Goodbye digital transformation, hello AI-first business transformation

Perhaps we got digital transformation wrong this whole time. Instead of focusing on the transformation part, we did a lot less transforming and a lot more digitalization. Instead of seeing digital as a new paradigm for our business, we over-indexed on digitizing legacy models and processes and modernizing our existing organization.

As a result, most businesses remain saddled with complexity, department silos, and old ways of doing things. The rise of artificial intelligence is giving us all a second chance. We can choose to use AI to do the same things faster and better. Or we can make the right things more efficient while also charting a new path and harness this technology to truly transform into AI-first businesses.

Digitalization is not transformation

Remember when the digital revolution promised to transform businesses? The reality for most businesses was much less revolutionary. We did not really invest in digital transformation, instead we did digital reformation – when you reform, you modify, but you do not reinvent. This only fortified traditional models instead of breaking down the walls that separate people and work inside our organizations. And we gave each silo its own system of record to optimize how each group works, but also complicates any future for connecting the enterprise.

Added up, perhaps these are among the reasons that 51% of companies have not seen an increase in performance or profitability from digital investments, according to KPMG research. Gartner found that only 19% of boards reported making progress toward achieving digital transformation goals.

Consider the following business solutions in their early forms:

• Workday for HR
• Salesforce for sales
• Adobe or Hubspot for marketing
• SAP for ERP

These solutions reformed the way we thought about HR, supply chain, or CRM, but they did not transform the work itself. They were new products, interfaces, and architectures to do the same thing we always did. Data and workflows lived, and still live, disparately within each domain.

Instead of transforming our businesses in the same way, we gave them a lifeline. We didn’t challenge our own conventions. We didn’t change our perspective on how we think about our businesses and how we should work in a digital-first world. We just iterated on what we’ve done in the past.

Digital-first companies

 While most continued business as usual in a digital age, there were outliers. A new generation of digital-first companies emerged that reimagined operations, enterprise architecture, and work for what was becoming a digital-first world.

• Amazon reimagined commerce to become digital-first.
• Netflix reimagined entertainment to become digital-first.
• Twitch reimagined gaming.
• Uber reimagined transportation.
• Airbnb reimagined hospitality.
• Doordash reimagined delivery.

Most businesses used new technology to do what we did yesterday better, faster, cheaper, and bigger. On the other hand, digital-first companies gave us the same capabilities we had before but reimagined their business to provide services in a way that was better, more experiential, and culturally relevant.

Everything is changing…again!

In hindsight, what we did get right is that we recognized the importance of digital in improving how we work. We optimized. We scaled. We automated. We improved margins and profitability. But there’s more work to be done and we have a new opportunity for change in front of us.

The era of digital transformation is officially over. An entirely new era is upon us, the rise of an intelligence revolution. And it’s testing us all over again.

This time though, iteration isn’t enough. Legacy models and silos will only hold us back. AI is pushing for reinvention, innovation, and the exploration of the art of the possible. This time is about business transformation. It’s not just about adapting to an evolving future; it’s about creating something entirely new, but most of us haven’t paused long enough to ask if our current processes and models are right for what’s quickly shifting from a digital-first world to one that’s AI-First.

And as the great basketball coach John Wooden once said, “If you don’t take the time to do it right, when will you have time to do it over?”

The intelligence revolution

The problem with approaching AI like previous tech innovations is that AI isn’t “digital.” It’s something entirely different. Digital does not equate to intelligence, digital is technology without process improvement. AI is intelligent.

This means AI is ushering in an intelligence revolution, an age of innovation. At its core, AI asks us to challenge everything we know about how we structure, operate, and measure business success.

Start with how you think about work. Let’s revisit our current reality of powering each silo with its own system of record.

The thing about AI is that it’s 100% dependent on meaningful data to help you make decisions based on past activities and outcomes. In this new future of AI, can we really maximize data and insights using disconnected, siloed, dated data? No, of course not.

We have to connect the dots to assemble a foundation for the future of our organizations. Digital Transformation was the “how”, but AI gives us the “why.” It’s not just connecting silos and data, it’s also connecting work and people that produces meaningful output.

We need to challenge our fundamental assumptions about how we think about our business, how we work, and how we measure success.

Stop siloed thinking

Each business unit and function aims to optimize operational efficiency. When it comes to business transformation, though, there is no point in limiting AI benefits to silos. Investing in disparate intelligence efforts across the company means that each function may gain enhanced potential, but its impact remains constrained within that part of the enterprise.

Optimizing a CRM system in marketing, for example, does little good if the supply chain is not optimized to keep up with new demand signals. AI-driven efficiencies in customer service will not reach their full potential if they are not connected to sales insights or logistics capabilities.

