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- In a rapidly changing landscape
business leaders know that to get ahead,
they need to take action now.
- For most organizations, that means moving forwards
on the journey of digital transformation.
- And whether that transformation focuses
on technology, data, or agility,
scaling new initiatives past the pilot stage is hard.
- By scaling digital initiatives,
we mean embedding them throughout the organization
and its markets, its regions,
and fundamentally how it works.
- In theory, this should be a straightforward process
where the companies identify the initiatives
that would create most value if they were implemented fully.
- But the reality is often very different.
So, why is it so difficult to get to that level?
- What are the real challenges that business leaders face
and how can they approach them differently?
It starts with a shift in mindset.
- At the Boston Consulting Group,
we've long been studying the digital proficiency
and the link with digital maturity in businesses.
- Our latest study, commissioned by Google,
saw us speak to 2,000 companies
across all sectors from all over the world.
- We wanted to study digital enablement,
and specifically how some companies
have become more digitally proficient than others
by scaling digital processes, products, and services.
- In this research, we gave each company a score
to understand what digital leaders,
the top 30%, are doing differently.
So what can other brands learn from them,
and what opportunities might leaders have missed?
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- Our research found that digital leaders
future proof their organizations,
they increase long-term resilience.
- Through the turbulence of the COVID-19 pandemic,
digital leaders gained 5% more market share
and the same again in market capitalization.
But it's also showed that digital leaders
are seeing real results on their bottom line.
- They implement twice the amount
of digital solutions than their peers,
and this drives up to three times more
near-term gains in cost and speed
compared to less digitally mature brands.
This allows the companies to solidify their positions
as overall leaders in their sectors.
- Compared to their competitors,
digital leaders also see between
15% and 20% higher cost savings.
- And also 15% to 20% revenue growth.
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- A key part of our study was looking at the factors
that allow some companies
to scale up digital initiatives successfully.
Such as, how do they structure their organizations?
- How do they adopt new technologies?
And importantly,
how do they work with data and insights to create impact?
- We found that the businesses leading the way
share a lot of behaviors,
which fall into three key groups.
The first critical enabler we saw in digital leaders
was an aligned C-suite.
- Modernizing a business starts at the top,
but it shouldn't just be the remit of one business function,
whether that's the CMO, CEO, or chief digital officer.
- Instead, in the most digitally mature companies,
leaders across the C-suite join forces
behind a common digital strategy.
- This galvanizes united action from everyone
and drives transformation from the top down.
- The C-suite's alignment and commitment
to their digital vision, investment portfolio,
and resources is critical to long-term success.
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- We know both from this research
and through working with our own leading clients
that transformation can't happen
if this groundwork isn't already laid.
- To put it another way,
in order scale up digital initiatives,
companies need to first have in place
the capabilities, structures, and processes they need.
- For digital leaders,
that means making the most of quality data,
developing ways to adopt cloud services,
and building a highly skilled workforce.
- First of all, why build data capabilities?
- Well, putting in place the structures
to use data efficiently builds a solid foundation
for introducing more digital initiatives.
- To be a true leader in this space,
companies need high-quality, privacy-compliant data
that's accessible by the entire organization.
- This takes diligent data governance
and proper infrastructure.
- Using first-party data is increasingly important
as customers' privacy concerns grow
and third-party cookies are scaled down.
- We saw that nearly half of all digital leaders
use insights from first-party data
to create better customer value propositions.
- Our second essential capability
is about making the most of cloud solutions.
- So it came as no surprise in our research
that digital leaders rely on cloud technology to stay ahead.
- We found that most digital leaders now design solutions
that can be hosted on the cloud right away,
which makes for easier testing, deployment, and maintenance.
- Using cloud-ready solutions over legacy systems
creates sustained value over time,
and it helps companies be more efficient.
By being strategic about moving services to the cloud,
digital leaders can see their IT organizations
become two to three times more efficient.
- The third key capability covers a side
of transformation that's often overlooked,
and I'm talking about people.
Our study found that digital leaders are building
a highly skilled workforce
and plugging talent gaps,
and they're doing it quickly.
This means almost three-quarters of them
are planning significant HR investments
to upscale existing teams and make targeted new hires.
- Our research showed that this is a key area
where partners can step up their support and help fill gaps.
- Leaders that scale successfully by outsourcing to partners
generate 20% more cost savings
and 20% higher revenue growth
than the less digitally proficient companies.
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- As we've all seen in the past two years,
disruption can come at any moment.
And there's more on the horizon.
So, to be resilient enough to face future uncertainty,
organizations need to be constantly adapting and improving.
This means that leaders also must approach
digital transformation with an always-on mindset.
- Effective leaders continually evaluate new pilots
as the market evolves
and successful programs are quickly scaled up
through agile funding processes.
By taking a wide angle view across each business function.
Leaders can always look for the next opportunity.
We saw that the companies are best
at doing this follow three organizing principles.
- First,
they pilot innovations using cross-functional teams,
initially focusing on one or two lighthouse projects
which show the way for others.
- Secondly, they organize around agile product-led teams
for better collaboration between business and tech.
- And finally, they use a digital control tower,
to steer resources towards the most promising initiatives.
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- The path to unlocking value
from digital transformation has many steps to success.
There are equally as many starting points to your journey.
- Ultimately what we found is this,
companies that establish these enablers now,
can not only scale their digital initiatives for value
but they also embed these new ways
of working into their operating models.
- And this means they're more likely to travel
a value-generating, resilience-building path going forward.
- I hope you found these insights useful
for your own journey towards value creation from digital.
- [Both] So thanks for watching.
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