Data Management as a Driver for Strategy: A lesson from the COVID-19 crisis

We live in strange times. Much of what we once considered to be normal or routine, has changed. As we slowly move towards the post-COVID era, the world is shaping up to be quite different from the way it was before. However, if there is one thing that has only become more evident, it is the importance of data management.

This article will elaborate on the importance of the digital transformation, organisations’ digital capability and the crucial role of data management in the context of the 2020 COVID-19 crisis. Subsequently, the implications of a forced digital transformation will be discussed, after which the case for a sustainable role for data management as a driver for strategy will be made. 

Definitions

Within this article, three related terms will form the core of the argument. In this paragraph they will be defined in this context:

Digital Transformation is defined in this article in accordance with the definition as proposed by Gartner and ‘… can refer to anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models. The term is widely used in public-sector organisations to refer to modest initiatives such as putting services online or legacy modernization. Thus, the term is more like “digitization” than “digital business transformation’ (Gartner, 2020).

Digital Capability is defined here as a combination of the definitions from research and advisory bureau Jisc (2020) and publications by Uhl et al. (2014) and Westerman et al. (2012), namely as ‘an organisation’s fundamental skills and attitudes required to coordinate a successful digital transformation and thrive in today’s non-physical world.’

Data Management is defined as ‘the practices, architectural techniques, and tools for achieving consistent access to and delivery of data across the spectrum of data subject areas and data structure types in the enterprise, to meet the data consumption requirements of all applications and business processes’ (Gartner, 2020). 

Digital Transformation: thriving or surviving?

Every single one of us has been affected by the ongoing COVID-19 crisis; from teacher to soldier and from dentist to salesman. Often, organisations and institutions worldwide have been forced to react in completely new ways to the dangers and limitations that the past few months have posed. The key term often coined in boardrooms and crisis-meetings was ‘digital transformation’; a term that has been around in mainstream business for over a decade. The concept of digital transformation should, by now, be a familiar one for organisations of all trades and sizes (Evans, 2020; Menear, 2018; Schallmo & Williams, 2018).

Perhaps it is not surprising that high-tech and software corporations were among the first to employ examples of remote meetings, digital cooperation spaces and omnichannel customer support, many years ago. Supply-and-demand oriented firms have spent the better part of the 2000’s looking for ways to leverage the digital domain to be more flexible without losing economies of scale or inventory optimizations (Predictive applications, IoT, Industry 4.0). Governments, banks, insurance companies and brokers have been advancing their digital protection in light of DDOS-attacks, fake news and even information warfare.

While these examples provide little insight on what has been done by some organisations, if there is one thing the COVID-19 pandemic has underlined, it is the need for more and quicker adaptability amongst all organisations in our society. Nevertheless, the past decade has shown that transforming existing structures and processes to be more digitally flexible is anything but an easy feat to achieve (Sebastian et al., 2017). Digital transformation has to face one of management studies’ most established findings, which states that organisational properties that might once have been the defining factor for success, can be an obstacle for agility today (Birkinshaw et al., 2015; Mintzberg & Ahlstrand, 2008). This crisis has forced organisations to face their digital (dis)ability, and therefore their position in their own digital transformation. It has illustrated how an organisation’s digital capability is no longer a differentiating factor or enabler for competitive advantage, but a requirement for survival.

Data management as a commodity

When you think digital transformation, you have to think data. When you think 2020, you have to think a lot of data; big data. Without data, there are no functional systems, no information bases, no apps, no media and not even the internet; it is the foundation of everything digital. In an organisational context, data can be both a blessing and a curse. When managed correctly, data can be one of the richest and most unique sources of sustainable competitive advantage (Prescott, 2014). When under-managed or even neglected, it will not only drag on to be serious corporate cholesterol, but it can actively damage an organisation in different ways (Slesar, 2018; Xiaofeng et al., 2013).

As highlighted in the first section of this article, organisations have been forced to adapt to economic earthquakes and preventive measures of untold scales during this crisis. When forced to resort to the digital world to try and keep their primary processes functioning, not all organisations were able to comprehend their data, let alone leverage it. This is because of the fact that most organisations develop their data processing activities based on existing business structures and processes. The key point here is that these data processing activities are hence conceived with business principles in mind; not the rapidly changing and increasing importance of (big) data and the digital economy (G?lzer & Fritzsche, 2016). The result is that organisations that have been keeping up with these latter developments, have been adapting much better to the COVID-19 crisis. Unfortunately, research regarding the practices with which organisations have been improving their digital capability in the past months, suggests that this group of ‘readily adaptable’ organisations was in fact the minority[1]. This implies that most organisations have not been able to adapt quickly enough, with all the negative consequences that can be associated with such a lag as a result.

The COVID-19 crisis has shown that an organisation’s digital capability significantly contributes to its adaptability towards unexpected events or disruptions, such as a global pandemic. It should be noted that, while digital capability is heavily influenced by technology, communication and social factors are just as important (Zhao et al., 2020). Although terms like digital transformation and digital capability might sound imposing, it all starts with the way an organisation handles data. The biggest Supply Chain Management systems and the most complex predictive algorithms are all built on a foundation of solid data management. Data management is at the core of any digital transformation, and can concern a barber’s client list, a local shop’s inventory overview or a middle school’s roster. The point here is that business principles should not be the only important guideline for an organisation’s data-related and digital activities. Proper data management is a goal in and on itself and should be seen as a commodity, not a luxury, if one wants to successfully digitally transform an organisation.

