WEBVTT 1 00:00:00.125 --> 00:00:01.940 (electronic music) 2 00:00:01.940 --> 00:00:03.600 - In a rapidly changing landscape 3 00:00:03.600 --> 00:00:05.870 business leaders know that to get ahead, 4 00:00:05.870 --> 00:00:07.560 they need to take action now. 5 00:00:07.560 --> 00:00:10.640 - For most organizations, that means moving forwards 6 00:00:10.640 --> 00:00:13.291 on the journey of digital transformation. 7 00:00:13.291 --> 00:00:14.680 - And whether that transformation focuses 8 00:00:14.680 --> 00:00:17.510 on technology, data, or agility, 9 00:00:17.510 --> 00:00:20.840 scaling new initiatives past the pilot stage is hard. 10 00:00:20.840 --> 00:00:22.540 - By scaling digital initiatives, 11 00:00:22.540 --> 00:00:25.480 we mean embedding them throughout the organization 12 00:00:25.480 --> 00:00:28.000 and its markets, its regions, 13 00:00:28.000 --> 00:00:30.580 and fundamentally how it works. 14 00:00:30.580 --> 00:00:32.930 - In theory, this should be a straightforward process 15 00:00:32.930 --> 00:00:35.000 where the companies identify the initiatives 16 00:00:35.000 --> 00:00:37.770 that would create most value if they were implemented fully. 17 00:00:37.770 --> 00:00:40.790 - But the reality is often very different. 18 00:00:40.790 --> 00:00:43.690 So, why is it so difficult to get to that level? 19 00:00:43.690 --> 00:00:46.170 - What are the real challenges that business leaders face 20 00:00:46.170 --> 00:00:48.570 and how can they approach them differently? 21 00:00:48.570 --> 00:00:50.270 It starts with a shift in mindset. 22 00:00:51.130 --> 00:00:52.720 - At the Boston Consulting Group, 23 00:00:52.720 --> 00:00:56.110 we've long been studying the digital proficiency 24 00:00:56.110 --> 00:00:59.560 and the link with digital maturity in businesses. 25 00:00:59.560 --> 00:01:01.580 - Our latest study, commissioned by Google, 26 00:01:01.580 --> 00:01:03.420 saw us speak to 2,000 companies 27 00:01:03.420 --> 00:01:05.700 across all sectors from all over the world. 28 00:01:05.700 --> 00:01:07.870 - We wanted to study digital enablement, 29 00:01:07.870 --> 00:01:10.260 and specifically how some companies 30 00:01:10.260 --> 00:01:12.860 have become more digitally proficient than others 31 00:01:12.860 --> 00:01:16.920 by scaling digital processes, products, and services. 32 00:01:16.920 --> 00:01:20.040 - In this research, we gave each company a score 33 00:01:20.040 --> 00:01:21.970 to understand what digital leaders, 34 00:01:21.970 --> 00:01:25.030 the top 30%, are doing differently. 35 00:01:25.030 --> 00:01:27.270 So what can other brands learn from them, 36 00:01:27.270 --> 00:01:29.979 and what opportunities might leaders have missed? 37 00:01:29.979 --> 00:01:32.562 (upbeat music) 38 00:01:34.600 --> 00:01:37.280 - Our research found that digital leaders 39 00:01:37.280 --> 00:01:39.560 future proof their organizations, 40 00:01:39.560 --> 00:01:42.050 they increase long-term resilience. 41 00:01:42.050 --> 00:01:44.920 - Through the turbulence of the COVID-19 pandemic, 42 00:01:44.920 --> 00:01:47.510 digital leaders gained 5% more market share 43 00:01:47.510 --> 00:01:50.180 and the same again in market capitalization. 44 00:01:50.180 --> 00:01:52.150 But it's also showed that digital leaders 45 00:01:52.150 --> 00:01:54.910 are seeing real results on their bottom line. 46 00:01:54.910 --> 00:01:56.500 - They implement twice the amount 47 00:01:56.500 --> 00:01:58.780 of digital solutions than their peers, 48 00:01:58.780 --> 00:02:00.830 and this drives up to three times more 49 00:02:00.830 --> 00:02:04.180 near-term gains in cost and speed 50 00:02:04.180 --> 00:02:07.020 compared to less digitally mature brands. 51 00:02:07.020 --> 00:02:10.190 This allows the companies to solidify their positions 52 00:02:10.190 --> 00:02:12.650 as overall leaders in their sectors. 53 00:02:12.650 --> 00:02:14.100 - Compared to their competitors, 54 00:02:14.100 --> 00:02:15.920 digital leaders also see between 55 00:02:15.920 --> 00:02:18.410 15% and 20% higher cost savings. 56 00:02:18.410 --> 00:02:21.523 - And also 15% to 20% revenue growth. 57 00:02:22.881 --> 00:02:25.010 (soft electronic music) 58 00:02:25.010 --> 00:02:27.510 - A key part of our study was looking at the factors 59 00:02:27.510 --> 00:02:28.650 that allow some companies 60 00:02:28.650 --> 00:02:31.350 to scale up digital initiatives successfully. 