McKinsey&Company
Avoid pilot project purgatory
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Getting ahead in the cloud. Executives say that the constant pressure to operate faster and to expand their businesses is leading them to spend more of their budgets on cloud computing. Advanced software applications such as AI, Internet of Things, and business intelligence—which, for many companies, became necessary during the pandemic—consume large amounts of processing power, nudging up cloud expenses. Globally, businesses are projected to spend nearly $500 billion on cloud capabilities in 2022, a 20% hike over last year. [WSJ] |
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Beyond tech trends. With the onset of the COVID-19 crisis came a flood of digitization efforts across industries. But how do you get from the “valley of tears” (a time after the trendy new tech is adopted but actual business value is unclear) to the “plateau of productivity” (where there’s meaningful change)? One expert says to view digitization as a change in business model rather than in technology. Using a tool called the business model canvas can help leaders break down the different parts of a business and establish a baseline against which to measure change. [HBR] |
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A marathon, not a sprint. To undertake a successful digital transformation, companies need to define what “good” really looks like, says McKinsey’s Kate Smaje. “There isn’t a point in time when digital transformation is done,” suggests Smaje. “It’s more about, ‘How am I building a real muscle for the organization to continue getting better?’” One common mistake that can put success out of reach: every leader follows their own digital road map instead of having one clear set of priorities for the entire organization, adds senior partner Rodney Zemmel.
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The metrics that matter. How can a business measure what’s working in a digital transformation? Clearly defined metrics are a start, and it’s best to look beyond operational and financial objectives (although those are, of course, important). For instance, companies can determine if decisions are being made faster, capabilities are improving, and the culture is being transformed. Listen to this episode of The McKinsey Podcast to learn three guidelines for getting the most value from digital initiatives.
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| — Edited by Sarah Thuerk |
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