(upbeat music)
The pressure on management teams keeps growing,
from activist investors, market disruptions,
and new types of competitions.
Many companies have already launched
performance improvement programs,
and captured the winds from traditional levers.
But digital and database initiatives
and tools, can generate fast, sustainable,
and real-world improvements.
For companies that have already undergone
traditional transformations, these digital levers
can help get to the next level of performance.
And for companies that haven't yet begun the process,
they should be an integral part
of a performance improvement program.
(upbeat music)
Digital levers lead to new ways of working,
rather than just cutting costs and asking teams
to execute existing processes with fewer people.
Digital levers allow leaders
to redesign processes from the ground up.
They're automated, with data captured at the right junctures
to deliver insights to managers.
For these reasons, digital measures
require organizations to perform better,
not through a one-time change,
but through fundamental reboot in how work gets done.
(upbeat music)
We identified ten, grouped into two main categories.
The first is the company's product and service offering
including go-to-market functions.
That category includes levers
like digitizing the sales force, marketing,
customer service, and even making R&D
and product development faster and more efficient.
The second category is operations in areas
like manufacturing, procurement,
rethinking the supply chain, and improving service.
(upbeat music)
One of the examples
from the product and service offering category is pricing.
A lot of organizations, even today,
pricing is based on hunches more than data.
It is gut instinct or what we charged last year.
But gathering data from a lot of different sources
can tell companies far more about the perceived value
that the customer feels about a given product or service.
That can help them make sure they have the right offering,
format, and price tailored to every customer,
purchasing occasion, and channel.
One fashion retailer used data and analytics
to improve its promotions and markdowns
which are a big part of the fashion industry.
That led to a 7% boost in margins on promotions
and an 18% impact on markdowns.
Similarly, a US retailer boosted revenue by $5 million
in a single product category.
That's with the exact same products,
just applying a data-driven approach to pricing.
(upbeat music)
Let's take the example of procurement.
That function can be extremely fragmented,
and purchasing managers are often on their own
in terms of making decisions.
But an AI-based tool can help them use
the right negotiation approach
for a given category or purchase.
The tool analyzes the factors
driving a specific commercial decision
and uses game theory to identify the strongest tools
such as the type of auction, or tender process,
along with the commercial aspects
such as different type of commercial optimizations.
It also learns from previous negotiations
and incorporates changes in the commercial environment
to improve its accuracy over time.
One company that used this algorithm
reduced procurement spend by 5%
and freed up about 30% of manager's time
by simplifying the negotiation process.
Think about it.
A lot of processes and those functions
are consistent and repeated over time.
Finance has to close the books every month
or at least every quarter.
HR has to onboard new employees and handle
administrative stuff like expense reports and travel claims.
A lot of that can be done faster
and more accurately through algorithms.
And by doing so, companies can also start
to gather insights about how to improve those processes.