Analytics as Digital Backbone

"Digital Transformation" and "Digitization" are the new buzzwords on the market and, while the topic is becoming more and more common in meeting with customers and the new role of CDOs - D standing for Digital this time - pops out everywhere, seldom companies have a clear strategy and defined path for it. Being associated with innovation, digitization is too often seen as a creative process with unpredictable results, especially when it goes beyond the simplicity of "making a process digital" and explores the opportunities provided today by BigData and IoT.

While this might be to some extension true, it is also true that ,just like for innovation, you have to setup your organization for digital transformation and it all starts with building a digital Backbone.

The digital Backbone

The concept of a digital backbone is not new at all. In the late 90s and early 00s the focus of IT was on ERPs, seen as the "Master System" in a very egocentric vision of the business (it is funny how some IT trends 100% match the current social trends), mainly driven by and focused on internal processes, in those days often subject to redesign and optimization through methodologies like Six Sigma and Lean Manufacturing.

With a progressive shift towards customers, starting from 2005 companies started looking at CRM as the master repository of information, the piece of software to integrate to and be lived as the digital backbone.

But, exactly as predicted by Gartner in 2013, in these days we are moving away from a model where business software is the main actor towards a model where analytics become the beating heart of corporate strategy, and it becomes instinctive to look at Analytics as the natural candidate to build the digital backbone. But not all analytical solutions have what it takes to address all the flavors of digital transformation strategies, and making the right decision might make a huge difference in the end result of the Digitalization Strategy.

Digital Transformation Strategies

When it comes to digital transformation there are three main strategies a company can use to approach it, sometimes ran sequentially, sometimes in parallel, sometimes under the same owner, sometimes under different owners. What is interesting is that each of those strategies requires an analytical platform with different characteristics

Operational Excellence strategies

Operational excellence is the most traditional field for Analytics, still one of the most important. Having the business under control, knowing exactly what's happening and why, how to make a desiderable outcome repeat or an unwanted one not happening again, optimizing processes, resource allocation and distribution and more in general keeping your business at high level of efficiency can be a quick-win for you investment in Analytics. But to make this effective effective data must be democratized. It does not mean that everyone shall have access to every information, but that everyone should have full access to the information relevant for her/his role, not by analysis done by other, pre-digested, so to say, but to be exposed to an analytical platform that's easy to use, very much self-service orientated and capable to allow true data discovery.

Customer engagement strategies

The focus of a customer engagement strategy is the development of customer loyalty and trust — and, in the best cases, passion. Companies choosing this approach offer seamless, omnichannel customer experiences, rapid responses to new customer demands, and personalized relationships built upon deep customer insights. Recognizing the always-rising bar of customer expectations, companies with a great customer engagement strategy are constantly identifying new opportunities to connect with their customers.

Just to mention one example, there is a growing attention toward what has been defined "conversational interfaces" for companies. The simple fact our interactions with friends/colleagues is moving away from a call/emails towards messaging system has as consequence the fact we expect/prefer the same interaction to happen with the companies/services we interact with. The progresses done by AI and natural language recognition offer to company not only a way to fulfill this request, but also automate this kind of interaction and collect an all new set of information from customers, that can be used to shape a personalized offer or capture new trends in a timely manner.

It is then important to onboard an analytical solution that can not only integrate, but literally co-operate as a peer with external technologies, whether this is AI, advanced analytics, conversational interfaces or whatever the fast paced and exciting world we live will bring in our business.

Digitized Solutions strategy

A digitized solutions strategy transforms what a company is selling. It seeks to integrate diversified products and services into solutions, to enhance products and services with information and expertise that help solve customer problems, and to add value throughout the life cycle of products and services. Over time, digitized solutions can transform a company’s business model by shifting the basis of its revenue stream from transactional sales to sophisticated, value-laden offerings that produce recurring revenue. Even in this case analytics are very often the central piece of the creation of digitized solutions ideally being a platform that extends beyond the boundaries of the company and exposes informatons to our customer base, very often involved in the process as part of the value we provide (just think at reccomandation systems or traffic alerting systems).

"One Analytical Platform to rule them all"

In conclusion there are several different ways the Digital Transformation can be interpreted in a company and these strategies can be selected based on corporate goals/culture or used all holistically, can be implemented sequentially or in parallel but they all require a solid and living ground to put their root on if we want them to survive and provide value.

Analytics can be that fertile soil, the backbone supporting our digital strategies, provided they are not seen just as a additonal piece of software to check a number of KPIs, but as the common layer and the foundation to the entire corporate strategy and culture.