Sector News

The keys to scaling digital value

March 31, 2022
Borderless Future

As any CxO will tell you, pilots are easy but scaling up is hard. It’s true for all types of transformation—digital, agile, technology, or data. Pilots produce great initial results, but efforts to move those results into the market or embed them across an organization often fall short.

Only digital solutions that scale can generate significant value, and the ability to scale digital solutions at speed differentiates companies that realize value from their digital transformations from those that do not. The urgency of successfully scaling rises in times of business volatility or economic turbulence. Companies that scale digital solutions drive near-term gains in revenue, cost, and speed—and increase long-term resilience. Our latest research into digital scaling and enablement found that digital leaders are much more likely to navigate successfully through crises and emerge stronger. For example, over the past two years of the pandemic, digital leaders gained 5 percentage points (pp) or more of market share and over 5% more market capitalization than their peers. A full 70% of digital leaders expect to gain another 5 pp or more of market share in the coming three years.

The scaling process should be straightforward: companies develop a set of digital solutions that can generate value, and then they identify which solutions can create the most value if scaled across the organization. But there are a couple of significant organizational hurdles to implementation. Many companies try to scale too many digital solutions whose potential impact is limited, particularly because the solutions focus on specific domains. Other companies remain locked in vertical silos of data, algorithms, and technology that inhibit their ability to scale.

Companies that do scale successfully are seeing their performance advantage widen over those that struggle. Digital leaders today achieve three times higher revenue growth and cost savings from their digital transformations than laggards, and they bring twice as many digital solutions to scale. (See Exhibit 1.) These companies are solidifying their positions as overall business leaders in their sectors. READ MORE

By Karalee Close, Marc Roman Franke, Michael Grebe, Hrishi Hrishikesh, and Kristi Rogers

Source: bcg.com

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