Companies investing in digital transformation may be investing in the wrong places, according to a new report from McKinsey.
McKinsey found the digitization of supply chains will have the biggest impact on revenue, yet 49% of companies are investing in digitizing their distribution channels or marketing instead. Only 2% of companies are applying digital strategies to the supply chain.
The most successful companies invest more boldly in digital transformation efforts than their less well-performing counterparts do, according to McKinsey. "As digital increases economic pressure, all companies, no matter what their position on the performance curve may be, will be affected."
Digital transformation isn’t going away anytime soon, so there's no point in ignoring it. In fact, the more boldly a company pursues digital transformation efforts, the more likely they are to see a big payoff.
In other words, the more aggressively companies respond to the digitization of their industries, "the better the effect on their projected revenue and profit growth," according to the report.
Business leaders that think digital transformation is simply a trend or a passing fad are simply wrong. To remain competitive in the market, going digital is becoming mandatory. At least companies are starting to have a digital transformation strategy, though few have completed it.