Data-Driven Transformation

PUBLICATION

DATA-DRIVEN TRANSFORMATION:

an accessible approach to the digital future

Demystifying the clear path to a
digital future

More and more companies around the globe find themselves pondering an attractive opportunity: How do we truly start to base decision-making and business strategy on data? While organizations that were “born digital” seem to do this quite naturally, their non-digital counterparts may feel insecure about how exactly to catch up and safeguard the future viability of their business.

This sense of insecurity is not surprising considering that many born-digital companies are able to leverage data in diverse ways to drive important innovations. In response, leading “analog players” have started investing in data as a strategic resource to achieve success and raise value generation for the organization and its stakeholders – be it in the core business or in a new offering. Not only has the market shown us that this journey holds real potential but, equally important, it is also accessible to businesses at any level of digital maturity.

What exactly do we mean by data-driven transformation? Here, we’re referring to the aim of many companies to transform by turning the large quantities of data available to them – be it internal or from the market – into an asset. These companies have realized that data can be leveraged to make more informed decisions, more effectively orient the overall strategy and generate more value for the business.

A data-driven transformation is the change that these companies need to go through in order to make use of this new asset and address different considerations:

  • How do we use, collect, organize or govern this data?
  • How do we connect it with our day-to-day business?
  • How do we generate engagement and buy-in among users?

This journey addresses broad strategic, technical, procedural and cultural questions, from selecting system architecture to involving people in a way that ensures impact and absorption of a new modus operandi. The transformation offers short, medium and long-term benefits:

  • Using data and KPIs to orient the core strategy Achieving          improvements   in         processes        and efficiency gains
  • Establishing strategic capabilities to gain insights, uncover new business opportunities and drive the value proposition.

 

An accessible transformation

Despite the apparent urgency to act, business leaders are often reluctant to set off on this path due to a mix of apprehension and, ultimately, a lack of understanding as to what the data-driven transformation entails – and what it doesn’t. We should point out that much of the buzz surrounding this topic is hype. Starting the data-driven transformation, as we have seen among clients, can be much more straightforward and down to earth than it seems.

Despite the apparent urgency to act, business leaders are often reluctant to set off on this path due to a mix of apprehension and, ultimately, a lack of understanding as to what the data-driven transformation entails – and what it doesn’t. We should point out that much of the buzz surrounding this topic is hype. Starting the data-driven transformation, as we have seen among clients, can be much more straightforward and down to earth than it seems.

There are three main reservations that cause businesses to avoid the topic.

  1. We’re too disconnected from the issue and won’t be able to overcome the initial gap.

This fear stems from the thought that the company is behind in terms of the data-driven solutions it currently uses (if any), resulting in a paralysis to act. However, this perceived “gap” is generally much greater than the reality and very possible to overcome. As we’ve seen with many companies, the real gap to be overcome rests in securing the will and forward movement needed to start the transformation. Once you’ve started the journey in a structured way, the targeted changes and benefits gradually arrive and
serve as a boost for the business.

  1. We simply don’t have the resources to invest in this large-scale investment right now.

Added to the misconception that the data-driven transformation demands a large sum of capital upfront, business leaders also worry about risks to business continuity brought about by complex projects involving system architecture overhauls and modernizing the IT infrastructure – which can be quite delicate topics. But this is not how the data-driven transformation needs to work in practice. Different paths exist within this transformation, allowing you to move forward, develop a data-driven culture and evolve as a business without necessarily undertaking large-scale systems changes from the outset.

  1. We don’t know how to connect the transformation with other business needs to ensure returns.

Despite coming in an abundance of forms, many business leaders view data as an “uncertain” resource in the journey – one that holds high potential yet without any guarantee of success. As in any transformation, this journey will indeed demand both monetary and human investment to achieve objectives and returns that tend to stretch beyond the short term.

As such, it is vital to connect the need for the data-driven transformation with other projects and initiatives that offer returns in the short to medium term. With the right approach, these points can be harmonized and provide the momentum and engagement required to sustain this investment. The key is that any data-driven transformation needs to be carried out at the service of the business – not the other way around.

Starting off simple

For any business leader seeking to wrap their head around the topic of data and digital, it’s important not to get caught up in the technical jargon and overstated complexity often surrounding this topic. The essence of this transformation should be made easy to approach and understand once the reservations outlined above have been addressed. At the same time, the solutions being developed need to offer clear frameworks, accessible language and simple concepts for all the stakeholders involved. If discussions are too “exclusive” and only understood by a few experts, professionals at your company won’t be able to put the new approaches into day-to-day practice – and the organization ultimately won’t transform.

In our experience at Integration, we’ve seen that it’s most effective to approach this in a simple manner and to start generating inertia through practical steps that can be followed by businesses at any level of maturity.

This report provides a panorama of nine key considerations for achieving success in the key questions, trade-offs and common errors that your business should take into account based on our past experience supporting clients in this endeavor. The best practices presented here draw on successful transformation journeys and are meant to serve as a guide for newcomers to this topic. To close, the report includes a selection of cases with real-life insights from past projects that supported businesses in their own data-driven transformations. 

