* . *
  • About
  • Advertise
  • Privacy & Policy
  • Contact
Friday, September 5, 2025
Earth-News
  • Home
  • Business
  • Entertainment
    ITV Studios Launches New Entertainment Label – Global Bulletin – IMDb

    ITV Studios Unveils Exciting New Entertainment Label

    TS Entertainment bringing Malibu Jack’s to former Owensboro mall – Lane Report

    TS Entertainment Launches Malibu Jack’s at Former Owensboro Mall Location

    Jenny Han Dropped a Major ‘The Summer I Turned Pretty’ Easter Egg Revealing [SPOILER] – yahoo.com

    Jenny Han Just Unveiled a Huge ‘The Summer I Turned Pretty’ Easter Egg That Changes Everything [SPOILER]

    Liam Payne’s Cousin Ross Harris Honors Late Singer With Emotional Song ‘Bones’ – yahoo.com

    Liam Payne’s Cousin Ross Harris Honors Late Singer with Emotional New Song ‘Bones

    Country music star apologizes after drunken show ends with cops taking him down: ‘I’m not OK’ – PennLive.com

    Country Music Star Apologizes After Drunken Show Ends in Police Intervention: ‘I’m Not OK

    Comanche Nation Entertainment closes casino near Devol – KSWO 7News

    Comanche Nation Entertainment Closes Casino Near Devol in Surprising Move

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Monkey Island LNG Picks ConocoPhillips’ Liquefaction Technology – Hart Energy

    Monkey Island LNG Selects ConocoPhillips’ Advanced Liquefaction Technology for Next-Gen Energy Solutions

    Credo Technology Group Holding Ltd. (CRDO) Surpasses Q1 Earnings and Revenue Estimates – Yahoo Finance

    Credo Technology Group Surpasses Q1 Earnings and Revenue Expectations

    The Economist is hiring a science and technology correspondent – The Economist

    Exciting Opportunity: Become Our Next Science and Technology Correspondent!

    Blockchain lender Figure Technology seeks to raise up to $526M in IPO (FIGR:Pending) – Seeking Alpha

    Blockchain Lender Figure Technology Sets Sights on $526M in Thrilling IPO Launch

    New Technology from Ramsey Theory Group Brings Diagnostic Testing and Telehealth Directly into Patients’ Homes – Yahoo Finance

    Revolutionary Ramsey Theory Technology Delivers Diagnostic Testing and Telehealth Right to Your Doorstep

    China’s CATL sells stake in Finnish subcontract car manufacturer – Reuters

    China’s CATL Sells Stake in Finnish Auto Supplier in Strategic Move

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
  • Home
  • Business
  • Entertainment
    ITV Studios Launches New Entertainment Label – Global Bulletin – IMDb

    ITV Studios Unveils Exciting New Entertainment Label

    TS Entertainment bringing Malibu Jack’s to former Owensboro mall – Lane Report

    TS Entertainment Launches Malibu Jack’s at Former Owensboro Mall Location

    Jenny Han Dropped a Major ‘The Summer I Turned Pretty’ Easter Egg Revealing [SPOILER] – yahoo.com

    Jenny Han Just Unveiled a Huge ‘The Summer I Turned Pretty’ Easter Egg That Changes Everything [SPOILER]

    Liam Payne’s Cousin Ross Harris Honors Late Singer With Emotional Song ‘Bones’ – yahoo.com

    Liam Payne’s Cousin Ross Harris Honors Late Singer with Emotional New Song ‘Bones

    Country music star apologizes after drunken show ends with cops taking him down: ‘I’m not OK’ – PennLive.com

    Country Music Star Apologizes After Drunken Show Ends in Police Intervention: ‘I’m Not OK

    Comanche Nation Entertainment closes casino near Devol – KSWO 7News

    Comanche Nation Entertainment Closes Casino Near Devol in Surprising Move

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Monkey Island LNG Picks ConocoPhillips’ Liquefaction Technology – Hart Energy

    Monkey Island LNG Selects ConocoPhillips’ Advanced Liquefaction Technology for Next-Gen Energy Solutions

    Credo Technology Group Holding Ltd. (CRDO) Surpasses Q1 Earnings and Revenue Estimates – Yahoo Finance

    Credo Technology Group Surpasses Q1 Earnings and Revenue Expectations

    The Economist is hiring a science and technology correspondent – The Economist

    Exciting Opportunity: Become Our Next Science and Technology Correspondent!

