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Designing the Machines That Will Design Strategy
« No matter how advanced technology is, it needs human partners to enhance competitive advantage. It must be embedded in what we call the integrated strategy machine. »
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Amazon represents the state-of-the-art in deploying an integrated strategy machine. It has at least 21 data science systems, which include several supply chain optimization systems, an inventory forecasting system, a sales forecasting system, a profit optimization system, a recommendation engine, and many others.
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« “Within the next five years, how will technology change the practice of management in a way we have not yet witnessed?” »
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We know, for example, that the success rate of M&A deals is no better than a coin toss, and one study suggests that 83% of such deals fail to achieve their original goals.
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IBM, for example, has begun to use an algorithm rather than human judgment to identify and qualify acquisition targets.
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. McKinsey has invested heavily in a series of companies and software capabilities it calls “McKinsey Solutions,” many of which depend on analytics and the semi-automated generation of insights
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Digital in industry: From buzzword to value creation
« In the past few years, we have seen digitization bring its first benefits to the industrial sector, particularly in processing and manufacturing, yet enormous untapped potential remains. Digital capabilities such as e-commerce platforms can significantly improve traditional customer-supplier experiences. Additional advances in automation, big data and analytics, and the Internet of Things create additional opportunities for substantial gains along the entire industry value chain. »
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Where customer access was once constrained by minimum order sizes and the cost to serve in a particular market, e-commerce and web shops allow companies to reach customers they could never have reached before; hence cost to serve can be cut by 50 to 70 percent
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Suppliers who once relied on subjective analysis and historical knowledge to determine prices can now use faster, data-driven tools to optimize pricing.
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Sales directors can make smarter resource-allocation decisions based on timely inputs from sales reps, individual performance data, and automated recommendations from tools.
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But digital is not only a means to optimize a company’s existing operations. It also gives both attackers and incumbents the power to disrupt value chains, enter new sectors, and create innovative business models.
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Moreover, the McKinsey Industry 4.0 survey of more than 300 manufacturing experts in Germany, Japan, and the United States from January 2016 shows that only 16 percent of manufacturers have an overall Industry 4.0 strategy in place, and just 24 percent have assigned clear responsibilities to implement it.
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Prioritize and scale up. Use structural assessments to determine the customer appetite versus willingness to pay by using mockups to conduct interviews with potential customers and external experts.
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Adopt a test-and-learn approach. As technology-driven change accelerates, forecasting and planning are becoming less relevant and reliable.
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Put foundations in place. To maintain the efficiency and stability of existing operations while providing the processing capacity and speed required by new data-driven activities, smart companies move to a two-speed IT infrastructure—overlaying a fast, next- generation cloud-based IT system on their secure, robust, resilient legacy systems.
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Treat data as a competitive advantage. Data fuels the algorithms that provide insights into markets, customers, and business processes, so ensure that data management has a clear structure and governance.
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Work across functions, and manage change in the organization. Digitization requires that all departments work together to capture joint benefits for the whole business.
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When thinking about digital priorities, identify the technologies and applications that would have the greatest potential impact.
Découvrez le livre que nous avons co-écrit avec 7 autres experts avec pleins de retours d'expérience pour aider managers et dirigeants