Few firms have positioned themselves to capture the real business benefits of digital technologies, but research points to a real “digital advantage” to those that do.
Businesses in every industry face a bewildering array of new tools and technologies that have the power to help them modernize and innovate, including social media, mobile and analytics. But while much attention has been paid to fast-moving startups or large, high-tech firms, this study by Capgemini Consulting examines more than 400 large, traditional companies to classify how they are changing their customer engagement, internal operations and even business models to take advantage of new technologies.
Those companies that have achieved the greatest digital successes are classified as “Digerati.” These firms have achieved significant digital maturity to innovate and drive enterprise-wide transformation -- and as a result have attained higher financial performance than their less digitally-mature competitors. On average, Digirati are 26% more profitable than their industry competitors.
Capgemini measures digital maturity using two metrics: digital intensity, which includes investment in technological initiatives to change how the company operates, and transformation management intensity, which consists of creating the leadership capabilities necessary to drive digital transformation in the organization going forward.
While different industries have adopted digital technologies at very different paces, Capgemini’s research demonstrates that digital maturity matters in every industry. Industries such as travel, hospitality, financial services and retail have already gone through significant digital transformation; others, like manufacturers and pharmaceutical firms, are still beginners in the digital space. Beginners in any industry face several years of catch-up to gain the digital maturity that their “Digirati” competitors have already attained.
“Every industry – from manufacturing to high technology – has firms that have already begun to gain the benefits of digital transformation.”
Capgemini identifies four key transformation management practices that enable firms to coordinate their digital efforts, develop a common vision and execute to achieve their goals. These include transformative vision, which helps employees picture how the company will be different in the future; digital governance, which includes mechanisms to improve digital efficiency and execution; engagement of employees in the firm’s vision of a digital future; and IT-Business relationships to drive forward digital initiatives. By incorporating these initiatives into their business strategies, firms can fully embrace technological transformation and create their own digital advantage in their industries.