Transforming under pressure

As was touched upon in the outline above, COVID-19 has put many IT-projects in the fast lane and scarce budgets are being reallocated towards data-driven applications across the globe. As a result, even ways of working that are primarily used in the field of IT, such as Design Thinking or Scrum, have found their way into mainstream projects (Cankurtaran & Beverland, 2020). Even though a great deal of organisations have proven to have radically increased the priority on their digital assets and efforts, this does not automatically result in increased digital capability or better data management. Recent surveys indicate that IT personnel in a variety of organisations has been rushing to reach deadlines in order to keep the business afloat, all while putting out fires of underdeveloped applications elsewhere. IT professionals are wondering whether the forced steps organisations now take regarding their digital transformation are future proof, as compromises are being made across the board (Cordon, 2020). While it is difficult to determine whether or not they are, and it will probably vary per case, the fact is that the true value of digital assets is seen in a whole new perspective by many who would previously not have seen it at all. Local restaurants have gone into online catering, schools are taking digital exams, virtual job interviews are being conducted everywhere and even doctors diagnose via webcam; the crisis’ pressure made it all possible. As a Forrester research noted: ‘the prevailing wisdom was that you could never provide the service we do without being in the office. Having to deliver it remotely has shattered that belief.’ (Forrester, 2020).

Despite the new awareness of and priority for the aspects that entail digital capability and data managment, there are also several negative aspects associated with these concepts as a result of the pandemic. While the investments towards digital capability and a (partial) digital transformation were crucial for survival in the case of many small and large organisations, there are still financial and social repercussions. The International Data Corporation reports that IT budgets are being squeezed everywhere, with major vendors such as Microsoft and SAP witnessing future projects being put on hold or even cancelled. On the short term, firms that rely on physical products, in-person presence or luxury goods will be postponing IT projects in favour of re-solidifying their core business. Additionally, organisations of all sizes are projected to reduce their IT-spending for the remainder of 2020 by an average of over 1% (Business Wire, 2020). It seems only logical that businesses, NGOs and governments need time to recover as the world slowly settles into the ‘new normal’ and hence expenses must be saved. Despite this, digital enterprises such as Google and SAP have seen the newfound widespread recognition for their expertise and are already preparing their long-term strategies for a future in which digital is the new standard (Nunez, 2020; SAP Sapphire Now).

Driving strategy

So far, this article has illustrated the importance of the digital transformation, an organisation’s related digital capability and the foundational concept of data management. Furthermore, we touched upon the response of organisations worldwide and the implications of this response. When analysing these actions and the outcomes, it becomes clear that the crisis-situation has created a newfound appreciation and, more importantly so, a sense of urgency with regard to an organisation’s digital transformation. Of course, the pandemic came with both enormous financial and social costs, but a large number of stakeholders does recognize the value that digital assets were able to save or maintain in spite of these circumstances (Cordon, 2020). 

The impact on both new and established organisations is huge; no one will forget what happened during this crisis and no one knows how long the aftermath will last. No matter how unsettling an idea; a second COVID-wave is certainly not impossible. The takeaway in this argument is; organisations need to be prepared. In case a similar event occurs, processes need to continue, and people need to be paid. While this is a notion that involves many internal and external actors, this article proposes a short argument:

• What is the best way to prepare? For an organisation to undergo a sound digital transformation.
• How is this enabled? By improving the digital capability of the organisation.
• How can this be achieved? By effective data management.

Data management is the foundation and is already a part of almost every organisation. However, as was argued earlier in this text, it is rarely done right. As an IT consultant, I get to see many companies who are taking data management (and their digital transformation) very seriously and were already considering it a major part of their company-wide strategy before I even got there. This crisis, however, has proved that the vast majority of organisations and institutions still sees data management as means to an end, a luxury instead of a commodity. This perception and the subsequent actions based on it, fundamentally undermine the organisation’s capacity to undergo a digital transformation and become digitally capable.

Circling back to G?lzer and Fritzsche’s work, organisations need to start seeing that it is no longer an option to base everything data-related on the existing business; rather, the modern, digital economy dictates how you do business. Data management should therefore no longer be considered as a factor within a strategy, but as a driver for strategy. Business principles might influence what an organisation does with its data, but in an era where data is considered ‘the new gold’, it should certainly be the other way around as well. This very notion is something that the COVID-19 pandemic has illustrated on a grand scale, as many organisations have adapted their business principles to the possibilities provided to them by their own digital means; just look around in your local environments and you will definitely see examples of this development.

Having presented this argument, it should be stated that data management in itself is not a small thing. As the definition from Gartner as given at the beginning of this article already claims, it spans the entire organisation. Good data management is only (if even) half a technological challenge, and more so a human one. 

