effective corporate strategies for the digital age | a.t. kearney
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Digital Full Potential:Eective Strategies forthe Digital AgeFindings from a Survey of Global Executives
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By 2020, more than50% of revenues willbe funneled throughdigital channels and/ordriven by digital products,services, and business.Is your company on theright trajectory?
Digital Full Potential: Eective Strategies for the Digital Age
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Source: 2016 A.T. Kearney survey of 446 global executives
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Executives see the threat of digitizationas significant and imminent. Digitization ranked the #1 potential
disruptor shaping their industry
~50% of executives say digitization willhave a high or even transformational impacton their business
72% believe full digital impact willunfold in the next five years
Source: 2016 A.T. Kearney survey of 446 global executives
Digital Full Potential: Eective Strategies for the Digital Age
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Companies are divided on theirgreatest digital challengeandfew are strongly prepared.
Digital Full Potential: Eective Strategies for the Digital Age
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Source: 2016 A.T. Kearney survey of 446 global executives
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Despite dierent paths along the digital journey,no industry feels truly ready.
1 Weighted average pparedness score (1 to 5, 5 being fully prepared)2 Weighted average impact score (1 to 5, 5 being high impact on industry)Source: 2016 A.T. Kearney survey of 446 global executives
3.0
3.5
4.0
4.5
5.0
3.0 3.5 4.0 4.5
Energy & process
How Big Is The Threat of Digitization?2
How
Pre
pare
d A
re Y
ou?1
Financial institutionsCommercial &
prof. svcs.
Telecom
Auto, engineering & industrials
PE
Transport and infrastructure
IT
Consumer products and retail
Healthcare
Aerospace & defense
Major threat; digitaljourney well underway
Moderate threat; digitaljourney just beginning
Threat not (yet)recognized
Fully prepared
Moderately prepared
Moderatethreat
Fullydisruptive
Companiesshould be waryof perceptionbiasesThose companiesexpecting amoderate threatmay underestimatethe impact of digital;those identifying asprepared may beoverestimating theircapabilities.
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Digital Full Potential: Eective Strategies for the Digital Age
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No industry reports as fully prepared
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Executives acknowledge their strategies dont yetfully embrace digital disruption and opportunities.
Source: 2016 A.T. Kearney survey of 446 global executives
How are digital initiatives prioritizedin the strategic planning process?
60%
35%
6%
Incorporated (digital initiativesare included in our traditional
corporate strategicplanning process)
Separate (digital initiatives are not included in the
corporate strategic planning process)
N.A (No digital initiatives exist in our company currently)
Is digital strategy created as part of thecorporate strategy process?
46%
42%
9%
2%
As part of thecorporate strategy
process
In parallel with thecorporate strategy
process
There is some overlapwith the corporate
strategy process,but not much
Independently
Digital Full Potential: Eective Strategies for the Digital Age
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Companies report multiple constraints to eectivelyembrace digital in their corporate strategies.
Percentage of respondents answeringvery high or high significance
Source: 2016 A.T. Kearney survey of 446 global executives
Organizationalstructure
boundaries
Capabilitygaps
Capitalconstraints
Resourceconstraints
Culturebarriers
Processbarriers
Tool gaps
61% 60% 57% 54% 52% 51%56%
Digital Full Potential: Eective Strategies for the Digital Age
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How significant are the following barriers to integrating digital into the traditionalcorporate strategy development?
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There is a global consensus that digital andcorporate strategies need to be one.
95%
5%
Yes No
Why?Should digital strategydevelopment be moreincorporated intotraditional strategy?
In future everything will be digitalized and corporate strategy cannot be formed without it
Digital strategy fully depends on corporate strategy
Because business model, functions and operations have highly integrated digital components
It is an increasingly important part of the way we interact with our customers
Corporate strategies should be mirrored digitally
Digital strategy receives more attention when it is included holistically as part of overall strategy.
Its the 21st century. Adapt or get eliminated
All aspects of strategy development must be aligned. Therefore, they should not be created in isolation
Source: 2016 A.T. Kearney survey of 446 global executives
Digital Full Potential: Eective Strategies for the Digital Age
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Notes: Excludes responses with none and other. Quartile 1 represents survey respondents who were most prepared responded strongly preparedto most of the threats presented; quartile 4 represents survey respondents who were the least prepared across the threats presented.Source: 2016 A.T. Kearney survey of 446 global executives
Laggards
35%
45%
41%
Underlying business model
New products and services
Supply chain and operations
Marketing, advertising, and customer interaction
30%
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LeadersOf the key digital strategic levers, which does yourcurrent strategy address?
Digital aects all dimensions of the businessleaders initially advance over laggards by integratingdigital into their value chain.
47%
55%
48%
52%
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Digital Full Potential: Eective Strategies for the Digital Age
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Source: 2016 A.T. Kearney survey of 446 global executives
Yet, executives struggle with how to realize theircompanies digital full potential.
How can I mergemy historically semi-annual strategy cycleswith the new needto address digitalstrategy much morerapidly?
What is the rightoperating model and
organizational structureto ensure I address
digital while stillfocusing on
my core?
How do I comparedigital investmentsof unclear payback
to our core businessinvestments? When is the
best time to invest?(i.e., build versus
buy and, if buy,what stage?)
How can I makemyself more aware
of the digital optionsthat exist for operating
more eiciently?
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Source: 2016 A.T. Kearney survey of 446 global executives
Digital Full Potential: Eective Strategies for the Digital Age
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Executives should begin by focusing on thefour key dimensions of digital impact to theircompany business models.
Improvedcustomer
engagement
Eectiveoperational processes
Enhanced valuepropositions
New businessmodels
1 2
3 4
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Want to align your corporate and digitalstrategies to truly transform your business?
Digital Full Potential: Eective Strategies for the Digital Age
A.T. Kearney is a leading global management consulting firm with oices in morethan 40 countries. Since 1926, we have been trusted advisors to the worlds foremostorganizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieveimmediate impact and growing advantage on their most mission-critical issues.For more information, visit www.atkearney.com.
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