Many analysts have predicted that for companies to survive in the digital age they must transform into digital enterprises. What are the benefits of such a transformation? “By harnessing the power of devices and data, and leveraging the ever-accelerating technological advancements,” states Dr. Sania Irwin, Chief Innovation Officer at Cimphoni, “we have the ability to shape every aspect of the world around us, from broad policies, to business offerings and practices, to daily living. Successful companies and institutions will be able to quickly put into play solutions that can sense, anticipate and respond to the needs of society, and change for the better how the world operates.”[1] Irwin foresees the digital enterprise eventually transforming into the cognitive enterprise, which she defines this way:

“A cognitive enterprise analyzes and learns from the digital imprints humans and human institutions leave on society, to create solutions that establish customer and industry trends. Along this journey, it also transforms itself (people and processes) to most effectively deliver those outputs — in other words, it adapts by learning from its own digital signature.”

When asked how far along the path to the cognitive enterprise we are currently, Irwin stated:

“We are well on our way to digitizing the collective human learnings over the millennia. Advancements in and access to computer platforms (processing and storage), networks and devices have contributed to the ‘democratization’ of knowledge through channels such as the internet, social media, online services, etc. However, we are only in the technological infancy stage when it comes to processing this information — to first predict, then shape the future. Early efforts hold promise (e.g., consider prediction of travel times), but we are merely at the starting line. The ability of entities and enterprises to link information sources, derive and exploit insights from those domains, and create solutions that better customers’ experiences will determine the true potential of the digitally-connected planet.”

Digital Enterprise Transformation Imperative

It’s clear from Irwin’s description of the cognitive enterprise that cognitive computing is going to become the brain of the enterprise with connectivity forming its nervous system. Surveys indicate that Irwin is correct when she notes most companies are only at the starting line of their race to become digital enterprises. Bob Violino (@BobViolino) reports that a new study published by Forrester concludes, “There’s a sharp divide between the expressed need of enterprises to undergo digital transformation and their ability to accelerate that transformation.”[2] If analysts from IDC are correct, companies need to bridge that divide if they are going to survive in the years ahead. Ben Rossi (@BenRossi89) reports, “By 2020, 30% of the top firms in every business sector will cease to exist, as they’re known today. Research from analyst firm IDC predicts that one-time leaders will have been replaced by new contenders, will have been forced to merge to survive, or will simply have fallen by the wayside or slipped into irrelevancy.”[3] If IDC’s prediction is accurate, then companies have little time to make the digital enterprise transformation. Below are some do’s and don’ts that have been offered by various pundits for making that transformation.

The Do’s

Shamlan Siddiqi, digital practice lead at NTT DATA, offers five best practices of digital transformation.[4] They are:

1. Analyze current systems and operations before determining transformation strategy. “By taking inventory of the technologies, business procedures and performance metrics in place, organizations can determine what areas need improvement or should be replaced before making an investment in a digital transformation. Outdated legacy systems often force businesses to invest repeatedly as to not fall behind, while still being unable to adapt to current digital expectations.”

2. Develop goals for digital transformation so stakeholders are unified on the desired outcomes. “Setting specific goals helps each group stay on the same page during the transformation. By defining goals and evaluating an organization’s ‘digital readiness,’ it clearly establishes how stakeholders can contribute to achieve successful results. Goals also ensure that company culture, leadership and processes are aligned. Of course, specific goals are also necessary to measure progress.”

3. Protect data by backing up information as a safety measure before beginning a digital transformation of legacy systems. “Data is vital to modern business practices, so it is imperative existing data is secured before attempting to make changes to how and where data is stored. Multiple backups are recommended as a precaution before undergoing a transformation.”

4. Implement feedback from employees and customers during the transformation to maximize efficiency and satisfaction. “Two-way communication requires feedback from employees and customers. By incorporating insight from these stakeholders, businesses can more effectively improve their services or products based on the end users.”

5. Incorporate new technologies and industry trends continuously to account for company growth and customer demands. “To stay ahead of the curve, businesses need to stay up-to-date on new technologies and trends. Digital transformation is not a one-time fix, but rather progress toward a commitment to relevancy in the digital age. That said, each business must be selective when implementing new technologies since not all of them will best serve the organization’s purpose.”

