Here is a summary report on the results of a recent McKinsey Global Survey, results that indicate that executives expect that new digital technologies will transform their businesses, but many admit their companies are far from prepared in developing capabilities and meeting challenges. To read the complete article, check out others, learn more about the firm’s services and resources, and sign up for email alerts, please click here.
Source: Business Technology Office, McKinsey & Company
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Most C-level executives say the three key trends in digital business—namely, big data and analytics, digital marketing and social-media tools, and the use of new delivery platforms such as cloud computing and mobility—are strategic priorities at their companies, according to McKinsey’s first annual survey on the topic. Sixty-five percent of respondents say big data and analytics is either a top corporate, top-three corporate, top-ten corporate, or top priority for one to two business units on their organizations’ strategic agendas; 68 percent say the same about digital marketing and social tools, and 56 percent about flexible delivery platforms. The online survey was in the field from April 3 to April 13, 2012, and garnered responses from 1,469 C-level executives representing the full range of industries, regions, and company sizes; 8.5 percent of these executives have a specific technology focus. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.] The survey asked executives in the C-suite about their companies’ adoption of these trends; the extent to which their companies are investing in new digital technologies; the value that they expect to reap from these investments; and the role the IT function plays in driving digital business initiatives forward.
These executives have high expectations for the potential value their companies can generate from the three trends, and one-third even expect digital business to increase operating income by more than 10 percent over the next three years. However, they also report some tough challenges. Nearly half of respondents say their companies’ investments in digital initiatives are too small to deliver on their goals. Many executives also cite overall organizational shortcomings and a lack of IT capabilities as barriers to meeting their companies’ technology priorities.
• The broader organizational issues identified in the question about challenges indicate that executives must think carefully about how to carry out digital business initiatives in their organizations. This challenge may be the most revealing, as it speaks to the potential need for a different operating paradigm—and the fact that traditionally siloed functions (for example, marketing, product development, or IT) could obstruct a dynamic approach to digital business that requires speed and flexibility to create the most value. Also required is a new approach to managing talent by utilizing flexible team structures, engaging outside collaborators, and increasing corporate tolerance for failure.
• Executives and companies also need to focus on building and acquiring the skills necessary to carry out a digital business agenda. In our experience, good people are scarce in each of these three technology areas, as companies compete for talent not only within their industries but also with high-tech firms and start-ups. Companies should be resourceful in developing homegrown skills wherever possible, as well as creative in finding or contracting for the talent to implement their strategies most effectively.
• At companies where the IT leadership is actively engaged and sponsors digital business activities, respondents are far likelier to say their organizations capture more value than competitors: 44 percent say so, compared with 24 percent at companies where the CIO plays a more passive role. This difference suggests that active participation by the CIO contributes significantly to achieving digital business leadership and further highlights companies’ need for an active CIO who is engaged and credible across the business.
Contributors to the development and analysis of this survey include Brad Brown and Johnson Sikes, a director and consultant, respectively, in McKinsey’s New York office.
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To read the complete article, please click here.