Digital transformation has gone from being a disruptive trend spearheaded by a minority of tech-savvy pacesetters to becoming a basic necessity if you want you to keep up in the modern business world.
Nearly all organisations have by now taken some steps towards embracing cloud computing, digitising sales and marketing channels, automating operational processes and the rest. It is hardly a choice anymore. Such are the benefits in speed, efficiency, cost savings and agility that digital brings to a business that, if you don’t embrace it, you risk getting left behind.
But that begs the question – now that everyone has ‘gone digital’, how can you still gain a competitive advantage from it?
Commentators have started to refer to a ‘second wave of digital transformation’ to describe how the trendsetters are once again gaining an edge. This is partly being driven by new technology, IoT, blockchain, AI and others. But beneath the surface, there is an even more fundamental force driving this second wave – data, and more specifically, the intelligence it offers to businesses that can harness it properly.
Digital systems have always produced data and, since the start of the digital revolution, businesses have been using analytics to gain meaningful, valuable insights from it. But in the search for continued digital advantage, data-led intelligence is taking on a new importance. As digital becomes embedded deeper and deeper right across organisations, companies are looking to extract new value from the vast data resources their systems are creating.
Most notably, the ‘second wave’ is seeing businesses seek to gain real-time intelligence from data resources which feeds into dynamic decision-making across the organisation, as well as accurate forecasting about future patterns and events.
So we might say that the ‘second wave’ is no longer just about ‘going digital’. It is about setting up your company to be digitally intelligent – using digital assets and the data they produce to deliver informed, robust, dynamic decision-making capabilities.
So what does it mean to be ‘digitally intelligent’, and how far along the road is your organisation?
Four Steps to Digital Intelligence
We are in the middle of a period of exponential growth in data. According to IDC, the global volume of data generated and stored in 2018 reached 33 zetabytes (a zetabyte is one billion terabytes). By 2025, that figure will have soared to 175 zetabytes. Driven by massive growth in IoT/smart automation, 5G mobile, next-gen cloud and the parallel emergence of hyperscale data centres and edge computing, most of that data will be amassed by and within enterprises and other organisations. IDC suggests there is already more data stored in enterprise clouds than in all the world’s digital devices put together.
So the first step to digital intelligence is recognising the data resources available and the potential value they carry. At present, it is estimated that organisations make use of less than 20% of the data available to them, which leaves a massive untapped resource for building a competitive advantage. Digital intelligence must in the first place be built on clear insight into the data available, at which point plans can be made for putting it to use.
As PwC puts it, data is already an asset most businesses have at their fingertips, but one they can do little with until it is “enriched and brought into focus.” Big Data and Artificial Intelligence (AI) are the two key technologies which will help businesses turn under-utilised data into meaningful intelligence. So the next marker on the road towards digital intelligence is the adoption and integration of these. While still considered separate approaches, in the coming years we can increasingly expect AI to be applied to Big Data processes in order to make analysis faster, more agile and more automated.
Which brings us on to the third step towards digital intelligence – the speed of decision-making. The traditional analytical cycle involves collating and assessing historical data, reporting on the key insights and then using the findings as a basis for decisions. Inevitably with such a process, there is a gap between when the data was created and when the decision is being made, perhaps of weeks or months.
If we are always looking backwards at available data, there is always the risk that what it tells us is already obsolete – just look at how the COVID-19 pandemic has made all the operational and performance intelligence we might have wanted to use from Q4 2019 so suddenly irrelevant. Another way to gain an edge from data, and a sign of digital intelligence, is the ability to make real-time decisions based on the latest available data, or even harness the powerful statistical modelling capabilities of Big Data and AI to make future predictions.
Finally, a fourth step towards digital intelligence is how data skills are deployed across your organisation. There is no longer any value in siloing away your analytical and data science talent in the IT department. Data must be viewed as a core business asset, and data skills must be embedded at every level to make the most of it. Recruitment must focus on where data skills can make the biggest difference across all departments, and the best talent must be allowed to rise to the top to lead your organisation through the second wave of transformation.