All too often, companies rush to implement the latest solution in the name of digital transformation only to end up with technical debt. The consequences of implementing the wrong technologies become painfully evident in a disrupted marketplace like the one we’re facing today.
According to Sandy Shen, Senior Director Analyst at Gartner, “The value of digital channels, products and operations is immediately obvious to companies everywhere right now. [COVID-19] is a wake-up call for organizations that have placed too much focus on daily operational needs at the expense of investing in digital businesses and long-term resilience. Businesses that can shift technology capacity and investments to digital platforms will mitigate the impact of the outbreak and keep their companies running smoothly now, and over the long term.”
We’re being forced into a new age of digital. To successfully adapt, you need to focus on these four foundational elements that drive digital transformation.
1. Data
Data is the bedrock of any digital transformation strategy. This foundational element refers to processes and technologies related to data management, integration and identity resolution.
But for companies with high-touch, siloed data capabilities, making the most of data for digital transformation can be a challenge. Overcoming this challenge requires consideration of the two sides of data management—the technical side and the information side.
On the technical side, we have to ask ourselves if we have the right data infrastructure to achieve business goals. Enterprises that succeed in digital transformation create a tiered data environment. They have a data lake that is automatically populated by business systems without any human interaction, a conformed layer where data is cleansed and business rules are applied and a publish layer where data is made available through data stores and analytic marts.
This kind of tiered data environment creates an always-on data exchange that helps internal teams and external partners leverage actionable data. Think about it as a unified data strategy that can be democratized across your organization. Sales will still operate in CRM systems and marketers will still operate endpoint solutions—but all of those disparate systems will have more accurate and actionable data at their fingertips.
On the information side, focus on data quality as storage becomes centralized. You can enhance your data in multiple ways, including the purchase of third-party data to augment your existing insights and adoption of additional data sources to help you make more evidence-based decisions across channels.
But data is only as valuable as your ability to link it together through governance and integration.
- Integration: Microservices and APIs allow systems to send data to and from platforms in your ecosystem. Connecting your systems seamlessly eliminates the inflexibility that comes with high-touch, highly manual data exchanges.
- Governance: The formalization of definitions, production and usage of data to manage risk and improve quality and usability of selected data. Without putting these guardrails in place, you won’t be able to make the most of your data for digital transformation.
Data management has to be about more than just identifying customers. Knowing who your customers are without insight into their behaviors and interests won’t benefit your digital efforts. If you want to dig deeper, explains the necessity of building your foundation of data management, data hygiene and persistent identification of offline or first party profile data and the impact on customer experience when that foundation cracks.
Read more: In times of uncertainty, data helps us stay connected
2. Insights
Data on its own won’t drive your digital transformation forward. The second foundational element of your strategy is insights—the actionable information you draw from your data.
Capturing and analyzing interactions for individual channels limits your ability to derive prescriptive insights that apply to the broader customer journey. By moving away from siloed data infrastructure, you’re able to run more unified reports that uncover broader actionable insights that make customer experiences more relevant.
There are four key considerations when addressing insights as a foundational element of digital transformation:
- You need a singular analytics environment to derive the most valuable insights. Most endpoint solutions have their own reporting capabilities, but that information is limited to the teams who are use that particular platform. Unifying analytics gives you broader insights.
- Business and marketing measures across your organization need to be consistent and optimized for digital transformation success.
- You should leverage automated capabilities with AI, machine learning and decision engines once you’ve built a mature data infrastructure and singular analytic environment.
- In addition to enhancing analytics capabilities, you need to take a customer-centric approach to enable more proactive engagement and interactions. Having a cohesive data set makes this possible.
3. Orchestration
The orchestration aspect of your digital transformation foundation is where you focus on creating audience and content to build out a customer journey.
With a data infrastructure built for digital transformation, you get integrated consumer attribute and interaction data that you can segment globally and locally for audience management across channels, functions and tools. Establishing programmatic access to data will help your endpoint solutions pull information in near-real time and enable enhanced campaign activation.
There are two high-level considerations for orchestration success:
- Organizational goals and approach: Define what your business is setting out to do with each segment of customers. For the best results, you need to reduce audience silos across all audience management processes.
- Segmentation: Identify all meaningful areas of separation and clustering among your current customers. Create segments based on demographics, loyalty data, purchase history and other insights that can improve the targeting of marketing activities.
4. Activation
The final foundational element of digital transformation is where everything comes together. Activation is where we create and optimize the consumer experience across all touchpoints—email, web, social media, direct mail, in-stores, etc.
But this is where we see a lot of technical debt. For example, someone in the organization bought an email platform years ago, but it’s designed more for B2C than your B2B organization and rather than sunset it, you just buy a new platform.
To avoid technical debt as you execute a digital transformation strategy, you need to:
- Deeply understand your channel goals and the technology capabilities you already have that can execute those goals.
- Identify the right platforms and then strategically create/deliver omnichannel experiences optimized by your actionable insights.
- Increase campaign velocity—not so that customers receive more, but to develop and execute faster while reducing marketing spending.
Learn more: How to maximize returns on your martech investment
Bringing the elements of digital transformation together
If we know who customers are (data) and can see trends in their buying habits (insights), we can segment them correctly to deliver the right messages (orchestration) and connect through their preferred channels (activation). But that may seem easier said than done.
Marketing is complex. We need to build an enduring foundation by thinking holistically about how we can leverage underlying technology rather than focusing on each foundational block independently.
When you create your foundation, you’re fundamentally changing the way you do business. You’re unlocking audiences, creating data-driven marketing plans, achieving higher performance with less waste and generating reliable results.
Finding the right technologies to increase marketing efficiency while also elevating customer experiences will drive digital transformation success—and ultimately lead to increased brand loyalty and sales.