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Management Tools

Digital Transformation

Digital Transformations integrate digital technologies into an organization’s strategy and operations.

  • April 02, 2018
  • min read

Article

Digital Transformation

Digital Transformations integrate digital technologies into an organization’s strategy and operations. Focusing the entire organization on opportunities to merge the best of both digital and physical worlds, Digital Transformations examine each link in the customer experience chain, explore new technology links that can bolster the base business and weave them into holistic systems that create superior customer experiences. The process aims to profoundly extend competitive advantages and accelerate profitable growth.

Usage and satisfaction among survey respondents

 

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What Digital Transformations do:

Managers begin by determining whether they must prepare for Digital Disruption or Digital Transformation. Digital Disruption ultimately destroys and replaces physical businesses with purely digital solutions. Management’s primary task, therefore, is to change the mix of business to compete effectively in a purely digital world. Digital Transformation, on the other hand, merges the best of digital and physical worlds into Digical® innovations that create wholly new sources of value.

Digital Transformations require that managers change not only the mix of businesses but also the capabilities of people in and around those businesses. The following actions help to maximize the chances that a Digital Transformation will succeed:

  • Understand the degree of digitization in the current environment and assess future threats
  • Develop a vision for how to engage the customer and achieve profitable growth using digital technology
  • Design a plan to tap the best sources of value from digitization, adding links and strengthening linkages in the customer experience chain
  • Mobilize the organization to win. Transform the approach to innovation, develop appropriate operating models and build a digital-savvy leadership team
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Companies use Digital Transformations to:

Digital Transformations engage every function in the organization. They use digital technologies to reinvent each link in the customer experience chain, including:

  • New product and service development
  • Marketing personalization to help customers discover and evaluate company offerings
  • Product and service customization
  • Purchasing processes
  • Supply chain and fulfillment networks
  • Product usage and service models
  • Return and upgrade processes
  • Product review and feedback systems
Brief

Management Tools & Trends

Five key trends emerged from Bain's survey of 1,268 managers.

Digical® is a registered trademark of Bain & Company, Inc.


Selected references

Baker, Mark. Digital Transformation. CreateSpace, 2014.

Davidson, Alistair. Innovation Zeitgeist: Digital Business Transformation in a World of Too Many Competitors. Eclicktick Consulting, 2013.

Kaufman, Ira, and Chris Horton. Digital Marketing: Integrating Strategy and Tactics with Values. Routledge, 2014.

Mazzone, Dominic M. Digital or Death: Digital Transformation—The Only Choice for Business to Survive, Smash, and Conquer. Smashbox Consulting, 2014.

Provost, Foster, and Tom Fawcett. Data Science for Business: What You Need to Know About Data Mining and Data-Analytic Thinking. O’Reilly Media, 2013.

Rigby, Darrell K. “Digital-Physical Mashups.” Harvard Business Review, September 2014, pp. 84–92.

Rogers, David. The Digital Transformation Playbook: Rethink Your Business for the Digital Age. Columbia Business School Publishing, 2016.

Siegel, Eric. Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die. Wiley, 2013.

Trefler, Alan. Build for Change: Revolutionizing Customer Engagement through Continuous Digital Innovation. Wiley, 2014.

Venkatraman, Venkat. The Digital Matrix: New Rules for Business Transformation Through Technology. LifeTree Media, 2017.

Westerman, George, Didier Bonnet, and Andrew McAfee. Leading Digital: Turning Technology into Business Transformation. Harvard Business Review Press, 2014.

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