THE DIGITAL PATH AHEAD

These 9 key considerations for finding success with data-driven culture outline how companies can establish an adept strategy, start adapting through implementation and effectively adopt changes for the long term.​

An Overview Of The Journey

Key Question

Trade-off

Common Errors

Success Factors

THE THINKING CAP

Calibrating the internal machinery

Once clarity is reached as to whether the business needs an inward-facing data-driven strategy with a focus on boosting efficiency or outward-facing one with a focus on growth – be it via disruptions or incrementally – the next critical question is: Where should we start? Which areas do we want to be impacted by our data-driven transformation first?

Initially, it may seem that all areas of the business would be viable candidates, from marketing and finance to sales and logistics. However, setting focus areas at this stage of the overall transformation is crucial. The first target area (or areas) should be the ones with the acutest shortcomings paired with a potential to quickly generate added value as well as ensure the longer-term transformation keeps its momentum.

Key question

Which processes, rituals and areas will be impacted by the targeted changes?

From our experience, a sensible basis for prioritizing actions starts with identifying if a focus on specific areas of the business or on governance as a whole is more suitable to your strategy.

  1. Taking a vertical approach entails addressing a critical area of the company first – leveraging visibility over the area's activities and performance.
  2. A horizontal approach is broader in essence and directly addresses corporate governance – leveraging visibility over objectives and indicators to provide a broader perspective.

Some considerations can be used as guidance for deciding if a horizontal or vertical approach is most suitable for your business. For organizations pursuing a better understanding of their business reality (typically those that are less mature in the management and use of data), a horizontal approach will be a better fit. For those seeking to achieve specific operational advantages, a vertical approach is a better choice.

A retail client we supported on their data-driven journey urgently needed to improve decisionmaking processes among top leadership, for which a control tower with indicators was recommended. This horizontal approach didn’t target any specific area but was meant to impact leadership across the whole company. A special dashboard was created for each leader to review on a weekly basis, using the indicators presented there to make more informed decisions about client and employee satisfaction, service level, ROIs, financial health and competitiveness.

There is also an important cultural factor at play here that should be considered. If the business’ overall strategic objective is to promote broader transformation involving:

  • a new strategy,
  • a new vision for the company or
  • a new mindset

that connects diverse areas and stakeholders – from the leadership down to the teams – a horizontal vision is suggested. On the other hand, if the objective of the transformation is to

  • progress to a new level in a specific practice or function,
  • sustain a particular strategic project or
  • develop a new capability that did not exist before, a vertical approach will be better suited. While the approaches are not exclusive, pursuing both can easily lead to disputes over resources as they rely on similar teams and information sources.

Vertical focus on an area

Trade-off

Horizontal focus on governance

It’s important to bear in mind that any new tools or indicators you plan to create through the data-driven transformation plan should be specifically tied to the business needs at hand. In order for a dashboard to be effective, it must respond to a given decisionmaking process – which we call rituals.

One of the best practices that we’ve identified in this regard involves taking a pre-existing ritual and asking:

  • What needs does this ritual fulfill?
  • What type of decisions is it used for?
  • How often do decisions need to be made here?
  • Who participates in this ritual?

The responses to these questions can be used to design a data-driven solution focused on the specific reality at your organization. The benefits of this approach are clear:

  • Adoption of the new solution will be much higher
  • More value will be added and with greater impact
  • Precision in reaching your objectives will improve

At the same time, it is important to establish this connection to the real practices and necessities of your organization from the very outset to avoid unnecessary adjustments down the road.

Embedding a data-driven culture in your organization is not simply a one-off project but a step-by-step transformation that will deliver incremental benefits with each advancement. As such, knowing which levers to focus on at the beginning is critical. Organizations can quickly get lost by spreading their efforts too thin with an overabundance of (shallow) indicators.

The best practice that we recommend at this stage is to concentrate: start small and add more indicators little by little as the organization adapts and see gains. Experience shows that being overly ambitious by introducing dozens of indicators at the same time is ultimately unproductive:

  • Implementation will be complex as each indicator demands time, documentation, validation and some back and forth
  • Certain indicators may not be set correctly at the start – and the more there are, the harder adjustments become
  • Resistance can be minimized by adopting a gradual approach, as change generally bears psychological costs

Taken together, the key message here is: Keep things simple, especially at the beginning. Even though the journey as a whole may be broad and involve many changes, there is nothing preventing your organization from starting small and focused, provided alignment has been reached in terms of the essence, scope and strategic objective of the data-driven transformation.

Common errors

Setting indicators without a connection to existing governance

Seeking to cover everything and overlooking small/good indicators

THE DOING CAP
THE ACHIEVING CAP
THE DO-NOT TAKE-FOR GRANTEDCAP

CASE OF STUDY

The following selection of cases from diverse industries presents real-life insights drawn from our past experience. These were projects Integration worked on to support businesses at various degrees of digital maturity pursue and find success in their own data-driven transformations.

SETOR: RETAIL PHARMACY

CHALLENGE

A lack of granular information about store performance – management, inventories, customer care, staff capabilities, employee satisfaction – was impacting the effectiveness of decision-making at different levels of the company management at a leading retail pharmacy chain.

