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Digital without disruption

Why are so many companies failing
to drive growth through digital?

Overview

The allure of digital has persuaded many companies to invest heavily in adopting digital technologies to reduce costs and fuel growth. Digital can accelerate and automate complex business processes, and significantly transform the customer value chain.

But it seems the majority of companies have not achieved this value proposition. Only 36 percent strongly agree their business sustains the benefit of cost reduction programs, and only 24 percent report their company consistently delivers on strategies that drive value and create competitive advantage for the organization.

While digital has helped business leaders reduce costs, it has not delivered the growth that many anticipated.

READ REPORT [PDF]
73% of companies cannot consistently deliver on strategies and execute the activities that drive value for organization

Key findings

Companies are achieving incremental cost savings, but are not moving the big needles of performance. A few factors are getting in the way of growth through digital.

Executives aren’t certain about where to invest.

While digital technologies are the most common (54 percent) direction for reinvestment of cost savings, those investments are applied across a disjointed spectrum of opportunities. Only 23 percent of executives report being able to consistently identify and remove business activities that do not add value.

A cross-functional view of the organization from the eyes of the customer is missing.

Companies have achieved incremental cost savings by focusing on improving functional excellence, but digital is rarely being used to improve the total customer experience lifecycle. Forty-nine percent of digital adoption is driven by Individual business units and functions—without collaboration across the enterprise.

Cost savings initiatives aren’t helping companies differentiate.

Rather than investing cost savings in areas that deliver incremental benefit, savings should be reinvested strategically to create competitive advantage. However, only 30 percent of executives prioritize cost savings in line with business strategy.

Digital has created a new set of issues that companies need to address.

Many companies that have adopted digital have not addressed the people/process/governance components, leading to collisions with legacy culture and ways of doing business. 

VIEW INFOGRAPHIC [PDF]

Only 1/3 of companies strongly agree their business sustains the benefit of cost reduction programs


Recommendations

Companies can pave the way to growth by linking digital investment with growth strategies and optimizing the customer experience.


Understand the end-to-end value chain


Key elements that make a company successful can become lost amid functional silos, clutter and inward focus. Maximize value in complex business landscapes to drive outcomes of strategic importance and value for customers.

Walk a day in your customer's shoes.

Find the best opportunities for digital disruption by starting with the end in mind. Look at how work is conducted across the value chain from a customer perspective. Where should digital plug in?


Authors

Mark helps clients around the world transform their operations and processes to achieve high performance. Over the past 10 years, he has designed and supported enterprise transformation initiatives at more than 40 Fortune 1000 organizations in many industries, including Automotive, Consumer Goods and Services, Energy, Life Sciences and others. Mark is a well-respected author and holds US patents in Lean analytics and Enterprise Speed. He is based in Dallas.

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Nik helps clients identify and target value, define business strategy, align operations and design target operating models to optimize business outcomes. He specializes in diagnosing strategic opportunities, leading transformations toward digital, optimizing operating models and solving clients' most strategic issues. He has worked in the retail, energy, chemicals, resources, technology, manufacturing, warehousing and distribution, public sector, publishing, transportation and financial services industries. Nik is based in Washington, DC.

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Ryan helps clients develop and deploy operational transformation initiatives based on a deep understanding of the clients' industry landscape and business options in the context of global, economic, technology and social trends. He has expertise with functional strategy development, architecting value and defining operating model architecture skills. Over the past twenty years Ryan has supported enterprise transformation initiatives and driven quality and operational improvements for government, military operations, and commercial industries. Ryan is based in Atlanta.

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