A good cognitive computing system can help facilitate digital transformation and can establish a company on the path towards becoming a cognitive enterprise as described by Irwin.

The Don’ts

Walter van der Scheer (@wvanderscheer) suggests a few pitfalls (drawn from surveys) that should be avoided during digital transformation.[5] They include having:

1. A lack of vision. “No less than 88 per cent of respondents indicate that the opportunities of data for their organizations are substantial. … Respondents still think … a strong vision (87%) and support from management (60%) as most crucial for success with data.”

2. No data or poor quality data. Frankly, most companies have access to some data; but, is it the right data? Van der Scheer writes, “When it comes to laying the technological foundation, the data infrastructure, the biggest challenge is making data available (49%) followed by improving data quality (48%). Developing the right skills to setting up data infrastructure (35%) seems to be less of a challenge.”

3. Storing data in an insecure environment. “With more and more applications finding their way to the cloud, we were interested to learn what professionals think of the security of cloud storage. Remarkably, 1 in every 5 (22%) participants do not feel that data in the cloud is as secure as data stored locally. Also, 30% of the participants indicate that data within the organization today is not stored completely secure.” With new data breaches reported everyday, making sure data is stored securely is an imperative.

4. No time available for experimenting. When my company, Enterra Solutions®, deals with customers, we almost always recommend a crawl, walk, run approach so that kinks can be worked out and solutions tinkered with during the crawl and walk stages. Van der Scheer adds, “Being a data driven organization is not only about data and technology. The supporting systems and processes are crucial as well, according to 46% of the participants. Room for experimentation and an agile approach are vital ingredients for a data driven process.”

5. Static websites without personalized user experience. “Looking at the solutions that organizations develop, we see an interesting development. The number of organizations that develop predictive models (65%) is getting closer to the number of organizations that make use of dashboards and business intelligence (80%). Despite the fact that marketing is the most popular application of data science, only 12.6% of researched websites is actually personalized in real-time. Most websites today are still static (50%), providing a poor and outdated user experience.”

6. Trouble attracting data professionals. “Besides the aforementioned data, technology, process and skills, it’s the people that really make the difference. Not every organization employs data professionals, over 54% of organizations says they work with external consultants. Organizations that recruit their own data professionals need to adjust their organization and working condition to the demands of data engineers and data scientists.”

There is at least one other pitfall to avoid; namely, having a poor corporate culture. “Neither new competitors nor mounting pressure represent the biggest threat in today’s dizzying digital environment. According to the ‘2016 Digital Business Global Executive Study and Research Project’, conducted by ‘MIT Sloan Management Review’ and Deloitte Digital, the most significant peril they face is their own organizational inertia.”[6]

Summary

Violino reports that the Forrester survey found, “Digital transformation is a high or critical priority for 70% of organizations surveyed.” However, recognizing that something must be done and actually doing it are not the same thing. Irwin encourages companies look beyond digital transformation towards becoming a cognitive enterprise. She explains, “The cognitive enterprise itself evolves to adapt to [the] future environment, redefining not only what it delivers to society, but how it does so — altering the role of people, processes and technologies within the organization as it impacts those beyond its boundary. Simply put, a cognitive enterprise doesn’t just respond to the challenges of today, but defines the opportunities for tomorrow, and transforms itself to efficiently deliver on those promises.”

Footnotes
[1] Staff, “A sneak peek at the cognitive enterprise,” Smart Industry, 15 August 2016.
[2] Bob Violino, “Study Finds Wide Gulf Between Wanting and Doing Digital Transformation,” Information Management, 22 August 2016.
[3] Ben Rossi, “Enterprise networks are proving to be blockers to digital transformation,” Information Age, 12 August 2016.
[4] Shamlan Siddiqi, “5 Best Practices of Digital Transformation,” Information Management, August 2016.
[5] Walter van der Scheer, “Six Pitfalls to Avoid When Becoming a Data Driven Enterprise,” Datafloq, 9 August 2016.
[6] Deloitte, “Corporate Culture Threatens Digital Progress,” The Wall Street Journal, 2 August 2016.