Businesses that use 10 digital best practices are achieving stronger financial results than those that don’t.
That’s according to a global survey of 2,000 executives by a network of consulting firms, PwC, www.pwc.com. The report is entitled, the 2015 Digital IQTM Survey.
“Everyone talks about digital, but few understand the specific leadership behaviors that drive performance,” said Chris Curran, PwC advisory principal and chief technologist.
“We are seeing signs this is changing, with leading digital practitioners looking to how today’s investments can improve tomorrow’s business results. This is a critical mindset, especially as digital technologies become more pervasive,” adds the consultant.
Ninety-nine percent of the ambitious companies anticipate immediate returns on their investments. The remaining 1 percent want to disrupt their own or other industries.
However, the companies are under pressure internally because of changing tech spending patterns and digital roles.
Even though CEO enthusiasm for digital investments is quite high, the report also says 73 percent must hasten their investment approaches to dominate their marketplaces and prevent internal disruption.
PwC interviews were equally divided among business and IT executives.
Increasingly, companies are investing in technology to drive immediate business value. Forty-five percent of respondents expect growth in revenue. Twenty-five percent want improved customer experiences and 12 percent want stronger profits.
The PwC report states businesses were 50 percent more likely to enjoy rapid revenue increases and twice as likely to do so if they used 10 strategies.
Here are PwC’s 10 strategies:
- The CEO is a champion for digital.
Seventy-three percent of business and IT executives said that their CEO was a champion for digital, a significant increase over the fifty-seven percent who said they had a CEO champion in 2013.
- The executives responsible for digital are involved in setting high-level business strategy.
CEOs may set the tone and vision for digital, but those responsible for operationalizing digital, often the CIO or CDO, are instrumental in setting high-level business strategy.
This is especially true in companies where digital leaders have their own P&Ls and are responsible for a significant share of the business.
- Business-aligned digital strategy is agreed upon and shared at the C-level.
Organizations and leaders that are aligned are more likely to maximize investments and can better identify areas of overlap and resource gaps that could derail efforts.
- Business and digital strategy are well communicated enterprise-wide.
Strategy isn’t complete without engagement by everyone in the organization.
Currently, 69 percent of companies say that business and digital strategy are shared enterprise-wide and last year that figure was 55 percent and in 2013 it was 50 percent.
- Active engagement with external sources to gather new ideas for applying emerging technologies.
Top-performing companies find digital inspiration everywhere, especially outside their organization.
Innovative companies are much more likely to evaluate many emerging technologies, characterizing their approach to adoption as one that’s purely technology driven (69 percent), in contrast to the rest of companies (54 percent).
They also look to a wide variety of sources to seed their idea pipeline, actively engaging with industry analysts (63 percent), customers (46 percent), and vendor ecosystems (44 percent) the most.
- Digital enterprise investments are made primarily for competitive advantage.
An indicator of evolving roles, 68 percent of digital spending comes from budgets outside of IT’s budget, a significant increase from 47 percent the prior year.
Also, the executive responsible for digital investment continues to shift, with the CIO (27 percent) and the CDO (14 percent) sharing that job with the CEO (34 percent) and CFO (13 percent).
- Effective utilization of all data captured to drive business value.
Getting value out of data often means using it to guide strategic decisions like how to grow the business or whether to collaborate with competitors.
This remains a challenge for executives, citing specifically behavioral and skills barriers, such as understanding which data to use and how it benefits their role, nearly as much as issues with data quality or accuracy.
- Proactive evaluation and planning for security and privacy risks in digital enterprise projects.
As companies add new technologies, customers, partners, devices, and data, there are ever more interdependencies and risks to address. That’s the baseline today.
What’s different when it comes to Digital IQ is the level of proactivity required. Businesses need to consistently think about how their cybersecurity strategies can help build brand, competitive advantage, and shareholder value.
- A single, multi-year digital enterprise roadmap that includes business capabilities and processes as well as digital and IT components.
Progress has ebbed and flowed as digital has become more pervasive in the enterprise while at the same time also more fragmented.
Today, 53 percent of companies have a comprehensive roadmap that includes business capabilities and processes, as well as digital and IT components.
- Consistent measurement of outcomes from digital technology investments.
Consistency in measurement is also crucial. Businesses and their boards want to see the value they’re achieving from digital investments.
Top-performing companies lead lower performing ones here again (79 percent vs. 72 percent). Demonstrating this requires a combination of traditional metrics (like ROI) to track against growth goals, as well as newer ones for measuring more disruptive investments.
From the Coach’s Corner, here are related strategies:
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“The real problem is not whether machines think but whether men do.”
-B. F. Skinner