Banks and insurance companies are investing heavily in big data analytics, mobile payments, and electronic trading and e-commerce systems, to digitise virtually every aspect of retail banking.
The sector is ahead of the computer, telecommunications, and retail industries in the take-up of digital technology, the Booz digitalisation index reveals.
The gulf between digitised business, such as financial services and businesses that have yet to embrace digital technology is accelerating, the management consulting firm warns.
Even companies in traditional sectors such as hospitality and construction are unlikely to survive in the long term if they fail to embrace digital technology, it claims.
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“The problem is you have managers who grew up in an analogue world who don’t see the full power of digital technologies. They don’t see that they need to address it strategically,” said Roman Friedrich, partner at Booz&Co.
A traditional business, like field maintenance, can improve its efficiency by a factor of 2, by issuing engineers with mobile devices that can tap in directly to the company’s ERP system, Booz suggests.
As a result, leading businesses are appointing Chief Digitisation Officers at board level, to ensure their companies reap the benefits of digitisation.
Protector and Gamble, for example has made it a corporate goal to become the number one digital player in its sector.
“They have put their customer interaction on a digital platform, but that is not enough,” says Friedrich. “Everyone is talking about social media, e-commerce and digital marketing.”
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CIO’s are in a strong position to champion digitisation in many organsations, he suggests.
“The CIO has the potential to act as a chief digitisation officer. But he has to understand he has to do more than support the business, he has to see the potential for new business models.”
Friedrich advises CIOs to conduct a digital audit, to understand how their businesses rate against their competitors.
The research predicts a bleak future for businesses that ignore digital technology.
“The music industry was focusing on physical products when the first digital recordings came out. The model broke and it took them two years to reposition themselves. It was a disaster for the whole industry,” he said.