1、SPECIAL REPORTEnterprise Digital Impact in 2023 2 L.E.K.ConsultingSPECIAL REPORTContentsAbout L.E.K.ConsultingWere L.E.K.Consulting,a global strategy consultancy working with business leaders to seize competitive advantage and amplify growth.Our insights are catalysts that reshape the trajectory of

2、our clients businesses,uncovering opportunities and empowering them to master their moments of truth.Since 1983,our worldwide practice spanning the Americas,Asia-Pacific and Europe has guided leaders across all industries from global corporations to emerging entrepreneurial businesses and private eq

3、uity investors.Looking for more?Visit .L.E.K.Consulting is a registered trademark of L.E.K.Consulting LLC.All other products and brands mentioned in this document are properties of their respective owners.2023 L.E.K.Consulting LLCThe digital future starts now.3Challenging the status quo.3Defining su

4、ccess in digital.5Habits of digital leaders.9The future of enterprise digital transformation.13Leveling up your digital maturity.20Appendix:Views of digital maturity.223 L.E.K.ConsultingSPECIAL REPORTEnterprise Digital Impact in 2023The digital future starts now Its no secret that businesses struggl

5、e with digital transformation.Part of the challenge is that its hard to get the most out of technology thats constantly changing.And now,between rapid advancements in artificial intelligence(AI)and the digital surge post-COVID-19,the pace of change has kicked into overdrive.What does it take to harn

6、ess the power of digital in this environment?Are there practical steps that businesses can take to align business and digital strategy for profitable growth?What lessons can be drawn for executives seeking to prepare their organizations for a digital future?These are the questions L.E.K.Consulting s

7、et out to explore.We interviewed prominent stakeholders,canvassed 1,000 digital executives across sectors,brought our experience from hundreds of projects and researched success stories in industries from consumer goods to steel.Recognizing that digital doesnt stand alone its inherently an enabler o

8、f business strategy we looked at where and how digital is deployed,to understand its importance and impact.Our inquiry yielded insights about the current state of digital transformation as well as what lies ahead for those just starting to apply digital to enable dramatic growth.The findings reveal

9、that a new wave of digital transformation is underway.In this current wave,leadership is defined less by efficiency or ecommerce than by customer-centricity,trust and pervasive deployment of digital across organizations.In this Special Report,we summarize those insights and offer our take on what co

10、mpanies require to future-proof their business and prepare for the digital future.It starts now.Challenging the status quoDigital leadership is a moving target.In the first wave of digital transformation,leading organizations developed basic information technology(IT)infrastructures and used point s

11、olutions to eliminate manual work processes.Later,digital leaders were among the first to invest in ecommerce platforms and enhanced customer experiences.4 L.E.K.ConsultingSPECIAL REPORTAlong the way,companies began to collect large volumes of customer and internal data.That led to a second wave of

12、transformation when digital leaders embraced the development of advanced analytics,data management and automation.Today,companies that stand at the leading edge of digital transformation challenge the status quo of tactical,siloed digital and technology projects.Theyre generating data with an eye to

13、ward enabling digitally driven processes and businesses.They also deeply understand how decisions get made,and they digitize processes for the specific purpose of conferring speed,accuracy and reliability to analytical methods.The art of the possible Where are digital leaders headed next?Theyre movi

14、ng beyond digitizing the work they already do,harnessing digital as a powerful vehicle for future growth.Digital leaders are rethinking how business goes to market,building products powered without humans and creating entirely new markets with digital solutions.Theyre expanding their digital footpri

15、nt to interconnect data analytics functions across business objectives,coordinate investments,deploy advanced cybersecurity tools and techniques,and monetize data.At the same time,digital leaders are automating decisions with AI and building resilient,data-first businesses.This results in organizati

16、ons now providing experiences at a scale that otherwise wouldnt be feasible.“Theres an increased emphasis on connected,frictionless journeys”for customers,according to Athletic Greens Chief Digital Officer Kelly Smith.“That includes automated,segmented and personalized marketing using data and AI to

17、 tailor offerings and content.”The overarching themes of this third wave of digital transformation customer centricity,trust and pervasive digital are new.But the approach we just described is standard operating procedure for digital leaders.More than other companies,digital leaders make digital inv

18、estments with the intention of long-term benefits,in a comprehensive and cohesive manner.The investments advance their core business efficiency and reflect tactical choices on which digital tools to use and what business function to deploy them in.And they have the financial commitment and managemen

19、t support it takes to be successful.A value creation strategyBut most companies arent there yet.While digital leaders are using digital to drive growth through pervasive adoption of digital to achieve business objectives,others are still working on basic siloed advancement of data handling capabilit

20、ies and 5 L.E.K.ConsultingSPECIAL REPORTdetermining the best use cases for digital in their work processes.Broad adoption of digital to drive strategic business objectives remains low across companies(see Figure 1).Figure 1Level of adoption of digital strategy across business objectivesSource:L.E.K.

