The Critical Role Data and Analytics Plays in Your Digital Transformation

The stakes are high for any organization coming out of the last year. As the marketplace faced unforeseen disruption, it became imperative for businesses to digitize how they engage with both employees and customers. Whether the goal is to sustain, compete, or disrupt—organizations of all types, sizes, and industries have had to reimagine their business models and processes. The phrase that’s been on the forefront of every business-centric conversation for a while has been “digital transformation”, but companies have ramped up their interest since the COVID-19 disruption. According to research firm Statista, digital transformation is the top priority for IT technology initiatives in global companies in 2021.

In this blog we’ll discuss what digital transformation really means and explain why data and analytics play a critical role in any successful digital transformation—from start to finish, and even long after.

What is Digital Transformation?

People throw around the term “digital transformation” a lot, but there isn’t one standard definition for it and digital transformation can mean different things to different companies. For example, for a retail store it could mean changing its business model by adding an ecommerce capability to a brick-and-mortar presence. For a company that already has digital commerce in place, however, it could mean changing processes or adopting digital technologies so that it can analyze customer behavior and attributes to hyper-personalize its product offerings and provide a better customer experience.

Regardless of how you define it, for a digital transformation to be successful, you need to implement the right data strategy, technology, and infrastructure to modernize your company and become a more competitive and agile player in the marketplace. It requires technology, digital processes, and organizational change. It also requires a focus on data and analytics because the two are key accelerants of any digital transformation effort.

Why Data and Analytics Are the Thread that Carries Your Digital Transformation

As technologies and consumer expectations continue to evolve, businesses need to keep pace. A company’s ability to compete and thrive will be determined by its ability to make quick, informed data-driven decisions. Data can also be used to design new, or improve existing product offerings, and data can be offered as a product itself—enabling your organization to compete in a digital economy.

Where data provides the information, analytics provide the insights that lead to informed decision-making. Using data and analytics as the thread that carries your digital transformation—before starting and throughout—allows you to overcome key modern business problems that can be roadblocks to successful data initiatives. These modern business problems include:

• Data Siloes: When data is siloed and segmented across different business units, tools, and platforms, it can add to the difficulty organizations face in integrating the data and gaining insights from it, and in turn optimizing on its value. Using data and analytics as the primary driver of your digital transformation allows you to consider technologies and strategies that will enable combining data from different sources and systems to see the big picture.
• Data Quality Issues: High-quality data can help a business meet its objectives. But if steps aren’t taken to ensure the quality of data, then it can lead to costly mistakes and missed opportunities. Valuing data as an asset across the organization allows you to consider data management, data security, and data ownership—all of which will lead to transparency and trust in the data and better decision-making across the organization.
• Complexities with Legacy Systems/Applications: Legacy systems are often costly to maintain and update, and in some cases impossible to integrate with more modern elements of your infrastructure, and they can pose security concerns for the organization. They hinder your ability to compete in a digital economy. Looking at this through the lens of data and analytics will allow you to select fit-for-purpose systems that enable agility, user adoption, better security, and optimized performance.
• Meeting Customer Expectations: Customers today expect seamless end-to-end experiences, and companies rely on data to help provide it. Data helps you understand who your customers are, what their needs and wants are, what they’re purchasing, when, and how often, as well as how they prefer to engage. A digital transformation that focuses on data and analytics can enable technology and processes that will help gather and analyze that data so that you can meet customer expectations even as they evolve.

These modern business problems can pose roadblocks for any organization, and likely the reason you’re looking to digital transformation in the first place. Understanding the problems that you want to solve and being able to prioritize them is critical in having a successful outcome. If you allow data and analytics to drive your digital transformation, and to carry it through as well, you’ll find that you set yourself up for long-term flexibility and digital enablement and enhancement across the business. Defining your goals will allow you to map out where you’re at and where you want to go.

What Data and Analytics Components Are Needed for A Successful Digital Transformation?

Too often, digital transformations fall short of their objectives and the reasons are varied and complex. But starting with a data and analytics framework in mind can help drive the program forward and ensure you realize the return on investment now, and in the future.

A digital transformation is not a one-time project, but rather a continued program that relies on data and analytics. It is also not just adopting new technology; it requires a cultural shift within the organization focused on putting data at the center of decision-making. The core data and analytics components of a successful digital transformation include:

• A defined data strategy for your digital transformation. A data strategy isn’t just about data. It is a defined plan that outlines the people, processes, and technology your organization needs to use data to achieve its business goals. A defined data strategy can support your digital transformation by answering questions such as:
  • How can you use data to support your business goals and solve business problems, and ultimately drive your business forward in a digital economy?
  • Where is this data sourced from and is it of good quality? Will it provide insights that will allow you to better understand your customers and their needs?
  • What processes are required to ensure the data is high quality and accessible?
  • What technology will enable the storage, sharing, and analysis of data?
• A defined data management plan that will support your digital transformation. Once you have your data strategy in place, you need to define how you will manage your data, especially if your goal is to solve business problems such as eliminating data silos and reducing data quality issues. An effective data management plan that will support your digital transformation and allow you to:
  • Define how to manage, secure, and use your data throughout its complete lifecycle.
  • Enable business users to have access to meaningful data and analytics and ultimately empower them to drive forward business objectives.
• A defined change management plan that will support a data-driven organization. Without a plan to promote user adoption, the likelihood of meeting your digital transformation business goals is low. Have a plan in place to effectively communicate your data and analytics strategy, get buy-in early and often, make sure to train end users on why data and analytics are important and how to use both in their day-to-day tasks, and always remember to celebrate the wins. Data and analytics need to become a part of an organization’s overall strategy, and that means creating a culture that promotes and embraces both.

As you look to start your digital transformation program, remember that data and analytics is not just where you start, it is the thread that carries your company through the transformation and allows you to change with the market.