All of us have moved on digital platforms and consequently, an unimaginable amount of digital footprint is being created. Smart enterprises and their leaders have been able to leverage the data and draw insights from them to redesign their products and services, change their strategies to engage existing customers, draw new customer cohorts, expand into new segments and optimise their operations. How can every organisation follow these practices?
Why can’t organisations and their leaders implement the obvious?
All leaders are seeing the digitisation around them right from the way we organise our travel, buy goods and services to the way we manage our money. However, all of them have not been able to get their business to take advantage of the possibilities offered by digital. From the smallest of businesses to the large ones, data helps in shaping business decisions – operational as well as strategic. There is no uncertainty around the ROI (returns on investment). Business leaders need to understand this and drive the business accordingly.
Some others have digitised their workflows and asked their ecosystem to go digital. And they want to analyse the data around them, but think that the capabilities and technologies needed to do that are expensive and hard to build. As cloud-based technologies galore, they have been caught contemplating and procrastinating. Forrester says that 74% of businesses want to be data-driven, but only 29% are successful at putting analytics into action.
All businesses do not need to buy a supercomputer or invest in data lakes and hire the smartest engineers to analyse the data their businesses generate. Several tools and systems are now available for each industry sector; these are fairly easy to implement and adapt. We need the leadership team’s belief and resolve to monitor and leverage whatever happens around them objectively.
Making a start is not enough!
Many companies have invested a good amount of effort and money in creating the analytics. The biggest challenge in these firms has been to get the rank and file to absorb the information and analytics being presented to them. Like we need to have the capability to read, write and speak in a certain language, our workforce needs literacy around data to be able to understand and appreciate them; leverage the insights drawn from the information.
A study by McKinsey shows that a large number (~70%) of digital transformation projects don’t meet their objectives. Hence, billions of dollars spent by enterprises failed to deliver the ROI. One of the reasons behind this is the fact that most organisations lack AI and data literacy. Thus, they fail to use the systems provided to them, do not appreciate and understand the reports that come out of the systems, let alone the possibility of leveraging data.
What can we do?
Firstly, the leaders have to align their teams on the significance of data literacy and show them what they can do if they are data literate. The leaders across the spectrum need to understand that they need to develop the desired skills to interpret data and take decisions based on the data. Then, the entire organisation from the top to the bottom needs to cultivate the habit of reading the data, relying on the information that stems out of the data and drawing the underlying trends and insights from the information. This is the hardest part of the execution.
Last, but not least is to identify opportunities for gathering data, building systems for it and developing the layer of analytics on top of it so that new insights can be generated. Business leaders have to anchor their annual operating plans on data-driven insights rather than gut-level presumptions, feelings and opinions. They need to call out the continual improvements they will make in their business in terms of systems and processes.
Organisations capable of making their organisation data-literate will win in the marketplace of tomorrow. It will be a competitive advantage that creates superior value for their stakeholders.