According to McKinsey’s survey it shows that executives on a C-suit level are more involved in and are driving digital strategies compared to last year.
The survey focused on five key trends:
- Digital engagement of customers
- Big data and advanced analytics
- Digital engagement of employees and external partners
- Digital innovation
Sofie says: To get a digital strategy to work you need involvement on all levels in an organisation. [To tweet this just click the link]
Our customers are more and more demanding and they expect better and faster service. To meet their needs businesses must step up and use new technology to be a good service provider. Businesses that choose to stay behind with digital development are loosing customers, and may put themselves at risk of going bust.
Sofie says: Success or failure when implementing new technology very much depends on the leadership and their mind-set. [To tweet this just click the link]
Despite the host of technical challenges in implementing digital, respondents say the success (or failure) of these programs ultimately relies on organization and leadership, rather than technology considerations.
As businesses continue to embrace digital tools and technologies—especially when engaging with customers—C-level executives in a recent McKinsey survey1 say they are stepping up their own involvement in shaping and driving digital strategies. This is vital to the success of digital programs, as survey respondents most often cite a lack of senior-management interest as the reason for an initiative’s failure. Respondents also suggest that organizational alignment is critical to seeing real business impact from digital.
In the survey, we asked respondents about five digital-enterprise trends: big data and advanced analytics, digital engagement of customers, digital engagement of employees and external partners, automation, and digital innovation.2 Specifically, we inquired about their companies’ adoption of and focus on each trend, what impact digital technologies can (and do) have on their businesses, and what obstacles companies face in meeting their digital goals. We found that despite the organizational and talent challenges, executives remain optimistic about digital business.
They report, for example, that their companies are using digital technology more and more to engage with customers and reach them through new channels. What’s more, growing shares report that their companies are making digital marketing and customer engagement a high strategic priority. Nevertheless, there is more work to do: most executives estimate that at best, their companies are one-quarter of the way toward realizing the end-state vision for their digital programs.
Focusing on customers and the top line
Executives say each of the five digital trends we asked about is a strategic priority for their companies.3 Of these, the trend that ranks highest is customer engagement: 56 percent say digital engagement of customers is at least a top-ten company priority, and on the whole respondents report notable progress since 2012 in deploying practices related to this trend (Exhibit 1). Companies have made particularly big gains in their use of digital to position material consistently across channels and to make personalized or targeted offers available online.
By comparison, companies have been slower to adopt digital approaches to engaging their own employees, suppliers, and external partners. Here, executives say their companies most often use online tools for employee evaluations and feedback or knowledge management; smaller shares report more advanced uses, such as collaborative product design or knowledge sharing across the supply chain.
Responses also indicate growth in the company-wide use of big data and advanced analytics, matching our experience with companies of all stripes, where we are seeing executives consider analytics a critical priority and dedicate increasing attention to the deployment of new analytic tools. Notably, respondents report increased use of data to improve decision making, R&D processes, and budgeting and forecasting (Exhibit 2). What’s more, executives say their companies are using analytics to grow: the largest shares report focusing their analytics efforts on either increasing revenue or improving process quality; reducing costs tends to rank as a lower-level priority.
Likewise, when asked about the next wave of business-process automation, respondents say their companies are automating a wide range of functions to improve the overall quality of processes (by removing breaks or errors, for example) or to build new digital capabilities (for example, remote monitoring) into the processes; few say their companies have automated processes primarily to replace labor. When asked about innovation practices, more than 40 percent of respondents say their companies are either incorporating digital technology into existing products or improving their technology operating models (for instance, using cloud computing). Just 23 percent say they are creating digital-only products.
Across most of the C-suite, larger shares of respondents report that their companies’ senior executives are now supporting and getting involved in digital initiatives (Exhibit 3). This year, 31 percent say their CEOs personally sponsor these initiatives, up from 23 percent who said so in 2012. This growth illustrates the importance of these new digital programs to corporate performance, as well as the conundrum that many organizations face: often, the CEO is the only executive who has the mandate and ability to drive such a cross-cutting program.
CEOs are now more likely to sponsor digital initiatives than they were in 2012.
Thirty percent of respondents also report a chief digital officer (CDO) on their companies’ executive teams, a sign of the widespread awareness that these initiatives are important. This result also squares with our experience that some organizations have created the CDO role as an executive-level position with cross-cutting responsibilities for all digital initiatives. In a sign that this new role is already creating value, respondents whose organizations have a CDO also indicate significantly more progress toward their digital vision than those without one.
Organizational challenges continue
Despite the host of technical challenges in implementing digital, respondents say the success (or failure) of these programs ultimately relies on organization and leadership, rather than technology considerations. We asked executives to think of past initiatives at their companies (one initiative that worked and one that didn’t) and then identify the most decisive factors behind each outcome. Executives most often attribute the success of digital programs to managerial factors—senior management’s interest and attention, internal leadership, good program management, and alignment between organizational structure and goals—and are less likely to cite any technical considerations (Exhibit 4). Interestingly, the absence of senior-management interest is the factor respondents most often identify as contributing to an initiative’s failure.