To be successful, companies have always had to adapt to changing circumstances. In the past, the drivers of transformation were industrialization, globalization and megatrends. Today, in the digital age, the drivers are no longer individual, clearly definable influences that develop steadily over a period of time, but constant, rapid change.

It is not a single upheaval, but a series of successive small and large transformations. Once one hurdle has been successfully overcome, the next one is already peeking around the corner.

The new challenge means that companies can no longer focus on a trend and then transform on the basis of a 10-year strategy. Instead, they need to find business transformation strategies that can efficiently manage the next change. Transformations should be carried out quickly and results should be usable in the long term.

But how can such digital sustainability be achieved?

Grafik des St. Galler House of Digital Business. (Eigene Darstellung in Anlehnung an Leimeister, J.M. (2015). Einführung in die Wirtschaftsinformatik. Heidelberg: Springer Gabler)

One possible approach is the goal of the "Data Driven Company". Here, the path is the destination and the journey is a continuous further development of various areas of the company. The "St. Gallen House of Digital Business" can serve as an orientation for the journey. In this model, the focus is on four crucial areas that must be built up and continuously developed.

1. Question business model

Digitization has fundamentally changed the prerequisites for business models. For this reason, a company must ask itself fundamental questions at the beginning of the journey: What do we do? How do we provide our products and services?

These questions must be answered taking into account the new prerequisites of digitization. A framework model such as the "Business Model Canvas" by Osterwalder (2010) can be helpful here. This is not a one-off matter either. In keeping with the "design, test, pivot" approach, these questions should be asked again and again, the answers tested, and the alignment adjusted if necessary.

2. Sharpen corporate strategy

Based on the revised business model, the associated corporate strategy must be sharpened. According to Porter (1998), this primarily means deciding as a company: What do we do and what do we not do?

Porter lists five basic questions, including, among other things, where you as a company are active in the market, how you want to win in this area, and what capabilities are necessary to do so. This results in a set of decisions that set the course for the digitization of a company.

3. Develop data strategy and governance

"Data is the new Oil" - the analogy to oil is manifold. A crucial one, however, is that oil, like data, has only a fraction of its value in its raw state. This means that a company must not only collect data and make it accessible, but also utilize it.

How data is to be handled in a company is set out in a data strategy. Based on the Business Model Canvas, the areas of employees & culture, technology, data sources, data capabilities, channels, products and customer segments are defined there. An integral part of the strategy is data governance.

This in turn describes the aspects of data quality, data security and master data management. The aim of these concepts is to ensure that work with data can be carried out in a targeted, structured and organized manner.

4. Build data culture

The data culture is probably the most important and at the same time the most difficult element on the way to a Data Driven Company. A successful data culture is based on three pillars. 

• An authentic attitude of top management towards innovation and decision-making. Openness, curiosity and a spirit of discovery based on data-driven concepts.
• Establish data democratization depending on the maturity level. This means making data available to each user group in the form that matches their capabilities. At the same time, empowering users to evolve in this regard.
• Data literacy Build. Employees should develop the skills to work with data in a critical way: Data should not simply be consumed, but more closely scrutinized, processed, and applied.

5. Create a "digital twin" of the company

Modeling has a dusty image. To counter this, there is increasing talk of the "digital twin" of the enterprise. This is increasingly bringing the application benefits of modeling into focus.

With the development of an enterprise architecture, a map is created as orientation on the long journey to the Data Driven Company. However, modeling the company involves more than just process modeling. The focus is also on the areas of strategy, organization, systems/application and data.

The holistic modeling should help to maintain an overview and to be able to understand changes immediately. The model should depict reality as a whole without getting lost in the details. In order to keep the concrete application benefit of modeling in focus, correctness and up-to-dateness are more relevant. The most important aspect, however, is that the models are lived and maintained - therfore they must be Part of the data culture.

This list of measures is not exhaustive. However, it does give an indication of an approach to tackling the path to becoming a Data Driven Company. Once the foundations have been laid, the implementation of concrete initiatives will be crucial to the success of the transformation. Through preparation, the necessary critical discussions are held in advance, the focus is set, and thus the prerequisite is created for the initiatives to have a greater chance of success.

This post was published on 04.06.2020 on computerworld.ch.