    Blockchain lender Figure Technology seeks to raise up to $526M in IPO (FIGR:Pending) – Seeking Alpha

    Blockchain Lender Figure Technology Sets Sights on $526M in Thrilling IPO Launch

    New Technology from Ramsey Theory Group Brings Diagnostic Testing and Telehealth Directly into Patients’ Homes – Yahoo Finance

    Revolutionary Ramsey Theory Technology Delivers Diagnostic Testing and Telehealth Right to Your Doorstep

    China’s CATL sells stake in Finnish subcontract car manufacturer – Reuters

    China’s CATL Sells Stake in Finnish Auto Supplier in Strategic Move

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
Earth-News
No Result
View All Result
Home Business

The Value of Digital Transformation

August 1, 2023
in Business
The Value of Digital Transformation
Share on FacebookShare on Twitter

While 89% of large companies globally have a digital and AI transformation underway, they have only captured 31% of the expected revenue lift and 25% of expected cost savings from the effort. Until business leaders are convinced of the value and confident in how to get it, they are unlikely to do the difficult, hands-in-the-dirt changes needed to improve their success rate. To see where digital transformation creates value, the authors used McKinsey’s Finalta benchmark, which tracked the performance of 80 global banks every year from 2018 to 2022 against a set of 50 normalized metrics, such as digital/mobile adoption, digital sales by banking product, number of people in contact centers, and number of branches. They found that digital leaders are creating much more shareholder value than laggards, often by creating value that’s hard to copy.

“Show me the money!” Cuba Gooding Jr., playing Rod Tidwell, made those words a cultural touchstone in the movie Jerry McGuire. He was not just voicing his concerns about committing to a sports agent, played by Tom Cruise in this case; he was also questioning Cruise’s commitment.

Business leaders, shareholders, and board members have increasingly been saying the same thing — albeit using different words — when it comes to their company’s digital and AI transformations. While 89% of large companies globally have a digital and AI transformation underway, they have only captured 31% of the expected revenue lift and 25% of expected cost savings from the effort.

That track record begs some tough questions: Is all this digital effort worth it? Do I really need to lead my industry or is being a fast-follower a smarter strategy? Can I create digital and AI capabilities that give me a lasting competitive advantage or is this just the price of doing business in the modern age?

Until business leaders are convinced of the value and confident in how to get it, they are unlikely to do the difficult, hands-in-the-dirt changes needed to improve their success rate, as we argue in our book Rewired: How to Outcompete in the Age of Digital and AI. But using proprietary data, we’ve found just how and where digital transformations create value — and what businesses can do to beat the competition.

Hard Evidence, Real Value

Hard evidence that directly ties digital and AI transformation to improvements in operational KPIs and financial performance is scant.

To redress this issue, we turned to banking, a sector that has enough of a history with digital transformations to produce meaningful findings and where we own a unique longitudinal dataset.

First, we used McKinsey’s Finalta benchmark, which tracked the performance of 80 global banks every year from 2018 to 2022 against a set of 50 normalized metrics, such as digital/mobile adoption, digital sales by banking product, number of people in contact centers, and number of branches. We then isolated performance in two metrics — the percentage of mobile adoption by their customer base and the percentage of sales originated in digital channels — to define 20 digital leaders and 20 digital laggards. These two metrics are broadly recognized in the industry as core indicators of a digital retail banking model.

Next, we combined this data with McKinsey’s Corporate Performance Analytics to see how banks ultimately perform against financial metrics (e.g., total shareholder return, growth, expenses). We then ran a blind assessment (i.e., the identity of the banks was hidden) of the maturity of digital and AI capabilities of the leading and lagging banks.

The findings have been striking: Digital leaders are creating much more shareholder value than laggards. Between 2018 and 2022, digital leaders achieved average annual total shareholder returns of 8.1% vs. 4.9% for laggards. Leaders also had significantly better return on pre-tax tangible equity (ROTE), growing it from 15.5% in 2018 to 19.3% in 2022, vs. a more modest growth from 13.6% to 15.3% for laggards.

This financial outperformance is a result of leaders’ success in growing revenue and better containing expense growth. Between 2018 and 2022, digital leaders have grown their active customer base at 0.5% and their retail revenues at 0.8% annually, while digital laggards saw zero growth in their active customer base and a decline of 1.4% per year on retail revenues. During the same period, leaders’ operating expenses grew at 1.3% per year, while laggards grew at almost twice that (2.3% per year). So, how are leaders able to outcompete so demonstrably?

