– Originally written by Stefano Maifreni –
Most modern business operations are inseparable from the IT systems and infrastructure that support them. Yet, for all their investment, many businesses are not seeing the anticipated return.
The role of data in a digital transformation
Over the past few years, a mass movement to digitalise business processes and customer experiences has swept through the business world. Combining data analytics with smart, automated technologies was supposed to give organisations some stability in an unpredictable world.
Usually, businesses that make the switch to digital processes and automated systems have two goals in mind. They want to maintain both profitability and their competitive advantage in the face of shifting customer preferences and behaviours, increasing regulatory demands, market disruptions, increasing competition and uncertainty.
Ironically, when a business IT infrastructure is not helping leaders achieve these goals, the response is often to pump even more time, money, and energy into the system. Not only is this a waste of resources, but it also doesn’t solve the underlying problem.
Data currently remains a significantly untapped business resource. For instance:
According to a McKinsey survey, SMBs in the UK are only analysing a third of their data, and only 30% of companies align their data strategy with their broader corporate strategy.
Data professionals throughout the world also spend 44% of their workday on unsuccessful data activities.
Why are organisations failing to achieve their desired results despite investments in cutting-edge data collection and analysis tools and having data analytics and digital transformation strategies in place?
The answer is that there is a misconception about what a digital transformation is. “Going digital” means much more than having the most advanced tools and systems. Businesses need to realign all their operations around digital processes clearly defined by data-driven insights and goals to keep up with the pace of change successfully and profitably.
Defining a data-driven culture
Before any successful digital transformation can bear fruit, an organisation needs to undergo a “data transformation.” The recording, organising, and even analysing of critical data is just the first step. It’s also the easiest part of the process. The real work involves leveraging that data to guide business decision making throughout the organisation, and for that to happen, the business needs a data-driven culture.
In a data-driven culture, the use of data in business decision-making is a fundamental strategic process. Data collection, management, and analysis are transformed from a business expense to a proprietary business asset. Business leaders also focus on making data available to employees and empowering them to use it.
To that end, many resources ensure that the correct data gets to the right individual at the right time. Most data-oriented tools and third-party platforms will generally be powered by AI technologies that help companies fully leverage their data while giving employees the time and information they need to work efficiently.
Building a data-driven culture from the top down
Unlike building an IT infrastructure, a data-driven culture cannot be purchased or manufactured; there isn’t a one-size-fits-all solution that can just be plugged in, either.
Senior business leaders must carefully consider their organisation’s unique needs and goals and then plan, nurture, and cultivate internal change among employees.
How can leaders effectively establish a data-driven culture? Here are three tips to encourage employee engagement:
Leading by example
Whenever leaders communicate with staff regarding strategic business decisions, they should frequently refer to the data they used to come to their conclusions. Business leaders should consider data that may run contrary to their assumptions or beliefs. When company-wide goals are achieved, and an announcement is made to staff, it can be paired with some of the data that helped the company be successful.
Investing in training
The best tools and processes may be in place, but it won’t help if employees do not properly use them. Businesses need to develop employee training programs and monitor performance to determine how effective these programs are. Leaders should also seek feedback from employees to discover knowledge gaps.
Showing employees the impact of data-based decisions.
Lastly, employees making data-based decisions should see the effect of data on their own choices. For instance, customer-facing employees can get customer satisfaction survey results and relevant sales conversion data, whereas administrative staff can see error rates and productivity scores.
In short, the success of a business digital transformation depends on how well the organisation leverages critical data to guide the process. It is very much a company-wide effort. When all operations and decision-making are working towards the same goals, that’s when a company turns into the well-oiled machine needed to compete in today’s business environment successfully.
An engineer by education, product manager by role and expert at achieving growth by career, Stefano has an outstanding track record in business strategy, operations, product and marketing, with extensive P&L management and international expansion experience.
His professional journey includes Senior Manager roles in global Blue-chip companies, Growing Businesses and Start-ups in technology-intensive and innovative industries (IT, Telecom, Technology Manufacturing, Drones, IoT and FinTech).