are so large that traditional methods of data processing are inadequate to deal with them. The challenges posed by big data include capturing, storing analysing, sharing, transferring, querying, updating and keeping it private.
Dark data, on the other hand, is any digital information that isn’t being used; assets that a business or organisation collects, processes and stores but then ultimately fails to use it for any specific purpose. Often, the data is left alone for practical reasons; the data might be dirty and by the time it can be scrubbed, may be too old to use. In such cases, records may contain incomplete or outdated data or simply be stored in formats that have become incompatible or obsolete.
Big data in simple terms: Substantial and complex data sets that traditional processing softwares are inadequate to process them.
Dark data in simple terms: any data that is acquired but not used in any way to derive insights or for any decision making.
A lot simpler than it sounds, digital transformation is essentially a game of two halves. The first half concerns the embracing of technological innovations to the advantage of your business. Digital natives like Airbnb and Uber are the perfect example, managing to successfully disrupt their respective industries by meeting customer needs in new ways by taking advantage of the technologies available such as the cloud.
This doesn’t mean you have to abandon your core strengths and structure; businesses with a long heritage have enduring qualities that won’t just disappear in the digital age. But that’s not to say you should rest on your laurels. Vision and planning are both critical requirements for delivering transformation so work out what you do well and find a way to do it that will serve you long into the future.
And whilst digitally transforming your business does involve the investing in new disruptive technologies, it’s also a process of introducing new ways of working. A digital strategy is only as good as the business attempting to execute it, so strong leadership and buy-in from employees from every level are essential in making it a success.
Digital transformation in simple terms: any change that is associated with the introduction of digital technology.