61 00:02:31.350 --> 00:02:34.040 Such as, how do they structure their organizations? 62 00:02:34.040 --> 00:02:36.280 - How do they adopt new technologies? 63 00:02:36.280 --> 00:02:37.240 And importantly, 64 00:02:37.240 --> 00:02:41.140 how do they work with data and insights to create impact? 65 00:02:41.140 --> 00:02:43.380 - We found that the businesses leading the way 66 00:02:43.380 --> 00:02:44.810 share a lot of behaviors, 67 00:02:44.810 --> 00:02:47.750 which fall into three key groups. 68 00:02:47.750 --> 00:02:50.030 The first critical enabler we saw in digital leaders 69 00:02:50.030 --> 00:02:51.763 was an aligned C-suite. 70 00:02:52.870 --> 00:02:55.470 - Modernizing a business starts at the top, 71 00:02:55.470 --> 00:02:58.490 but it shouldn't just be the remit of one business function, 72 00:02:58.490 --> 00:03:02.980 whether that's the CMO, CEO, or chief digital officer. 73 00:03:02.980 --> 00:03:06.070 - Instead, in the most digitally mature companies, 74 00:03:06.070 --> 00:03:08.390 leaders across the C-suite join forces 75 00:03:08.390 --> 00:03:10.550 behind a common digital strategy. 76 00:03:10.550 --> 00:03:13.800 - This galvanizes united action from everyone 77 00:03:13.800 --> 00:03:16.920 and drives transformation from the top down. 78 00:03:16.920 --> 00:03:18.740 - The C-suite's alignment and commitment 79 00:03:18.740 --> 00:03:21.240 to their digital vision, investment portfolio, 80 00:03:21.240 --> 00:03:24.688 and resources is critical to long-term success. 81 00:03:24.688 --> 00:03:27.105 (soft music) 82 00:03:28.030 --> 00:03:30.370 - We know both from this research 83 00:03:30.370 --> 00:03:33.000 and through working with our own leading clients 84 00:03:33.000 --> 00:03:35.320 that transformation can't happen 85 00:03:35.320 --> 00:03:37.530 if this groundwork isn't already laid. 86 00:03:37.530 --> 00:03:38.560 - To put it another way, 87 00:03:38.560 --> 00:03:41.040 in order scale up digital initiatives, 88 00:03:41.040 --> 00:03:42.820 companies need to first have in place 89 00:03:42.820 --> 00:03:46.080 the capabilities, structures, and processes they need. 90 00:03:46.080 --> 00:03:47.310 - For digital leaders, 91 00:03:47.310 --> 00:03:50.290 that means making the most of quality data, 92 00:03:50.290 --> 00:03:52.980 developing ways to adopt cloud services, 93 00:03:52.980 --> 00:03:56.050 and building a highly skilled workforce. 94 00:03:56.050 --> 00:03:58.900 - First of all, why build data capabilities? 95 00:03:58.900 --> 00:04:00.480 - Well, putting in place the structures 96 00:04:00.480 --> 00:04:03.960 to use data efficiently builds a solid foundation 97 00:04:03.960 --> 00:04:06.900 for introducing more digital initiatives. 98 00:04:06.900 --> 00:04:08.650 - To be a true leader in this space, 99 00:04:08.650 --> 00:04:11.760 companies need high-quality, privacy-compliant data 100 00:04:11.760 --> 00:04:14.470 that's accessible by the entire organization. 101 00:04:14.470 --> 00:04:16.640 - This takes diligent data governance 102 00:04:16.640 --> 00:04:18.610 and proper infrastructure. 103 00:04:18.610 --> 00:04:21.880 - Using first-party data is increasingly important 104 00:04:21.880 --> 00:04:24.070 as customers' privacy concerns grow 105 00:04:24.070 --> 00:04:26.760 and third-party cookies are scaled down. 106 00:04:26.760 --> 00:04:29.860 - We saw that nearly half of all digital leaders 107 00:04:29.860 --> 00:04:32.320 use insights from first-party data 108 00:04:32.320 --> 00:04:35.900 to create better customer value propositions. 109 00:04:35.900 --> 00:04:37.620 - Our second essential capability 110 00:04:37.620 --> 00:04:40.200 is about making the most of cloud solutions. 111 00:04:40.200 --> 00:04:42.860 - So it came as no surprise in our research 112 00:04:42.860 --> 00:04:47.240 that digital leaders rely on cloud technology to stay ahead. 113 00:04:47.240 --> 00:04:49.533 - We found that most digital leaders now design solutions 114 00:04:49.533 --> 00:04:51.860 that can be hosted on the cloud right away, 115 00:04:51.860 --> 00:04:54.990 which makes for easier testing, deployment, and maintenance. 116 00:04:54.990 --> 00:04:58.620 - Using cloud-ready solutions over legacy systems 117 00:04:58.620 --> 00:05:01.290 creates sustained value over time, 118 00:05:01.290 --> 00:05:03.950 and it helps companies be more efficient. 