On what degree of digitization is your company at? How digital is your industry?

A recent study of the McKinsey Global Institute analyzed the degree of digitization in different sectors of the economy finding an ever greater gap between some of them. Most digital companies grew of brutal manner in their productivity and profits unlike the growth of others that do not belong to that group. The Harvard Business Review presented its conclusions, which I will translate in part today, where they analyzed 27 indicators that allow analyzing any industry in its phase of digitization. These indicators are divided into three categories: digital assets, digital use and digital workers, the latter two that make the difference more significantly.

It is true that in most cases when speaking about the 'digital' many managers and entrepreneurs don't have it clear what is really beyond purchase updated versions for their systems, when in reality all this is only the first step, the beginning. To be competitive, to stand out, should be to "think digitally", be digital, retrain the workforce and of intensified management in all aspects of the company.

Digital assets have multiplied exponentially in the business world. We have digitized many things, applications have been implemented and new ways to reach customers have been generated in scenarios such as professional or social networks. But we are still far from what 'digital transformation' means. These assets are important but they are only the smallest part of the challenge that many companies will face urgently.

There are two divisions, two different competitions between different economic sectors. The study to which I am referring to is to generate an index scan of any industry. An analysis model that I use when inside some consulting we must know in detail the relevant aspects to carry out the work of transformation they are asking of me. The best of all is that it is a job that must be done with the management teams and they are the ones that locate the exact measure of their state of digitization. Normally they get surprised. Nor it is so little in some cases not as much as others often believe.

Let's look at each of the three categories of the index. First, digital assets. The degree to which companies have digitized their physical assets as connected vehicle fleets, large volumes of data or systems achieving high performance of equipment, systems and supply chains. An example is the new Caterpillar S60 smartphone, which comes with built-in thermal imaging capability and is useful for builders, electricians and utility workers.

The second category: digital use, measures the degree to which companies are involved digitally with customers and suppliers. Companies from leading sectors make more intensive use of digital payments, digital marketing and product development design. Burberry, for example, has sought the integration of social media and immersive experiences in their physical stores, which has achieved a tremendous disruption in their value chain.

But what really differentiates leaders is the third category: the degree to which digital tools are put in the hands of members of the company. To get an accurate picture, more than 12,000 detailed job descriptions were evaluated to identify those most associated with digital technologies.

The differences are enormous companies from leading sectors have a workforce 13 times more digitalized than the rest of the competition. In lagging sectors, the digital commitment of labor can be erratic; some organizations have made progress in certain areas, but still have not addressed the fundamental tasks their workers perform. Many organizations of health care, for example, use very sophisticated technology in the diagnosis and treatment, but a significant portion of their template uses very rudimentary tools or directly no technology. Less than 20% of payments to providers in the health care and their suppliers is done digitally, for example.

It is mandatory for managers and entrepreneurs to identify digital priorities, taking into account the transformation of the global business to maintain a competitive advantage. This requires an external approach to understand more deeply the expectations that can be reached according to the sector and category of digitization as I said before.

Customers are changing and companies must also change to better meet these new needs. When a client asks me to analyze his state of digitization and develop an action plan to identify those gaps with management teams, we design a strategy of low financial impact and a roadmap that has short-term results in order to bring confidence to process coming next. Think of your industry and then ask about the degree of digitization in which you are at. If you need help do not hesitate to contact me.