Conclusion

This article has attempted to illustrate the value of data management as a driver for contemporary organisational strategy, by presenting an argument involving an organisation’s adaptability as enabled by its digital capability in times of crisis. Entire books are written on how to implement good data management and full panels have been dedicated to discussing the up-and downsides of specific practices; these are outside the scope of this text.

In an ever rapidly changing world, people, organisations, and institutions rely more and more on data. Our society and economy cannot function without the digital infrastructure that connects us all, and in times that we cannot physically reach each other, it has proven to be the very thing that keeps our planet spinning. In the post COVID-19 era, considering data management as a driver for organisational strategy is not a guarantee of success, but not seeing it that way is a guarantee of falling behind. 

-

References:

Balaouras, S. (2020). ‘Entering The New Normal: How To Safely Bring Your Workforce Back’, Forrester.com. https://go.forrester.com/blogs/entering-the-new-normal-how-to-safely-bring-your-workforce-back/

Birkinshaw, J., Zimmermann, A., Raisch, S. (2015). ‘How Do Firms Adapt to Discontinuous Change?: Bridging the Dynamic Capabilities and Ambidexterity Perspectives’, California Management Review, Vol. 58, No. 3.

Business Wire (2020). ‘IDC Forecasts a Drop in IT Spending in Nearly Every Industry in 2020 Due to COVID-19, But the Scope of These Reductions Will Vary Across Industries’. https://www.businesswire.com/news/home/20200421005068/en/IDC-Forecasts-Drop-Spending-Industry-2020-Due

Cankurtaran, P., Beverland, M.B. (2020).’ Using design thinking to respond to crises: B2B lessons from the 2020 COVID-19 pandemic’, Industrial Marketing Management, Vol. 88.

Condon, S. (2020). ‘Is the COVID-19 crisis spurring faster digital transformation or short-term IT fixes?’`, www.zdnet.com. https://www.zdnet.com/article/is-the-covid-19-crisis-spurring-faster-digital-transformation-or-short-term-it-fixes/

Evans, D. (2020). ‘Post COVID-19, The Answer Is Digital Transformation, Now What’s The Question?’, Forbes.com. https://www.forbes.com/sites/daveevans/2020/05/19/post-covid-19-the-answer-is-digital-transformation-now-whats-the-question/#7661283d3643

G?lzer, P., Fritzsche, A. (2017). ‘Data-driven operations management: organisational implications of the digital transformation in industrial practice’, Production Planning & Control, Vol. 28, No. 16.

Menear, H. (2018). ‘The history of digital transformation’, Technology Magazine.

Mintzberg, H., Ahlstrand, B. W. (2008). ‘Strategy Safari: Your complete guide through the wilds of strategic management’, Prentice Hall.

Nunez, A. (2020). ‘Covid-19, the biggest test for governments and businesses’ digital strategy (especially if they didn’t have one)’, thebulletin.brandtschool.de. https://thebulletin.brandtschool.de/covid-19-the-biggest-test-for-governments-and-businesses-digital-strategy-especially-if-they-didnt-have-one/

Prescott, M. E. (2014). ‘Big data and competitive advantage at Nielsen’, Management Decision, Vol. 52, No. 3.

Schallmo, D.R.A., Williams, C.A. (2018). ‘History of Digital Transformation’, Digital Transformation Now!, P. 3 – 8.

Sebastian, I., Ross, J., Beath, C., Mocker, M., Moloney, K., Fonstad, N. (2017). ‘How big old companies navigate digital transformation’, MIS quarterly executive, Vol. 16, No. 3.

Slesar, M. (2018). ‘The Pros and Cons of Big Data for Businesses’, www.Onix.com.

Uhl, A., Born, M., Koschmider, A., Janasz, T. (2014). ‘Digital Capability Framework: A Toolset to Become a Digital Enterprise’, Digital Enterprise Transformation.

Westerman, G., Bonnet, D., McAfee, A. (2012). ’The Digital Capabilities Your Company Needs’, MIT Sloan Management Review, No. 54205.

Xiaofeng, M., Xiang, C. (2013). ‘Big Data Management: Concepts,Techniques and Challenges’, Journal of Computer Research and Development, No. 1.

Zhao, M., Liao, H-T., Sun, S-P. (2020). ‘An Education Literature Review on Digitization, Digitalization, Datafication, and Digital Transformation’, Atlantis Press - Advances in Social Science, Education and Humanities Research.

www.digitalcapability.jisc.ac.uk (2020).

www.Forrester.com (2020).

www.Gartner.com (2020).

www.SAP.com – Sapphire Now Reimagined (2020).

[1]: https://www.forbes.com/sites/bernardmarr/2020/03/17/how-the-covid-19-pandemic-is-fast-tracking-digital-transformation-in-companies/#5ac2c560a8ee; https://thebulletin.brandtschool.de/covid-19-the-biggest-test-for-governments-and-businesses-digital-strategy-especially-if-they-didnt-have-one/; https://www.gartner.com/smarterwithgartner/coronavirus-cio-areas-of-focus-during-the-covid-19-outbreak/; https://www.zdnet.com/article/is-the-covid-19-crisis-spurring-faster-digital-transformation-or-short-term-it-fixes/.