With the massive shift to digital resulting from COVID-19, video and live chat have emerged as predominant channels for interacting and closing sales with B2B … Never miss an insight. These are additional signs digital sales are here to stay. When held off to the side, digital strategies often splinter into smaller initiatives that are too diffuse to gain momentum and too limited in scope to make a material difference. Press enter to select and open the results on a new page. He is a leader of McKinsey Digital Labs’ work in … For suppliers, this evolution of interaction preferences is an opportunity to transform the customer experience, improve satisfaction, prevent churn, and reduce the cost to serve (Exhibit 4). More effective targeting insights helped the company increase sales by 8 percent. BP describes the technology as similar to the Shazam mobile phone application that identifies songs. In our 2016 survey, the rate of success was 20 percent; in 2014, 26 percent; a… Where will (or could) it come from in the future? The pandemic has accelerated digital adoption across industries, resulting in technology service providers witnessing a sharp growth in digital deals. “BP recently created BP Launchpad as a business incubator,” AZERNEWS, May 10, 2019, azernews.az. our use of cookies, and In this archetype, companies use their understanding of the industry to develop new ventures, disrupt their own existing business models, and unlock new revenue streams, typically using a stage-gate financing approach. Rather than biting off a slew of digital improvements at once, B2B companies often get faster results by starting with small wins to build conviction and momentum—concentrating on areas where they have existing capabilities, clear objectives and strong leadership backing. The start-ups are given the independence they need to pursue promising opportunities in an agile, flexible fashion and to enlist top talent. On average, across cultural DQ measures, B2B companies … Inward-facing processes, limited transparency, confusion about roles, and a lack of prioritization from executive leadership are common. While such platforms bring substantial relevant reach, they can also cannibalize sales that come through other, potentially more profitable channels. Artificial Intelligence(AI) has three main components that will show its impact on the B2B digital transformation. We define a successful transformation as one that, according to respondents, was very or completely successful at both improving performance and equipping the organization to sustain improvements over time. As is the case at many companies, … Transforming B2B organizations to improve digital experience Any customer-experience program should start with an inventory of customer needs, a leadership commitment to governance, and a grouping of … According to our survey, “slow response time” is the issue that frustrates them most in their interactions with suppliers (named by 40 percent of all participants, ahead of “pricing issues,” named by 19 percent). In parallel, B2B players then need to be thoughtful about identifying and augmenting those capabilities that are critical to achieving scale. For instance, Chris guided a large bank through a digital and agile at-scale transformation, has led the DevOps for a number of leading banks in Europe, and helped build a new digital business for a flower distribution company by reinventing how flowers and plants are sold B2B using a digital … Published work “Radically rethink your strategy: How digital B2B ecosystems can help traditional manufacturers create and protect value,” McKinsey & Company, August 2019 “How to make sure your digital transformation succeeds,” McKinsey & Company, August 2017 Digital @ Scale: The Playbook You Need to Transform Your Company, John Wiley & Sons, June 2017. We'll email you when new articles are published on this topic. By contrast, top-performing B2B companies are using advanced analytics to improve their insights-generation capabilities and deploying tools that help marketing and sales understand what offers, content, and services will hit the right notes with key segments. 3. With over 15 years of experience delivering digital transformation programs, Chris is an ardent believer in the power of innovative technology to change how companies do business. But that level of success requires close coordination from front office to back, and while many B2B companies have done a good job automating the back office, they fall short when it comes to connecting those processes to the front end. These are McKinsey & Company’s ‘Four Ds’ of digital transformation outlined in a new report. Please use UP and DOWN arrow keys to review autocomplete results. Most transformations fail. The modern seller is a problem solver for their customers and may only ever engage with them in a digital only environment. 40% of all technology spending will go toward digital transformation, with enterprises spending in excess of $2 trillion in 2019. The DQ scores for organizational maturity reflected these challenges. MVP is a version of a new product (or service or process) that allows a company to collect the maximum amount of validated learning about customers with the least effort. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. We interviewed thousands of patients from different age groups, countries, genders, and incomes; respondents had varying levels of digital savvy. At the Netherlands-based bank ING, for instance, corporate clients have a single point of access to real-time account overviews, customized reporting, and the ability to execute payment and hedging transactions wherever they are in the world.4 [ Get answers to key digital transformation questions and lessons from top CIOs: ... For example, Zemmel says that McKinsey’s data shows that B2B remote selling is working: “It’s easier to schedule, more efficient than in-person, [and leads to] faster buying behavior.” No one expects in-person selling to go away, but it may be a smaller part of the mix than before. Others are using rapid prototype development and minimally viable products (MVPs) to transform speed-to-market. GE also went on an ambitious hiring spree, bringing in thousands of new software engineers, user-experience experts, and data scientists to acquire needed skillsets and embed the right innovation mind-set.1 Any process change creates a ripple effect across the wider organization, and particularly the commercial organization. Top-performing digital companies are also willing to dust off their metrics and think strategically about what types of measures and incentives will engender the outcomes they want. Article From “wartime” to “peacetime”: Five stages for healthcare institutions in the battle against COVID-19. The components include machine learning as a service (MLaaS), open data, and embedded intelligence. Of all archetypes, this one is most removed from a company’s existing operations. The pandemic has accelerated digital adoption across industries, resulting in technology service providers witnessing a sharp growth in digital deals. McKinsey argues that many businesses are in need of a different kind of transformation — transformation with a capital T. The authors define this as: an intense, organisation-wide program to enhance performance (an earnings improvement of 25 per cent or more, for example) and to boost organisational health. That can ramp up the cultural changes needed and lay the groundwork for broader, deeper improvement. New, highly agile, digitally native firms are entering the market and could sig-nificantly disrupt existing business models. Ping An annual reports and investor resources; McKinsey research. Drawing from online surveys of 229 U.S.-based B2B decision makers in a range of industries, including manufacturing, financial services, health care, and telecommunications, in companies having at least $25 million in revenue, The 2019 FPX Digital Transformation Study confirms this trend. 3. We mentioned at the very start of this article that, whilst digital transformation was already on the minds of B2B business leaders, the events of 2020 forced the hand of many brands to start the digital transformation … It ’s merely a necessary action that mid-size and big companies should undertake to stay competitive. Research by McKinsey reveals 7 out of 10 B2B decision-makers will consider making fully self-serve or remote purchases of $50,000 and up. Consider your own experiences as a buyer, consumer, and shopper. McKinsey & Company estimates that B2B digital leaders see five times more revenue growth than those not focused on digital transformation strategies. At the majority of the B2B companies we studied, organizational challenges can blunt the reach and effectiveness of digital initiatives. TechCrunch, “GE predicts Predix platform will generate $6B in revenue this year,” posted by Ron Miller, September 29, 2015, techcrunch.com. Electricians rate the supplier 4.9 out of 5 on Trustpilot. They conceived, tested, and built the new model in less than 12 weeks. Digital Transformation may be a trending topic today, but the concept of digitizing business processes, products, and services was introduced way back in the early 90s and the 2000s. B2B buyers who interact with multiple channels, such as field sales, online web stores, and so on, spend more than those who only purchase from a single channel. CDOs report to the CEO of the business unit (who in turn reports to the CEO of GE Digital) and have final say on platform investments. That lack of integration can lead to multiple customer handoffs between functions, long turnaround times for quotes, missed delivery dates, and a proliferation of unnecessary technologies, applications, and data. Blockchain technologies come with a wide range of potentials for industries. The company now controls almost the entire value chain (except for on-site installation), from product design to distribution to licensed electricians. Some, like Merck, have invested in innovation hubs centered near research and entrepreneurial hotspots to unearth promising research and to forge licensing or partnership arrangements. But even though the average B2B customer now uses six different channels over the course of their decision-making journey, many B2B companies struggle with disjointed selling models that make it hard for customers to move smoothly from face-to-face interactions to the online environment (see “Do you really understand how your business customers buy?”). According to a study, digital transformation … Our research … Drawing from online surveys of 229 U.S.-based B2B decision makers in a range of industries, including manufacturing, financial services, health care, and telecommunications, in companies having at least $25 million in revenue, The 2019 FPX Digital Transformation Study confirms this trend. Knowing it needed to make significant changes to compete as a modern digital business, for example, GE made an audacious move, investing more than $1 billion to create a new market around the Industrial Internet. 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