Data As The True Accelerant For Digital Transformation
Digital transformation, previously considered as a competitive advantage, has now become a ‘must have’ for organisations to not just thrive, but survive in the new paradigm. Inevitably, digital transformation has compelled companies to adapt to the changing imperatives of the new market reality and reimagine their businesses.
Unlike previous business transformations where industries and companies shape-shifted in order to meet their unique strategic goals, the ongoing digital transformation is not being driven by the companies that are undergoing this change. Instead, it is being driven by the customers. Today’s customer wants to be ‘always connected’, prefers seamless interactions, and expects customised solutions. It is the customer’s journey that dictates the business strategy – and the customer is now asking businesses to embrace technology.
Data and analytics as the centerpiece of digital transformation
For organisations, successful digital transformation will hinge upon successful data transformation. Data about an organisation’s customers, employees, infrastructure, market dynamics, supply chain, business-technology systems, etc., coupled with the ability to analyse this data will be the key enablers for digital transformation. This is the reason that data is increasingly being valued as a corporate asset and has been given the moniker ‘oil of the 21st century. Almost every aspect of digital businesses draws support from the accuracy and accessibility of data. Ergo, data and analytics have become the key accelerants of an organization’s digitisation and transformation efforts. A report from Harvard Business Review shows that 55% of organisations agreed that data analytics for decision-making is extremely important today, and 92% confirmed the increasing importance of data and analytics through 2020 and 2021. Further, A poll conducted by Profinch on the importance of customer data in digital transformation revealed that 96% of the respondents considered data to be very important while 4% said that it is not yet important. Organisations who want to architect customer journeys rather than interact with them in a fragmented manner, need to embed themselves into the lives of their customers. Customer data enables businesses to get up close and personal with their customers, meet their existing needs, anticipate their future needs, and holistically provide them with relevant solutions.
A typical digital transformation journey accelerated by data and analytics would look like the following:
Step 1: Information gathering would be the first step. Due to consumers’ increasingly growing digital footprint, i.e., data from their digital interactions and partners’ transaction systems, organisations can gain consented access to reams of customer data. Further, many organisations already have a great deal of customer data residing in every nook and cranny of their organization. Inevitably, it is challenging to derive value from data that is locked up in siloed technology platforms. Therefore, the first step is to break this data silos, gather all the data from multiple external and internal sources and ensure data accessibility, quality, and usability. At an initial level, a digital transformation could simply mean the digitization of the organisation’s data environment, i.e., move the data from on-premise to the cloud.
Step 2: The next step would be data analytics that could help organisations derive meaningful insights about customer preferences from the data gathered. Data analytics has quickly become table stakes for organizations looking to leapfrog their digital transformation curve. Not only do line-of-business (LoB) managers rely on analytics-based solutions to report, analyze, and plan, but are increasingly leveraging them for smart decision making.
Step 3: The final step would be to solve for fragmentation to transform the customer experience. Customers today expect intuitive and seamless interactions with organisations across multiple channels. Unfortunately, the multiplicity of digital channels leads to fragmented customer journeys which leads to low loyalty and high drop-offs. Data-driven solutions that unlock insights by unifying fragmented data present across customer touchpoints, applications, and platforms coupled with technology-enabled delivery can create seamless and end-to-end customer journeys.
Data on its own is simply a commodity. It derives its value from being distilled into meaningful insights. Organisations that are able to make data-driven decisions with analytics are at a competitive advantage. Laggard organisations that are saddled with legacy systems and processes are at risk of falling behind their more agile competitors that understand that data is the lifeblood of digital transformation. However, it is equally important to understand that this digital transformation cannot happen overnight. It is both, a technological as well as a cultural shift. Therefore, in order to achieve complete digital transformation, organisations must adopt a holistic transformation approach which is driven by data and enables every person within the organisation to optimally leverage data and analytics.
Author: Nikhil Deshmukh, Business Head – JAPAC (Banking and Insurance)