Why Commercial Operations was a focus in 2021 digital transformation strategies
In our most recent market survey data report, the 2021 State of Commercial Operations transformation, we surveyed business decision-makers in North America, Europe, and Australia to take a pulse on their approach to digital transformation strategy in general and Commercial Operations transformation in particular.
We’ve brought these findings to you in our 2021 survey report: State of Commercial Operations transformation.
We think some of the results will surprise you.
Considering digital transformation strategies in 2021
Today’s market landscape presents new challenges and keeping up with the competition is more critical than ever. Companies can’t rest on their laurels and continue with business as usual, but instead have to constantly adapt and rethink their approach in order to stay ahead of the pack.
Technology is constantly evolving, and it isn’t news that technology innovation plays a huge role in this process. Companies that are able to successfully implement technology solutions to adapt to market changes and customer needs have a competitive advantage.
But digital transformation (DX) requires much more than simply applying technology to a business process or problem. It involves business model transformation as well, or really rethinking how business gets done, and innovating processes and strategies in a way that takes advantage of and builds on technological change. Whether companies are successful in their digital transformation initiatives often has to do with how ready they are to digitally transform, or how digitally mature they are.
Benchmarking the digital transformation journey
Companies today understand that digital transformation is an essential element of their core business strategy. In fact, 99% of global companies surveyed had a digital transformation strategy in place going into 2021. This represents an increase from our 2019 inaugural data, when 97% of companies had such a strategy.
As might be expected, the acceleration of digital transformation strategies is due in part to the COVID-19 pandemic, which prompted an increase in digital approaches to all elements of business. Our data shows that 73% of those surveyed report that the pandemic has accelerated their DX strategy.
While nearly every company recognizes the need for a formal approach to digital transformation, and current market conditions are accelerating this trend even more, it remains difficult to execute effectively on DX strategies.
Only 50% of companies report that their digital transformation initiatives are mostly successful. Perhaps even more striking, is the same level of success reported in our original data survey report. Digital transformation today remains as difficult to execute on effectively as it was in 2019. This is clearly an area where companies need targeted, effective methods and approaches to get the return on significant investment they are making through their digital transformation initiatives.
How Commercial Operations fits into the digital transformation strategy
Commercial Operations makes up a set of key business operations within organizations that drive revenue generation, enable automation of key document-based processes, and allow for effective contract and lifecycle management. As these elements are integral to any business, the vast majority of organizations see Commercial Operations as essential to their digital transformation strategy. Our data shows that a full 98% of companies have transformed components of their Commercial Operations as part of their overall DX strategy.
Yet, while many business process transformation initiatives focus on Commercial Operations, the challenges to successful implementation remain. In fact, the rate of successful Commercial Operations initiatives is even lower than that of digital transformation initiatives in general. Only 37% of companies describe their efforts to transform Commercial Operations as “mostly successful.”
While it is surprising that these essential revenue-generating strategies are so difficult to get right, the explanation might lie in the fact that Commercial Operations are so complex and multi-faceted, touch on so many parts of an organization, and are difficult to integrate and orchestrate successfully.
When we asked survey takers where specifically they have focused on digitally transforming their Commercial Operations, it becomes clear that essential functions get diverse levels of emphasis within a single organization. For example, this graphic of the survey data shows that the most common area of transformation is documents, and the least common is pricing -- and that there is a different level of emphasis on the low-hanging fruit versus the more difficult business processes to transform.
[Graphic from p. 15 of Survey report: the state of Commercial Operations transformation] Note: responses to the survey question, “Which of the following areas of commercial operations have been digitally transformed as part of your organization’s digital transformation strategy?”
Why transforming Commercial Operations is worth it
Given the rates of success among the survey takers, this seems like a steep hill to climb. But the fact is, even with very limited success, there are still considerable benefits to the digital innovation required for Commercial Operations transformation. As our survey data shows, most companies see the massive potential and considerable upside of even partial success. Commercial Operations transformation created a competitive advantage, helps optimize commercial performance, automates workflow, and improves the customer experience:
[Graphic from p. 13 Survey report: the state of Commercial Operations transformation] Note: Responses to the survey questions,
14. “Do you believe that digital transformation of commercial operations is putting/would put your organization ahead of the competition?”
15. “To what extent do you agree or disagree with the following statements? The commercial performance of our organization will never be maximized until we can optimize our commercial operations.”
16. “To what extent do you agree or disagree with the following statements? An improved commercial operations plan/ strategy would improve the customer experience.”
In conclusion, companies continue to see a path to successfully transforming their Commercial Operations through process transformation. Efforts to implement these initiatives, which lead to business process and workflow automation, produce meaningful business outcomes when it comes to productivity, integration, visibility, and growth. These projects also hold the promise for even greater benefits with improvements in initiatives to digitally transform their Commercial Operations.
Download the full Survey report: the state of commercial operations transformation.