Creating Value That’s Hard to Copy

Where does value come from? Let’s look under the “digital hood.” Both digital leaders and laggards are growing adoption of their mobile app at the same rate, with a gap of 14 to 15 percentage points between them staying constant over time. (See below chart.) This is not surprising. As soon as a bank introduces a new mobile app feature, others see it and follow suit relatively quickly. The mobile app is table stakes.

Turning to digital sales provides a much more insightful answer. Here, the gap between leaders and laggards is growing fast, with leaders almost doubling their advantage over laggards over the five-year period. In fact, digital leaders grew digital sales from 40% to 70%, while digital laggards grew from 8% to 17%.

The reason for this large differential is that to drive digital sales, leading banks go well beyond the mobile app to digitally transform what’s hard to see and hard to copy: the end-to-end process from origination to fulfillment to servicing. To do this, they must orchestrate hundreds of teams capable of developing digital and AI innovations, day-in, day-out, across all their customer journeys and core business processes.

At the front end of this process, for example, leading digital banks deploy personalization analytics and digital marketing campaigns to bring relevant offers to (potential) customers. In the middle of this process, they create an omnichannel experience where branch and contact center professionals have the tools and data to support customers at any stage of the sales journey, even if that journey was started online. These leading banks also provide customer approvals in real time, thanks to automated credit-risk decisioning. At the back end of the process, they drive customer self-servicing through well-designed digital workflows enabled by a modern data architecture.

The value of this approach to transformation is also revealed in contact center staffing. Laggards saw an increase of 20% over the past five years, as they were unable to contain inbound calls from customers that enter digital channels. In contrast, digital leaders were able to decrease contact center staffing by 11% as they benefited from their ability to fully fulfill customer demand online and provide effective self-servicing capabilities.

Knowing what to do is important, but executing on the “how” is what makes the difference. Let’s see how a U.S. bank did it for its secured lending business. Traditionally, the bank took about 45 days for a customer to secure a loan, on average. The process involved multiple documentation requests to customers (e.g., pay stubs, W2s, letters of explanation), and back-end processes (e.g., initial file review, file assignment, ad hoc reports) were highly manual.

To transform this journey, the bank’s leadership team reinvented the entire process. To speed pre-approvals, they developed a database of tens of millions of U.S. households combining credit, property and income attributes using internal and external data sources. This data allowed them to generate personalized pre-approved offers that customers could accept with one click. They built a mobile-first customer experience, where customers could personalize their offers based on real-time data and finalize a pre-filled application, either on mobile or with the assistance of a bank employee. They redesigned key processes (e.g., specialized loan “assembly lines”), automated key tasks (e.g., initial file scrub), and developed digital tools for operators to drive productivity (e.g., daily workflow management). And they modernized credit policy execution to enable greater use of data in underwriting (e.g., using direct deposit data for income), while maintaining or increasing risk controls for the bank.

To enable all these innovations, they implemented key technology and data capabilities, including a customer data platform, AI/ML models (e.g., propensity models), data products (e.g., income), a digital app for customers and a workflow tool for the fulfillment center, all deployed on a cloud-based platform-as-a-service infrastructure.

All in all, this transformation required more than a dozen use-cases across the entire journey and massive change management programs (e.g., training, retooling) for agents in branches, contact centers, and operations. But, only 18 months after the initial launch, the approval process was shortened from 28 to 7 days. This leap allowed the bank to become a leading secured lending originator and increase originations by 35%, while reducing origination cost by 20%.

The Capabilities Needed to Outcompete

A company that aspires to outperform needs to do the kind of end-to-end changes the bank above did across dozens of customer journeys and core business processes. That’s only possible when it is rewired with differentiated capabilities. Our study of more than 200 large-scale digital and AI transformations isolated the six core capabilities rewired companies develop:

Creating ambitious and focused transformation roadmaps. This requires business leaders to align their efforts on specific domains (e.g., journeys or processes) that matter to customers and generate significant value.

Building a quality digital talent bench. Leaders prioritize creating an environment that attracts top-notch engineers and allows them to thrive (e.g., tailored career tracks, autonomy).

