THE BENEFITS OF DIGITAL TRANSFORMATION C ompanies that effectively manage

The benefits of digital transformation c ompanies

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THE BENEFITS OF DIGITAL TRANSFORMATIONCompanies that effectively manage digital tech-nology can expect to gain in one or more of three areas: better customer experiences and engage-ment, streamlined operations and new lines of business or business models. Though innovative new business models are what every CEO dreams of, companies more often see digital technologies help transform their customer experience or operations. Business model transformation is difficult, and far less prevalent, according to survey respondents.Customer experiences reflect the clearest impact of digital transformation. The survey found that A CURRENT AFFAIRAlmost half of employees think digital transfor-mation is upon us, and a third say it looms. FIGURE 2Within the next 2 yearsThat time has passed — it is already a matter of survival27%This year18%33%3 years or more13%It’s never going to become important across the entire organization5%When will it become critical to implement Digital Transformation across your organization?DIGITAL CASH REGISTERDigirati — the best companies at managing digital technology — get the best financial results. FIGURE 3BeginnersConservatives Fashionistas DigiratiRevenue creationProfitabilityMarket Valuation+9%+6%-11%-12%+7%+9%-10%-4%-24%-7%+26%+12%Percentages don’t add to 100% due to exclusion of those responding “don’t know.”SOURCE: MIT’s Center for Digital Business and Capgemini re-port “The Digital Advantage: how digital leaders outperform their peers in every industry (The-Digital-Advantage/index.html)”
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6 MIT SLOAN MANAGEMENT REVIEWCAPGEMINI CONSULTINGSLOANREVIEW.MIT.EDU R E S E A R C H R E P O R T E M B R A C I N G D I G I TA L T E C H N O L O G Yimproving customer relationships was the area where companies were having the most success with digital technology. Most prominent was improving the over-all customer experience, followed closely by enhancing products and services in customer-friendly ways. Survey respondents said their organizations also are seeing improvements in operations, in part in au-tomating operations. A number or respondents said internal communications are sharply improved, espe-cially through using social media. For example, Jon Bidwell, chief innovation officer at Chubb, a large specialty insurer, told us that social business tools and processes had transformed the company’s innovation culture, helping it develop products and understand risks as rapidly as new markets emerged. The opportunity for digital technologies to create new businesses is real, and a quarter of respondents expect digital transformation to launch new prod-ucts and services. General Electric is pushing an Internet of Things service strategy that will help it tell customers how to schedule maintenance and avoid part failures, improving operations. The company expects it will sell services related to maintaining its products.
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  • Fall '12
  • MIT Sloan School of Management, Massachusetts Institute of Technology, Sloan Management Review, mit sloan management, digital transformation

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