We knew intuitively that companies that have digital technologies and AI at their core have fared better in the pandemic.
But now, there appears to be some evidence of this as per research by the Boston Consulting Group
The BCG calls these resilient companies by an odd name: Bionic companies which can be described by a combination of AI and humans to create superhuman capabilities. Leaving aside the attempts at meme-making from consulting companies, the sentiment itself is valid overall. Bionic companies blend new technology with human capabilities to transform operations, improve customer experiences and relationships, and develop new offers and businesses.
What this means is:
- The most digitally mature companies lead all other companies in value creation and have proved more resilient during the crisis.
- Despite early setbacks, their market caps have rebounded.
- Within six months, their valuations were, on average, 23% above pre-crisis levels, while the least digitally mature companies had managed just 7% growth, on average.
The findings come from BCGs annual Digital Acceleration Index (DAI) study, a global survey of about 2,300 companies across ten industries. The research identifies four accelerators that correspond to the ability of these companies to translate strategy into outcomes and market dominance.
Investing Significantly in Technology, Data, and Human Capabilities
Some more interesting data points for technology investment
- For three out of four bionic companies, digital initiatives account for more than 15% of their operating expenses.
- Of that, 30% is spent on increasing data quality and accessibility.
- Critically, these companies implement a unified data model to create a single source of truth across the enterprise.
- 35% of bionic companies can map more than 25% of their data to a unified data model, while only 16% of digital laggards can do the same.
- 59% had more than 20% of their employees in digital roles in 2020, and
- 55% plan to increase their digital workforce by more than 20% over the next three years.
Putting AI at the Core of the Digital Transformation
- They increased their investment in artificial intelligence (AI)
- Bionic companies increased their efforts to scale AI.
- Training employees in AI gave companies the biggest boost.
Establishing Governance and Adopting a Platform Operating Model
- Bionic companies assign ownership and accountability for digital initiatives.
- They have roles like head of digital (to create new value through digital) and chief data officer (to generate business value from data).
- The leaders who fill these roles, along with the CEO, are responsible for the company-wide digital strategy.
- Bionic companies facilitate cross-functional teams.
Connecting Technology and Human Capabilities
- They establish a culture (through leadership engagement and incentives) in which employees are expected to continually look for ways to integrate technology and data into their routine day-to-day responsibilities and tasks.0
- When this integration becomes a natural reflex, a company has a human-tech augmentation (HTA) capability. The idea of HTA has three evolutionary stages: manual work, automation, and optimization.
Link to BCG article HERE
Image source: Pixabay
