{"id":25800,"date":"2020-04-13T08:43:43","date_gmt":"2020-04-13T08:43:43","guid":{"rendered":"https:\/\/www.ceo-na.com\/?p=25800"},"modified":"2020-04-13T13:43:28","modified_gmt":"2020-04-13T13:43:28","slug":"how-digital-champions-invest","status":"publish","type":"post","link":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/business\/innovation-business\/how-digital-champions-invest\/","title":{"rendered":"How digital champions invest"},"content":{"rendered":"
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Technology and advantage. These two words provide a lot to think about given today\u2019s digital disruption and technological game changers.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Article by<\/strong> Michael Grebe, Michael R\u00fc\u00dfmann, Michael Leyh, and Marc Roman Franke<\/em><\/a><\/p>\n

Technology is both transforming industries and creating opportunities to solve important questions for industry and society. Yet there\u2019s also another aspect to all this: human advantage, which comes from combining technology with who we are and how we work. Throughout history, technology has been our human advantage\u2014a source of innovation, and a means of doing things we had previously not thought possible. For generations, we have used tools to gain mastery over our physical environment. We have also developed ways of organizing and coordinating to do things in different ways. The pace and speed at which we adapt our organizational strategies and practices are as important as technology-driven innovation. Because the real advantage is in how we use technology, and not just the technology itself.<\/p>\n

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This study notes that today\u2019s digital champions not only invest aggressively in digital efforts, but also dedicate a significant percentage of their workforce to digital projects. And they plan to expand their digital talent base and upskill their existing workforce. The outcome is something we see time and time again: investing in the workforce and helping employees to learn new skills leads to more engaged and creative teams and produces better value for the organization. The emphasis on both technology and humanity is clearly a winning factor.<\/p>\n<\/div>\n

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In addition to coverage of tech topics like quantum computing, AI, and microservices, this edition offers insight on agile transformation and how organizations are moving toward agile at scale for greater innovation, speed, customer focus, and efficiency. Tech is powerful, but only humans can provide other galvanizing elements, like creative thinking. Linking the two sources of power will be critical.<\/p>\n

Investment priorities<\/h1>\n
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If you want to understand what sets digital champions apart from digital laggards, take a look at their investment priorities. Champions invest aggressively in digital efforts, devoting a sizable proportion of funds to building a world-class technology\/IT function. They dedicate a significant percentage of their workforce to digital projects\u2014 and have ambitious plans to expand their digital talent base and upskill their existing workforce. And they invest in pushing digital efforts to scale, with what is now an increasing focus on scaling up in data and AI.<\/p>\n

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These insights are among the findings of Boston Consulting Group\u2019s third annual survey on digital maturity. The study made use of our Digital Acceleration Index (DAI) to understand how companies across industries and regions stack up in terms of their digital evolution. We asked decision makers at more than 1,800 companies in Asia, Europe, and the US to assess the digital maturity of their company along 35 dimensions, with those inputs used to derive an overall digital maturity score.<\/p>\n

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Our findings this year shed light on which industries and regions of the world are ahead in digital and illuminate how champions are positioning themselves to expand their lead. Companies aiming to improve their digital maturity should carefully study how digital champions have honed their competitive advantage and where they are currently directing their investment firepower.<\/p>\n

Digital maturity by industry and region<\/h1>\n
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The 2019 survey revealed that financial services and telecommunications are the most digitally advanced industries, with more than 25% of companies qualifying as digital champions. In contrast, energy and the public sector trail be- hind, with more than 40% of organizations qualifying as digital laggards. In the middle are companies in technology, automotive, manufacturing, insurance, and consumer and retail, in order of declining DAI score.<\/p>\n

Our analysis also included an assessment of industry performance across regions. In Asia, the best-performing industry is financial services, while in both Europe and the US, telecommunications is the leading industry. (Exhibit 1.)<\/strong> The strength of Asian financial services companies is not surprising given that many players are digitally native and that digital banking companies such as WeChat are subject to less stringent data privacy restrictions than competitors in other parts of the world.<\/p>\n

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Exhibit 1<\/p><\/div>\n

Some industries that are low scorers in other regions are high performers in Asia. Consider consumer and retail. Although the industry ranks second to last in terms of digital maturity in Europe and the US, its DAI score in Asia is roughly 10 points higher. In the retail sector, online players in Asia, such as Alibaba, are shaping the shopping space more than their peers in other regions, thanks to their innovative digital offerings. A similarly big spread can be observed in insurance, where insurers\u2019 DAI score in Asia is 8 points higher, on average, than in Europe and the US. This disparity is due to the fact that Asian insurers have been more technologically innovative, such as in digitizing the customer journey.<\/p>\n

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In contrast, Asian telcos show comparatively low digital maturity\u2014a surprising finding given that the telecommunications industry has one of the highest DAI scores worldwide. Some 38% of telecom companies in the US and 32% in Europe qualify as digital champions, while only 13% in Asia do. The below-par performance of these companies in Asia likely stems from regulations that have not incentivized Asian telcos to upgrade legacy technology\u2014a gap that is now inhibiting digitization efforts.<\/p>\n

Champions apply digital boosters<\/h1>\n
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Digital disruption affects every company throughout the world. So the question is, Why do digital champions digitize faster than their competitors? We have identified three levers, or \u201cboosters,\u201d that digital champions have adopted to a much greater degree than laggards have\u2014and the improvement in digital maturity that they enjoy as a result (Exhibit 2)<\/strong>:<\/p>\n

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Exhibit 2<\/p><\/div>\n

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Digital champions devote more than 5% of operational expenditures (OPEX) annually to digital. Those that invest at this level have a DAI score that is, on average, 16 points higher than the score of laggards that do not.<\/p>\n

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They focus more on digital talent, with more than 10% of full-time-equivalent (FTE) employees serving in digital roles. The DAI score of champions that have achieved this level of digital staffing is 11 points higher than that of laggards that have not.<\/p>\n

Digital champions are able to scale up pilots and use cases to realize the benefits of these digital solutions. Such companies have a DAI score that is 9 points higher than that of laggards without this ability.<\/p>\n<\/div>\n

**About the authors<\/strong> | Grebe is a managing director and senior partner in the Munich office of BCG; Ru\u0308\u00dfmann is a managing director and senior partner in the firm\u2019s Munich office; Leyh is a knowledge expert and team manager, focusing on Technology Advantage, in BCG\u2019s Du\u0308seldorf office; and Roman is an associate director, focusing on digital transformation, in BCG\u2019s Berlin office.<\/h4>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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