The Evolving

State of Digital
Transformation
Six Key Digital Transformation Trends Indicate Increasing Digital Maturity

90% 80% 75%

of companies list customer-facing initiatives of transformations intend to self-fund1 via of transformations are on the agenda of the
such as digital marketing among their top existing digital initiatives CEO/ExCo leadership throughout the initia-
business goals for transformation tive’s life cycle

70% 65% 35%

of transformations are sponsored by business of companies undergoing transformation of companies view digital technology as dis-
leadership rather than the CIO or CTO have a dedicated chief digital officer in place ruptive to their business model

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1
Includes partial self-funding.
We Surveyed 825 Leaders Experienced in Digital Transformation

Industry1 Region2 Digital maturity3

Industrial Financial
goods
18% institutions
15%
24% North 34% Europe
Tech, media,
America
and telco
15% Consumer 14% 22% 47% 31%

Healthcare 16% 10% 11% South 32% APAC Low Medium High
Energy
America

Insurance 6% Public sector 6%

Designation Headcount Organization type

3% 24% 35% 14% 24% 29% 30% 41% 42% 41% 37% 18%
Board CEO CDO/ CxO Other executive <5,000 5,000–10,000 >10,000 Publicly Private equity Privately State
member CIO position listed owned owned owned
(VP and above)

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825. Responses were collected from organizations with minimum total annual revenues of US $500 million, except for India (US $250 million). CDO = chief digital officer, CxO = other C-level executives.
1
Responses were collected at the subsector level and then aggregated as per BCG industry verticals.
2Responses were collected from APAC (Australia, China, India, Japan); Europe (France, Germany, Italy, UK); North America (Canada, US); and South America (Brazil).
3Maturity was determined by assessing the readiness level across aspects that included digital awareness, vision, leadership mindset, talent, ways of working, technology capabilities, and data strategy.
Around 90% of Companies Now List Customer-Facing Goals Among Their
Top Business Objectives for Digital Transformation

Digital transformation is increasingly focused on revenue generation and

getting closer to customers rather than the traditional focus on cost-cutting
Companies typically pursue
Percentage of respondents by focus of business goals in their transformation initiatives 1
focused, discrete goals over
end-to-end business
Driven by digital marketing
transformation

88
“We see a big change in the way
60 people connect to us, and that’s
46
entirely enabled through digital.”
16
—CIO of a Dutch electronics company
Digital marketing, Innovation and new Digitizing and End-to-end
customer centricity, business opportunities, automating business
personalization product enhancements operations transformation

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1
Respondents were asked to select the specific goals of their previous digital transformation.
Around 80% of Transformations Aim to Self-Fund1 Through Revenue
Generated or Costs Saved via Digital Initiatives

We see increased adoption of

self-funding over the past three years Identifying short-term, measurable
“lighthouse” initiatives that deliver

~50% ~80% rapid value is critical

2017 2020 “Ensuring that the transformation was at least partially

Gartner 2017 BCG Global self-funding helped us drive continued excitement and
CEO survey2 2020 survey3 support across the organization—all the way from the
board to the working team.”
Adoption of self-funding • Higher adoption (~85%) among younger companies —BCG case experience with a leading European bank
varies by sector and age • Lower adoption (~65%) in public sector
of company

Sources: 2017 Gartner CEO and Senior Business Executive Survey; BCG Global Digital Transformation Survey 2020 (April−June, 2020).
Note: N = 825.
1
Including partial self-funding.
2In 2017, 50% of CEOs reported the self-funding of digital transformations versus funding from existing budgets.
3Respondents were asked what the source of funding for their digital transformation was; multiple sources were allowed, indicating a combination of self-funding and other sources.
75% of Transformations Are on the Agenda of the CEO/ExCo Leadership
Throughout the Initiative’s Life Cycle1

How closely does senior management Who did transformation

monitor digital transformation efforts? (%)2 leaders report to? (%)3

Quarterly or
more frequently 71 Reports to CEO 62

Semiannually Reports to CDO,

to annually
25 CTO, or CIO
20

Annually or Reports to CFO, COO,

less frequently
4 CSO, or CMO3
18

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825. CDO = chief digital officer; CTO = chief technology officer; CIO = chief information officer; CSO = chief strategy officer; CMO = chief marketing officer.
1Respondents were asked if their digital transformation was on the agenda of the CEO/ExCo (executive committee) leadership throughout its life cycle.
2Respondents were asked how closely the digital transformation was monitored by the most senior leadership.
3Respondents were asked who the transformation leader reported to.
Over 70% of Transformations Are Sponsored by Business Leadership Rather
Than the CIO or CTO

The buying center should continue to shift as digital is increasingly embedded in the core business

Respondents, by main sponsors

of the digital transformation1
“When everyone talked about digital five to seven years ago, there was
a lot of skepticism around it. It was largely the CIO’s responsibility.
Now, everyone has woken up to the fact that digital is key, and CEOs
and business leaders are actively driving it.”

