For example, only one-third of respondents say their companies are building new digital businesses to provide new sources of revenue. Yet the survey results suggest that many companies are building new digital businesses for reasons other than strictly financial ones, which could explain why a new business is less likely than a core business to hit its targets. a focus on attracting and developing tech-savvy executives and on better overall integration of tech talent into the organization rather than just getting new tech talent in the door.the development of proprietary assets, such as AI, data, and software, rather than a reliance on off-the-shelf tools.the use of digital tech to achieve strategic differentiation on customer engagement and innovation rather than cost efficiencies-and bolder digital strategies that are more likely to be successful than more incremental ones.While many of the traditional challenges to digital transformation remain, three new factors have emerged as critical to capturing value from them today-and going forward: We looked closely at what the top-performing companies are doing differently from the rest. are much more likely than their peers to report value from these efforts. And while many respondents say their companies haven’t seen the impact on revenue or costs that they expected, those working at “top economic performers” 4 We define “top economic performers” as companies where respondents report increases of at least 15 percent in their organizations’ revenue and in EBIT over the past three years. ![]() 3 The survey asked about three types of digital transformations or investments: making technology-based changes that enable the core business’s future competitiveness (for example, digital-ready architectures and platforms, cloud enablement, and open interfaces), making tech-based changes to the core business (for example, embedding AI into the current business’s operations, increasing digital interactions with customers, and building proprietary software) to differentiate the company from competitors strategically, and building a new digital business that is separate from the core business. Nine in ten C-level and senior leaders say their organizations have pursued at least one large-scale digital transformation in the past two years. 2 The online survey was in the field from January 25 to February 4, 2022, and garnered responses from 1,331 C-level executives, senior managers, and business unit, department, or division heads representing the full range of regions, industries, company sizes, and functional specialties. While some of the obstacles to digital-transformation success are well known, our newest McKinsey Global Survey on digital strategy and investments asked business leaders about the evolution of these challenges, digital tech’s role in their businesses, and companies’ strategic responses. Now, organizations are under even more stress to make consequential business decisions not only at a faster pace but also in business areas that may have no previous experience with or knowledge of digital tech or transformations. ![]() The challenge has only become more acute over the past two years, when companies’ adoption-and the strategic importance-of digital technologies accelerated dramatically. 1 “ Five moves to make during a digital transformation,” McKinsey, Ap“ Losing from day one: Why even successful transformations fall short,” McKinsey, December 7, 2021. ![]() Success with digital transformations, and transformations in general, has always been hard to come by.
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