Why Data Is Essential to Successful Digital Transformation

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Click to learn more about author Gaurav Belani.

Before we get into the specifics of why data is essential to the success of digital transformation, let’s first get acquainted with the term “digital transformation” that’s becoming every business manager’s favorite word these days.

What Is Digital Transformation?


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In simple words, digital transformation can be defined as a process of digitalizing existing business processes, culture, and customer experience by modifying them using digital tools and software. The process of creating new digitally centered processes also makes a part of digital transformation.

The main reason why digital transformation has become imperative for every business is to enable and equip them to keep up with the changing customer behaviors, business requirements, and market landscapes.

Digital transformation is essentially reimaging your business for the digital age.

With digital transformation, the silos built around departments like sales, marketing, and customer service disintegrate to revolve around customers and how to engage them.

“Every digital transformation is going to begin and end with the customer, and I can see that in the minds of every CEO I talk to,” says Marc Benioff, chairman and co-CEO of Salesforce.

More often than not, digitalization is used interchangeably for digital transformation, which is not quite right. Digitalization means using digital data and tools to simplify and thereby improve your current business processes, whereas digital transformation is much more complicated. 

The core idea behind digital transformation is to add value to each and every customer interaction regardless of where and how it takes place.

Now that we have a clear understanding of digital transformation, let’s explore, dissect, and understand the question at hand: Why is data essential to successful digital transformation?

The Role of Data in Digital Transformation

We are living in an information age, and yet most organizations are not able to use the available information to its true potential. The organizations that have started treating information as an asset now have a competitive advantage over every business in their industry and are considered as the pioneers or leaders of their industry.

The word “information” here means the available, tracked, and measured data that organizations have.

These leading organizations are using this data to create and deliver value to their customers by understanding, aligning, and actioning the available data – digital and offline.

And remember, digital transformation and data are not limited to offline businesses. The whole point of digital transformation is to bring all the data points together in one place for a more comprehensive and holistic view of the entire business’s ecosystem.

Having such a broad view and understanding of different data points allows business owners and managers to see a greater value and thereby expand and enhance their customers’ experience with them.

According to Gartner, around 90% of corporate strategies will consider information as a critical enterprise asset by 2022. In addition to that, they’ll consider analytics as an essential competency.

Benefits of Data-Driven Transformation

The notion that “data is the new oil” isn’t just an empty saying. Data is the fuel that’s enabling organizations to reimagine their business on the solid pillars of data-driven digital transformation. Here are a few benefits of digital transformation.

  1. Equilibrium between risk and reward: Injecting the right data points into business intelligence and business analytics tools enables businesses to stimulate future market scenarios. This helps them to maximize benefits while minimizing the market risks. Not only that, advanced and unified digital transformation tools allow them to track and maintain compliance with global rules and regulations and keep their carbon footprint in check.
  2. Exploring new business opportunities: Data allows businesses to stay ahead of the emerging threats, opportunities, and trends, which means they can explore new business opportunities like entering new marketing, shifting business priorities, and other strategic decisions.
  3. Redefined processes: Data has the ability to expose the tiniest of details of any business process, which allows businesses to identify inefficiencies, risks, improvement areas, etc. This way, business managers can replace the old ways of doing things with new and improved processes to make the business more profitable. For example, instead of allocating resources for customer onboarding, they can implement a robust digital adoption platform that will allow them to digitalize the entire customer onboarding process.
  4. Deeper insights into customer behavior: With data, business managers have the ability to track, measure, and map each and every customer’s interaction and build detailed customer profiles with their needs, wants, and behavior patterns. This will allow them to create better and customer-centric new products, improve overall customer experience, and turn more customers into promoters.

Defining Digital Transformation

Every organization and business has its own rules, goals, priorities, and own ways of conducting business and catering to customers. So, it’s inevitable that one organization’s digital transformation strategy will be different from the other.

For example, if two organizations are trying to digitalize the customer onboarding process, one organization might be interested in Appcues for their feedback collection and employee engagement since their strategy depends highly on feedback. On the other hand, the other organization might look for Appcues alternatives as their focus to make their onboarding seamless with in-app interactive guides and self-service resources.

It’s quite possible that even different departments from the same organization are applying different digital transformation strategies, starting points, and technologies in place for digital transformation.

The most important thing for you, as a business manager, to make sure of is that the digital transformation with data is targeted towards implementation and refining of unified tools, Data Management and strategy, processes, and analytics, which will help enable precise data insights and intelligent, informed decision-making.

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