Although companies are structured in silos, work does not stay in silos. Every process is interconnected, and intelligence must flow seamlessly between functions. For AI to thrive, data and decision-making must be integrated across the enterprise, unlocking insights that drive systemic efficiencies.

This requires more than just AI adoption—it demands a reimagination of how businesses operate. Instead of simply digitizing existing workflows, organizations must embrace operational innovation, rethinking processes, roles, and collaboration through an AI-first lens. By shifting from siloed intelligence to an intelligent enterprise, companies can break free from incremental improvements and unlock exponential transformation. AI doesn’t just optimize—it enables businesses to orchestrate intelligence across the value chain, unlocking new synergies, competitive advantages, and future-ready capabilities.

The question isn’t just how to deploy AI in specific functions; it’s how to design a connected enterprise where AI enables a new way of working—one that is faster, more adaptive, and capable of driving strategic impact at every level.

AI-first mindset

This level of business transformation requires a mindset shift. Think about how we think about work today. We describe work by personas and we think of each persona as a function within any given silo.

If you work in HR, you may work in Workday.

If you work in customer service, you work in any variety of support environments.

If you work in business services, the same is true.

If you work in finance, you’re working in SAP.

If you work in sales or marketing, I think you get the idea.

And if all these departments and silos work effectively, does it make your business better? Not necessarily. It makes those departments better. These systems inherently reinforce business, operational, and data silos. Business transformation though starts with connecting how work flows across those departments.

Say you work in HR. If you’re an HR leader, is your work limited to HR? No way. No matter your role, you can be multiple personas in any given scenario. You’re also an employee. You have your own employment needs. You need occasional support from IT. You sit on cross-functional workstreams. Maybe you have ideas about how to improve your work and realize that AI can help you create new no-code solutions to save time and effort in how you work. The same is true if you’re in marketing, finance, product, sales, or business services.

The point is that today, you jump across siloed workflows because they weren’t designed to connect you across the enterprise. To transform your business, you need to think about the pipes that connect those silos.

Work itself can be reimagined and connected to bring the enterprise together. Data, people, insights, and innovation also get connected and activated like never before.

In an era of AI-first transformation, we can no longer just focus on improving existing models. We need to reimagine those models, processes, and workflows. We need to think AI-first.

AI-first business transformation leads to an augmented enterprise

When we truly transform, everything becomes connected. And when everything is connected, people and data come together, AI comes to life, and supercharges not only how we work, but also unlocks work we couldn’t do before. For the first time ever, we understand not how work is done, but now, with intelligence, and an always improving approach to how work can be done. That’s what makes this such an extraordinary moment.

We connect our work. We automate our work. And we now augment our work toward entirely new possibilities and output.

Just like in the digital-first era, AI-first companies are starting to take shape.

These companies have the chance in the coming months, weeks, or maybe even days, to become the AI-first equivalent of Amazon, Netflix, Uber, and Airbnb of our time.

This is a time to reimagine work for an AI-first world. To do that, we need a system of record for our entire organization, an intelligent platform that connects, optimizes, and augments how we work and how work gets done. But it’s more than an enterprise-wide system of record, it’s an enterprise-wide system of intelligence.

Imagine integrated functional and cross-functional workflows, people, and roles. AI serving as individual guides, contributors, and collaborators. Eventually, we’ll see Large Language Models that evolve into Large Action Models, creating a connected system of insights and action. AI doesn’t just help us automate our work, it augments our capabilities to do what we couldn’t do before. And as AI becomes more pronounced within the organization, AI agents will accelerate connecting disparate work across the enterprise. Eventually agents will learn how to take action on our behalf, making business transformation augmented, agentic, and exponential, something we’ve never seen before.

New levels of performance, output, and effectiveness break the linear progress of the past, enabling growth at orders of magnitude we never imagined. We create the exponential enterprise all made possible by a connected, intelligent platform…the new OS of AI-first companies. For the first time, we have the potential not just to produce an Enterprise Operating System, we have the chance to create an intelligent Enterprise Operating System.

A new era of intelligent, exponential transformation

In an era of AI, we shift from digital transformation to AI-first business transformation. AI becomes an empowered reality where augmented intelligence is core to operations. AI agents will only continue to introduce new opportunities for AI to learn, optimize, and augment our work, capability, and potential. And it will exponentially compound year after year. Imagine where you can be just three years from now.

In partnership with AI, you get to shape what integrated, augmented organizations look like. Wherever there’s curiosity, exploration follows. And once we venture out into new frontiers, innovation and transformation become inevitable destinations. As Open AI CEO Sam Altman recently observed, “This is the most interesting year in human history, except for all future years.” The next decade is going to be the most productive in human history. What an incredible time to not only witness but also shape what is to come.