21、Digital Survey(2023)Percentage of respondents(N=1,000)020406080100Improve customer experienceOptimize sales reach and effectivenessLaunch/improve products and service offerings and quality(including data monetization)Increase business resilience and agilityImprove operational efficiencyImprove suppl

22、y chain managementNot yet implementedImplemented37%63%35%65%30%70%30%70%29%71%28%72%Figure 1Level of adoption of digital strategies across business objectivesSource:L.E.K.Digital Survey(2023)Moving beyond this stage requires a thoughtfu,l cohesive and integrated strategy owned by the C-suite.Accordi

23、ng to Aon Chief Data and Analytics Officer Ibrahim Gokcen,“Digital has become a core part of every leaders responsibility.From finance and accounting to human resources and supply chain management,all business functions must consider digitization in their strategic plans.”At the board level,Gokcen a

24、dds,digital has become a critical topic because its viewed as a key strategy across all business types to increase growth while reducing risk and expense.Defining success in digitalWe examined a cross-section of businesses and evaluated their reported progress against performance targets to single o

25、ut firms that are successful at digital transformation.We found that this group shares a unique set of principles that shed light on what it takes to pursue winning digital strategies.6 L.E.K.ConsultingSPECIAL REPORT1.Strategic alignmentDigital leaders execute transformations to advance corporate st

26、rategies and achieve business objectives.That calls for“embedding digital in the business strategy,linked to competitive advantage and value creation,”Smith says.The goal isnt to digitize for the sake of digitization,but to improve customer experience,operations or business resilience.“Is digital tr

27、ansformation critical to achieving business goals?If not,then your digital transformation program wont go well.”2.An enterprise perspectiveLeaders understand that success depends on deploying digital across an organization versus pursuing tactical,piecemeal investments in select business functions(s

28、ee Figure 2).Leaders are investing in many of the business objectives that impact the business functions that are most important.Deploying digital to support only one strategic objective limits the potential benefit from the investment by creating inconsistent experiences for customers or employees.

29、That in turn makes it harder to deliver customer centricity or deploy advanced digital solutions like AI.Figure 2Level of adoption of digital strategy(leaders vs.others)Source:L.E.K.Digital Survey(2023)Percentage implemented across digital strategy business objectives(2023)01020304050Improve custome

30、r experienceOptimize sales reach and effectivenessLaunch/improve products and service/plan/care offeringsIncrease business resilience and agilityImprove operational efficiencyImprove supply chain managementOthers(N=927)Leaders(N=73)44%34%43%28%41%28%38%37%37%29%29%28%Figure 2Level of adoption of dig

31、ital strategy(leaders vs.others)Source:L.E.K.Digital Survey(2023)7 L.E.K.ConsultingSPECIAL REPORT3.Granular monitoring of resultsLeaders track their digital success via measurements that are directly linked to the performance outcomes they aim to achieve with a given digital investment.To gauge cust

32、omer experience and personalization,for example,digital leaders may measure customer lifetime value or net promoter score instead of broader indicators like market share and shareholder return.Digital allows companies to measure the impact of investments much more directly and quickly than before.Gr

33、anular monitoring provides insights into whats working and what isnt so that leaders can make necessary changes.4.Top-level attentionIn leading organizations,the C-suite and the board broadly own and drive digital strategy and implementations(see Figure 3).Figure 3Digital strategys level of importan

34、ce in board-level discussionsSource:L.E.K.Digital Survey(2023)All(N=1,000)(N=73)(N=927)LeadersOthers77%99%74%High to critical importanceLow to moderate importanceFigure 3Digital strategys level of importance in board-level discussions(2023)Source:L.E.K.Digital Survey(2023)“Digital transformation is

35、something that cuts across all functional groups and requires a lot of effort to organize,”says Lee Clark-Sellers,former chief innovation officer of Cornerstone Building Brands.“In order to succeed,its critical to have an executive who acts as the point person for the initiative,and to hold extensiv

36、e boardroom discussions to gain full buy-in from across the organization.”8 L.E.K.ConsultingSPECIAL REPORT5.Clarity of purposeLeaders define digital strategies that are straightforward and unambiguous,with a proper governance structure(see Figure 4).Overly general goals such as“digitization”create c

37、onfusion on what objectives any digital investment must achieve.Success requires asking a simple“why?”and deploying a governance structure to measure and course-correct as needed.Figure 4Level of clarity of digital governance structureSource:L.E.K.Digital Survey(2023)All(N=1,000)(N=73)(N=927)Leaders

38、Others65%91%63%High to critical importanceLow to moderate importanceFigure 4Level of clarity of digital governance structure Source:L.E.K.Digital Survey(2023)Each of these principles is necessary but insufficient by itself to become a digital leader.For instance,many organizations adopt digital acro

39、ss business objectives,as we see in Figure 2.But digital leaders,who operate in line with all five principles,have significantly more success with their digital investments than other organizations do(see Figure 5).9 L.E.K.ConsultingSPECIAL REPORTFigure 5Digital investments degree of success,by busi

40、ness objectiveSource:L.E.K.Digital Survey(2023)Percentage of digital leaders and others ranking a 6 or a 7 on a scale of 1-7(7=“highly successful”)020406080100Improve customer experienceOptimize sales reach and effectivenessLaunch/improve products and service offerings and quality Increase business

