The Fifth Phase by Mark Powell

Author:Mark Powell
Language: eng
Format: epub
Publisher: LID Publishing
Published: 2023-11-15T00:00:00+00:00

The fifth phase of business transformation will be insight-led and data-enabled, and driven by the astonishing power of AI technologies.

We need to move from a data-driven, ‘data up’ approach to a value-driven, ‘value down’ approach. One of the problems with the whole concept of data lakes is that they work on the assumption that all datasets have equal value. But all data are not equal. Data in itself has no value. But a set of data that has no apparent inherent value may have the potential to become extremely valuable when linked to other sets of data and viewed through the lens of value.

Business leaders need to frame the questions that have the potential to add real value to their businesses. I find it useful to see any business as a series of potential optimization points, and then work out which individual optimization has the capacity to deliver most added value. The goal is to produce a ‘value map’ of the organization. Very often, the optimization points that have the most value occur throughout the various silos of the organization. Making a radical improvement to the optimization point can ripple through the whole organization, adding surprising amounts of new value. The trick is to ‘test’ this optimization, to create a ’proof of value.’ That is, to prove that we have the ability to make the improvement we want, and the improvement will deliver the desired added value.

The concept of proof of value is distinct from the usual understanding of ‘proof of concept’ in business. Very few proofs of concept break genuinely new ground. They tend to apply established techniques to a business problem in the appropriate order, and with the right structure, to achieve a desired outcome. The focus tends to be more on whether the solution will actually work than on whether it will deliver real value. With proof of value, the focus is on testing small-scale but valid scenarios to see if they not only work but also deliver real value. Embarrassingly large numbers of data projects have consumed huge amounts of money and failed to deliver significant value. Sometimes they fail to work at all and are abandoned.

Proof of value is an experimental, agile process. A key part of the agile approach is to constantly review progress, and to assess blockers and barriers using the mantra, ‘pause, pivot or stop.’ At each barrier to progress we decide whether to pause, while we look for new data, or perhaps an enhancement, that would allow us to then move ahead. Or, pivot and approach the problem from an entirely different angle. Or, stop and agree that this approach doesn’t seem to be working.

In this second part of this book, I will focus on real-life examples of insight-led and data-enabled business transformation, because this is first and foremost a practical approach. The fifth phase of business transformation is all about driving value from data and using the power of AI to generate new insights.

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