But many B2B as well as B2C companies are hampered by lack of digital expertise and effective e-business organization, McKinsey says.
More than half of companies say digital business efforts, such as using web analytics and connecting employees and suppliers in online networks, will drive 15% or more of growth in efforts to build revenue and profits over the next three years, according to a recent study published by management consulting firm McKinsey & Co.
Digital initiatives are also expected to help in a number of other ways, as many companies say they’re increasing their spending on digital business efforts and as top executives play a more direct role in supporting and even sponsoring digital projects, the study says. It notes, for example, that 30% of companies expect that digital business initiativeswill drive 15% or more of growth stemming from projects for “shoring up existing business and keeping pace with competitors.” And it notes that 61% of CEOs are involved this year in supporting digital business initiatives, up from 55% last year and 46% in 2012.
The study was based on an April 2014 survey of 850 business executives across various industries, including 57% classified as business-to-business, 27% business-to-consumer, and 16% businesses that sell to government agencies and other types of organizations.
The study also identified the challenges companies face as they pursue e-business strategies. For example, only 7% say their organizations “understand the exact value at stake from digital,” and only 4% “report high returns on their companies’ current investments.”
Underlying these shortcomings, McKinsey says, are several structural issues, including:
● 28% of companies say they have difficulty in finding employees with functional or technical expertise in digital business;
● 22% say their organizational structure is not set up to effectively involve personnel in digital efforts;
● 19% say their existing business processes are too inflexible to take advantage of new digital opportunities;
● 18% cited a lack of data quality to inform e-business decisions;
● 17% cite their company’s inability to experiment with new business practices.
When asked where they will have the greatest need within the next 12 months for digital business talent among employees, 44% of companies said analytics and data science; 40% mobile or online business development; 28% project management; 23% cloud and distributed computing.
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