41、resilience and agilityImprove operational efficiencyImprove supply chain managementOthers(N=927)Leaders(N=73)95%54%94%62%94%58%91%57%81%63%79%62%Figure 5Digital investments degree of success,by business objective Source:L.E.K.Digital Survey(2023)Habits of digital leaders Now that we know what digita

42、l leaders look like,lets unpack some of the things they do differently.Invest in solutions that impact core business objectivesThese investments include foundational technologies and digital enablers:A foundational technology serves as the basis for advancements or applications across a business.Oft

43、en,these technologies are infrastructure that supports the development and integration of more advanced solutions.A digital enabler is a more advanced technology built on a foundational technology.It gives a business more advanced capabilities and helps it operate or compete in the digital era.Digit

44、al leaders are significantly more likely than other companies to invest in both areas(see Figure 6).10 L.E.K.ConsultingSPECIAL REPORTWhile leaders have invested more than others in technologies across the board,theres a theme to the most significant gaps:data.For foundational technologies,the bigges

45、t investment gaps between leaders and others are in enterprise applications,advanced analytics and agile ways of working.For digital enablers,the biggest gaps are in physical robotic automation,robotic process automation,digital simulations,blockchain and computer vision processing.This is also expe

46、cted to vary depending on the business objective.If process automation and improved operational efficiency are the objectives,for instance,companies may invest more in additive manufacturing and less in customer data solutions or digital experience platforms(DXPs).Figure 6Current investment in found

47、ational technologies and digital enablers(leaders vs.others)Source:L.E.K.Digital Survey(2023)Cybersecurity technologyEnterprise applications(e.g.,SAP,Workday,MS Office 365)Capture,storage andhandling of large,complex datasetsCloud computing(e.g.,AWS,Microsoft Azure,Google Cloud)Payment technologiesA

48、dvanced analytics/algorithmsAgile ways of working2.53.03.54.04.55.0Customer data solutionsInternet of thingsArtificial intelligenceComputervision processingDatainteroperability toolsAlternativepurchase of dataPhysicalrobotic automationRoboticprocess automationBlockchainGenerative AIDigital simulatio

49、nsDigitalexperience platformsAugmented/virtual realityAdditive manufacturingRespondents average score on a scale of 1-5(5 being significant investment)(N=1,000)Others(N=927)Leaders(N=73)2.53.03.54.04.55.0Investment in foundational technologies,leaders vs.others(2023)Investment in digital enablers,le

50、aders vs.others(2023)Figure 6Current investment in foundational technologies and digital enablers(leaders vs.others)Source:L.E.K.Digital Survey(2023)11 L.E.K.ConsultingSPECIAL REPORTFoundational technologies and digital enablers are important investments because they dovetail with a range of busines

51、s objectives to form a cohesive investment strategy that advances digital across the business.To understand how,consider digital solutions for launching or improving products and service offerings.Such solutions draw investments in capture,storage and handling of large,complex datasets,as well as in

52、vestments in advanced analytics that directly impact the ability to improve a variety of business objectives.Track performance with relevant measurementsCompared with other companies,digital leaders have 10%-15%higher levels of commitment to tracking progress,setting targets and incentivizing improv

53、ement(see Figure 7).Figure 7Digital investments success,by target measurement maturity(leaders vs.others)Source:L.E.K.Digital Survey(2023);L.E.K.research and analysisAverage rank(N=1,000,N=927,N=73)Incentivizes performance measurement improvement and enforces accountabilityTracks and regularly monit

54、ors performance measurementsDigitalleadersDigitalothersOverall01234567+10%5.75.76.2Has clear targets/goals for performance measurementsDigitalleadersDigitalothersOverall01234567+13%5.85.76.5DigitalleadersDigitalothersOverall01234567+15%5.75.66.4Figure 7Digital investments success,by target measureme

55、nt maturity(leaders vs.others)Source:L.E.K.Digital Survey(2023);L.E.K.research and analysisDigital leaders more often achieve their measurement targets,even though the ones they set(like return on digital investment and customer lifetime value)are more relevant and specific to the business objective

56、 than the ones other companies use(think shareholder return or market cap).12 L.E.K.ConsultingSPECIAL REPORTShow financial commitment and use expertise to overcome barriers and challenges around digital implementationTwo common barriers are cybersecurity and data privacy concerns and high upfront co

57、st(see Figure 8).High upfront cost is less of a barrier for digital leaders,likely due to the strong financial commitment and executive buy-in they tend to have.Figure 8Top barriers preventing digital solution adoption,by business objectiveSource:L.E.K.Digital Survey(2023)Cybersecurity/data privacy

58、concernsOutdated/legacy technologiespreventing integration with new systemInternal resistance to changeHigh upfront costTime required to stand up digital initiativeLack of existing customer dataor low-quality customer dataLack of internal digitalexpertise/knowledgeLack of internal bandwidth020%40%60

59、%Percentage of respondents(N=1,000)Others(N=927)Leaders(N=73)Figure 8Top barriers preventing digital solution adoption,by business objectiveSource:L.E.K.Digital Survey(2023)Cybersecurity and data privacy concerns(the most common barrier,selected by roughly 45%of respondents)require an emphasis on tr

