BCG’s research reveals six key success factors and the steps companies need to take to drive innovation, gain competitive advantage, and build for the future.
The following insights are part of BCG’s Build for the Future series, based on three years of research conducted on digital transformations at major organizations around the world.
To succeed in today’s demanding business environment, companies need an agile and resilient operating model—one that supports their digital initiatives, eliminates duplication, bolsters results, and allows them to recover quickly from a crisis. Yet, BCG’s new Build for the Future (BFF) survey finds that legacy incumbents are typically struggling with siloed data, noninteroperable IT systems, and legacy infrastructure. They lack frontline decision-making ability. And they are resistant to change. These and other challenges block the path to success.
Perhaps unsurprisingly, executives in a separate survey point to digital capabilities as the top transformation priority. And many businesses have already deployed numerous—and often duplicate—small-scale digital initiatives. Others have implemented large-scale and effective projects, but the resulting capabilities are underused. Our BFF survey reveals how leading companies have succeeded. (See “Build for the Future”.)
Build for the Future
BCG has been researching the success of digital transformations—and the reasons for those successes—for the past three years. In the latest phase of our study, we undertook a systematic and forensic analysis of more than a hundred BCG-supported digital transformations and supplemented this analysis with external research involving 725 executives at companies that have undertaken digital transformations. The combined data set covers all geographic regions, industry sectors, and types of digital transformation.
Our latest survey asked all participants about:
From this research, we identified the path that companies must take to become built for the future. We’ve reconciled the challenge of what these companies need to do (identifying which initiatives drive the most value by sector) with the challenge of how to do it (determining which capabilities drive success and how to build them fast). CEOs can tailor this new playbook to their company-specific change agendas. Learn more about our Build for the Future campaignhere .
Our latest survey asked all participants about:
- Five areas that are fundamental to success
- The emphasis of transformation efforts
- How successful transformation efforts have been
- The degree to which each of more than 50 potential influencing capabilities were in place
From this research, we identified the path that companies must take to become built for the future. We’ve reconciled the challenge of what these companies need to do (identifying which initiatives drive the most value by sector) with the challenge of how to do it (determining which capabilities drive success and how to build them fast). CEOs can tailor this new playbook to their company-specific change agendas. Learn more about our Build for the Future campaign
At a Glance
The most successful companies in our survey are outperforming the competition and thriving in the current business environment. Of these “future-built” companies, 100% have implemented an agile and resilient operating model. They have done so by excelling in every constituent capability, including agile ways of working, rapid scalability, and optimized talent and skill design. Ten times the percentage of future-built companies, for example, have a high agility score than the percentage of companies we classify as stagnating. Why? Because their decentralized, multidisciplinary, agile teams own and run what they build. (See the slideshow.)
By the Numbers
The benefits of an agile and resilient operating model include recovery from crises more than two times faster than that of stagnating companies. (See exhibit.)
The Platform Operating Model
One way to ensure agility and resilience is to adopt a platform operating model (POM). The POM is a way of organizing and working that brings together funding, people, and assets to create “platforms” that deliver shared products and services across the enterprise. POM eliminates duplication, silos, and substandard capabilities, supporting the creation of customer value more quickly, cheaply, and at scale than a traditional model.
There are two potential paths to developing a successful POM. A business can begin from the bottom up, first building a single “no-regrets” platform that allows it to generate value quickly—testing and learning from its efforts in a specific area. This platform should focus on capabilities that are shareable across the enterprise, strategically valuable, likely to be widely adopted, and unarguably part of the company’s future blueprint. After a successful pilot, the business can move on to designing a full blueprint for the transformation.
Learn More
Learn More
Alternatively, a business can begin top-down, designing a full blueprint for its target-state platforms across the organization. This would typically include such steps as creating a baseline from the current operating model, confirming which business units and platforms will be included, developing a roadmap for implementation, and then designing and building the platforms in waves—such as function by function or division by division.
Supporting Business Ambitions with the Right Technology
Here’s an example of how one company successfully deployed a platform operating model: A large North American regional bank found that its fragmented and complex legacy infrastructure was making customer and employee experiences frustrating and inefficient. Maintaining so many legacy applications was also costly, leaving limited resources available to invest in new capabilities and business growth. And the bank lacked the talent to address these issues, in part because much of the IT work was outsourced, leaving a lack of internal applications and product knowledge.
