TLDR: Organizations’ efforts to go digital, and drive growth through digitization, are picking up steam. But many have more work to do before they can scale their efforts and see material impact.
More and more organizations are feeling compelled to “go digital” but there are a wide variety of strategic objectives behind the digital programs of many companies. For example, McKinsey Global’s recent Digital Tipping Point survey found that 54 percent of businesses believe that their digital efforts over the next three years will generate new business or allow them to tap into new revenue pools. Thirty-one percent expect such efforts to help develop a competitive advantage in an existing business and 30 percent are looking to simply keep pace with competitors. Technology is also commonly believed to help organizations reduce costs but only 11 percent of surveyed firms think their digital efforts will result in improved operating margins. More from the report, “As digital becomes more integrated into businesses, executives acknowledge that some investments must change. Across the trends, respondents are most likely to say their companies are underinvesting in big data and analytics—though they predict that in three years’ time, big data will become a higher spending priority. More broadly, only one-fifth of executives report that their organizations spend at least 5 percent of their current cost base on digital programs; nearly one-third of respondents expect their spending will reach this level in three years’ time. In North America and in information-intensive sectors such as financial services, high tech, and telecommunications, executives report even higher levels of spending, both now and in the future. … Many companies (and leaders) have recognized the importance of digital and focused their digital strategy and spending. Yet many still have a long way to go in creating an organization that is well positioned to see digital efforts scaled across the company and achieve the large financial impact that respondents expect. One such challenge is the struggle to recognize value from existing digital efforts. When asked about the funding of and impact generated from digital projects, just 7 percent say their organizations understand the exact value at stake from digital. … Many executives also agree that digital talent remains a trouble area for their organizations. Only one-third of respondents say at least one in ten of their employees spends any time working on digital projects. Of the challenges companies face in meeting their digital priorities, difficulty finding talent often tops the list. Roughly nine out of ten executives say their companies have some pressing need for digital talent in the next year—especially in analytics…”