60、ust deploying a system that builds trust internally and experiences that are viewed as trustworthy by customers.Clark-Sellers says that the presence of inconsistent,legacy systems is especially common for companies that have grown through acquisition.“Its very expensive and time-consuming to update

61、and standardize these systems.And after that happens,training employees on the new system is another,very nontrivial obstacle companies must face.”13 L.E.K.ConsultingSPECIAL REPORTEmbedding trust into experiences and systems and reducing technical debt through modernization arent the most exciting i

62、nvestments to make,but theyre critical to overcoming barriers.Ensuring that expertise and funds are appropriately allocated to all aspects of the digital transformation increases the likelihood of success.The future of enterprise digital transformationDigital leaders use technology to its fullest ad

63、vantage.But they also take specific steps to make their organizations resilient to an ever-changing digital environment.Activate the dataDeliver with AI execution built on a strong data foundationCompanies collect data from external sources like social media,transactions and customer engagement.They

64、 also collect data from internal sources like customers and supply chain partners.Both kinds of data can be used across a range of business objectives,but first the data needs to be cleansed,organized and sorted.Digital leaders have figured this out.Their planned investments in advanced data handlin

65、g capabilities(see Figure 9)indicate theyre moving beyond collecting and analyzing data.Going forward,theyll act on the insights they derive from it,using AI to enable real-time decision making.Figure 9Companies investing in capturing and handling datasets(leaders vs.others)Source:L.E.K.Digital Surv

66、ey(2023)Percentage of digital leaders(N=73)Percentage of digital others(N=927)Figure 9Companies investing in capturing and handling datasets(leaders vs.others)Source:L.E.K.Digital Survey(2023)14 L.E.K.ConsultingSPECIAL REPORTTo refine their data-driven capabilities,leaders(82%)will spend more than o

67、thers(54%)on external data.“Over the past decade,theres been an arms race to collect the most data possible,”says Patrick Reynolds,chief marketing officer at BlueConic.Leaders will also invest in digital enablers that make their data more productive (see Figure 10).2.53.03.54.04.55.0Respondents aver

68、age score on a scale of 1-5(5 being significant investment)(N=1,000)Others(N=927)Leaders(N=73)Customer data solutionsInternet of thingsArtificial intelligenceComputer vision processingData interoperability toolsAlternative purchase of dataPhysical robotic automationRobotic process automationDigital

69、simulationsDigital experience platformsAdditive manufacturingBlockchainAugmented/virtual realityGenerative AIFigure 10Future level of investment in digital enablers(leaders vs.others)Source:L.E.K.Digital Survey(2023)15 L.E.K.ConsultingSPECIAL REPORTDigital enablers aim to break data out of siloes,in

70、tegrate it and make the right data available to the right staff at the right time for different purposes.Reynolds offers customer data platforms as an example:“You want your marketing staff to be able to pull out only the most relevant data they need to do their job as efficiently as possible.”Other

71、 examples of silo-busting platforms include those for workflow automation and processing(think ServiceNow or Adobe Workfront).Clark-Sellers company activated its data to achieve the benefits of AI.“When we paint metal widgets,we need to monitor flow rates to ensure we apply the right coating thickne

72、ss,”she says.“Weve now developed intelligent machinery that reduces flow rates when they become too high,and no longer need technicians to make manual adjustments.Theyre doing higher-value jobs.”The number of people required to touch each widget declined up to 80%in some cases,according to Clark-Sel

73、lers,“while improving the quality of our product.”Process and quality improvements arent the only benefits of getting the data in order.Companies can also make faster,more insightful business decisions and make more sense of the business environment around them.The better they get at capturing and h

74、andling data,the more that it can be put to work in the business.Businesses will even be able to derive new classes of insights and widen data sharing further by adding interactive data the kind that users generate when they work with a platform to the episodic data generated by discrete events.Case

75、 in point:Amazons automated merchandising In the early 2010s,Amazons retail business launched an internal project to boost worker productivity and improve the speed and quality of its business decisions.The project initially focused on automating processes like demand forecasting,pricing and invento

76、ry management for products with large sales volumes.Amazon put its vast stores of data to work training predictive models on consumer behavior.The aim was to enable more efficient and effective decisions such as positioning,pricing and demand planning across merchandising of the site.Eventually,the

77、project expanded to the rest of the business,automating all work processes across retail operations.Amazon began using the AI and machine learning algorithms developed through the project to characterize their customers,including what they buy 16 L.E.K.ConsultingSPECIAL REPORTand when.The algorithms

78、 also reveal how customer behaviors vary by geographic location,income level,age and more.These customer insights help Amazon plan its supply chain operations from demand to delivery.For example,the retailer can anticipate sales of popular seasonal items more accurately and stock its fulfillment cen

79、ters before customers place their orders.Meanwhile,a vendor manager can use the companys AI algorithms to determine how much of a day-to-day item should be stocked at each fulfillment center and what price to negotiate with the supplier.Case in point:Big River Steels AI-powered productionBig River S

80、teel is a steel manufacturing upstart that entered the market in 2014 with the aim of disrupting the industry via its use of AI and automation.The companys“flex mill”is an integrated facility capable of operating a wide range of steel production processes.Production equipment is equipped with sensor

