Why Digital Transformation MUST start with Data Strategy

Forbes estimates that a massive 84% of companies fail at digital transformation.  Yet change is inevitable, and those who fail to innovate will get left behind.  Blockbusters, Polaroid and more recently Toys R Us are examples of those that have fallen to the sword of change.  This is why 90% of corporate strategies will list ‘information’ as a critical enterprise asset by 2022 according to Gartner.

So how can we move the needle to deliver more effective Digital Transformation initiatives?  As Warren Buffet once said, “It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes”.  Take the time at the start of the project to research the common pitfalls of Digital Transformation and be deliberate in your planning to avoid them.

Let’s be clear, digital transformation is complex and involves many stakeholders with different objectives, vast webs of complex legacy systems and code and of course requires a shift in mindset and culture.  But here are a couple of things I’ve observed over the years that hinder Digital Transformation initiatives:

Lack of clarity and alignment on goals

It’s absolutely vital to understand the goals of the initiative and how they help the organisation to achieve it’s strategic objectives.  If you are unable to draw a dotted line from what individuals are doing on the ground to the objectives set in the board room, then stop and ask ‘why?’.  Otherwise it’s like running a marathon but not knowing where the finish line is.

Technology first approach

Technology is only a small part of Digital Transformation and with the cloud, it is often the easiest part.  Digital transformation is about intelligent use of ‘information’ to drive better ‘outcomes’.  Yet we often forget about the ‘Information’ and the ‘outcomes’, and just look at the technology.  Maybe this is because it’s the easy bit, the one that the technical team that’s been hired is more familiar with.  Focus on outcomes and ‘Information’.  That’s where data strategy comes in!

Data Strategy

I hear so much talk in the corridors of large corporates about the latest AI (Artificial Intelligence) or ML (Machine Learning) initiative or how the organisation is using RPA (Robotic Process Automation) or IoT (Internet of Things).  But I hear far less about Data Governance, Data Quality, Data Catalogues and Data Literacy. 

Yet IoT, Automation, AI & ML are underpinned by Data!  Without it they simply do not scale or deliver effective results. 

I often hear the term ‘Data Rich and Information Poor’ but it’s often akin to being ‘Rich’ with counterfeit money (i.e. The ‘data’ isn’t real or of a high quality) so the organisation isn’t really Data Rich at all.  The data is poorly categorised, inconsistent across systems, has no clear ownership and is often undocumented.  This results in mistrust of the technology (whether it is shiny and new or 30 years old), silos of information and poor decisions.

So start your Digital Transformation journey with a data strategy and map out the ‘Information’ required to deliver effective outcomes and how you plan to govern it.  Consider our four pillars, and define where you are right now in terms of people, processes, technology and data.  Ensure you have a team or partners that can bring people on the journey, create clarity around the outcomes and deliver solutions that truly scale.

The four pillars of a data strategy

Mention data to some executives and you’ll get a range of reactions, ranging from evangelical to utterly perplexed. The latter group might know data is important to their business and understand that using it correctly can bring significant wins, but there is often considerable confusion over how to best implement it. Fret no more, as here are the four pillars you need to launch a successful data strategy. 

People 

First look around your organisation and assess existing strengths and weaknesses. Do your staff understand the power and value of data? You don’t necessarily have to run out and employ a team of experts, instead audit existing skills. If somebody is a whizz with an Excel spreadsheet, chances are you can train them up to become more data literate.   

Next take a step back and look at the structure of your organisation. Is there a divide between your IT department and your business people? If so, that needs rectifying. To get the most out of your data, everyone needs to work together. Rather than make it the sole preserve of techies, a joined up approach will spread the responsibility and offer the best chance of creating a successful data culture. 

Process 

One of the quickest wins is in the optimisation of existing business processes. One company we worked with wanted to create a more efficient system for posting journals in their finance system. At the time they had a 20 step process for this seemingly straightforward procedure; laboriously copying information into Excel, running four different reports, then ticking off a long paper checklist before finally postingThrough automation we were able to reduce that process down to two or three steps, while still allowing for all important checks to take place. 

Ensure automation is built into your data systems. It will transform the working lives of even the most data-phobic employees, providing alerts on anything from fluctuations in sales to customer complaints. Rather than finding out about this in the annual report or having to dig through the data for answers, a simple warning symbol in your regular reporting will alert you to potential problems before they cause too much damage.    

Data 

While it’s important to have everyone on board, it is crucial to have trusted individuals overseeing data in areas such as customer and product information. You need people who can own that data and be responsible for it. Ensure that they have clear strategies around managing data quality and data governance. This stuff is as important to growing your business as your staff and product – treat it with the same care and you’ll reap the rewards. 

Technology 

Once you have thought through all areas of your strategy, only then should you commit to spending money on the necessary tech. We often meet companies who have muddled through by bolting on extra systems here and there. What they should have done is to step back and ask whether it might be simpler and more efficient to just start from scratch? Often building on a legacy system is a false economy, while investing in the correct, modern system for your needs will save you time and money. 

If you take just one thing away from this, it’s that upfront thinking is absolutely crucial. We see so many companies who have taken bad advice and invested in a pricey data lake or warehouse that ultimately didn’t serve their needs. They then have to start over, or are forced to work with compromised systems. Never overlook the importance of starting with a defined data strategy, it is one of the most important business decisions you will ever make. 

What better way to kick of you data strategy that a FREE 90 minute Data Strategy workshop tailored to your business? Book your call with one of our data gurus now to understand how data can help you to achieve your goals:

https://meetings.hubspot.com/david-rice2/free-90-minute-data-strategy-call