71%
Business leadership —CIO of a multinational financial services company
CIO/CTO

“I’m really proud of the fact that digital transformation has become an
end-to-end enterprise endeavor. Our board is very keen on it, our
executive team is very keen on it, and we’re really driving it as a group.”
Around 50% of transformations —CIO of a US- and UK-based energy distribution service
have the CEO as the main sponsor

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1Respondents were asked who the main sponsor of the transformation was.
65% of Companies Undergoing Digital Transformation Have a Dedicated
Chief Digital Officer in Place

Around 2/3 of companies with a recent or The CDO role is more prevalent among
ongoing transformation have a CDO role1 companies that are high in digital maturity2
Percentage of transformations with a CDO
in the organization, by digital maturity1
As per Gartner’s 2016 CIO survey, around
~10% 10% of companies in 2016 had a CDO role
High maturity 78

In contrast, about 65% of companies with a Medium maturity 68

~65% recent or ongoing digital transformation today
have a CDO in place1
Low maturity 30
Higher adoption of CDO role seen in emerging countries (>75%)

Sources: Gartner survey, “Building the Digital Platform: The 2016 CIO Agenda”; BCG Global Digital Transformation Survey 2020 (April−June, 2020).
Note: N = 825.
1Respondents were asked whether they have a CDO in the organization.
2Maturity was determined by assessing the readiness level across aspects that included digital awareness, vision, leadership mindset, talent and ways of working, technology capabilities, and data strategy.
35% of Companies View Digital Technology as Disruptive to Their
Business Model

Organizations increasingly recognize the potential of digital

Respondents who
view digital as disruptive1 to generate significant shifts in their business models and
value propositions

Disruptive
Digital technology has the potential to materially change our
current business model or enable us to add new business models.
35% Sustaining
Digital technology helps us pursue our current business model
more effectively.
Includes companies that either are not thinking through the potential of digital,
or are so far advanced that digital is already core to business model

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1
Respondents were asked if the company views digital technology as disruptive or sustaining to its business model.
The View of Digital Technology as Disruptive Varies by Industry and
Organization Type

55% of consumer companies view digital technology 43% of publicly listed companies view
as disruptive to their business model digital technology as disruptive
Percentage of respondents viewing digital as disruptive1 Percentage of respondents viewing digital as disruptive1

Consumer 55 57 72
Financial institutions 40 43 28
Industrial goods 40 Publicly listed (%) Not publicly listed (%) Disruptive

Health care 36 Sustaining

19% of state-owned companies see
Insurance 35 digital technology as disruptive
Percentage of respondents viewing digital as disruptive1
Energy 26

Tech, media, and telco 23 62

81
Public sector 18 38
19
State-owned (%) Not state-owned (%)
Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).
Note: N = 825.
1
Respondents were asked if the company views digital technology as disruptive or sustaining to its business model.
Urgency for Digital Transformation Has Increased in Light of COVID-19

>80% ~65% Initiatives around remote

working at scale, cybersecurity,
of respondents feel that of respondents anticipate digital commerce and
digital transformation has increased investments marketing, and automation are
become more urgent in digital transformation now higher priorities

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
While Digital Has Been a Top Priority for Several Years, 83% of Companies
Now Plan to Accelerate Their Digital Transformation Efforts

Percentage of respondents by views on the urgency of digital transformation in light of COVID-191

All industries 83 10 7

Consumer 87 8 5

Energy 85 1 14
Become more urgent
Industrial goods 84 7 9
No change
Health care 84 11 5 Become lower priority 84

Tech, media, and telco 82 8 10 82

Insurance 80 16 4

Financial institutions 79 18 3

Public sector 78 14 8

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1Respondents were asked if the COVID-19 pandemic affected the urgency of their organization’s overall digital strategy.
64% of Companies Expect Digital Transformation Funding to Increase,
but 90% Expect Higher Scrutiny or a Stricter Funding Policy

Percentage of respondents, by views on digital transformation funding post-crisis1

All industries 64 22 14

Consumer 75 18 7 90%
Industrial goods 73 14 13 Expect increased scrutiny along with a stricter
funding policy2
Tech, media, and telco 64 27 9

Health care 63 21 16
“Companies need to invest very wisely; business
Financial institutions 59 23 18
cases should be clearer than ever, with defined
Public sector 57 33 10 KPIs and targets.”