81、s and gauges that collect data on a range of factors influencing the quality of steel,such as operating speed,temperature and pressure.An extensive IT network makes the data available for analysis across Big Rivers operating entities.Analysts use predictive AI engines to optimize production by unloc

82、king breakthroughs in maintenance and production line scheduling,logistics,and environmental protection.This helps Big River be more responsive to its customers.It also makes it possible for the company to offer cleaner,more formable and more affordable steel in a variety of grades,sizes,material co

83、mposition and width gauges.Future-proof the businessEnable deep customer centricity with an enterprise digital transformationDigital tools enable entirely new models.They give companies the means to develop software as a service,platform as a service,freemium and other disruptive business models.Com

84、panies will use digital solutions to design and develop new products.Marketing and sales teams will use them to understand consumer needs and preferences,personalize customer engagement,and create a better user experience to drive sales.17 L.E.K.ConsultingSPECIAL REPORTCompanies will even monetize d

85、ata itself,whether directly(data as a service)or indirectly(insights as a service).Data-based services can be add-ons to existing offerings or stand on their own.Another option is to collaborate with similar companies to create data utility platforms.Depending on how it fits with the business,data m

86、onetization creates new customer opportunities,new revenue streams and competitive advantage singly or in combination.All this demands a rethinking of the entire business.A subscription model,for instance,is more than a new website or app.It requires an entirely different back-office and delivery mo

87、del,with a refined digital-first value proposition and underlying technologies.To succeed in this kind of transformation,“you cant just address normal or unmet needs,”says digital industry leader Andy Main.“You need to satisfy a need no one knew they had.Get your teams thinking differently.Make them

88、 think about the value chain,not their silo.How can you move them away from transactional thinking and become customer obsessed?”Case in point:Bridgestones new business unit In 2020,tire maker Bridgestone set out to be the leader in helping people and products get from point A to point B efficiently

89、 and effectively.This required understanding the customers key pain points,including identifying situations where preventive maintenance couldnt keep vehicles on the road.Key to this strategy was the modernization of Bridgestones IT systems,data platforms,cybersecurity and most importantly its organ

90、izational model.The company had access to a wealth of data,from current tire pressure and temperature to tire retail sales.Through integrating data from existing sourcing and collecting vast amounts of data from connected cars,solutions that keep products moving and companies working become mission

91、critical for Bridgestones clients.One solution prevented tire pressure-related breakdowns by combining thousands of point-of-sale data touchpoints with data on things like vehicle performance,road conditions,fleet management and maintenance.The firms investment in these areas resulted in the establi

92、shment of the Bridgestone Mobility Solutions business unit,which served 1.2 million connected vehicles as of 2021.18 L.E.K.ConsultingSPECIAL REPORTCase in point:Waste Managements digital refocus At Waste Management,digital was a separate function,brought in by the business only as needed for technol

93、ogical support.Then the company shifted to a team-based,customer-centric approach to business.As part of this endeavor,new leadership and staff took charge of integrating digital across the organization.The waste haulers new,more holistic approach was less about solving technical problems and more a

94、bout furthering specific business goals.Remote truck route monitoring helped managers identify and correct suboptimal truck routes.Remote landfill monitoring saved employee trips while reducing operational costs.And predictive fleet maintenance reduced the total cost of ownership for the companys fl

95、eet of trucks.To improve the customer experience,Waste Management introduced self-serve Q&A capabilities and a billing option that significantly boosted ecommerce sales.Business resilience and agility went up with increased investments in cloud capabilities,cybersecurity and advanced enterprise reso

96、urce planning(ERP)systems.Digital leadership requires something of a mindset change to put into operation.Ordinarily,companies focus on their products and what it takes to produce them.But digital business models are more suited to focusing on the customer and what it takes to address their unmet ne

97、eds.That means identifying customer touchpoints across the business,from the supply chain to finance to cybersecurity,then assigning teams of humans and machines to find ways to improve the customer experience at each point.Thats what VF Corp.is doing with Vans,says Reynolds:“Rather than organizing

98、teams around logos or product groups,they look at individual customer segments what their needs are and how they engage.As we continue to see an acceleration of consolidation with more logos clustered under the same parent companies,its becoming increasingly important to adopt this posture so as to

99、not have 10 different logos talking to one person.”From there,companies will allocate supply activities to fulfill customer demand in real time.Clark-Sellers says this approach helped her address the needs of customers who placed orders for large,complex buildings:“Wed end up delivering different pr

100、oducts to customers at different times,but not in the order they needed them for building.We came up with a solution,which was a collaborative effort between marketing and operations,where we provided our customers a 3D mockup of their 19 L.E.K.ConsultingSPECIAL REPORTorder using digital twin techno

101、logy.Wed then feed the information from that mockup into our manufacturing lines to prioritize what needed to be produced and delivered to customers first.”A seamless,cohesive enterprise is the next frontier in digital leadership.Suppose more companies had better visibility and data processing betwe

102、en marketing and manufacturing.Marketing would benefit from up-to-date information about product supply,while manufacturing would gain timely insight into market demand.The result would be a more efficiently run business with better performance against business target measurements like inventory tur

