An Executive’s 2018 Checklist for Digital Transformation
“The size of competitors and the longevity of their brands, are less predictive of future success than the importance they give to data, the quality and speed of their information logistics systems, and the operational tempo of their business.” ~Kevin Benedict
More data is being generated today than ever before, and in 2018 leaders should be laser focused on investing in and implementing the following digital systems/solutions:
- Data collection
- Big data analytics
- AI/Machine learning
- Automation (RPA)
- Real-time contextually relevant personalized experiences
There is a new sense of urgency today as businesses realize data is the blood that runs through the veins of a successful business in this digital era, and that data has a shelf life, and the value of it diminishes rapidly over time. In an always-connected world where consumers and their needs are transient, timing is everything and a special type of data is needed – real-time data. In order to capture competitive advantages and contextual relevance before data expires, enterprises must deploy optimized information logistics systems (OILS) that deliver on the potential fast enough to exploit it.
Digital consumers are impatient and demand instant results. IT infrastructures must be able to support real-time interactions, and this requirement will increase as mobile commerce is predicted to grow to 47% of all e-commerce by 2018. Supporting real-time information requires not only real-time IT environments, but also digital transformation across the entire organization so the business can exploit it. In order to succeed, businesses must react to location-based and time-sensitive information while it is still contextually relevant.
Data is the lifeblood of digital commerce, and increasingly in physical stores as well where the digital and physical worlds are rapidly converging. As commerce rapidly shifts to digital, the success of products, brands and companies are increasingly dependent on data and systems that consume it in order to support the demand for more personalized digital experiences . How an organization makes sense of data, protects it, and disseminates it is a complex and challenging issue.
Data strategies and the execution of them will determine the winners of the future, and the future is now. Businesses are learning that effective data and analytics strategies are the secret to success in digital markets. Information dominance is now the strategic business goal.
In addition to investments in IT, achieving real-time operational tempos in the enterprise takes rethinking business models, organizational structures, decision-making and business processes. It requires new ways of operating and employee training. Supporting real-time operational tempos is a daunting task many have failed to prioritize, and are suffering as a consequence.
At the risk of repeating myself, winners of a digital tomorrow will invest in the following six IT and business areas:
- Optimizing their information logistics systems
- Implementing effective sensing systems (IoT, IIoT, automated data collection systems, etc.)
- Utilizing automation supported by AI to gain speed, predictability and quality (think RPA)
- Achieving real-time business operational tempos
- Increasing business, leadership and cultural agility
- Using contextual relevance to personalize digital user interactions and experiences
The purpose of these investments are to capture the value of data fast enough to gain competitive advantages and to deliver the best possible digital and physical experiences. Speeds should be maximized in the following 6 areas:
- IT systems
- Business processes
- Business alignment/transformation
- Customer alignment
- Cultural alignment
IT systems that support real-time speeds will take advantage of sensors of all kinds, online interactions, wearables, mobile devices, etc., to collect data. Sensors can be embedded chip technology that monitors physical and chemical environments and wirelessly transmits digital results, or they can be software code that monitors contextually relevant opportunities, moments and environments (CROME) by reading data inputs collected from all digital sources. CROME triggers are “meaningful bits of data that when captured and analyzed can activate time-sensitive and relevant personalization that can be used to enhance user experiences.”
CROME triggers integrated with real-time artificial intelligence algorithms can transform the potential value of data, into kinetic value by instantaneously personalizing a user’s experience and making it contextually relevant.
Businesses that embrace digital transformation will optimize their organizational structures and business models to support the operational tempos demanded by a mobile and connected world. By tempos we mean the pace or speed at which the organization must operate to compete successfully. Increasingly digital users demand real-time responses. To support real-time responses requires an enterprise to move beyond “human time” and into the realm of “digital time”.
Humans are biological entities that operate at a pace governed by the sun, moon, and the physical requirements that keep our carbon-based bodies alive. These requirements and mental limitations make scaling humans beyond these time-cycles impossible without augmentation. Augmentation takes the form of robotic process automation, artificial intelligence, machine learning and algorithms. These types of augmentation technologies have the advantage of being able to work 24x7x365, and don’t as yet ask for holidays off.
Once an organization is capable of supporting real-time business tempos, and can support the personalized interactions digital users demand, the challenge becomes business agility.
Agility is the speed at which a business can recognize, analyze, react and profit from rapidly changing consumer demands in a hyper-competitive market. Businesses that can accurately understand customer demand and their competition, and then respond faster, will soon dominate those, which are slower. The military strategist John Boyd called these competitive advantages, “getting inside of your competitor’s decision and response curves.” This means your actions and responses are occurring at a pace that surpasses your competitions’ ability to understand and react.
Businesses must recognize the demand for real-time operational tempos is only going to increase and this requires strategy, action and a budget. One of my rules based upon experience is the following, “As the number of digital consumers and interactions increase, so also will the need for more speed, digital transformation and automation.” They go hand in glove together. Delaying a response, or denying the need for these requirements are not winning options.
Sub-optimal information logistics systems, and the glacial operational tempos of yesteryear will not succeed in today’s or tomorrow’s world, and company valuations have already begun to reflect this. One-third of investors and equity analysts surveyed believe that good data and analytics strategies are rewarding companies with higher valuations. Gartner’s Douglas Laney has even coined the phrase infonomics to describe how information, as a new asset class, can be measured to estimate its impact on company valuations.
To succeed in the digital future, leaders must implement innovative data strategies and information logistics systems capable of winning in a real-time world where contextually relevant, instant and personalized experiences are required. They must develop company cultures where change is viewed as an opportunity. They must digitally transform their businesses to operate at real-time tempos and move beyond “human-time” limitations to algorithm and automation supported “digital-time.” They must understand that rapidly changing digital consumer behaviors mandate companies operate in a more agile manner capable of rapid responses to new opportunities and competitive threats.