Regular engagement with our fellow Chief Data Officers and Chief Information Officers (who are all awesome by the way!) shows that the drivers pushing or drawing organisations into data driven transformation tend to come from one or more of five origins.
The first is competitive advantage. Many organisations understand that their data contains insights that will deliver a competitive advantage by allowing them to serve their customers more effectively. The advantage may be to increase customer acquisition, reduce customer turnover, increase customer lifecycle value or match products and services to customers at the right time, in the right place. This driver includes not only those organisations seeking to transform to grow, but also those organisations looking to transform to survive. Think about what happened at the established TV channels when Netflix came along.
The second is customer service and personalisation. Again, organisations may appreciate that the data they collect, or could collect, provides the raw material to give a better more personalised customer experience. This experience may be delivered on a digital platform or in an analogue manner. This model is one that the personal insurance market is working with to great effect.
Third is operational efficiency. Most organisations can improve operational efficiency through observations in their data. Data analysis or advanced analytics can provide actionable insights for informed decision making that could transform an organisation. Large transportation companies and utilities are starting to make the most of this area.
Fourth is regulatory pressures and requirements. Most organisations now operate in a regulated environment, where they are required to provide regulatory data for compliance or assurance. Transformed operating models based on data and data insights can make the regulatory environment more efficient, more assured and change the relationship with the regulators.
The final driver arises when previous forms of transformation have been attempted but not delivered the expected business benefits. This is far from unusual. A remarkable number of organisations in all sectors and verticals have undergone, often at sizeable cost, technology or digital transformations that have failed to deliver tangible business outcomes.
If these are the basic economic or commercial drivers, others are more abstract in nature. The driver may come from a CEO or senior executive who understands the true potential that lies in their organisation’s data. However, this usually happens because that person is addressing one of the five above mentioned areas.
Whatever the driver, organisations are beginning to realise that transformation is driven by more than technology, platforms and processes. Data underpins so much of your organisation that to transform without paying sufficient attention to it would be comparable to building a house without foundations - it might work but do you really want to take that chance?
Article by Caroline Carruthers, Director at Carruthers & Jackson
On 26th/27th June Caroline will be co-hosting DataTalks, the conference for Data Leaders by Data Leaders. Tickets are available here for your chance to hear from some of Europe’s leading Data practitioners.