Digital Transformation Begins with Data

Imagine being 15 and showing up for your first driving lesson — but instead of meeting a responsible adult in a sensible car, you find yourself alone in a souped-up Lamborghini. Your first thought is probably, “This is amazing!” 

But then what? How do you even use this thing? And what do all those street signs mean, anyway? The best-case scenario is that you just sit there in the parking lot. The worst case is catastrophic. 

It can be easy to see other businesses succeeding with their digital transformations and get the itch to jump right into the sports car. But you can’t skip the first step, and that’s taking the time to organize and understand the data that fuels any digital transformation. In fact, data is so important that it should be a shared responsibility across your business.

Why Data Matters in the Digital Age

Data is the bedrock of almost everything that helps modern businesses become and stay secure, competitive and profitable. For example:

• Distributors can leverage market data, as well as data about their products, to improve pricing and maximize margins.
• Distributors can use inventory and sales data to improve turnover rates and anticipate changing demand patterns. 
• Distributors can also leverage customer data to feed sales reps opportunities.
• Manufacturers can optimize their rebate programs to capture growth and recover lost margin.
• Data helps businesses become more customer-centric, including hotels and casinos that improve customer engagement by offering more meaningful guest journeys.

Data can improve risk management by revealing possible anomalies, facilitate better collaboration, and make it easier to define, track, and measure employee performance. 

Of course, simply having the raw data isn’t enough. For today’s tech solutions, especially those using AI, to achieve a desired outcome, your data needs to be clean, accurate, and accessible, and perhaps most importantly, you need to know what datasets will actually provide value. 

Building a Strong Data Foundation

To ensure that you’re set up to properly use your data, you first need to get your company’s leadership on the same page about what it really is and why it’s important. 

Data is not just an operational output that’s stored and managed by technical experts. Data assets are products that can actively drive business, and so team members need to take ownership. Your IT and business teams should work together to build a data infrastructure that supports your business goals.

That means moving away from monolithic storage structures that are primarily designed for archiving and toward more democratized structures that make data easier to access and analyze for anyone who needs it. 

One way to ensure that such a move is successful is by using data contracts that govern the use, format, and structure of data assets, as well as the rights and obligations of the parties providing, sharing, and using them. With a strong data contract, organizations can become more responsive to change while improving the accuracy of their data and the quality of their data analysis.

The Risks of Failing to Invest in Data

If you don’t put in the leg work to overhaul your approach to data and skip right to the digital transformation part, you’ll end up putting a hard cap on the potential of your tech investments. 

For example:

• Your AI models won’t function at their best. AI needs large, clean datasets to work from, and that data needs to be relevant and valuable. Disorganized data will produce lower quality outputs — and you’ll end up overlooking big opportunities for revenue and innovation as a result.
• Your customer experience will suffer. Even if you invest in great software that promises to improve customer experience, gaps in data will throw a wrench into the works. Incorrect, incomplete, or outdated data about customers, your products, or your inventory levels will inevitably lead to dissatisfaction, no matter how shiny your new technology is. 
• You’ll create the need for new workarounds. It’s a familiar story: Your old software wasn’t very efficient, and so your people had to come up with novel ways to work around its shortcomings. But the problem wasn’t just the software — it was the data, too. Upgrading to a new solution without also cleaning up and restructuring your data will simply lead to more inefficiencies and workarounds. 
• Your digital transformation will fail to deliver the desired ROI. Even if the implementation of your new tools goes smoothly and you gain widespread adoption, the above issues will show up in the form of a lower ROI. 

Finding the Right Data Partner

At ProfitOptics, our expert data engineers can simplify your data landscape and curate datasets to maximize the value of your tech investments. Reach out to our team today to learn more.