Most companies and their leaders, acknowledge that we are now in the digital age. In many sectors though, the strategies and subsequent actions don’t reflect this reality.
Data still appears to be miss-understood. Especially by large financial institutions, such as banks and insurance companies.
For a company to be considered digital, their business model needs to be digital in nature. i.e., their business processes are digital in nature. Data in general, is the reflection of the business process, which in turn is a reflection of the business model, which happens to be a reflection of the business strategy itself.
Fig: How Data Intersects with Your Business Model and Business Strategy
While companies that consider themselves to be ‘digital’ enjoy higher valuations, companies which don’t, struggle with their valuations. By digital, we mean companies whose business processes are enabled digitally.
The classic example that I tend to share is the valuation of Paypal as compared to some banks. The banks off late becoming less valuable in market capitalisation terms as compared with younger companies.
What is this disruption? Can data management help?
Companies that are able to successfully connect the dots between their business strategy, business model, business process and finally, their data landscape are the ones that are wining and will win in the digital age. The rest are likely to disappear. They will not survive.
When data is managed with an intension to create real economic to the shareholders, the customers, the employees and other relevant partners in the business model, there is highest probability to create massive value in financial terms, as the data in these circumstances is likely to be ‘person’ centric in nature. Here’s where emerging technologies related to big data analytics and cloud play a crucial part, in helping shape the business strategy execution.
On the other hand, when leaders do not recognise this, there is a tendency to miss-spend, delay or ignore timely investments and actions. Which, as we know will end up in disastrous consequences. Drop in revenues, in ability to develop the right value propositions, inability to efficiently manage business processes and operations, in ability to manage talent and the list goes on.
What matters most in any enterprise, is their ability to fit into the ‘digital world’ in a manner that is worthy of being able to serve the people involved in the business processes, adequately enough, and where possible, delightfully!
Ignore data at your own peril. Manage it to create value and you have a chance to win in the digital age. Nurture what I call, ‘the datapreneurs’ in your organisation. They will know how to create value in the digital age.