Energy 56 29 15 —CIO of a multinational financial services company

Insurance 51 24 25

Increased funding No change Decreased funding

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1Respondents were asked if they anticipated any change in the amount of funding for digital transformation in light of recent economic trends and events, in particular the COVID-19 pandemic.
2Respondents were asked if they anticipated increased scrutiny of funding for digital transformation In light of recent economic trends and events.
Due to COVID-19, Certain Initiatives Are More Urgent Across the Board

Ways of working Telecom: Remote visual assistance technology to Strengthening Technology: Acquired encryption service as part of a
(remote working, allow technicians to work remotely cybersecurity 90-day push to fix security flaws
digitally enabled Industrial Goods: VR-powered studio for design and and technology Insurance: Blockchain technology to enable and
working) R&D teams to collaborate virtually accelerate back-end processes such as data
verification

Digital marketing Banking: Enabling services through WhatsApp to allow Automation Consumer: Virtual assistant and chatbot to manage
and commerce customers to bank from their homes (operations and spike in online shopping
Consumer: Grocery stores allowing customers to book supply chain) Health Care: 5G-powered robots to reduce strain on
check-in slots and wait in a virtual queue using an app human personnel
Automotive: End-to-end digital showroom experience Energy: Semiautomation of battery plants to reduce
enabling consumers to view models, customize vehicles, worker involvement
make payments, and get the vehicles delivered

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1Respondents were asked if digital initiatives were now likely to become of higher or lower priority in response to the COVID-19 crisis.
The Most Common Business Goals Prioritized Due to COVID-19 Are the
Acceleration of Digital Commerce, Digital Marketing, and Automation

Top-priority initiatives by industry1

Consumer Accelerating digital commerce Digital marketing Automation

Industrial goods Innovation Accelerating digital commerce Digital marketing

Energy Accelerating digital commerce Digital marketing Innovation

Tech, media, and telco Accelerating digital commerce Customer centricity Automation

Financial institutions Automation Digital marketing Accelerating digital commerce

Insurance Automation Product enhancement Accelerating digital commerce

Health care Accelerating digital commerce Automation Digital marketing

Public sector End- to- end transformation Accelerating digital commerce Automation

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1Respondents were asked if digital initiatives are now likely to become a higher or lower priority in response to the COVID-19 pandemic.
The Most Common Capability Development Initiatives Prioritized Due to
COVID-19 Include Remote Working at Scale and Cybersecurity

Top-priority initiatives by industry1

Workforce centralization/
Consumer Remote working at scale Cybersecurity
decentralization
Upgrading IT infrastructure and the
Industrial goods Remote working at scale Cybersecurity
tech platform

Energy Remote working at scale Implementing AI at scale Cybersecurity

Upgrading IT infrastructure
Tech, media, and telco Remote working at scale Cybersecurity
and the tech platform

Financial institutions Remote working at scale Cybersecurity Implementing AI at scale

Upgrading IT infrastructure and the Workforce centralization/

Insurance tech platform decentralization
Cybersecurity

Workforce centralization/
Health care Remote working at scale
decentralization
Cybersecurity

Workforce centralization/
Public sector Cybersecurity
decentralization
Setting up digital hubs

Source: BCG Global Digital Transformation Survey 2020 (April−June, 2020).

Note: N = 825.
1Respondents were asked if digital initiatives are now likely to become a higher or lower priority in response to the COVID-19 pandemic.
COVID-19 Disclaimer

The situation surrounding COVID-19 is dynamic and rapidly evolving, on a daily basis.
Although we have taken great care prior to producing this presentation, it represents
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endorsement or recommendation of a particular response. As such, you are advised to
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presentation as guidance. Please carefully consider local laws and guidance in your area,
particularly the most recent advice issued by your local (and national) health authorities,
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