It is easy to see why the notion of appointing a Chief Data Officer or Chief Digital Officer as a “quick fix” catalyst for accelerating digital innovation efforts has gained traction with many organizations.
A recent Genpact Research Institute study found that more than two thirds of digital transformation projects fail to meet expectations. Further, just 35 percent of operational executives have seen strong benefits from the digital initiatives they have implemented. Why the shortfall between expectations and reality?
The answer is complicated, and may vary widely from enterprise to enterprise, involving factors such as misalignment between technology and business teams, process and legacy integration failures, and talent shortages. But data is a big part of the puzzle.
From an analytics standpoint, many of the struggles organizations face can be traced back to a failure to implement data governance procedures in the middle- and back-office that would enable both Chief Digital Officers and Chief Data Officers to truly accelerate digital transformation.
You may be aware of the Four Vs of Big Data - velocity, veracity, volume, and variety. However, in order for the digital enterprise to truly deliver on its promise, there is another V that is coming into sharp focus – one that is increasingly keeping both types of CDOs awake at night: data virility. Data virility is the potency and efficacy of data in generating the right insights that lead to impactful business outcomes.
For the data to be virile, it must be trustworthy.
Data in any organization primarily comes in from the systems of record. These systems are generally rigid. However, they are controlled by a certain set of information governance rules, values if you will.
As enterprises add more external data to the mix – e.g., information from credit bureaus, social media, and companies integrated through mergers and acquisitions, and various other sources – information governance becomes an ever more formidable exercise. Accordingly, as the gap between the systems of record and the management information systems increases, generating real value from the data becomes more elusive.
This is the challenge CDOs consistently grapple with:
Is my digital infrastructure adequate?
Do I have the right digital processes in place?
Is the data I use trustworthy?
Are the insights that my information systems are generating reliable and useful?
Are my analytics systems providing the data that my enterprise needs?
True digital transformation involves a combination of systems, and processes to create the “pipes” for data to flow. But when the data component is dysfunctional, no amount of digital change will matter, and CDOs will struggle, regardless of their mandate.
So what is the solution?
As more and newer sources of data enter the equation, CDOs need to understand how they can apply the same values and governance structures that exist in their systems of record further down the information value chain.
What does this mean in practical terms? First, it means that any sort of data manipulation should start with a focus on business outcome. CDOs need analytics engines that derive actionable insights to select the correct data across systems, and apply information governance so they can trace every manipulation back to its source.
Even with the best data governance, CDOs can benefit from digital systems that can best optimize all the information sources. Integrating technology and process re-engineering using Lean management strategies can help prevent the digitization of broken processes while also simplifying interventions.
The crying need is for fast paced, iterative change rather than the traditional long cycle, investment heavy, rigid transformation journeys which in today’s fast-changing environment are often too late and too expensive. Lean practices, used alongside advanced digital technologies and a design thinking discovery process that focuses first and foremost on the customer, are effective in driving agile and iterative transformation to achieve lasting enterprise-wide results.
Digital technologies are radically changing how enterprises run, arguably with greater and deeper impact than that of any previous evolution. But a continued reliance on legacy systems and a lack of governance across business processes and information systems continue to hold organizations back, keeping CDOs from achieving their promise. Only when data virility is established throughout the information value chain will true digital transformation be possible.
Today’s challenge is not new technology; it is management’s ability to re-architect how businesses run – at scale – by harnessing digital’s power to better adapt and compete. CDOs can drive greater benefits from digital technology aligned through the front, middle, and back office, to unlock more value, simplify complex processes and impact business outcomes.
This approach also drives the emergence of more intelligent operations that can execute faster and more accurately, and adapt over time. The end result delivers digital transformation that is more rapidly attainable, with scalable and cost-effective business process platforms tied to enterprise-wide results.
(About the authors: Paul Burton is Senior Vice President and Business Leader, Analytics & Research; and Sanjay Srivastava is Senior Vice President and Chief Digital Officer, at Genpact, a global leader in digitally-powered business process management and services.)
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