These days, everyone is a data-driven company—or at least wants to be. It seems like every company is going through an extensive digital transformation process, at least if you judge by a number of buzzwords they repeat like a mantra: cloud, data lakes, digital maturity, etc.
Yet when they pursue status of a data-driven organisation, companies often do not get it quite right. This may result in several undesirable outcomes, such as frustration of employees (who are forced to adopt new additional processes on top of what they do without an evident reason of doing so) and disappointment from upper management, either because the results are still far beyond the horizon and/or there’s no sensible business outcome despite all these efforts and investment.
There are many aspects of digital transformation for a traditional business, including adopting electronic documentations instead of pen and paper, digitalising procurement processes, etc. But here we are going to look at it from the data and data analysis lenses - based on my experience working in both fields.
Don’t Get Caught Up in These Digital Transformation Mistakes
Putting tools ahead of business goals. Often decision makers fall into a promise of a new shiny tool, presuming that it will further drive the change and magically solve company business problems. This is one of the most common misconceptions. The biggest mistake in this aspect is not knowing which business goals specifically these tools will help to resolve—and how—prior to investing into the tech stack.
Putting technology ahead of people and processes. Probably the second most common mistake in a digital and data transformation is also related to a cult of tools. While in some cases simply acquiring a tool can definitely be better than not having it at all, often companies end up in a position when they “hammer a nail with a violin.” Meaning that this tool is getting used, but far from its full potential (and far from it’s ROI). This is often due to infirm adoption, where it’s not clear who is responsible for it in the organization.
This responsibility includes not just usage, but building up an expertise and cadence of using it in order to solve specific business problems and driving data democratisation through other departments and teams with it.
Trying to execute digital transformation in one go. Often companies come up with a digital transformation plan, which is overarching and painfully detailed at the same time. A behemoth, that can include plans to overhaul digital assets (website, apps) and build an architecture of customer data collection and activation.
Such plans usually aim to bridge customer databases, marketing technologies and tools—through a multitude of connectors, platforms and technologies aimed at collecting each and every customer interaction—all at the same time.
With so many teams, tools, technologies involved, there’s no doubt that such an approach to transformation at best will take a few years to execute and won’t allow to reap business benefits sooner, leaving upper management questioning the invested time and money.
Hoping that a partner will solve everything for you. While inviting a seasoned digital transformation partner is actually a great idea to kick off the transformation and be guided along the way, please do not expect all your business problems to be magically resolved.
A partner has to be solid in terms of both technical knowledge and ability, and should definitely bring the domain expertise to the table—suggesting where and how to move. However, even the most advanced business and technical consultancies won’t be able to deliver to the fullest without your first defining the direction (the most valuable business outcomes).
Shift Your Mindset for Transformation Success
The above mistakes have one thing in common: they’re the result of a business simply stating “we want to become a digital company because everyone else is doing it”—not because it aligns with a key business value or result.
Equipping oneself with an arsenal of new shiny tools and changing the language for your existing business processes into everything “cloud”, “digital”, “innovative”, “redefining” etc. may not get you far. However, there are a few principles that you can apply to see the sustainable results of being more digital and data driven within a realistic timeframe.
Ensure that you know what you’re solving for, and then adopt the tools—not the other way around. Build your digital transformation strategy with well defined business objectives in mind. You should be able to explain how these objectives translate into a need for a particular practice in data activation, which will itself require a particular tool, technology and infrastructure in place.
Focus on high-impact business cases first (a critical business need that can’t be resolved without concrete insights in place and has a very clear path to follow).
Make emphasis on people and processes instead of tech. Like cars and airplanes, tools and technologies require trained and dedicated people and processes to operate them (this is especially important if you’re building a spaceship, not just a car). In addition to technical complexity, be mindful of human nature and people’s ability to adapt to new things. Execute adoption by clearly defining: business outcomes and impact (why should we bother?), roles and responsibilities of all involved parties or teams (you can try RACI matrix for start) and clear steps or cases to tackle for graduality of the process.
Also, if you feel a need to hire more specialists to your team, don’t just hire decorated data scientists and analysts. Prioritise domain knowledge above just technical skills.
Focus on evolution instead of revolution. While a strategic approach to digital transformation is not a bad idea per se, always aim to build up your success gradually through smaller wins. What is usually called POC (proof-of-concept) can help you to showcase real-life business benefits to your stakeholders much sooner than the completion of total digital and data overhaul.
Such POC can be as small as improvement of ROAS (return on advertising spend) of a particular marketing campaign, increase in upsell of a specific product, or overall improved conversion rate on your website. Make a rule to build the POC around one specific case with a predefined approach, and seek for the shortest “time to market” where possible.
Find the right balance between a partner’s help and internal responsibility. It’s absolutely normal that your digital transformation partner is responsible for the groundwork and heavy lifting in the beginning of the process, giving you a good sense of direction. But you know your business better.
In the course of a few years, your aim should be to build a data-driven culture in the organization, slowly but surely building an in-house capacity and processes to adopt data-driven, digital approaches.
Digital transformation is more than a trend to follow—it's critical to brand survival in a virtualised world. So while you may wish to transition into a truly data-driven business as quickly and seamlessly as possible, it's important that you don't do so blindly.
By following the process I've outlined above, you'll be better equipped to approach digital transformation with a clear plan in place—and will well be on the path toward transformation success.
Vasily Popravko is Data Lead Southeast Asia, MightyHive