Linking digitization and companies’ performance

Ahead of his talk at TM Forum’s Monetizing IoE InFocus in Amsterdam in October, Nicolas Windpassinger looks at what it takes to develop trust in digital ecosystems. He shares more insights in his book Digitize or Die; visit his site to learn more about it.

Our manufacturing world and its ecosystem of partners, developers and customers are undergoing a profound change which is already affecting markets once considered protected from revolutionary shifts in technology, such as accommodation and travel. Yet Airbnb, and Uber overtook these industries as super-unicorns [that is startups worth more than $1 billion) and car manufacturers such as Renault, Volkswagen, and Ford are under attack from Tesla, Google cars and others.

In 2012, Capgemini Consulting published its online report, How Digital Leaders Outperform their Peers in Every Industry after surveying 391 companies and analyzing 184 publicly traded companies to assess their digital maturity. Importantly, the results were linked to their industry-adjusted financial performance.

According to Capgemini, digital maturity means to invest in technology-enabled initiatives while enabling digital transformation leadership. The company separated those two dimensions into four categories and found the companies that combine investments both in technology-enabled initiatives and leadership capabilities outperform their peers.

Digitally mature companies derive more revenue from their physical assets (+9 percent), are more profitable (+26 percent) and have overall higher market valuations (+12 percent)

Another study, The Path to Digital Transformation, shows that digital transformation has the following positive impacts:

  • It takes four years to reap financial benefits from digital transformation.
  • The average net promotor score by customers will be 86 percent on average.
  • 55 percent of employees, on average, will have knowledge of digital capabilities.
  • On average, 45 percent of products will be ordered online.

Digitization might have different aspects and be understood differently when talking about technologies, organizations, channels and other issues, but it is a major contributor to financial performance, customer satisfaction and market valuation.

I highlighted the link between digitization and financial performance in a recent report.


    About The Author

    Global Partner Program Vice President - Schneider Electric

    With 15+ years of computer networking industry experience, Nicolas Windpassinger is the Global Vice President of Schneider Electric’s EcoXpert™ Partner Program, whose mission is to connect the technologies and expertise of the world’s leading technology providers, pioneer the future of intelligent buildings and the Internet of Things, and deliver smarter, integrated and more efficient services and solutions to customers.

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