In the digital economy, data is the new gold – but only if you know how to use it and have the form and focus to make it count.

Technological advancements have made it easier and faster to harvest, store and interpret data. Now, with machine learning advancements and with artificial intelligence (AI) becoming more user friendly, businesses have at their fingertips fast and effective ways to tap into this key resource and the insights it can unlock. If used wisely, this information can support strategic future thinking and valuable business foresight. 

Recognising the value in data and using data to support decision-making and strategic planning is certainly a vital business decision, but it isn’t the star performer in the organisation-wide digital transformation journey that underpins any data-driven businesses. The term digital transformation is easily misunderstood as being a solely technological journey, but at its core this "rewiring" and business evolution is a mindset shift that filters down throughout a business’ operations and attitude.

Amid the current hype it’s easy to become fascinated by the potential for glitzy, high-tech data-driven business models, and to assume they hold the elixir for business success. However, an organisation cannot be data-driven without first transforming its culture, embracing technological innovation, and fostering an environment where data literacy and analytical thinking are integral to every decision-making process.

Why is data-driven business such a drawcard?

The draw of data and digital solutions is inevitable for anyone in business, but being a data-driven business is not as simple as just clicking a button or purchasing a new software package. The process of becoming data-driven is about transforming how a business does things; and that means doing some corporate soul-searching about vision, purpose and people.

Make no mistake, as the world delves deeper into the realities of a technologically focused digital economy, traditional business models will become increasingly irrelevant as market entry becomes easier, barriers to entry erode, and demand for human talent balloons. In this environment, the capacity for using data as a strategic asset will become a differentiator. The companies that stand out will be those capable of harnessing data to continually make informed decisions, to improve operations, enhance efficiencies, drive excellence and fine-tune the business’ competitive advantage. For organisations and leaders that can make the link and take the digital leap, data will become a critical strategic enabler – hence the appeal of this journey.

In South Africa, Dell Technologies noted how, in 2020, 79% of organisations were fast-tracking some form of digital transformation programme. This compared to 80% for global mid- to large-sized organisations. In addition, 84% of South African businesses were currently re-inventing their business models to accommodate this digital transformation move (ahead of the global average of 79%).

Interestingly, South African firms were more focused on digital transformation than the technology uptake itself – highlighting that business transformation and the ability to tap into people, process and technology remains the true goal.

Where do you stand? Data infant or nimble transformer

One of the biggest challenges facing any business as they embark on a digital transformation journey is identifying the organisation’s existing digital and data outlook. 

At the bottom of the pyramid is the foundational analogue reality, an environment in which people are working on paper, using emails and Excel but not much more. This is not to say that analogue capabilities are not important in a digital tomorrow. In fact, they are critical since they deal with people, and people are central to the digital future. The discipline of people will underpin if processes are followed, if ownership is taken for capturing data and how information is interpreted to extract actionable ideas. Without human dexterity, all subsequent tiers in the digital transformation pyramid will not be sustainable in the long term.

With a strong analogue foundation in place, by the time an organisation reaches tier four (data-driven) the organisational environment will have evolved to the point of trust in the data and its quality. It is only at this point that true knowledge management is unlocked, which has the capacity to link well-maintained and trusted data to business objectives.

All of this builds up to tier five, digital dexterity, the precursor to digital transformation and the starting point to automation, which is where the real power of technology lies. Again, this level requires human buy-in and a collective, subconscious comfort and competence with digital solutions such as data taxonomy (classification and categorisation), data governance (security, accuracy and availability) and data hygiene (audited error-free databases).

Without this old fashioned, analogue human dexterity, any digital journey simply won’t have the fuel to get started. So, the starting point and the golden thread to any digital transformation journey must be people-centric.

Kickstarting your digital transformation strategy

Since data is not immune to human handling, there is always the possibility that mistakes might creep in, from the very human architects to AI models themselves, to the decision-making process of data output. Accepting that things will go wrong is part of the maturity and learning process, so this must be factored in. However, a culture of learning and digital comfort goes a long way in shaping an approach of collective responsibility across the entire data journey, from capture and translation to actioning insights.

As a business you get to this point when employees of all levels understand the importance of being data-driven, when its part of their performance matrix and daily reality. Drawing all departments or divisions into the data discussion is another critical enabler, since it gives the entire business a unified view of the available data, which enables teams to work together towards a common objective, rather than operating in siloes.

