Put Data At The Center
Originally published as part of, “The Day Before Digital Transformation” by Phil Perkins and Cheryl Smith
Data is the easiest raw material to launch and update new products and services. It is the core underlying asset that makes digital organizations more valuable. It is the strategic advantage that almost every disruptor is using against your organization.
The term “data exhaust” was coined more than a decade ago. It is essentially all the data that is collected by your organization’s operations, is used for a particular purpose, and then is thrown away or stored somewhere and never used again. It simply is not of value to the business outside of its original purpose, according to today’s thinking, so why waste additional time and money on it? Most traditional organizations take this one-and-done approach: they invest once in building the business logic in a way that is tightly coupled with the data that supports it and ‘throw’ the rest away.
Digital leaders turn data exhaust into advantages such as increased revenue, cost savings, and improved ways of doing business. They know what data is collected everywhere in their organization, they leverage that data to create new actionable information, they know the value of their data outside their own organization, and constantly seek new partners for both old and new data and uses. Data is an important part of every digital decision.
Digital leaders know that to embrace the full power of digital transformation, organizations must rethink how they collect and use data. Data should no longer be viewed as an afterthought; collecting and analyzing data to drive their organization forward is the new strategy. The means through which they gathered data became the then start-ups’ (now tech giants’) products and services, with the new data-centric revenue streams and back-office cost savings offering extremely efficient gross margins.
Organizations like Amazon, Google, and Facebook learned to empower rapid innovation by facilitating information exchanges between an ecosystem of independent groups. Data flows freely among every group in these global juggernauts, driving innovation and efficiency in processes, sales pipelines, products, and more. This level of data fluidity is the foundation of digital transformation success because it allows all enterprise data to be leveraged for the greater good of each organization. These principles directly apply to government organizations, and in the healthcare, insurance, banking, and energy industries to name but a few. As an example, let’s take a specific organization, an airline.
Consider the amount of data collected by an airline. The Boeing 787 generates 500 gb of data per flight.[i] That data is communicated to and stored in multiple systems, some of it real-time, some of it for later analysis, to ensure the safe operation of the plane.
Now think about other data that is collected by the airline: the individual crew members assigned to each flight; the customer service representatives (CSR) at the gate assigned to each flight; the airport and specific gate at which the plane is docked; the ‘under the wing’ crew members at that gate; the time luggage begins to be loaded; the time passengers begin to board; the moment the plane pushes back from the gate; the moment the plane lands at its destination.
One of the major performance indicators at an airline is On-Time Performance (OTP). Some airlines now refer to it as SPOT—Safe Performance On Time. The data listed above is automatically captured for every flight; no additional processes or procedures need to be put in place. The average OTP for every airline is published each year with great fanfare. The top airline enjoys bragging rights for a year.
But with minimal additional effort, OTP can be calculated every day for every crew member both above and below the wing; for teams of crew members; for every gate at every airport; for flights that take place on a regular basis between two airports; for each airport and airplane. An executive dashboard showing the OTP performance for a crew member, a CSR, an airplane, a gate, a flight, an airport, and any other OTP request a leader might have, for a day, a week, a month, a year, or over a lifespan is actually pretty easy to provide. Think of the impacts on improving operations, on training, on identifying areas for process change or where technology can be deployed. And yet such an OTP dashboard is relatively rare in the industry.
Similar examples are available for organizations in every industry: banking, construction, education, energy, government, healthcare, hospitality, manufacturing, trade, transportation, utilities. Just reading the list immediately suggests examples of the data collected from your personal interaction with organizations in these industries.
So why do we not live and work in the most amazingly efficient and effective environments and organizations imaginable? The data is available to give us detailed insights into just about every activity and interaction we experience outside our homes, and now inside our homes, and how to continually improve them. The amount of data being captured and stored at even more granular levels grows exponentially each year, and the analytic tools to help us draw insightful conclusions are abundantly available. Why are we not putting them to good use? Successful digital leaders are.
[i] “Millions of data points flying in tight formation, Part 2: How Big Data could improve commercial aviation safely,” Dhaval Shah, Aerospace Manufacturing and Design, December 19, 2014.