Digital transformation has become an overused buzzword.
When most people speak about digital transformation, they are really speaking about digitization, digitalization, or digital strategy.
They are all very different and none of them are digital transformation.
Let’s look at each of these four terms so that we can be very clear about what we are talking about:
- Digitization – Digitization is the process of converting information into a digital (i.e. computer-readable) format (source: Wikipedia)
- Digitalization – Digitalization is the adaptation of a system, process, etc. to be operated with the use of computers and the internet (source: Oxford Dictionary)
- Digital strategy – In the fields of strategic management, marketing strategy, and business strategy, digital strategy is the process of specifying an organization’s vision, goals, opportunities and related activities in order to maximize the business benefits of digital initiatives to the organization (source: Wikipedia)
- Digital transformation – A digital transformation is the journey between a company’s current business operations to a reimagined version from the perspective of how a digital native would build the same business operations leveraging the latest technology and scientific understandings of management science, leadership, decision science, business and process architecture, design, customer experience, etc. (source: bradenkelley.com)
At the heart of successful digital transformation, innovation, disruption, and even customer experience are two things:
- Humans
- Data
Digital transformation is not about digitizing physical objects, systems, or processes or about building a strategy for operating in the digital space, although all of those things may play a part, but it’s about people, the information they want, and the information you have – and information comes from data.
If you have the right data, connected in the right ways it turns into information, and when you consider the information you possess through the right lenses, you can create the knowledge and insights necessary to understand your customers’ needs and your future business success. But many organizations start building a digital transformation approach without putting a solid human-centered data foundation in place to build success on top of.
Insights are developed from the connection, distillation and analysis of data, information and knowledge to identify WHY the behaviors occur at all. Building upon my “Where Insights Come From” framework above, let’s look at an example of the distillation of data into insights:
- DATA will tell us that we sold 20 black cars, 19 blue cars and 17 white cars in Atlanta.
- INFORMATION identifies that we sold more black cars than any other color in Atlanta.
- KNOWLEDGE helps us see that we sold 20 of 100 available black cars, 19 of 50 available blue cars, and 17 of 17 available white cars in Atlanta, meaning that Atlanta residents are crazy about white cars and we should be making more of them.
- INSIGHTS will tell us that the white cars sold out because people prefer white cars that stay cooler in the hot sun, and so perhaps in addition to building more white cars we should experiment with offering more light colors for sale in Atlanta.
Looking through the insights lens forces us to focus on why things are happening and go beyond what the data, the information, or even our intelligence is telling us to get to the human influence on the situation we are evaluating.
The insight lens forces us to look carefully at the data we are gathering to identify whether it will help us answer the WHY question and identify situations where we need to make modifications in our data strategy to help answer the WHY question or to commission separate research to answer it.
Focusing on insights helps us be more empathetic, human-centric and to break out of the vicious cycle of gathering data just because we can.
But, it is only when we gather the right data and connect it all together that the magic happens. When a customer calls in, you can only anticipate their needs if your data is connected. For example, if your phone system doesn’t know all of the following, you are likely to underwhelm your customer:
- Two weeks ago they purchased the latest version of your product
- They called customer service last week
- Sentiment analysis of the call recording indicates it was a problem call
- A replacement product was shipped out
- Before yesterday they haven’t called customer service for seven years
- They have been a loyal customer for fifteen years
- They purchased an extended warranty on their previous product but not this one
- They received the shipment of an accessory yesterday
Customers don’t want to start from the beginning every time they call, but most companies do exactly that because their data lives in silos, it’s not connected, and they’re drowning in technical debt. Customers hope companies know them, and can anticipate their needs, but too often we let them down.
Every time a customer has a great experience – somewhere else – this becomes their new baseline. The companies moving the humans to the center of everything that they do (including their employees) are changing the game for everyone.
But it’s not all about delivering better customer service & support. When you create a human-centric data model free from silos, it empowers you to progress from creating better service to an overall improved customer experience, and beyond towards improved products & services and insight into marketing and innovation opportunities that will keep your company resonant and relevant.
Don’t be afraid to ask for help in creating a human-centric data model that pulls your customers and employees to the center of everything you do, they’ll thank you for it, and your shareholders will too.
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