Amit Dugh & Ravi Dugh, May 29, 2020
Digital Transformation is not just another buzzword anymore. This process requires an organization to have data digitized. Therefore, the digital transformation of an organization is a necessary condition for being a digital leader. As data become the new currency in the information age, algorithms become the core of business excellence. Successful businesses are those that are capable of redesigning their businesses for the new digital age. I say the new digital age because we are using data to make better decisions, and with this computing power, we are shaping the competitive landscape using data.
Further, it is not only the use of data alone but also algorithms coupled with human decision-making that will determine your success or failure in the new digital age. At the heart of algorithms is data. All organizations have all sorts of data generated at various points in the value chain.
So, is your organization ready for digital leadership? The maturity of your organization depends on how it manages its data. Roughly, digital transformation maturity can be divided into four levels.
Let’s start by thinking about how your organization currently manages and uses data. The answer to these four questions below will determine your AI readiness and digital maturity:
- Do you have data in silos? You perform a fundamental analysis of your data with KPIs. Data analysts distributed across the organization but only serve specific department functions.
- Do you integrate data across the value chain to make sense of what happened? You have the diagnostic ability to perform advanced analysis, including historical trends and KPIs across the value chain. Typically, this is a business intelligence function in an organization.
- Do you have the ability to predict using the data? You can predict what will happen and have forward-looking indicators. You have a data science team that generates insights to drive business decisions.
- Do you ability to make something happen? You can utilize algorithms to optimize business in real-time to drive decisions and improve KPIs. You have an established data science team across the organization with business managers who are taking strategic decisions to stay ahead of the competition.
Most organizations will fall across various maturity levels depending on how they use data across their value-generating functions. To assess an organization’s data maturity, you have to look at the core functions, e.g., production, supply chain, marketing, sales, customer service, etc. that generate the most value for the organization and evaluate its digital readiness. Also, not all functions in the organizations can lead to a big difference in its digital competitiveness.
Data-driven companies dominate the markets as you can see, the market capitalization of data-driven companies has been higher than they have ever been in the past.
According to a survey by Deloitte, digital maturity translates to better financial performance.
Innovation is at the forefront of the digital economy, and many countries compete for the digital leadership position. See below chart depicting the data maturity of companies for the top 8 countries.
Data is an essential input in this information age, and data with human interaction (decision making) is going to be the new profitability lever for the new digital age. A massive digital transformation happening in almost every industry and digital maturity will separate winners from losers.
- Photo by Brxxto on Unsplash