An operating model where hundreds of small cross-functional “pods” made up of business, engineering, and resources from control functions are mobilized against priority solutions. A single journey (or product) owner responsible for the end-to-end experience.

A distributed technology environment and modern software engineering practices to allow the entire organization — not just IT — to develop digital and AI-based solutions.

Data products and modern data architecture that make it easy for different parts of the organization to consume data for their own applications.

Change management to ensures digital solutions are adopted and can scale by making them easy to use and reuse across the enterprise.

In our blind assessment of these capabilities for the leaders and laggards, we found that leaders stand out across the board on these capabilities. No single one explains their success. All are needed. With that baseline, the most differentiated capabilities are talent and operating model, not technology. Over time, these capabilities create ever-improving customer experiences and drive lower unit cost. Financial rewards follow.

While our research has focused on banking, our experience reflects similar lessons and patterns in every industry, whether B2B or B2C, products, or services. A digital and AI transformation, however, cannot be done in “special project” mode. To pull this off, the entire organization must be able to deliver constant digital innovation, which requires a holistic set of capabilities. The effort is significant, but so is the reward.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Harvard Business – https://hbr.org/2023/07/the-value-of-digital-transformation

Tags: businessdigitalvalue
Previous Post

USD/JPY consolidates in a range around 142.35-40 area, just below three-week peak

Next Post

How to Secure Support for Your ERG’s Initiatives

Singapore Thrived in a US-Led World. Now What? – Bloomberg

Singapore Thrived in a US-Led World. Now What? – Bloomberg

September 5, 2025
Niger will be Africa’s fastest-growing economy in 2025, says World Bank – Peoples Dispatch

Niger will be Africa’s fastest-growing economy in 2025, says World Bank – Peoples Dispatch

September 5, 2025
Justin Bieber’s ‘Swag II’ Album Isn’t Out as Promised & It’s Keeping Fans Waiting – yahoo.com

Justin Bieber’s ‘Swag II’ Album Postponed, Fans Left Counting Down the Days

September 5, 2025
Kennedy draws bipartisan pushback at Senate hearing over moves to limit vaccines – NBC News

Kennedy Faces Strong Bipartisan Opposition at Senate Hearing Over Vaccine Restrictions

September 5, 2025
Stephen A. Smith is ready to talk politics: ‘I will spare no one’ – The Washington Post

Stephen A. Smith Is Ready to Dive Into Politics: ‘I Will Spare No One

September 5, 2025
Borgo Laudato si’: Pope Leo XIV to launch new ecological and spiritual chapter – Vatican News

Pope Leo XIV to Ignite a Powerful New Era of Ecological and Spiritual Renewal at Borgo Laudato Si

September 4, 2025
Scientific objectivity is a myth – cultural values and beliefs always influence science and the people who do it – The Conversation

Why Scientific Objectivity Is a Myth: How Culture Shapes Science and Its Practitioners

September 4, 2025
Nuclear Fuel: The Art And Science Of The Nuclear Renaissance – The National Interest

Nuclear Fuel Uncovered: The Art and Science Powering the New Energy Revolution

September 4, 2025

Ramlila Artists Embrace Healthy Lifestyles to Truly Bring Divine Characters to Life

September 4, 2025
Monkey Island LNG Picks ConocoPhillips’ Liquefaction Technology – Hart Energy

Monkey Island LNG Selects ConocoPhillips’ Advanced Liquefaction Technology for Next-Gen Energy Solutions

September 4, 2025

Categories

Archives

September 2025
MTWTFSS
1234567
891011121314
15161718192021
22232425262728
2930 
« Aug    
Earth-News.info

The Earth News is an independent English-language daily published Website from all around the World News

Browse by Category

  • Business (20,132)
  • Ecology (807)
  • Economy (826)
  • Entertainment (21,704)
  • General (16,863)
  • Health (9,867)
  • Lifestyle (839)
  • News (22,149)
  • People (827)
  • Politics (833)
  • Science (16,036)
  • Sports (21,324)
  • Technology (15,806)
  • World (807)

Recent News

Singapore Thrived in a US-Led World. Now What? – Bloomberg

Singapore Thrived in a US-Led World. Now What? – Bloomberg

September 5, 2025
Niger will be Africa’s fastest-growing economy in 2025, says World Bank – Peoples Dispatch

Niger will be Africa’s fastest-growing economy in 2025, says World Bank – Peoples Dispatch

September 5, 2025
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

Go to mobile version