Businesses striving to gain competitive advantage from investments in digital technology can find it hard to know where to focus their efforts.
In an age in which organisations are witnessing disruption both internally and externally, are there any approaches leaders can reliably take in order to deliver value? It seems so: ten ‘digital’ factors consistently correlate to higher revenue growth and margin.
As part of the Digital IQ Survey 2015, PwC collated responses from nearly 2,000 business leaders across the globe to examine the link between their organisation’s digital-related activity and its financial performance.
Out of the 26 behaviours that were assessed – spanning strategy, innovation and execution – we discovered that the organisations that scored highly in the following ten attributes were 50% more likely to achieve rapid revenue growth than the remaining respondents of the survey.
This allows us to create a benchmark for enterprises to assess their approach to digital investment. To gain an understanding of your own Digital IQ, investigate and compare how your organisation performs against these ten pointers for success:
1. The CEO must be a champion for digital
Digital is now a whole-of-business concern and as such, CEOs needs to champion the vision. This appears to be recognised: figures have grown significantly over the last two years, from just 57% of global CEOs actively flying the flag for digital in 2013, to 73% today. This is the foremost of all the strategy-led attributes and must be underpinned by the support of the executive team and engagement with the wider firm.
2. Involve digital leaders in setting business strategy
Rolling out digital objectives often involves breaking down internal silos to infiltrate high-level business strategy. Prompted by the CEO’s vision, executives responsible for digital (often the CIO or CDO) are then involved in setting the strategy.
3. Engage the executive team
Globally, we found that five times as many CEOs focus on disruption than CDOs – and misaligned expectations can cause plans to unravel. Not just the responsibility of the CDO and CIO, the entire C-suite must be on the same page when it comes to digital strategy. Productive executive relationships are essential to maximising value from investments and highlighting overlap or gaps that could hinder success. This is the attribute in which Australia performed best – scoring 84% against the global average of 80% when it comes to agreeing and sharing the digital strategy at board level.
4. Communicate strategies enterprise-wide
Engaging the organisation is the next step to a successful digital enterprise – so share your vision and plans with your wider teams and open a dialogue with employees around business and digital strategy.
5. Actively engage with external innovators to drive new ideas
Connecting to the community increases insights, options and agility when it comes to emerging technology. Leading organisations are certainly taking this outside-in approach to seek inspiration, particularly when it comes to challenging existing business models through disruption.
6. Make digital investments for competitive advantage
Seeking out options for emerging technology can help build a superior business and drive growth. However, with so many innovative solutions on offer, businesses must prioritise those that are most relevant to them. Areas flagged as most strategically important by respondents in the Digital IQ Survey include cyber security and data mining and analysis.
7. Utilise data to drive business value
Moving into execution, leading companies acknowledge the importance of data and know how to extract value from it. Capturing data may not be an issue – developing the skills to interpret it, however, is cited regularly as a barrier to success. Globally, businesses see the greatest value in third-party data (78%) followed by cloud application data (70%) and social media data.
8. Proactively evaluate and plan for cyber security risks
With increased data comes increased risk. A robust and proactive approach to cyber security doesn’t just make good business sense when it comes to tackling threats – it can create business opportunity as well. One example of this is US-based furniture company Steelcase1, which made investments in data analytics to monitor its information security threats and ended up discovering and addressing network performance issues as well.
9. Build a roadmap for digital strategy
Having a single, multi-year roadmap that includes business capabilities and processes has the least uptake both from a global and a local perspective. Only 43% of companies surveyed in Australia have this in place; worldwide, it is 53% – and that figure has declined in recent years. This presents a serious challenge for organisations, which cite a lack of skills as one of the barriers to delivering on the vision.
10. Consistently measure outcomes from digital technology investments
Boards inevitably demand a demonstration of value from their digital investments. This can be done using traditional metrics (such as ROI against growth goals) but as new innovations are being introduced, it is also important to consider new ways of measurement. Look at ways to assess your innovation process, digital project delivery, or customer satisfaction with new technology, for example.