103、ns,net working capital and operating cash flows.Once a company is digitally connected,it will become easier to evolve its business model to incorporate digital as well as determine digital ways to go to market for relevant products.Build trustEstablish your brand as a trusted source and partnerThe f

104、uture of digital transformation is being shaped by the ability to deliver solutions that enable a trustworthy enterprise and convey a trustworthy experience to stakeholders.When it comes to business relationships,“trust has always been about quid pro quo trading your data to drive a more valuable ex

105、perience,”Reynolds says.“Starbucks is a prime example.Im happy to let them use my location and have my payment information because I love their product.Providing them my data takes much of the friction and work out of getting coffee.”At the same time,however,customers and suppliers expect the organi

106、zations they do business with to comply with data protection and privacy regulations.They also expect security from data breaches and cyberattacks.“Safeguarding and preparing for any security incident is essential,”Smith says.End consumers also need to know that companies are safeguarding their pers

107、onally identifiable information and wont share the rest of their data without explicit permission.Building trust requires establishing credibility as a source of truth,being a good ecosystem partner for consumers and customers,and being thoughtful about safeguarding data.These tenets go beyond just

108、technology or cybersecurity training.They require establishing governance around core values that permeate the product and embed trust into every aspect of an organization.SPECIAL REPORTCase in point:Visas trust missionAs a major player in an industry that requires the highest level of trust,Visa ha

109、s made it a mission to invest in trust and advertise the steps required to keep companies and consumers safe.The credit card companys robust cybersecurity measures are a function of internal policies and trainings,in-house and third-party solutions,and regular audits.Visa has also introduced an inte

110、lligent security framework to its ecosystem partners.The framework includes tools for account onboarding and management,AI-powered consumer identity authentication and transaction authorization,dispute management,and payment performance optimization.Visas chief privacy officer manages global,cross-f

111、unctional teams charged with compliance and proper management of sensitive data.In 2020,the firm adopted the Visa Data Values,which detail the responsible use of data to serve clients better,improve internal security,protect consumers and drive positive community impact.Visas investment in fraud pro

112、tection has grown to over$9 billion over the years.Due to these efforts,the company helped prevent an estimated$27 billion in fraud in 2022 alone.Leveling up your digital maturityDigital leadership is an ongoing journey that requires a combination of technical capabilities,leadership ownership and a

113、n ability to keep pace with changes in the digital landscape.Its also about using technology to achieve strategic objectives.Fortunately,digital leadership isnt a contest.Neither is it especially exclusive.Any organization can achieve digital excellence by making the right strategic choices.One way

114、to start is by answering the following questions:How do different elements of digital fit into our strategy?Will digital change the kind of customers we target?Will it change the markets we enter?How will digital enhance our value proposition?How will it enhance our organizational effectiveness?20 L

115、.E.K.ConsultingSPECIAL REPORTWhen it comes to digital transformation,its easy to lose sight of the human element.But in the end,digital transformation lives or dies on the strength of the people behind it,so never go it alone.Assemble your team from IT,the lines of business,the C-suite,the board of

116、directors,your business partners,your external stakeholders and tap their strengths to advance your organization along the digital maturity curve.The authors would like to acknowledge L.E.K.s Digital Practice members Hunter Reynolds and Sophie Sun for their support and effort in authoring the survey

117、 and study.For more information,please contact:.21 L.E.K.ConsultingSPECIAL REPORTAppendix:Views of digital maturityDigital leadersOthersPrimary foundational technology investments Top categories:Cybersecurity technologyEnterprise applicationsCloud computingCommentaryWhile top categories of investmen

118、t are the same across leaders and others,commitment levels are drastically different,with 80%-90%of leaders indicating high investment levels compared to 50%-60%of others Investments in these categories are expected to stay high,with leaders highlighting cloud computing as a future area of investmen

119、tOthers are more likely to increase investment levels in areas like advanced analytics and data capture and storage,whereas leaders have already built these out and are keeping investment levels constantPrimary digital enablers investments Customer data solutionsInternet of things(IoT)Artificial int

120、elligenceCustomer data solutionsIoTDXPsCommentaryTop investment categories for both leaders and others are customer data solutions and IoT,with a high variance in magnitude between them(80%-90%of leaders reporting high investment vs.50%-60%of others)External data purchases are notably a much higher

121、priority for leaders(81%of leaders noting high investment vs.44%of others),suggesting superior data processing and analytics capabilities Leaders are most interested in investing more on advanced tools(like generative AI,DXPs,computer vision/natural language processing and digital simulations),as ev

122、idenced by a large(10+%)increase in expectations of investment in the future while indicating the maturity of their digital transformation journeyTargets measuredDigital leaders are more likely to emphasize target measurements specific to digital initiatives and objectives(e.g.,CAC for sales outreac

123、h)Others are likely to place more emphasis on higher-level,broad target measurements(e.g.,market cap,shareholder return)Barriers and challenges facedTop barriers and challenges leaders faced are concerns around data privacy and cybersecurity,as well as the integration of legacy technology systemsBes

