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The Digital Capabilities Your Company Needs

October 29, 2012 | George Westerman, Didier Bonnet, Andrew McAfee | Managing Technology

Every CEO knows about the success of digital upstarts like Apple, Amazon, Facebook and Google. But most companies are not digital; they are traditional companies with traditional products. The success of the Apples and Facebooks of the world might thus seem meaningless for them. In fact, all companies can achieve digital transformation and need to think about how new technologies could change their businesses.

MIT's Center for Digital Business and Capgemini Consulting interviewed executives at 50 large, traditional companies. They found four digital capabilities playing a transformative role in these companies.

The foundation of digital transformation comes from a unified digital platform "Òcompanies need to integrate their data and processes. Creating this platform may require significant effort and investment, but without it, transformation is unlikely.

Secondly, companies must revamp solution delivery — how to rapidly update internal processes to take advantage of new technologies. This can't always be done within IT; technologies like analytics, for instance, require skills that often aren't in IT departments. Companies either need to hire outside help or set up special groups in IT to get this done.

Analytics capabilities are the third important digital capability a company needs. Developing them requires a multi-pronged effort: Companies need to invest in new kinds of technology but also in analytics skills and corporate culture.

Finally, weak connections between the executives who run business units and IT will hamper efforts to gain transformative effects from technologies. When those relationships are strong, it gets much easier to navigate the complex waters of digital transformation.

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