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Why Data is Vital for Business Digital Transformation

Data is one of the most valuable assets that a business can have right now — and without it, digital transformation may be difficult or impossible. Big data in digital transformation helps to accelerate digitization and migration of key systems. Good decision-making during the digital transformation is much easier with the right data and insights.

Data and Digital Transformation Go Hand-in-hand

While fewer than 50% of documented corporate strategies “ mention data and analytics as fundamental components for delivering enterprise value,” in 2019 according to Gartner, the firm predicted that in the near future, 90% of businesses would begin to explicitly mention data and analytics as essential to business success.

Many businesses begin their digital transformation by taking control of their data — rather than allowing data to become lost, siloed off or under-utilized, the business creates new tools and systems that improve data gathering, storage, visibility and analysis across the organization.

These improvements to data governance help drive performance improvements and make the digital transformation easier to carry out.

Writers and business experts also often consider data and analytics to be foundational to a digital transformation. Organizational psychologist Tomas Chamorro-Premuzic, writing for the Harvard Business Review, lists five essential components of a digital transformation: people, data, insights, action and results.

To begin a digital transformation, according to Chamorro-Premuzic, businesses start with people — their employees, customers, business partners and so on. They draw on their knowledge of these people, like what a company’s salespeople know about its clients, which is valuable, but often siloed off and not easy to analyze at scale.

Next, the business will move on to collecting data. Using information from the business’s people, the company will develop data-collecting programs and solutions that gather valuable information on the business, its customers and the services it provides.

Using analytic tools, the business will extract usable insights from this data, which will lead to parts four and five of the transformation — action and results. Once a business has achieved some desired outcome, it can return to the data step and move through the process again, allowing for continuous improvement of business processes.

Benefits and Applications of Data and Analytics in Digital Transformation

Data from across an organization may be essential in determining which components of a digital transformation are actually yielding results.

Data, and the insights yielded by advanced analytics tools, are typically necessary for creating metrics and KPIs that allow businesses to more accurately determine performance, identify weak points and make good predictions about the future.

For example, a business that wants to personalize the customer experience will need a great deal of data on sales and customer behavior to determine which aspects of its personalization strategy are actually providing value to customers and driving additional engagement.

A data-driven culture can also provide additional benefits, like an improved customer journey and better communication or coordination across the company.

Businesses that invest in data and analytics will be less likely to silo data in a particular solution or organizational unit — helping ensure that data collected anywhere in the business will be available everywhere, allowing the entire business to utilize this information.

Centralized data can provide a single perspective on business operations that employees across the organization can use as a common reference point when talking to workers in other departments.

How Do Businesses Build Data and Analytics Competency?

At the executive level, the creation of roles like the Chief Data Officer can provide some additional structure to businesses that have struggled with integrating data and analytics into their business strategizing.

Top-down changes, new policies and organizational shifts can all have a major impact on how data is gathered, handled and analyzed throughout the organization.

Executives and managers can ensure greater focus on data at all levels of the business by discussing data and analytics in the boardroom or strategy meetings and encouraging investment in data and analytics solutions.

Change can also come from actors at lower levels within the organization — including individual employees, departmental heads and IT workers.

Discussing how data and analytics have already provided value to the organization can help encourage further investment in data and analytics.

Building or buying the right tools will also help. Machine learning and big data analytics are beyond the competencies of most companies, meaning that investing in these tools and the skills needed to utilize them can help businesses both secure a competitive advantage and get the most out of their data.

Advanced data-collection tools, like fleets of IoT monitors and sensors, may also be useful for businesses in certain niches — like logistics companies and manufacturers, who can use IoT to gather information on facility processes or the movement of goods and parts.

Businesses Need Data and Analytics to Drive Digital Transformation

Without data, the digital transformation of a business likely won’t be possible. Both good information and usable insights are needed to effectively integrate digital technologies into existing business processes and determine which elements of the transformation are actually providing value.

Both executives and employees at all levels of an organization can encourage the building of data and analytics competencies. Discussing the value of data and gathering specific examples of how data has already helped improve business performance can make further development of data and analytics capabilities more likely.

Shannon Flynn

Shannon Flynn is a technology writer who covers trends in business, cybersecurity, and IT trends. Shannon is a contributor to MakeUseOf, Hackernoon,, and more. She's also the managing editor of

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