Originally published in CIO Magazine on September 21, 2016. Below is an excerpt from the article, written by Clint Boulton, Senior Writer at CIO.
Consultants like to warn CIOs that if they don’t embrace modern technologies to meet customer demands that they will be left in the dust by more nimble rivals. Such sky-is-falling proclamations have been taken lightly because they’ve been difficult to back up. However, new research from Harvard Business School (HBS) professor Marco Iansiti and Keystone Strategy suggests that a divide is forming between organizations that have accelerated their digital transformations and those that are still figuring out a working digital model.
Digital leaders, defined in the report as companies that landed in the top quarter of its research, generate better gross margins as well as better earnings and net income than organizations in the bottom digital quarter. Leaders post a three-year average gross margin of 55 percent, compared to just 37 percent for the laggards. Leaders also outstrip laggards in three-year average earnings 16 percent to 11 percent. And in three-year average net income, leaders have the advantage 11 percent to seven percent.
“It’s a pretty substantial gap and it correlates with performance in significance ways,” says Iansiti, a professor of business administration at HBS, who collected his research from more than 300 senior business and technology decision makers from large enterprises. “The bad news is that it’s not going to go away so this is a call to action to go out there and do something about this.”
Read the entire article in CIO Magazine here.