This post originally appeared in our founder’s blog here.
This is a scary time for a company. But the state of play creates the potential for mass and creative disruption.
— $1 Billion for Dollar Shave Club: Why Every Company Should Worry @ NYTimes
Every company is a digital company. No longer is it a question of if your product will become digital – as was the case with music, newspapers, TV, movies, etc. – it is a question of how the experience of your product (and your company) changes even if your product isn’t digitized.
eCommerce, digital marketing, social, CRM, and content technology and strategies are critical. You will need to invest in those technologies – but underpinning all of those technologies is data – that data is the currency of your digital transformation.
Moreover, as traditional products become connected – as the Internet of Things provides value to consumers that extends the traditional value proposition with sensors, data, analysis and insight – the value of data will only be amplified.
And if we’ve learned anything from the preceding waves of digitization, the level of both customer value and business opportunity (and disruption) this digitization unlocks will be extensive and hard to predict.
I’m not alone in this – just take a look at what the Altimeter Group has to say:
All of which is correct. There is, however, one problem – this is a transformation to an unknown future digital state. After all – if the end state were known we wouldn’t need to think about our “Culture of Innovation” – as Altimeter puts it; we would also just call it project, with a defined start and end state.
And the digital strategists can not save you – they are no better at predicting the future than you are. But, your customers and the data from the digital innovations (experiments) you create can… so…
The real question for you digital transformation is:
How will you know what digital experiences to invest in and how will you know if it is working?
Without first addressing your decision support capabilities – your data – you won’t. And, no, your current data warehouse and reporting capabilities will not suffice. You need a new platform – one that enables you to discover in a constantly changing data environment. One that can still answer the questions you know you need to know the answer to, while also allowing you to explore within the data for insights driving new and impactful digital experiences. As importantly you need to establish a data driven culture and begin to understand the limitations of your current KPI driven decision-making.
And as data generating and driven experiences and opportunities begin to appear you’ll need a data platform and engineering capability that can enable them. Something well beyond the “save and retrieve” data environments you have today. An environment that can collect data that has velocity, variety and volume and from it generate valuable insights for your customer and your business.
Over time, companies and products that fail to do that will be replaced by those that do.
The underperforming digital transformations I’ve seen treated data as an afterthought. Implement digital platforms, move to SaaS, get some digital marketing, add a modern eCommerce platform… and then do the same things you were already doing with new technology. Your CIO declares victory and waits for the business to reap the rewards of being digital.
Only by establishing up front that data is the currency – that only by having a data platform and engineering capability paired with a data driven culture – can a business successfully navigate a digital transformation.