There is no denying it: Generative AI (Gen AI) is everywhere. Every boardroom is buzzing about speeding up innovation with new tech. Yet amid this excitement, a crucial point is often overlooked: Are we truly transforming our digital core, or simply modernizing it?
Let us break it down.
Modernization is tactical. It is about how we work, not what we do. Its aim is to do the same job better, faster, or cheaper by upgrading technology like swapping an old machine with a faster, more efficient one. Operations get smoother, but the products and business model remain the same.
Transformation, by contrast, is strategic. It asks broader questions like ‘What should we be doing? Why should we do it?’ The answers redefine your organization’s value. Here, the aim is a new strategic outcome — like guaranteeing equipment uptime. Technology becomes an enabler that reshapes the entire business, not just its tools.
To thrive today, organizations must prioritize transformation, not merely modernization, as the foundation of their digital core.
So, what does digital transformation actually mean in the AI era?
It is the deliberate, strategic repositioning of a business in the digital economy through emerging technologies. It requires acknowledging that industries are shifting and that organizations must adapt their business models and operations to stay competitive. This means innovating, creating new products and services, and anticipating market conditions before they emerge. Gen AI is now the most powerful lever for this shift — and it cannot sit as an item on an IT plan. It must shape core business strategy.
the pitfall of modernizing without transforming
IT modernization has been a constant in enterprises for decades. Companies have poured resources into cloud migrations, platform upgrades, and new software implementations. These moves boost productivity and efficiency, but they rarely deliver the strategic shifts.
Take Global News Inc. (GNI). In the early 2000s, as the internet surged, they moved to a cloud-based CMS and overhauled their web design. It all looked promising. But they stuck to the same 24-hour content cycle, even as the world shifted to interactive, real-time media. Digital-native competitors outpaced them quickly. All those tech investments could not save them because they never reimagined their business model. That mistake cost them everything.
Many organizations today risk repeating the same pattern. In the AI era, the goal must be to build a robust digital core — one capable of driving real transformation and delivering long-term value.
Encouragingly, digital transformation continues to be a top-three IT initiative.
building an AI-native digital core: a framework
Genuine transformation into an AI-native enterprise requires a holistic framework built on four interconnected pillars:
- technology foundation: This encompasses scalable, secure, and flexible architectures that seamlessly integrate AI models and data pipelines.
- knowledge construction: Building robust systems to extract, integrate, and synthesise knowledge from extensive datasets, transforming raw data into actionable intelligence.
- business intelligence: Moving beyond descriptive analytics to predictive and prescriptive insights, enabling data-informed decision-making across all organisational levels.
- AI orchestration: Establishing capabilities to deploy, manage, monitor, and scale AI models efficiently across the enterprise, whilst ensuring responsible and ethical AI implementation.
a practical approach to AI-driven transformation
Here is a 7-step structured methodology to transform your digital core:
- Begin by assessing current digital maturity. Conduct a comprehensive audit of existing systems, tools, and data infrastructure to establish a baseline.
- Define clear business objectives. Align transformation efforts with measurable key performance indicators that directly impact strategic goals.
- Start with focused AI pilots. Rather than attempting wholesale change, test predictive models or automation in specific departments, demonstrate value, and learn from the results.
- Invest in data modernization. Build robust, clean, and accessible data pipelines. AI effectiveness is fundamentally dependent on data quality.
- Integrate with cloud AI services. Leverage the scalability and advanced capabilities offered by major cloud providers' AI platforms.
- Develop teams and cultivate an AI-ready culture. Upskill employees and foster an environment where AI workflows are embraced rather than resisted.
- Measure and optimize continuously. Track the return on investment of AI initiatives, refine models, and adapt strategy based on performance data.
However, it is important to understand that transformation is not just a technological challenge — it is a human one. Education is its foundation, and it must start with senior leadership. Without leaders who continually develop and understand new paradigms, organisational transformation cannot take hold. Their informed vision ultimately sets the direction for the entire journey.
how Gen AI is accelerating transformation
Gen AI functions as a catalyst for transformation across three critical dimensions:
- For leadership, it enables data-enriched decision-making by synthesising complex information, simulating scenarios, and delivering insights at unprecedented speed
- For innovation, it accelerates research, design, and product development through rapid prototyping and idea generation at scale
- For talent, it provides on-demand expertise and automates routine work, freeing people to focus on strategic, long-term priorities.
The benefits of digital transformation are substantial and the impact is already clear: 56 per cent of US executives report that the ROI from their digital transformation initiatives has exceeded expectations.
conclusion
The age of generative AI presents a significant opportunity. Organizations that merely modernize their digital core risk gradual obsolescence. Those that strategically reposition themselves, leverage AI to redefine their value proposition, and foster cultures of continuous learning and innovation will achieve genuine transformation, creating sustained competitive advantage, and long-term value in the evolving digital economy.
how can Infosys BPM help?
As Gen AI reshapes industries, your digital core must evolve from an efficiency engine to an intelligent orchestrator. Infosys BPM’s business transformation services combines gen AI with proven transformation methodologies to reimagine your digital core. We harness AI-powered insights and design thinking to identify opportunities, optimize processes, and deliver bespoke automation solutions. Our comprehensive approach transforms disruption into sustainable competitive advantage. Turn AI potential into measurable business impact.
