A data-led approach to powering digital transformation

Mapping processes and data flow

There’s a lot of pressure to get digital transformations right. It’s suggested that while 89% of large companies globally have a digital and AI transformation underway, they’ve only captured 31% of the expected revenue lift and 25% of expected cost savings from their programmes. More often than not, efforts faulter because organisations have failed to understand their operations in the context of digital change.

Change isn’t easy, and companies frequently have complex, layered processes that have been developed organically, over time. These processes can be elaborate and digitising them requires a thorough understanding of how information flows through the business. It’s these disjointed processes that need to be scrutinised and mapping them out is essential to identify where complexity has been added along the way. 

It’s a crucial step, as it lays the foundation for identifying inefficiencies and areas where digital tools can be most beneficially applied. Effective change management is about understanding the true cost of delivery and the impact of changes on the organisation. A data-led approach helps, as it provides a clear picture of the existing processes and the data generated. By understanding the data flow and lifecycle within the business, leaders can make informed decisions about where to implement changes and how to measure their impact.

Saying that, it can be difficult to know where to start. For organisations with an established business change function, this team can be instrumental in leading the charge on digital transformation projects. As they have access to the information and possess knowledge of the organisations processes, people and workflows. However, when integrating new technologies, you need expertise to transform the way data moves through the business lifecycle – and that might not be available in-house. That’s why it’s important to call on both internal capabilities and external perspectives to fully realise the potential of digital transformation.

Crafting an effective strategy

Assessing current processes and data flows, is the foundation of a data-led approach. Organisations must map out the lifecycle of data within their operations, understanding where data is generated, how it flows through different systems, and where it ends up. Identifying critical data points is essential for measuring performance and driving decision-making. It will form the basis of your strategy and should align with your organisation’s overall digital transformation goals. 

The organisational strategy needs to drive the right cultural behaviours and attitudes. It’s estimated that 70% of digital transformations fail because of employee resistance. Leaders must articulate the benefits of digital transformation clearly, translating them into actionable, real-life examples to gain buy-in from employees. A clear strategic direction, supported by senior management and key stakeholders, helps align the organisation with the aims and objectives of the transformation. It should also outline how data will be captured, processed, and analysed. Establishing data governance policies ensures data quality, security, and compliance, as well as defining data ownership, access controls, and data standards.

Time waits for no one

The timing of digital transformation can significantly impact its success. Key trigger points include the end-of-life of critical technologies like ERP or CRM systems or the need to support business maturity. Starting early allows organisations to explore alternatives, understand their processes better, and make well-informed decisions. Delaying transformation can result in missed opportunities for efficiency and innovation. When organisations wait until technology contracts are up for renewal, they are often forced into making hasty decisions that don't align with their long-term goals. This can railroad the transformation process, making it reactive rather than proactive.

A data-led approach is about understanding the cost of delivery, the data dependencies of workflows, and structuring the data in a way that aligns to key performance indicators (KPIs). It’s an approach that requires a holistic view of the data architecture across the entire business. By joining up data meaningfully, organisations can avoid the pitfall of having various data silos that fail to deliver true value.

Ultimately, digital transformation is a complex but necessary journey for modern organisations. By adopting a data-led approach, organisations can navigate the challenges of change management more effectively. Understanding and mapping data flows, aligning organisational strategy, and leveraging technology are crucial steps to ensure a smooth transition. Business leaders play a vital role in articulating the benefits and driving the cultural shift needed for successful digital transformation. A well-executed digital transformation not only improves efficiency but also positions an organisation for sustained future growth and innovation.