Something Lost, Not Enough Gained

Across all industries, the majority of companies don’t yet have most of the business capabilities they seek from digital technologies (see Exhibit lll-4). Here’s how they see their capabilities shaping up so far:

The most frequently cited capability that companies have already achieved from their digital initiatives (if they sought to have that capability) was enabling customers to download their products or services. Overall, only 44% of respondents today can do this, although 90% of media and entertainment companies can.

The industries most likely to have already gained multiple capabilities from their digital initiatives include telecom, travel- related, and utilities. (These are the sectors with the highest number of green boxes in Exhibit III-5 below.)

Why these three industries? In telecom, phone service has become a highly digital offering. For example, in 2013 Verizon revenue (landline, wireless, and other businesses) was $121 billion. Revenue from Verizon’s wireless business was about two-thirds of that total ($81 billion).21 Wireless phone customers’ digital data reveals much more about them to a telecommunications firm (location by the moment, what they’re surfing, and so on) than does fi xed line customers’ data (location, who you’re calling, who’s calling you, among others).

As for the travel, hospitality, and transportation sector, travel agencies traffic in digital information: making travel arrangements for customers. The fast adoption of mobile devices has enabled travel services companies to help the mobile traveler 24×7. Since customers can easily make travel changes at any time and from anywhere, they may be making more demands from their travel providers-changing flights and hotels, or seeking recommendations for restaurants and other entertainment.

With smart meters sitting on a treasure chest of data about residential and business customers’ usage, utilities are now positioning themselves to sell preventive maintenance, new appliances, home monitoring, and other services. Using the data they have about customers’ power usage, utilities can customize pricing and tailor product offerings. Utilities across the U.S. have been installing smart meters at a growing rate; as of 2013, about 40% of U.S. households had them installed.22 The European Union is calling for 80% of European households to have smart meters by 2020. And another study predicts 70% of Asia-Pacific homes to have them by 2022, led by China.23

Exhibit lll-5: The Capabilities that Industries most want to Achieve by Going Digital

Exhibit lll-5 The Capabilities that Industries most want to Achieve by Go

Industries Get What They Need
How Digital Investments Differ by Industry