Four ways to become a digital powerhouse
Among successful digitized incumbents, four critical moves have put them on top.
A recent survey on digital strategy by McKinsey showed that digitized incumbents – companies that are more than 20% digital and are launching new digital businesses while transforming the core – are twice as likely as traditional incumbents to experience organic revenue growth of 25% or higher. According to a separate survey, four critical strategic moves distinguish top economic performers from other less successful digitized incumbents.
- Allocating digital capital – Top performers say their companies divide this capital equally between digitizing their core businesses and developing new digital businesses, while other companies put more money into digitizing legacy operations.
- Ensuring strong IT capabilities are on hand – Digitizing the core business remains crucial, even though the financial returns are comparatively modest. Companies with top performance on core IT tasks have made more progress than other companies in becoming fully digital and mastering key digital activities.
- Using basic and advanced digital technologies across the enterprise – For example, among companies that have embedded or piloted AI in one or more business units, 78% say that it has created significant or moderate value.
- Integrating digital technologies into day-to-day processes – Companies that have done this successfully say their digital transformations were also a success: it had brought about sustained improvements in performance.
Every company has its own definition of digital innovation and its own looming competitive threats – and the digital strategy should reflect this. With a dual strategy of building innovative new digital businesses while digitizing legacy operations, and with these four critical moves, any company can become a digital powerhouse.
For help determining your digital strategy, get in touch with Pipol.