Hrishi Hrishikesh is a partner and director at
BCG and a core member of Technology Advantage. Recently, they partnered with
Google to study how global companies successfully approach digital
transformation. They share their key findings here. A woman of color examines a
bar graph, while a white man makes adjustments to a growth chart. Senior
business leaders are keenly aware we’re in a new era of digital consumption, one
that’s been rapidly accelerated by COVID-19.
If the past few years have shown us
anything, it’s that companies must be ready to move quickly to stay ahead of the
pace of change. This has familiarized many marketing teams with a new
catchphrase: digital transformation. A company’s ability to quickly scale
digital solutions allows it to realize value from digital transformation. Since
2018, we’ve been partnering with Google to explore digital transformation, as
it’s evolved from a relatively nascent concept to a business imperative. Most
recently, we teamed up to better understand why some companies are able to
generate significant value from digital solutions — and why so many others still
lag behind.
Our approach was to study the digital proficiency and maturity of
2,000 global companies, and we found that the value companies get from their
digital solutions is inextricably linked to their ability to scale those
solutions at speed. Achieving scale is what transforms digital pilot programs
from interesting experiments into drivers of significant value. Companies that
are able to do this faster than the rest of the market hold a considerable
advantage.
This became an important factor for our study; it differentiated the
“digital leaders” — roughly 30% of companies generating significant value from
digital — from the others.
Our research showed that digital leaders achieve
three times higher revenue growth and cost savings, and have an accelerated
time-to-market twice as high as companies unable to gain value from digital.1 By
taking a deeper look at the digital leaders, we were able to identify three key
factors that allowed them to successfully scale their digital solutions. Here’s
what you need to know. Three people icons in a huddle, a hex nut, and a slider
control:
1. C-suite alignment.
2. Build capabilities.
3. Always-on mindset.
1.
C-suite alignment Becoming a digital leader begins at the top. Companies are
successful when digital transformation isn’t just the remit of one executive,
but when the entire C-suite aligns on a common strategy and road map. Once
they’ve set the North Star, CxOs must work together to galvanize the entire
organization to execute the vision from the top down. According to our research,
72% of digital leaders say that consistent C-level collaboration is essential,2
and a full 82% claim to align across the executive suite on digital vision,
investment, and other resources to drive the agenda forward together.3 A laptop
screen shows a growth chart. 82% of digital leaders align across the executive
suite on digital vision, investment, and other resources.
Think with Google
Source: BCG, Global, The Keys to Scaling Digital Value, a study commissioned by
Google, March 2022. Share To do this successfully, leaders must embrace agile
ways of working. They can’t work in silos if they plan to cascade strategies and
targets down to local business units. Flexible planning and budgeting processes
are critical, and the whole C-suite must be more involved in tech, data privacy,
and analytics to follow a successful digital road map.
2. Build capabilities
With C-suite alignment in place, digital leaders next invest in whatever helps
their businesses gain value from digital. To effectively understand this
question, companies need to take advantage of first-party data, from their
customers and themselves. Gathering insights from data requires access to the
same high-quality data throughout the organization. More than 90% of digital
leaders have gained the ability to connect digital solutions to their tech
stacks by using APIs and microservices.
An emphasis on proper data governance
procedures paves the way for a continuous supply of high-quality data that teams
use appropriately and consistently. A cloud contains a microchip. 90% of digital
leaders have gained the ability to connect digital solutions to their tech
stacks by using APIs and microservices. Think with Google Source: BCG, Global,
The Keys to Scaling Digital Value, a study commissioned by Google, March 2022.
Share Digital leaders also focus on creating agile working environments, powered
by productivity apps and AI analytics, which appeal to high-performing employees
and aid in recruitment. Fostering a competent workforce — and a more inclusive
and diverse workplace — also enables digital leaders to build more resilient
business models for the long term.
3. Always-on mindset Rather than viewing
digital transformation as a one-time project, digital leaders steer with an
adaptive, always-on mindset to improve and scale pilots as the landscape changes
and they prove their ROI. Just as technology, markets, and consumer behaviors
constantly evolve, so too will your approach to digital transformation. A
cultural reset is required to get comfortable with constant pivots. Digital
leaders continually test and learn, invest in flexible planning and budgeting,
and develop cross-functional teams, starting with the C-suite. It’s also clear
from our research that digital leaders have embedded these behaviors into their
company culture.
As C-levels align to invest in a digital foundation, they
become adept at using internal data as a decision-making tool for operational
challenges. A settings wheel inside moving arrows. An adaptive, always-on
mindset increases businesses’ ability to reimagine customer experiences. This
adaptive, always-on mindset also increases businesses’ ability to reimagine
customer experiences. By working cross-functionally, digital leaders are better
able to determine which customer-centric opportunities to quickly scale and
which unsuccessful or slow-moving initiatives to cut. It’s clear that digital
transformation delivers outsize value to digital leaders. All companies can
expect to realize similar value if they are willing to commit to change. By
embracing necessary success factors — an aligned C-suite, capabilities-driven
investment, and an always-on approach — any organization can become a digital
leader.
Further your business’s transformation by exploring the full BCG
research report.
Explore related content Digital
Transformation Global Karalee
Close Karalee Close Managing Director and Senior Partner; Global Leader,
Technology Advantage Boston Consulting Group Hrishi Hrishikesh Hrishi Hrishikesh
Partner and Director Boston Consulting Group
Antoniotopcat@gmail.com