The bank responded by designing and implementing a POM with agile cross-functional teams made up of developers, security specialists, and operations personnel. It filled its talent gap by recruiting and training advanced engineering personnel, and it remedied the lack of internal applications by equipping an API-enabled platform-as-a-service, which uses cloud infrastructure. The bank was then able to scale the effort quickly by implementing a program of reusing approved services. Within nine months of intervention, the bank had already seen substantial impact, including up to 40% reduction in delivery times for its products and services and the hiring and upskilling of 100 engineers. It further expects a 10% to 15% reduction in running costs—freeing up budget to deploy to more digital capabilities.
Organizations must contend with a rapidly changing market environment. Building an agile and resilient operating model through POM is one way to capture enterprise-wide value from technology investments, stay ahead on growth while withstanding disruptive external pressures, and better attract, retain, develop, and leverage talent.
Featured Insights: BCG’s most inspiring thought leadership on issues shaping the future of business and society.
ABOUT BOSTON CONSULTING GROUP
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.
Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.
© Boston Consulting Group 2024. All rights reserved.
For information or permission to reprint, please contact BCG at permissions@bcg.com. To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com. Follow Boston Consulting Group on Facebook and X (formerly Twitter).
Contact Our Experts
BCG’s latest research reveals that only about half of the companies that claim high agile maturity have actually achieved their transformation goals and can point to real business impact.
Implementing agile ways of working is relatively easy. Transforming the organization to ensure that agility takes hold is hard. Here’s how to do it.
Rather than attempting once again to optimize the matrix, companies are looking for new organizational solutions.
Amid growing complexity, many companies act in ways that increase their “complicatedness.” Instead, they should simplify, using an approach that fundamentally changes employee behaviors.
BCG’s latest research reveals that only about half of the companies that claim high agile maturity have actually achieved their transformation goals and can point to real business impact.
Implementing agile ways of working and fractal organization principles can help companies build the resilience to succeed in uncertain times.
Digital disruption is rendering traditional video distribution models obsolete. Companies that do not transform their IT will soon find themselves struggling to compete.
Automation and artificial intelligence can help farsighted companies save money, create killer content, and delight audiences.
The coronavirus renders collocation impossible but not agile ways of working.
Rather than attempting once again to optimize the matrix, companies are looking for new organizational solutions.
Rather than attempting once again to optimize the matrix, companies are looking for new organizational solutions.
With generative AI, global business services units such as HR and legal have a unique opportunity to outgrow the standard transactional focus and deliver real value to the organization.
Leaders at federal, state, and local levels can overcome government’s unique obstacles and reap the benefits of achieving their shared-services objectives.
Organizations can improve their agility and efficiency by making it clear which stakeholders own, veto, influence, and support crucial decisions.
BCG’s latest research reveals that only about half of the companies that claim high agile maturity have actually achieved their transformation goals and can point to real business impact.
Too often, IT projects fail to live up to their hype. Why does it keep happening—and how can it be fixed?
For many companies, data governance is already a pain point, the work too manual and tedious. Generative AI increases the burden but, smartly applied, can reduce it instead.
Rather than attempting once again to optimize the matrix, companies are looking for new organizational solutions.
BCG research reveals what sets a select group of leaders apart. Here's how to join them.
Leaders needn’t wait for a crisis. A playbook exists for building an always-on, disciplined approach to cost excellence.
Rethinking organization design does more than eliminate unnecessary expenses. It aligns decisions and resources with strategic goals, and promotes sustained performance.
Having an emotionally strong workforce makes it likelier that organization-wide changes will succeed. Cultivating it means helping people fulfill four fundamental human needs.
Tackling causes not symptoms: A Whole of Government approach to complex health challenges.
BCG’s latest global employer survey reveals that finding and keeping employees are among the top reasons that organizations are supporting new workforce initiatives.
Companies committed to becoming sustainable find that it can be a struggle to marshal their organization and people behind that goal.
Digital platforms are fast and efficient—but development often goes wrong. By avoiding the traps that hinder platform development, companies can improve performance and innovation.
What’s Next
Build for the Future
BCG’s research reveals six key success factors and the steps companies need to take to drive innovation, gain competitive advantage, and build for the future.
Slideshow
Designing Factories That Are Built for the Future
Advanced manufacturers lead their peers across six key attributes, particularly in embedding AI into their operations. This is the factory of the future.
Article
Advanced Logistics in the Factory of the Future
Higher levels of automation and flexibility help manufacturers offset labor shortages while boosting service and safety.
Slideshow
Building the Supply Chain of the Future
Companies that transform their supply chain for digitization, resilience, and sustainability while optimizing costs will create a powerful source of innovation and competitive advantage.
1 /
4