Digitalization: The Emperor's New Clothes?
Being digitalized means being data-driven
We can talk about digital transformation and what it means all day long, but to get to the core of what digitalization actually entails, we need to ask the question “What does it mean to be data-driven?”
The simple answer to this question is that it involves making decisions based on what your data reveals to you. In my opinion, many Norwegian companies can benefit from becoming better at utilizing their own data. Too many people believe, for example, that technologies such as artificial intelligence and machine learning alone can create significant value. Without good quality data and not least enough data, these technologies are of little benefit to companies that are looking to generate additional business value. Likewise, without access to the right amount and quality of your own data, digital transformation will not be possible either.
The correct data is more important than the sheer amount of data. If you are going to invest in artificial intelligence, the results will never be better than the data you feed into it. Fortunately, more and more organizations are getting better at leveraging existing customer data in order to create valuable and personalized services for their customers. For our customers, a digital service platform has been the solution.
We need to build platforms
Integrating a data-driven decision-making process into your strategy is a simple exercise. Being truly data-driven is more of a challenge. Although the expression "data is the new oil" may have become a cliché, I still think the analogy is true in one sense: If data is the new oil, we must build platforms for it. And by platform I mean a digital service platform.
Many companies today have enormous amounts of data that they are unable to utilize in a rational and value-creating way. By gaining access to and utilizing this data, you will ensure that your business can achieve its full commercial potential. This can be done with the help of a new digital service platform built on advanced architecture that exploits and enriches the value of your existing business systems.
The secret is to liberate the data from your core systems and allow it to interact with data from "the real world". It is when you succeed in interconnecting real-world data, often from your back-end systems, with your user solutions at the front-end, that you are able to create valuable services and targeted information for your customers.
Unfortunately, the truth is that there are very few Norwegian companies that have a well-defined approach for managing their own in-house data. They all have a technology strategy, but that is of little benefit unless their data is managed properly. Without this, you are in danger of making business-critical decisions that are completely incorrect, decisions that can have serious consequences for years to come.
Digitalization is about people too
And finally, I want to emphasize the importance of skills development and the way we work. Digitalization is about people. The biggest obstacle to digital success is a lack of competence and the way that we as leaders shape our organizations.
Regrettably, I think we have a "mismatch" today between management perceptions of their own digital expertise and the expertise present in their organizations. Recent experience of this reminds me a little of the fairy tale "The Emperor's New Clothes". In other words, many leaders today believe that they are digitally savvy, whereas in reality, they appear to be nakedly naive.
It is up to us as leaders to ensure that the digitalization mandate and accompanying decision-making power are located at the "right" level in our organizations. We must trust our employees and create scope for honest feedback. In this way, the digitalization project will have a clear direction and become a tool for efficiency, improved customer experiences and for long-term growth.