APPROACH

The transformation needed to start by boosting visibility of information regarding store operations – from store manager to CEO level. To do so, two key considerations were assessed:

  1. Which areas have the most direct impact on the business (store management)? ​
  2. Where can we identify the greatest lack of information organization?

RESULTS:

  • Ensured democratization of information​
  • Greatly improved quality of management
  • New control tower implemented allowing regional managers to improve the administration of stores under their responsibility
  • Basis for making effective decisions improved significantly for managers across different levels of the organization
  • Management initiatives became more grounded in real necessities and sales processes improved

SETOR: DIGITAL MARKETPLACE

CHALLENGE

This leading online marketplace sought to boost the efficiency of its commercial team to enable its intense growth strategy. With the fast-growing portfolio of sellers and the need to increase customer service while driving category strategy for growth, the commercial team lacked streamlined processes, governance and a data-driven foundation to perform effectively.

APPROACH

The commercial routines needed to be redefined by leveraging available but non-activated internal data in order to provide team with more insights for actioning information.

The business, BI and IT teams were connected to find the best solution in view of KPIs priorities based on two criteria (effort versus value). Finally, capabilities and responsibilities were defined with the commercial area for more accountability.

RESULTS:

  • Redefinition of business area capabilities and job descriptions to spread analytical capabilities among the team and increase efficiency
  • Definition of main KPIs to drive the business transformation in connected with the strategy
  • Organization of KPIs into dashboards and reports with clear rituals and responsible individuals for analyzing and making decisions
  • Prioritization of KPIs based on business needs and data maturity within the organization

SETOR: FASHION & RETAIL

CHALLENGE

Execute a strategic & organizational transformation to become a brand-oriented company.

APPROACH

To address this challenge, we supported the client in creating a central intelligence area that leveraged synergies with the two new brand-centered business units. This area would be a business partner to sustain the strategy, manage the new brand governance and centralize data management.

New capabilities and a data-driven culture were also established within the company to help shift the organizational mindset from industry to brand-led decisions. Finally, a new governance structure was designed with roles and structures and prioritized KPIs. Pilots were carried out to ensure a good fit while a data lake and data governance infrastructure were developed with third-party providers.

RESULTS:

  • Clear alignment achieved within C-Level and the entire organization on the role of the intelligence area within governance and the cultural transformation
  • New governance connected end-to-end value chain perspectives and drove decisions – from consumer insights, brand action, commercial performance to industry and supply chain service and optimization
  • Value generation from new governance piloted to confirm hypothesis and derive KPIs / implement reports
  • Data lake platform and service providers set up to meet business needs and long-term digital strategy

SETOR: FACILITY SERVICES

CHALLENGE

In order to perpetuate business contracts though increased client satisfaction and profitability, this B2B industry client sought to achieve commercial and operational excellence.

APPROACH

The business had a very specific operational challenge – measure commercial (hunting & farming) performance across a large national territory with many regional business units and operational teams in the field. This demanded the creation of a control tower area, physically located at the headquarters with realtime monitoring of commercial team routines. Visual management provided leadership with real-time insights and call-to-action tools to avoid mistakes at the moment of truth along the client journey, along with identifying cross-sell and up-sell opportunities.

RESULTS:

  • A control tower area was designed and implemented with a new structure, new ways of working and a new governance model connected with the C-level, KPIs and call-to-action capabilities
  • Regional leaders gained enhanced visibility and control over the operations provided by the control tower to better manage their operations and achieve financial targets
  • A digital application was developed to manage commercial routines in the field with a new workflow that connected execution to tactical decision while generating data for analysis and insights.

TALK TO US

André Valente

André Valente is a director at Integration and a leader within the Marketing & Sales Practice. With nearly two decades of experience supporting clients across diverse sectors and geographies, André is a specialist in the topics of innovation management, digital and data solutions, go-to-market models, market-entry strategies and global marketing approaches.

Guilherme Paz

Guilherme Paz is an engagement manager leading the Digital Practice at Integration. Having joined the company in 2015, Guilherme has over 7 years of experience supporting clients in transforming their digital strategies and supply chain operations. His focus lies in the consumer services, retail and FMCG industries, with various projects addressing digital strategies and operations, [...]

Jairo Pakes

Jairo is a Lab Manager and leads the data science team within Integration’s Tech & Digital Lab area. He has been working in the company since July 2007, and his 12 years of experience within the Marketing & Sales practice help him to support our clients taking on the challenges and opportunities arising with digitalization. He [...]

Jamie Gale

Jamie is a partner at our Office in London. He has spent more than 25 years in the consulting industry and private sector. Jamie is recognized for his extensive experience in digital, developing and executing strategies that enable business transformation. He has supported clients across manufacturing, retail, telecommunications, financial services, food & beverage and transportation [...]

Marília José

Marília José is a manager at Integration. From may 2014 to jan 2018 she worked in the Finance & Management Practice, and since then has been serving the Implementation Practice as a Finance & Management business partner. Her experience includes work in strategic roadmaps, transformation and cost reduction, project management, governance and indicators, and process [...]

  • On 16 September 2022