124、ides cybersecurity and integration of legacy tech systems,others also report high upfront costs as a barrier,indicating the need for strong financial commitment and executive buy-inOthers also report day-to-day bugs as a challenge to implementation,suggesting lack of digital expertise Digital maturi

125、ty by leaders versus others 22 L.E.K.ConsultingSPECIAL REPORTPrimary investment areasDigital leadersOthersFoundational technologies utilizedEnterprise applicationsCapture,storage and handling of large datasetsAdvanced analyticsCapture,storage and handling of large datasetsDigital enablers utilizedCu

126、stomer data solutionsFuture investment areasGenerative AIData purchasingRobotic process automationComputer vision/natural language processing(NLP)Data interoperabilityTargets measuredReturns to lifetime value(LTV)CACShareholder returnReal revenueBarriers and challenges to digital implementationCyber

127、security concernsIntegration of legacy tech systemsBusiness-to-consumer(B2C)firms are also worried about missing or low-quality customer data Others highlight high upfront costs as a barrier,indicating the need for strong commitment and financial buy-in from leadership Digital maturity by business o

128、bjective Customer experience(CX)Notes:Both B2B and B2C firms have established leadership in improving CX through digital investments;20%of B2B businesses,15%of B2C businesses and 24%of B2B2C businesses are leaders in CX.23 L.E.K.ConsultingSPECIAL REPORTPrimary investment areasScience discovery,resea

129、rch and engineering Product development and launch Foundational technologies utilizedCapture,handling and storage of large datasets Agile ways of working Capture,handling and storage of large datasets Payments technology Advanced analytics Digital enablers utilizedData interoperability Data purchasi

130、ng Cloud computing Data interoperability Additive manufacturing Future investment areasAdvanced analytics Computer vision/NLP Digital twins Augmented and virtual reality(AR/VR)Digital twins Payment technology Targets measuredRevenue Costs Earnings before interest and taxes(EBIT)Payback period(low re

131、turns)Return on digital investment(RODI)Market cap LTV Barriers and challenges to digital implementationBarriers to implementation:Time required to stand up the digital solution Cybersecurity risks Internal resistance to change Challenges faced during implementation:Cybersecurity Solutions not perfo

132、rming as desired Training staff Digital maturity by business objective Launch and improve new products or servicesNotes:Pricing optimization and product line profitability are another area of investment within product/service launch.Leaders typically invest in advanced analytics tools and are expect

133、ed to continue increasing investment in this foundational technology.Others have also invested in advanced analytics and are expected to increase investment in agile ways of working in the future.Digital leaders have set high targets for success in this business objective,and 90%of leaders have been

134、 able to achieve their targets compared with only 20%-30%of others achieving their targets,suggesting large gaps between leaders and others in their digital capabilities for launching and improving new products and services.24 L.E.K.ConsultingSPECIAL REPORTPrimary investment areasProcess automation(

135、nonmanufacturing)Lean and smart manufacturingFoundational technologies utilizedERPAgile ways of workingCapture,storage and handling of large datasetsERPAdvanced analyticsDigital enablers utilizedCustomer data solutionsIoTFuture investment areasAgile ways of workingCloud computingAdvanced analyticsAI

136、/machine learning(ML)Additive manufacturing Leaders are expected to decrease investments in customer data solutions and DXPsTargets measuredLTVCACRODIShareholder returnBarriers and challenges to digital implementationBarriers to implementation:Cybersecurity risksInternal resistance to changeOthers a

137、lso note high upfront costs as a barrier to implementationChallenges faced during implementation:CybersecurityTraining staff Cost of solutions Others also note day-to-day bugs and issues and tracking target measurements as challenges faced during implementation,indicating a general lack of digital e

138、xpertise Digital maturity by business objective Improve operational efficiencyNotes:Digital leaders outperform on measurement targets such as CAC,LTV and RODI;however,they underperform on customer count and brand awareness since those metrics are not directly related to operational efficiency 25 L.E

139、.K.ConsultingSPECIAL REPORTPrimary investment areasChannel expansionOmnichannelSalesforce effectivenessFoundational technologies utilizedCapture,storage and handling of large datasetsCloud computingPayment techAdvanced analyticsModerate overall foundational technology usage among leaders in this bus

140、iness objectiveAdvanced analyticsCloud computingDigital enablers utilizedAI/MLData purchasingComputer vision/NLPAR/VRData interoperabilityGenerative AIAR/VRGenerative AIAI/MLFuture investment areasAgile ways of workingDXPsLeaders are expected to decrease investment in data handling and customer data

141、 solutions,indicating that they have a strong data platform for collection and analysis of salesforce related dataOthers are expected to increase investment in data handling,suggesting that they are just starting to implement digital tools for salesforceAgile ways of workingCustomer data solutionsLe

142、aders are expected to decrease investment in data interoperability,IoT and data purchasing,indicating their advanced position in digital implementation for this business objectiveAgile ways of workingDecreased investment expected in AR/VR and advanced analytics Targets measuredLTVCACCustomer count O

143、thers also report measuring targets like shareholder return and market capBarriers and challenges to digital implementationBarriers to implementation:Outdated/legacy tech systemsTime to stand up digital solutionsMissing or low-quality customer dataLack of internal bandwidth to executeChallenges face

