Digital transformation: 3 common mistakes to avoid

Want to foster agility and innovation in your organization? Avoid these three common pitfalls
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Consumers embrace new things quickly. If companies don’t innovate fast enough, they’ll lose customers. This puts a very high demand on enterprises, whose business-to-end-consumer chain is long and complicated.

On any given day, you might need to respond within hours to a surging demand caused by a viral social media post – or perhaps you need to incubate a new product within days to catch up with the latest trends for your customers. The goal of digital transformation is to truly transform your business and enable the agility needed to keep up with business demands.

3 digital transformation pitfalls to avoid

Here are three common issues you should avoid if you want to enable an agile and innovative business.

1. Data models are not standardized

A typical enterprise includes multiple departments: marketing, operations, finance, and purchasing. The decision-making process among these departments can be long and complicated.

Capable employees can handle complex processes, but it’s a bottleneck for scale. We’ve seen even tech-savvy companies rely on Excel and email to transfer and manually process data, often with different data formats for each department. As a result, coordinating the processes is lengthy and difficult.

[Get answers to key digital transformation questions and lessons from top CIOs: Download our digital transformation cheat sheet.]

To ease this, integrate the data of each department and standardize the data model to maintain consistency for cross-department queries and adjustments. This serves as the foundation on which different systems speak the same language.

2. Systems are siloed

Many companies use standard systems to manage their processes and workflows. However, these systems are still siloed. There’s no central data depository for everyone to make decisions and real-time changes.

Standardized, modular products simply cannot respond fast enough to market requirements today. Instead, start with your siloed system and functionalities, extract business logic, and make them into shared services so they can be leveraged across your business units.

Our secret recipe is roughly a 70-30 percent model: the 70 percent is the same productized data and AI capabilities you apply to all the different business units; the 30 percent is customized algorithms, fine-tuned to meet the various needs of specific units.

If your integrated systems and data model don’t turn into faster decision-making processes, then your digital transformation effort has not really harnessed its power.

3. Decision-making process is not real-time

If your integrated systems and data model don’t turn into faster decision-making processes, then your digital transformation effort has not really harnessed its power.

Making your decision-making process more agile involves at least two steps: First, replace manual and repetitive processes with computation and artificial intelligence (AI) modules. Once your interdepartmental data are uniform, you can build mathematical models for all relevant business functions and develop corresponding algorithm modules.

Second, implement programs for real-time communication. They should include effective office automation for team members to upload data, approve or reject planning decisions, and notify other stakeholders via PC or mobile.

This enables fine-grained cost analysis throughout your supply chain and makes it convenient for sales and finance departments to formulate pricing and sales strategies. The goal is for the algorithms to automatically generate decisions to be fine-tuned by humans, and thus improve the rate of decision-making from weeks to minutes.

A quick reality check: Are your different systems speaking the same (data) language? Are they interconnected? Is your business able to make real-time decisions with integrated systems and data? If you can answer yes to these questions, you are set up for a successful, agile business.

[Where is your team's digital transformation work stalling? Get the eBook: What's slowing down your Digital Transformation? 8 questions to ask.]

Kate Yuan is a startup consultant with a focus on go-to-market strategies and enterprise sales. She has worked with startups in four continents and 30+ countries as an investor, advisor, and operator. Most recently, she was the Operating Partner at Hemi Ventures, an early-stage fund investing in mobility, biotech and enterprise AI sectors.
Rui Chen is a Consultant at Kate Yuan Consulting. As a solution architect with 20 years of experience in IT, cloud technology, and digital transformation, he has helped numerous Fortune 500 companies define, implement, and upgrade their IT strategy in emerging markets for business expansion.