McKinsey's 'Rewired' and Mengniu's Digital Transformation Journey
McKinsey’s “Rewired” and Reflections on Mengniu’s Digital Transformation
IoT ANALYTICS’ report on generative AI divides the generative AI enterprise market into three major areas: accelerated computing power market, foundation models and generative AI platforms, and generative AI consulting and implementation services. Most attention in social circles is on the first two areas, while the enterprise generative AI consulting and services market seems to be less mentioned. The report points out that this market achieved $3.2 billion in revenue in 2023. This week I was touched by Mengniu’s story of generative AI-based digital transformation 3.0, combined with reading McKinsey’s practical guide to the generative AI era, “Rewired: The McKinsey Guide to Global Corporate Digitalization,” published in May 2023.
McKinsey’s Perspective
McKinsey’s digital business accounts for half of the company’s total volume. Looking at client workload, it represents about a quarter of McKinsey’s total staff. Within McKinsey’s digital business, they focus on three directions: helping clients build new digital businesses, upgrading core technology, and driving enterprise digital transformation through AI.
What’s unique about generative AI? Previous AI technologies often followed a “one model for one purpose” approach. For example, to reduce customer churn, a specific model was needed; to improve the supply chain, another type of model was required; to predict market demand, yet another specific model was needed. The highlight of generative AI is that it’s a general foundation model that, with simple fine-tuning, can be applied across multiple scenarios, even by non-technical personnel. Although implementation isn’t as simple as it sounds, foundation models are like the “Swiss Army knife” of AI, easily handling different task scenarios and even mixed multimodal scenarios.
How will business analysts like McKinsey be affected in the generative AI era? Analysts are typically excellent communicators with broad domain knowledge and skills, capable of performing good analysis and often working late into the night. Now, with large model tools on mobile phones, this work can be completed in seconds. Indeed, some skills like good document communication ability may become commoditized, but value will be seen in at least three areas:
- True creation - large models are essentially probabilistic models and don’t possess true creativity
- Leadership - those who truly build and lead teams, set goals, motivate and coordinate teams
- Technical skills - this sounds somewhat contradictory, as models themselves are very easy to use, but they will increase demand for data engineering and certain technical skills
Practical Guide - Generative AI Transformation Handbook
“Rewired” hit the pulse of the generative AI era, reaching #3 on The Wall Street Journal bestseller list. McKinsey consultants observed an interesting phenomenon when examining enterprise AI transformation: when the book began writing, 91% of companies said they had ventured into AI, yet only 25% to 30% of companies actually achieved their profit targets - 25% in cost control and 30% in revenue meeting expectations.
Mengniu’s Digital Transformation Journey
Mengniu’s digital transformation 3.0 journey is particularly impressive. They’ve successfully integrated AI throughout their business operations, from supply chain optimization to customer engagement. Their approach demonstrates how generative AI can be applied across an entire enterprise ecosystem.