effective corporate strategies for the digital age | a.t. kearney

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


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



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Companies are divided on theirgreatest digital challengeandfew are strongly prepared.


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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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No industry reports as fully prepared


Executives acknowledge their strategies dont yetfully embrace digital disruption and opportunities.


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


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Companies report multiple constraints to eectivelyembrace digital in their corporate strategies.

Percentage of respondents answeringvery high or high significance


Organizationalstructure

boundaries

Capabilitygaps

Capitalconstraints

Resourceconstraints

Culturebarriers

Processbarriers

Tool gaps

61% 60% 57% 54% 52% 51%56%


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How significant are the following barriers to integrating digital into the traditionalcorporate strategy development?


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



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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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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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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


Want to align your corporate and digitalstrategies to truly transform your business?


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.

Contact A.T. KearneysStrategy & Top-Line

Transformation Practice

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