119 00:05:03.950 --> 00:05:07.410 By being strategic about moving services to the cloud, 120 00:05:07.410 --> 00:05:10.140 digital leaders can see their IT organizations 121 00:05:10.140 --> 00:05:13.340 become two to three times more efficient. 122 00:05:13.340 --> 00:05:15.290 - The third key capability covers a side 123 00:05:15.290 --> 00:05:17.310 of transformation that's often overlooked, 124 00:05:17.310 --> 00:05:19.270 and I'm talking about people. 125 00:05:19.270 --> 00:05:21.400 Our study found that digital leaders are building 126 00:05:21.400 --> 00:05:22.820 a highly skilled workforce 127 00:05:22.820 --> 00:05:24.800 and plugging talent gaps, 128 00:05:24.800 --> 00:05:26.450 and they're doing it quickly. 129 00:05:26.450 --> 00:05:28.160 This means almost three-quarters of them 130 00:05:28.160 --> 00:05:30.070 are planning significant HR investments 131 00:05:30.070 --> 00:05:33.600 to upscale existing teams and make targeted new hires. 132 00:05:33.600 --> 00:05:35.930 - Our research showed that this is a key area 133 00:05:35.930 --> 00:05:39.470 where partners can step up their support and help fill gaps. 134 00:05:39.470 --> 00:05:42.350 - Leaders that scale successfully by outsourcing to partners 135 00:05:42.350 --> 00:05:44.460 generate 20% more cost savings 136 00:05:44.460 --> 00:05:46.500 and 20% higher revenue growth 137 00:05:46.500 --> 00:05:48.958 than the less digitally proficient companies. 138 00:05:48.958 --> 00:05:51.875 (electronic music) 139 00:05:56.708 --> 00:05:58.500 (upbeat music) 140 00:05:58.500 --> 00:06:01.450 - As we've all seen in the past two years, 141 00:06:01.450 --> 00:06:04.040 disruption can come at any moment. 142 00:06:04.040 --> 00:06:05.850 And there's more on the horizon. 143 00:06:05.850 --> 00:06:09.010 So, to be resilient enough to face future uncertainty, 144 00:06:09.010 --> 00:06:13.010 organizations need to be constantly adapting and improving. 145 00:06:13.010 --> 00:06:15.230 This means that leaders also must approach 146 00:06:15.230 --> 00:06:19.310 digital transformation with an always-on mindset. 147 00:06:19.310 --> 00:06:21.890 - Effective leaders continually evaluate new pilots 148 00:06:21.890 --> 00:06:22.930 as the market evolves 149 00:06:22.930 --> 00:06:25.780 and successful programs are quickly scaled up 150 00:06:25.780 --> 00:06:27.670 through agile funding processes. 151 00:06:27.670 --> 00:06:30.760 By taking a wide angle view across each business function. 152 00:06:30.760 --> 00:06:33.440 Leaders can always look for the next opportunity. 153 00:06:33.440 --> 00:06:34.870 We saw that the companies are best 154 00:06:34.870 --> 00:06:37.830 at doing this follow three organizing principles. 155 00:06:37.830 --> 00:06:38.840 - First, 156 00:06:38.840 --> 00:06:42.010 they pilot innovations using cross-functional teams, 157 00:06:42.010 --> 00:06:45.760 initially focusing on one or two lighthouse projects 158 00:06:45.760 --> 00:06:47.530 which show the way for others. 159 00:06:47.530 --> 00:06:51.300 - Secondly, they organize around agile product-led teams 160 00:06:51.300 --> 00:06:54.110 for better collaboration between business and tech. 161 00:06:54.110 --> 00:06:57.440 - And finally, they use a digital control tower, 162 00:06:57.440 --> 00:07:01.073 to steer resources towards the most promising initiatives. 163 00:07:01.953 --> 00:07:04.536 (upbeat music) 164 00:07:05.370 --> 00:07:06.780 - The path to unlocking value 165 00:07:06.780 --> 00:07:10.390 from digital transformation has many steps to success. 166 00:07:10.390 --> 00:07:13.690 There are equally as many starting points to your journey. 167 00:07:13.690 --> 00:07:16.340 - Ultimately what we found is this, 168 00:07:16.340 --> 00:07:19.230 companies that establish these enablers now, 169 00:07:19.230 --> 00:07:22.760 can not only scale their digital initiatives for value 170 00:07:22.760 --> 00:07:24.580 but they also embed these new ways 171 00:07:24.580 --> 00:07:26.910 of working into their operating models. 172 00:07:26.910 --> 00:07:29.340 - And this means they're more likely to travel 173 00:07:29.340 --> 00:07:33.430 a value-generating, resilience-building path going forward. 174 00:07:33.430 --> 00:07:35.360 - I hope you found these insights useful 175 00:07:35.360 --> 00:07:39.280 for your own journey towards value creation from digital. 176 00:07:39.280 --> 00:07:41.051 - [Both] So thanks for watching. 177 00:07:41.051 --> 00:07:43.634 (upbeat music)