144、d during implementation:Integrating legacy tech systemsTraining and hiring staff Day-to-day issues and bugs Cybersecurity Others also note solutions not performing as desired as a challenge to implementation Digital maturity by business objective Sales outreach and effectiveness26 L.E.K.ConsultingSP

145、ECIAL REPORTPrimary investment areasSupply chain visibility Planning,procurement and execution Foundational and enabler technologies utilized Overall,adoption of foundational technologies is low across both digital leaders and others ERP,agile and advanced analytics are the only technologies reporte

146、d to be utilized Future investment areasDigital leaders report increased investments in IoT and digital twin technology Digital leaders report decreased investments expected physical robotic automation(PRA)Others plan to increase investments in AI/ML,robotic process automation(RPA)and agile ways of

147、working while decreasing investment in IoT and enterprise apps Digital leaders report increased investment in IoT and decreased investments in advanced analytical tools Others plan to increase investment in AI/ML,with decreased emphasis on IoT Targets measuredLTV Brand awareness CAC Cost change EBIT

148、 RODI EBIT Barriers and challenges to digital implementationBarriers to implementation:Internal resistance to change Cybersecurity Missing or low-quality customer data Outdated tech systems Challenges faced during implementation:Cybersecurity Solutions not performing as desired Incentivizing employe

149、es to use digital enablers Digital maturity by business objective Improve supply chain managementNotes:Highest-tracking target measurements(e.g.,LTV,brand awareness and CAC)are not directly related to supply chain.Cost change and EBIT are lower-tracking target measurements,which suggests inherent di

150、fficulties in successful implementation of digital tools for supply chain improvement.27 L.E.K.ConsultingSPECIAL REPORTPrimary investment areasDigitally focused operating model Data-driven decisions Foundational and enabler technologies utilized IoT Cloud computing Cloud computing IoT Capture,storag

151、e and handling of large datasets Future investment areasLeaders report increased investments in cloud computing,AI/ML and agile ways of working with decreased investment in enterprise apps Others are expected to increase investment in capture and handling of datasets with decreasing emphasis on clou

152、d computing Leaders report increased investments in data capture and handling and IoT with decreased investment in cloud computing Others are expected to increase investment in computer vision/NLP and IoT while decreasing emphasis on cloud computing Targets measuredRODI EBIT Others also note measuri

153、ng shareholder return,brand awareness and LTV CAC Revenue Shareholder return Market cap Others also note measuring real cost Barriers and challenges to digital implementationBarriers to implementation:Cybersecurity risk was highly significant as the primary barrier to implementation Time to stand up

154、 the digital solution is noted as the second-most significant barrier Others also note legacy platform as a barrier Challenges faced during implementation:Cost of implementation Training staff Others also note day-to-day bugs and issues as a challenge faced during implementation,indicating a general

155、 lack of strong digital expertise Digital maturity by business objective Increase business resilience and agility28 L.E.K.ConsultingSPECIAL REPORT29 L.E.K.ConsultingAbout the authorsJenny Lieb DIRECTOR,DIGITAL STRATEGY,SALT LAKE CITYJenny Lieb serves as Director of L.E.K.Consultings Digital Strategy

156、 practice.Jenny has expertise in digital transformation,strategy formulation,customer experience optimization,data and analytics,AI,omnichannel operations and digital work methodologies.Throughout her career,she has held the role of executive advisor to clients across diverse industries,including fi

157、nance,banking,aviation,healthcare,high tech and automotive.Ryan MooreENGAGEMENT MANAGER,BOSTONRyan Moore is an Engagement Manager in L.E.K.Consultings Boston office and a member of the firms Digital and Industrials practices.Ryan has experience in Digital strategy across various areas,including digi

158、tal commerce,customer engagement,and disruptive new business models.He has a particular focus on building products and residential and commercial services.Chuck ReynoldsMANAGING DIRECTOR AND PARTNER,BOSTON Chuck Reynolds is a Managing Director and Partner in L.E.K.Consultings Boston office and a mem

159、ber of the Digital Strategy practice.Chuck has extensive experience in digital strategy across various areas,including digital commerce,customer engagement,agile,direct-to-consumer,data and the application of AI/ML,with particular expertise in digital strategies that enhance growth and profitability

160、 through customer engagement.Darren PerryMANAGING DIRECTOR AND PARTNER,BOSTONDarren Perry is a Managing Director and Partner in L.E.K.Consultings Boston office.Darren has over 20 years of technology and strategy consulting experience,is a founding member of L.E.K.s Technology practice and leads the

161、firms service line for Digital Strategy.He advises clients across many industries and issues,including growth strategy,M&A,digital investment prioritization,digital customer engagement&commerce,digital products&business models,and digital ways of working.SPECIAL REPORT30 L.E.K.ConsultingJulie Sussma

162、nENGAGEMENT MANAGER,BOSTONJulie Sussman is an Engagement Manager in L.E.K.Consultings Boston office and a member of the firms Digital practice.Julie has significant experience across growth strategy,digital strategy,omnichannel optimization,customer segmentation and insights,AI strategy and transaction support.She advises companies across a range of industries and value chain stages,including B2C and B2B.