The COVID-19 pandemic is increasing companies’ urgency with digital transformation, management consulting firm BCG contends in this research report.
80% of companies accelerate their digital transformation
In a survey of 825 board members, CEOs, chief experience officers, and other executives across eight industries, BCG found that 80 percent of their respondents intend to accelerate their digital transformation in light of the pandemic while 65 percent indicate that they intend to increase digital spending.
Sense of urgency
Several forces are driving companies’ sense of urgency with digital transformation. The first, somewhat understandably, is the fact that a growing number of employees are working remotely during the pandemic, which is increasing associated cyber security and other digital-related challenges.
But CEOs also report that they are coming to see digital transformation’s promise not just in its traditional operational efficiencies but also as an increasingly valuable tool in revenue generation, including “customer-facing initiatives such as digital marketing, personalization, and streamlining the customer journey among their primary goals.”
Revenue generation vs. Cost cutting
In accompanying slides containing its detailed survey findings, BCG reports that 88 percent of respondents now see the mounting demand for digital transformation being driven by “revenue generation and getting closer to customers rather than the traditional focus on cost-cutting.”
The vast majority of survey respondents (80 percent) report that their company’s intend to self-fund their digital transformation initiatives through revenue generated or costs saved from these initiatives. This is up markedly from 50 percent who indicated their company’s intent to self-fund these initiatives three years ago, in 2017.
Business Leadership Drive
Interestingly, BCG found that digital transformation initiatives are being driven largely (70 percent) by business leadership, not chief information officers or chief technology officers. “Our board is very keen on it, our executive team is very keen on it, and we’re really driving it as a group,” one energy distribution chief information officer told BCG.
More Chief Digital Officer roles
A majority of companies (65 percent) engaged in digital transformation have a chief digital officer (CDO) already hired and in place. This represents a substantial leap in the growth of the CDO function in recent years. A similar survey question presented by Gartner four years ago, in 2016, found that only ten percent of companies had a CDO on board.