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The Impact of Technology on Business

Many companies are struggling to understand how to use business technology in the best possible way. Although big data and artificial intelligence have disrupted many industries, it is crucial to find the right balance between progress and regulation.

When was the last time you were personally annoyed by an algorithm?

I guess everybody gets worried when they are looking for something to buy on the internet, and seconds later an ad for the same product pops up on another website. What really worries me is that the internet companies seem to know almost everything about me. I ask myself, what is my privacy worth?

This shouldn’t be a surprise for you as a CTO, right?

Of course not. I fully respect that online services you can use for free come at a price—your personal data. Yet, the boundary of where my privacy starts and where it ends has become very blurred. There should be the possibility to decide which actions online should be private and which should be open to marketing professionals.

Malt Strategy also uses algorithms to match companies with consultants. Where is the benefit and how do you protect this data?

Yes, and all users—companies as well as consultants—have consented to us using this data. We take a machine learning approach, using historical information to match the right consultant with a project quickly and at a very high success rate. Working with more and more advisors, we will scale that process, including skills and personality patterns. In the end, it will still be people who will have to work together. Business technology is just the enabler for the best possible collaboration.

Consultants will not become redundant any time soon.

Forecasts predict that 40% to 70% of all current professions will disappear as a result of digitization. When will consultants become redundant through technology?

I don’t think this is going to happen any time soon. I remember predictions for 50 billion interconnected and autonomous devices by 2020 in machine to machine communication several years ago. That will not happen. And we are still waiting for driverless cars. The devil is always in the detail. Furthermore, ethical questions have been ignored in these projections. Let me answer your question: consultants bring so much experience, personality and inpidual trust to the table, you can’t just replace that with artificial intelligence and business technology.

In your experience, do companies have realistic ideas as to when and in which area they want to use business technology and what concrete measurable benefits they expect from it? 

There are certain proven areas where business technology can add value for a company. I see a different aspect in the whole process of integrating technology into a business model. Companies should try to power their core business strategy and product with software developed in-house as part of their intellectual property but opt for off-the-shelf software or SaaS to automate operational activities. Often mistakes are made in this all-important decision on “build or buy” with regards to software.

How can companies ensure that they are not investing in the wrong areas?

First, this problem is not caused by the existence of technology. It’s all about company culture. You need to be agile on all levels of your organization. The same is true for strategic decisions. The way you make your decision, the way you experiment in quick iterations, in-house or with products off-the-shelf–the whole process needs to be agile. Accepting experiments gives you quick feedback, you learn, set up the next experiment, you even may have to change the methodology. The difference with technology is that decisions should be made quickly. If your competitor is faster than you, you will be left behind.

Malt Strategy operates in various countries. What degree of digitization do German companies have compared to other countries? Who is ahead of others, who is catching up, who is falling back? And for what reasons?

Here is an example based on my personal experience. When I moved from Turkey to Germany four and a half years ago, I was very surprised how far behind digital banking in Germany was compared to Turkey. I was shocked that the process of lending money was so difficult in Germany, everything had to be done offline and the process took at least two weeks. In Turkey, you could receive a loan by simply sending a text message to your bank, and minutes later, the money was in your account. The risk management process was performed in milliseconds. In the meantime, a lot has happened in Germany as competitors have entered the market. Now, digital consumer loan products are available here as well, but even that process still isn’t as fast as it was in Turkey when I left. So, there is still much work to do.

Let’s look at the future: where does the economy stand on a scale of 1-100 for digitization?

I personally see Germany at 45 when it comes to the use of business technology. Many companies started quite late and proceeded slowly. Nowadays, companies are catching up. They are being supported by strong investments, either by using their own capital or by collaborating with the venture capital market which also invests in the start-up area. Fortunately, the start-up scene has become a vital and lively part of the German economy, driving innovation and keeping traditional corporations on their toes.

When do you think we will see technology take the next major step forward?

Although not the fastest, I think Germany is doing it right now. Introducing new technology in the business world also requires social and ethical responsibility. We may not be as progressive as the companies in Silicon Valley. They are fast, but in the name of progress, some rules were broken. This may have also caused a lot of damage. Technological advancement and regulation should be well balanced, and it seems that Germany is doing a good job. As I said before: the devil is always in the detail.