Business leaders should not be disillusioned by digital transformation – and in fact double down and commit to a data-first culture
Digital transformation has become a wide-reaching, catch-all business buzzword, and now many organisations have upgraded their infrastructure members of the c-suite are frustrated by the lack of return on investment. Admittedly it could be worse: ask those business leaders who had not taken the plunge to upgrade their digital ways of working before the coronavirus pandemic and are finding life particularly hard now.
As disillusion sets in, some are even predicting another artificial intelligence (AI) winter. However, a large part of this missed potential is because business leaders are not levelling up and focusing specifically on data transformation – the act of converting data from one format to another to make it more usable or gain value from it.
Enterprises across Europe plan to invest more than £40 million on average in digital transformation by 2021, according to recent Insight UK calculations. To avoid wasting this, they need to be confident that they have the right data to drive innovation. As Lee James, Chief Technology Officer EMEA at Rackspace, says: “Data that is captured and stored by companies is doubling every six months, the vast majority of this data is what the industry calls unstructured.” He continues: “Using a restaurant analogy, imagine unstructured data to be a constant stream of ingredients being brought to a kitchen where the cook has no menu or recipe.”
How, though, can businesses successfully pivot to a data-first culture? And what exactly does it mean to have a data-first culture?
DEFINING A DATA-FIRST CULTURE
John Brennan, Principal Solution Architect at Capgemini, says: “A data-first culture is where fact-based decision making is the norm and data is acknowledged as an asset of the organisation. This means that employees need fast, accurate and usable access to insights that allow them to make good decisions. There is a spectrum of data-driven choices which can vary from the very simple – this customer is a bad credit risk through to the very complex – your next action should be this based on the data available and trends we are seeing.”
Mr James agrees. “Imagine a company where every employee focuses on the customer needs, wants, desires, and behaviour and utilises this data to drive improvements, feedback loops, revenue, new products, services and stunning experiences. This is a data-driven culture,” he says.
“It’s achieved by making data widely available and accessible and focuses on capturing, storing, cleaning, and presenting meaningful data from across the business to employees to improve the customer experience.”
Mr Brennan urges business leaders – especially those in charge of manufacturing organisations that are lumbered with legacy systems and outdated methods of working – to invest in understanding data and equipping workers with the skills needed to make the best use of the insights, on the factory floor and above.
“Data transformation means more than prosaic mapping and cleansing of data into new formats; it means an organisation treating data as an asset,” he continues. “Indeed, data transformation and digital transformation are two faces of the same coin. Without a data transformation resulting in solid, reliable data, it is challenging to derive useful insights. Without a digital transformation, it is tough to share and act on those insights in a timely and profitable manner.”
When asked to name examples of successful data-first cultures, Mr Brennan points to Facebook, Amazon, Netflix and Google. “People in manufacturing face a much bigger challenge as they are not making and selling digital assets and experiences, but are turning ideas and designs into real-world products be they cars or cups,” he concedes.
“But the reason that a digital-first culture is critical is because it helps firms innovate and compete more successfully. One of the key behavioural changes that challenge the adoption of digital culture is getting the organisation to try new things and not be afraid of failing fast – identifying the projects and ideas which won’t work quickly and moving on. This mindset is often difficult in manufacturing where a lot of effort is quite rightly put on getting things precisely right.”
For manufacturers, in particular, there is a widespread distrust of data, but it is misplaced and almost Luddite, according to the Capgemini employee. “The main pain points being felt by business leaders when it comes to building a data-first environment are around convincing the workforce to trust in data and adopt it into their decision-making processes. Employees firstly need to trust that the information or the solution they are being provided with really with can augment their ability to do their job. They need to trust that the tooling they are given is there to help them and not to replace them.
“An example of the distrust in data comes from the disconnect between the shop-floor IT systems and the corporate back-office solutions. This means it is difficult to get an ‘end-to-end’ view of the performance of the business as it requires reporting across systems often ending in reports being manipulated on spreadsheets. We are seeing people start to address these issues with cloud-based platforms taking away some of the barriers to full end-to-end performance solutions and providing a more holistic view of the business.
“For a true end-to-end view, firms need to marry shop floor data or Internet of Things (IoT) data with the information often held in corporate ERP systems. An enabling platform which pulls these sets of data together is a foundation for company-wide AI solutions.”
Practical tips to accelerate data transformation include appointing a Chief Data Officer, educating and communicating why it is crucial to all workers, in regular and straightforward messages, and finally using data visualisation to bring to life the art of the possible.
Offering a final nugget of advice, Mr James adds: “I would start small, pick a business unit that is customer focussed or heavily process-driven, and perceived to be inefficient. I would take key stakeholders on a ‘data roadshow’, visit customers, other industries, and speak to specialists to understand the art of possible. Data is most powerful when it can be visualised, when it creates an emotional connection and the value is obvious.”