B2B companies are way behind their B2C peers when it comes to digital. In this blog we consider the positives for B2B CEOs looking at developing their organisation's digital capability.
Recent research (from McKinsey) shows that B2B (business-to-business) companies worldwide significantly trail their B2C (business to consumer) peers in their digital capabilities.
- Less than 24 percent of executives understand how their industries are being disrupted by digital
- Only one in four companies said their leadership communicates digital strategy clearly
- Less than 15 percent of companies had adopted test-and-learn approaches to new digital business initiatives
- Only 6 percent of B2B companies have a mobile strategy
In the B2C sector, the uptake and percentages are substantially higher and leading digital companies in the B2C sector are reaping the benefits, being up to 25% more profitable than their peers.
Digital in Australian B2B Companies
In our experience working with mid-size and small B2B organisations in Australia, the worldwide percentages reflect what is happening locally.
The four statistics (bullet points above) are startling. They show that B2B organisations don’t fully understand the opportunities or risks of digital.
Australian B2B companies need to get digital roadmaps in place and start reaping the benefits that digital offers. The alternative is to let your products, services and business model become obsolete.
Many struggling organisations in the b2b sector bemoan off-shoring, outsourcing and other factors beyond their control. In truth, many have failed (and are continuing to fail) to adapt to digital disruption and the constant business model changes that are occurring as a result.
3 positives for B2B companies wanting to embrace digital
For B2B companies that have yet to confront the new digital world, there are some real pluses to be taken from this research.
- It is not too late. If you were in the B2C sector you might already be dead! The digital B2C train has left the station and the B2C companies who were not on board were left behind, are struggling to survive or have not survived at all. In reality, many of your B2B peers are as far behind as you. This means you still have a chance to catch the train.
- There may be opportunities to become a digital leader and reap the financial benefits. Our observation is that many senior management teams in the b2b sector are suffering from digital paralysis. They can’t and won’t move or change. If you can get your senior management to develop and implement a digital roadmap you can quickly get a competitive edge, improve profitability and grab additional market share.
- You can draw lessons from the B2C sector. Given the B2C sector is ahead in its adoption of digital, you can learn much from how B2C companies have embraced digital. Find B2C companies with similarities to your B2B business. Focus on those that have embraced digital and made alterations to their business models. What has worked? What has not worked? What successful digital innovations in the B2C sector can be easily transferred to your business in the B2B sector?
For CEO’s in B2B companies now is the time to act. You can take a deep breath and thank your lucky stars that the digital B2B train has not (yet) left the station. But make no mistake – this research is the stationmaster blowing the whistle and shouting “All aboard”. Will you take the chance that departure will be delayed for another 6 or 12 months? Or is this the wake-up call you need to start your digital journey. The decision is yours but don’t say you haven’t been told!
Symphony3 exists to help organisations like yours to be successful in the digital world. Contact us today to find out how our digital roadmaps can guide you on your journey.