On top of this important cultural shift, any organisation embracing data solutions must ensure it has the proper data architecture and reporting lines in place, and the highest levels of security and privacy built into its systems. This means complying with legislation like South Africa’s Protection of Personal Information Act, and developing the right data posture – a combination of cyber resilience and cybersecurity.

These are the nuts and bolts, but the big picture view comes from the leaders in an organisation. Leaders who themselves have a high degree of data dexterity and comfort. For corporate leaders who are not themselves tech experts, this can be challenging, but making use of technology to create usable data visualisations is one way to develop the data dexterity needed to lead confidently. Data dashboards help to bring real-time data into a business, making it easier to access insights and information and helping leaders build confidence in using data to frame decisions.

This is not to say that gut feeling no longer has any place in business and leadership. Ultimately, the role of leaders in a data-driven business must be to draw knowledge from across the entire ecosystem, seeking new ways to constantly learn and improve, and never closing the feedback loop – to an AI or to a seasoned human expert.

How do you measure success?

Ultimately, data-driven businesses need to be able to show that this approach is leading to measurable business outcomes. It’s important not to be fluffy, so leaders should absolutely link the data journey to the strategic intent of the business and to measurable business outcomes and operational metrics such as bottom-line performance, increased revenues, cost reduction, cost avoidance, and improved customer satisfaction.

The companies that get this right are those that put the business outcome first, and whose executives and leaders are asking the right questions and taking their rightful place as the champions of a data-driven tomorrow. These leaders promote an enabling culture, demonstrate their own use of live data and incentivise others in the business to use data as a strategic asset. They highlight the importance of data-driven insights but never lose sight of the ultimate goal: true and enduring digital transformation.

Who is getting it right?

While most organisations are still feeling their way towards a digital transformation model that works for them, there are some business making great strides in transforming the theory around people-process-technology into a recipe for data-driven business decision making.

Fedgroup, the South Africa financial services group, and its dynamic CEO Grant Field is a great example. Fedgroup is doing amazing things with the Internet of Things (IoT), data-on-demand, and gamification, and is really coming into its own as a data-driven organisation. What makes Field’s leadership approach so interesting is that he used to be a chief information officer – which explains his level of digital dexterity and the company’s innovative take on products and services, such as investing in impact farming or solar installations.

As Field told me in conversation, this fresh and innovative investment offering is underpinned by data insights and the use of technology. Fedgroup has IoT devices that are sitting on those blueberry bushes or solar panels, telling the customers exactly the value they are getting from that product when they make the investment. Operationally they’ve deployed gamification and made a Minecraft augmented reality representation of the company, with each division having its own avatar and performance being visually represented across the entire organisation. Not bad for a financial institution!

Another well-used but equally well-deserved example is Discovery. Across the entire Discovery business model, from insurance to banking to the Vitality chain, the data dexterity is clear and the company does appear from the outside to be more data-driven than its counterparts.

An interesting example, in the mining sector this time, is Exxaro. It is using robotics process automation (RPA), which you don’t see in a mine every day. If you are using RPA in your day-to-day financial processes, then this shows a positive level of dexterity.

What these examples highlight is how the core dexterity of an organisation is what enables an evolutionary approach to data-driven business. Digital transformation can indeed be strategically incremental, rather than aggressively revolutionary. 

Core questions any good leader should be asking right now

  • Where does my organisation sit in terms of data usage, digital readiness and making data-informed choices?
  • How well do I know my operation?
  • Are we operating in real-time?
  • How does data link to our strategic intent?
  • Are we getting the best out of our resources – both data and human capital?
  • How does being data-driven link to our digital transformation strategy?
  • How must I and my fellow leaders evolve to support a more data-centric culture?
  • Are we paying attention to harvesting the value from our own data and do we know how to channel it?
  • How are we analysing data (the rules behind the output) to meet our desired objectives?
  • What needs to be done to shift our employees and customers towards our potential digital dexterity?

Antonios (Tony) Christodoulou has been part of GIBS’ adjunct faculty for more than 12 years. He recently took on a new role as CIO/CISO for Cyber Dexterity, a consultancy and advisory firm, having previously worked at global Fortune 500 company American Tower Corporation as CIO of the EMEA region. Tony is a non-executive director for Hansal International and boasts 22 years of successfully steering organisations towards digital excellence through the seamless integration of IT strategies and the successful navigation of the evolving technology industry. He has worked across the world, from the United States to Europe, the Middle East and throughout Africa.

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