There is a lot of conversation about Digital Transformation, but often only a partial understanding of what it is or how it can be achieved. The Institute has produced a fluid document called the Digital Transformation Manifesto. The manifesto includes (among others) these tenets:
- Decisions driven by data
- Reimagined business strategies and practices
Most businesses have the words data-driven somewhere on their website; it’s generally in their mission statement. To say it is one thing; achieving it is something else. In most enterprises, we see many individual department: Human Resources, Information Technology, Finance, Marketing, Sales, Production, Research and Development, Quality Assurance, and so on. Each has its own suite of applications and associated data, so the amount of data collected and stored by the organization overall increases but is often splintered. As a result, the applications may enable the various business areas to work efficiently, but they also tend to create data silos.
Even if the business units are able to increase efficiency and velocity individually, the Theory of Constraints tells us that, without a clear overview (provided in this case by sound data governance and analysis), bottlenecks will develop, and the increased velocity becomes counterproductive.
Edd Wilder-James described data silos in a Harvard Business Review article in 2016. “These silos are isolated islands of data, and they make it prohibitively costly to extract data and put it to other uses.” If you can’t extract data, you can’t analyze it or use it to fuel innovation or enhance customer experience.
Unanalyzed data, called dark data, make up somewhere between 50% and 80% of the data organizations are storing, depending on whose study you read, and the percentage is rising as more and more applications are used to expedite the processes of business units. Dark data are “information assets organizations collect, process and store during regular business activities, but generally fail to use for other purposes,” says Gartner. If, then, the organization is making data-based decisions, those decisions might be based on as little as 20% of their data, and almost certainly less than half of what they are storing. The dark data cost money to store, and its existence increases cybersecurity risks even though the organization gets no value from it.
For example, the voice recordings from thousands of phone conversations to and from the organization’s contact center—many containing valuable Personally Identifiable Information (PII)—go unanalyzed. Only the small sample the contact center uses for “quality assurance and training purposes,” as the outgoing message always says, is ever unearthed . Sales, Marketing, R&D, and many other areas could learn and benefit from these conversations and the customer comments and sentiments they contain, but usually have no access to the data or associated analytics. The contact center is, in this case, a data silo.
Similar examples exist throughout enterprises, and that’s one of the reasons Digital Transformation has become important to CxOs in almost every industry vertical. They know why they need to do it, but often aren’t sure where to start or what will be involved. All too often, they begin by thinking solely about the technologies involved, which they assume to be Artificial Intelligence (AI), Machine Learning, and other emerging tech.
One European company with which I am acquainted developed a digital continuity plan to address their data silo problem, which would in turn enable them to move through the next steps in their transformation journey. A significant component of the plan was a cloud-based data platform to “serve as a single source of truth,” integrating data from all their enterprise systems as well as other fragmented business data. This eliminated data silos and illuminated dark data in the targeted areas. Working with a consultant, the company held a series of design thinking workshops to define features and produced a responsive web application to run on top of the data platform, giving the organization a true 360-degree overview.
A tool is only as valuable as its use. Competing priorities often complicate the path forward. In this particular construction company’s case, the three top priorities were identified as a digital boardroom, a bill of materials, and site inspection, giving all the various operational teams a view into project statuses and material inventory, as well as a single dashboard for issue tracking. Now, the construction company was able to gradually eliminate their data silos and identify previously hidden opportunities and potential threats. They could begin making truly data-driven decisions through the intelligence and tools provided in the digital boardroom.
While it was technology that enabled their digital boardroom and the data-based web application, it was their ability to prioritize and their design thinking exercises that opened the gate to transformation success.
Roy Atkinson is one of the most recognized thought leaders in IT, service management, and customer experience. He is a prolific writer, speaker, webinar presenter, and podcaster as well as an industry analyst. His expertise has been featured by The Economist, BizTech Magazine, Social Media Today, Computerworld, Oracle Customer Experience, SAP Business Innovation, and others. He was described on CIO Insight as a “model for the future digital leader” and by Nextiva as one of the “Top 50 Customer Service Experts of the Decade 2010-2020.” He was HDI’s 2019 Lifetime Achievement Award honoree. He holds a master’s certificate in advanced management strategy from Tulane University’s Freeman School of Business.