McKinsey Digital performed an annual strategy survey which reveals how technology investments are proving their worth, that the COVID-19 challenges of 2020 and 2021 actual created new opportunities and helped drive technology transformation. Companies with top-performing IT organizations have taken advantage and differentiated themselves from others in their efforts to create value, adopt new technologies, and bring technology and business closer together. The survey resulted in "The Seven Lessons".
The Seven Lessons (a brief review)
Lesson #1: Technology investments are creating significant business value
More than three-quarters of the initiatives their companies pursued have yielded some or significant cost reductions and improvements to employee experience. Two-thirds surveyed indicate these initiatives/efforts have increased existing revenue streams and and more than half cite the creation of new revenue streams.
Lesson #2: People-focused plays result in the most value
Across ten transformation initiatives, respondents say that changes to their companies’ people and talent strategies are among the highest value moves to make. Changing practices to attract, retain, and upskill talent with digital and engineering skills—respondents report the greatest impact on all four measures of business impact vs. respondents whose companies saw no or negative value across these measures say they were least likely to pursue talent transformations or the scaling of their data and analytics capabilities.
Lesson#3: Talent remains the holy grail of technology transformations— valuable to pursue but difficult
to execute.
Talent strategy is more commonplace at top-performing companies. Despite the high value potential, people-focused initiatives have not been adequately pursued by lower performing companies. At companies that have
pursued recent transformations, the top challenges to doing so continue to revolve around talent, skills gap, etc. Finding talent appears to impede progress at the companies that haven’t pursued technology transformations; 42 percent of respondents say they have stuck with the status quo because it’s difficult to source the talent they need.
Lesson #4: The talent challenge has clear implications for sourcing
Addressing skill gaps has clearly arisen as a top concern regardless of whether a company has already been through technology transformation or not. Most respondents say their companies have engaged partners in a range of talent sourcing models, from traditional time-and materials to managed services and joint ventures which may be responsible for the displacing existing talent who could otherwise be upskilled.
Lesson #5: No silver bullets—the top performers execute more transformation plays than others
On average top performing companies have run five out of ten transformation initiatives in recent years, versus
three initiatives at the bottom-quartile companies. For example, companies that work on scaling their agile-development capabilities often invest in hiring new talent—and accelerating their cloud or automation strategies to enable continuous integration/continuous delivery (CI/CD) and DevOps—in parallel. However the report did not emphasize the training and certification of existing talent.
Lesson #6: The broader use of advanced technologies supports greater value creation
Top-performing respondents report using a larger suite of solutions to help drive costs down.
Lesson #7: Bridging the business technology chasm is critical to outperformance
Beyond their focus on talent, deployment of new technologies, and a broad transformation agenda, the top performers also follow several practices that foster a stronger partnership between technology and the business (Exhibit 5). At top-performing IT organizations, 57 percent of respondents say their senior leaders are very involved in strategic planning, versus 17 percent in the bottom quartile.
Download the complete McKinsey Digital Report here
