The debate over digital transformation is really a battle of definitions. While both sides agree that digitalization is critical to the survival of a business, there seems to be a difference of opinion of what “digital transformation” means. One side argues that it’s about advancing the customer experience with technology, while the other believes process automation is the key.
In some ways, both sides are right. But the staggering failure rate of digital transformation indicates that they are missing the bigger picture. According to SAP’s Dan Fagan, vice president of the Enterprise Transformation Practice; David Roberts, Enterprise Transformation lead; and John Mikos, Enterprise Transformation lead, real transformation happens when processes and data are brought together to make better decisions and deliver a customer experience with the ever-elusive “wow” factor.
“Data is indisputably the new oil when becoming a digitally connected, real-time enterprise,” Roberts mentioned during the Americas’ SAP Users’ Group (ASUG) Webcast “A Practical Guide to Digital Transformation: Lessons and Examples from the Real World.” “Businesses must refine this resource to find information that is valuable not just inside the enterprise, but also outside. Mashing these two aspects of data together provides insights that can be genuinely operationalized in every area of the value chain.”
Complexity is best solved through data-driven pragmatism
As emerging technology – such as predictive analytics, artificial intelligence, machine learning, and blockchain – is capturing every business executive’s imagination, the volume, quality, and origin of data have never been more critical. However, those are typically the last items on the agenda.
Businesses are constantly looking for ways to leverage the latest technology to achieve their vision of digital transformation, noted Mikos. “Businesses want to accelerate the enterprise, grow productivity, and run the business in a seamless, integrated, and agile manner. But what they really want is simplification. They want harmonized processes,” he said.
The main obstacle to achieving these goals is maintaining a traditional view of data. All too often, data is seen as a complex bucket of amalgamated information. But really, it’s a union of two distinct sides of business intelligence:
- A system of record: This part of the IT landscape is the authoritative source that helps ensure all systems run on data with integrity, high quality, and truth.
- A system of innovation: When combined in a unique manner, data and processes can drive new ways to move the business forward.
Paying attention to both sides of the data equation sets the foundation for capabilities that drive digital transformation. Better speed and total cost of ownership, actionable decisions, efficient processes, value-driven products, and new business models – all these things businesses want are fueled by data.
Source: “A Practical Guide to Digital Transformation: Lessons and Examples from the Real World,” Americas’ SAP Users’ Group, 2018.
“If you look in the middle [of the above image], you’ll see that process improvement straddles the line between the two systems,” Fagan pointed out. “By pulling from the system of record, processes can improve, replace less effective ways of work, and evolve. From this point, the business can absorb advanced technology of innovation – machine learning, for example – to enhance processes further.”
This approach to marrying data and processes opens the door to tremendous value. Each new capability achieved – in a left to right fashion as shown in the above figure – is a building block that leads to competitive advantages that are separating industry leaders from the rest of the competition. Over time, the business can innovate value-driving ways to embed new technology into products and create new business models to gain a vibrant customer following, enter new markets, and take advantage of game-changing partnerships and acquisitions.
Data bridges the gap between digital strategy and future advantage
Every digital transformation starts with a futuristic, hopeful vision of possibilities. However, no dream has ever been realized without the right foundational tools to enrich the people, processes, and things needed to achieve it.
Such is the case with the relationship between digital transformation and data. The right insights can guide businesses towards the right path – from knowing which questions to ask and which dots to connect. Doing so will lead to not only accurately defined goals, actionable strategies, and mapped-out building blocks, but also the will to forge ahead to a transformation that yields outcomes of significant competitive advantage.
Turn data into your foundation for digital transformation success. Learn key industry lessons from the Americas’ SAP Users’ Group (ASUG) Webcast replay “A Practical Guide to Digital Transformation: Lessons and Examples from the Real World,” featuring Dan Fagan, vice president of the Enterprise Transformation Practice at SAP; David Roberts, Enterprise Transformation lead at SAP; and John Mikos, Enterprise Transformation lead at SAP.