Pundits have been talking about ‘digital transformation’ since at least 1999, but it is a difficult concept to pin down, much less execute. Yet in a business environment in which former market leaders like Sears and GE are failing the challenge, the need for transformation has never been so stark. Digital transformation is one of the biggest factors driving IT and machine data growth as incumbents race to transform their operations before newcomers disrupt their business models and revenue streams. In this battle, the prize goes to those who have better data, leverage that data to understand what customers and prospects want, and have a ruthless focus on eliminating inefficiency. Data is the key to digital transformation. Data can tell you when to examine and change your business model; where your core strengths and adjacent opportunities lie; and point the way to the white space in the market – an area where digital transformation must also include organizational transformation. How can a company begin the journey to digital transformation? Professor Paul Tallon of Loyola University Maryland, writing in the research paper Operational Data: A Roadmap to Value Creation, lays out five steps: Develop a data-driven culture Data-driven companies are built by leaders who believe not only that data is valuable for more than one-off insights, but also that it’s important to encourage data-driven experimentation. In these organizations, leaders consciously encourage the development of a culture where people turn first to data for the answers to strategic questions. McDonald’s has not made the transition to its current business model – supplier of goods and services to retail stores that serve food to consumers – by hugging tightly to the belief that its business model is that of a fast-food restaurant. Using data, the company has transformed itself to meet the demands of the changing market. Assess your data needs Many organizations don’t know what data they have, much less what data they should have. Typically most of a company’s data is held in silos, some logical – employee/HR management systems – and some controlled by tribes – for example, sales and marketing data. The first step to transformation is to assign someone to take over data governance, or find the person or team already in charge of data governance, then explore opportunities for data sharing and identify unmet organizational needs that could be met with better data. Find those who will benefit from data-driven insights Data analytics and transformation initiatives fail because companies haven’t taken the steps necessary to act on their data discoveries and communicate insights to the right person at the right time. Some even lose insight by aggregating data without exploring granular data for its value. Find out who in the organization would be most surprised or shocked by insights from granular data, then show them the benefits of analyzing all data. Foster internal data-sharing partnerships Most organizations reflexively build barriers against sharing data with other people at the same company, even when it makes sense to share. But research shows the benefits of sharing data between strategic business units: higher firm performance. Be open to partnerships with individuals in other business units to share data and insights. Develop a data operations platform We’re biased here, but it’s clear from discussions with our customers that having a data operations platform enables organizations to stream and ingest multiple sources of data, and to layer over that various data analysis models to reveal trends that machines are inherently good at finding. The key to digital transformation is to know what’s in all data – it’s the only way to transform your business before someone else does. Even though data is growing at petabyte rates, costs are soaring and experts to run IT ops systems are hard to find, it is possible to handle the data you have, plan for data growth, and extract insights from all your data at speed and scale. Your journey to digital transformation should start today. Be purposeful, be prepared, and be proactive. Read our latest white paper, Operational Data: A Roadmap to Value Creation, which details the roadmap to digital transformation and provides examples of companies that have successfully transformed their operations with machine data.