While most companies have been slow to embrace consumer technologies, leading firms are bucking that trend by leveraging tools such as social media and the cloud to stay ahead of their competitors and get deeper insights into their customers. This according to the fourth annual Digital IQ survey, released today by PwC US.
Top-performing U.S. organizations show greater mastery in how they leverage digital technologies by offering mobile tools for customers, measuring data through social media, mobilizing applications to the public cloud and the innovative use of business intelligence.
Top performing companies are defined as those rated in the highest quartile for annual revenue, growth, profitability and innovation as well as revenue growth of more than five percent in the last 12 months. PwC defines a company’s digital IQ as a measure of how well companies understand the value of technology and weave it into the fabric of their organization.
“Raising a firm’s digital IQ means improving the way it leverages digital technologies and channels to meet customer needs,” said John Sviokla, principal at PwC, in a statement. “The core of the ecosystem for innovation has moved from inside the firm to out in the marketplace. Customer and employee expectations are being shaped by this new, dynamic and exciting environment — if you miss this trend you will be increasingly irrelevant to the market.”
The CIO plays a critical role in the planning process for increasing a company’s digital IQ. According to the report, CIO’s must be excellent at managing the internal factory, but also excel at mobilizing new plans into action. A high digital IQ requires the CIO to find better ways to sift through and drive insight from the increasing torrent of data streaming from every manner of device and interaction, and to create a platform that can deliver these capabilities across a varied set of changing mobile devices.
According to the survey, 63 percent of respondents revealed their greatest challenge is the inability to gather, understand and act on customer data. Fifty-eight percent cite an inability to quickly understand and adopt new information technologies needed to be competitive.
Survey results point to four technology-related truths of the digital enterprise that organizations can build upon to increase their digital IQ:
Everyone is now a mobile consumer – Executives must recognize that the expectations of employees and customers are largely affected by consumer-driven technologies. Employees want the tools they use for work to be as good as those they use in their personal lives, and customers expect to interact with firms on the platform and device of their choice.
The survey shows that while many firms are focused on developing better mobile tools for their workers, they are under-investing in solutions for their customers: Only 45 percent of all respondents say they interact with customers significantly using mobile channels, and less than one-third are currently investing in mobile technologies for customers.
Social media is a critical data source – Social media creates a channel to engage clients and build loyalty. The real value is its ability to add a new dimension to the entire product lifecycle and create more regular interaction across the lifespan of a product or service. This information can be instrumental in wringing greater value out of existing products while providing invaluable insight as new products are developed.
Despite this, most companies have yet to embrace the benefits these tools can provide: Among the total pool of survey respondents, only 37 percent have invested in social media tools to reach customers. Industries who have invested more significantly on engagement customer through social media include the retail and consumer sector (51 percent) and the industrial product sector (50 percent).
Moving business applications to the public cloud can make your organization more competitive – The development of the cloud is arguably the strongest driver of the consumerization of IT. Cloud computing not only allows consumers to access information on the Internet, it also empowers them to solve complex problems, organize events on the fly, and perform hundreds of complicated tasks — all from their mobile phones.
In an age of outsourcing, the cloud increasingly is an important consideration. This is perhaps the reason why investment in public cloud applications is on the rise. Among respondents that identify their organizations as top performers, 30 percent are investing in public cloud applications and 87 percent expect that investment to increase in 2012. Private cloud investments still outweigh the public realm, however, suggesting that companies are embracing a hybrid approach is a positive step toward raising the organization’s digital IQ.
You can gain greater insight from business data by working from the outside in – The wealth of information created outside the organization is quickly outpacing that of the corporate world. As a result, executives must think more broadly about how to use external data to provide critical insight into operations, product development and customer strategies.
Top performing companies report investing more to manage their data than organizations whose performance does not stand out. Out of all the companies surveyed, 55 percent say they will be investing more in the coming year to collect customer data and 43 percent say they will invest more to measure operational performance.
The Digital IQ findings call for business leaders and, in particular, today’s CIOs, to lead their organizations to change and innovate from the inside out. The report findings suggest that excellence in IT has not been commoditized and is still differentiating as a competitive advantage. Indeed, IT-enabled, multi-channel connections with customers can make a marked difference to business results. But to succeed, today’s CIOs (and the C-suite more broadly) must excel at not just managing internally, but also mobilizing new plans into action.
As with PwC’s previous Digital IQ studies, the results confirmed that top-performing companies not only put IT at the heart of their strategies they ensure that senior management actively helps to drive the mobilization and execution of those plans.
“Consumerization of IT is on the rise, and in the survey we continue to see a need to serve the mobile customer, move to cloud services and use data more effectively,” said Chris Curran, principal at PwC, in a statement. “Organizations that have an integrated strategy, which includes technology, seem to perform better.”
About the survey
The 4th annual Digital IQ survey was conducted by PwC and included responses from roughly 500 U.S. companies with annual revenues of more than $500 million (with an emphasis on those with $1 billion or more in revenue). Half of the respondents were business executives. The other half, were IT executives. The survey covered a number of industries, including financial services, insurance, healthcare, retail and technology, among others.