Some days the message comes through load and clear. If my company is “digital” yet, I am way behind things and getting “behinder”.
Yesterday was too late for a strategy.
So … when will you abandon the “non digital” approach? When will you adopt a new strategy? This is not a question of if, but when.
All the talk of digital disruption turning incumbents into dinosaurs and unicorns into masters of entirely new domains might lead you to think this is already an old narrative—so 2016. In fact, digitization has barely started, and so has the accompanying upheaval.
Digital technologies and processes have penetrated only about 35% of the way into the average industry, meaning that merely a third of a typical company’s products and operations that could be digitized have been. Yet the impact has already been dramatic: Globally, digital disruption is shaving 45% off incumbent companies’ revenue growth and 35% off their earnings before interest and taxes (EBIT). As digitization accelerates, the hit to revenues and profits of digital laggards will grow significantly, even as the digital leaders capture disproportionate gains.
These findings emerge from a research effort my McKinsey colleagues and I undertook to examine the nature, extent, and implications of digitization’s spread. We wanted to understand how economic performance will change as digital technology continues its advance, and what strategies are most likely to win the game.