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How Companies Should Leverage Digitization

Summary:
As the COVID-19 pandemic has underscored the fragility of many business models, it has also intensified the race to adopt cutting-edge technologies. But adoption is only the first step; how these technologies are applied across five key areas will determine who reaches the finish line – and when. NEW YORK – It is no secret that rapid digitization is upending firms’ operations, systems, and entire business models. Whether companies can both manage the risks and also reap the massive rewards that digital technologies can deliver depends significantly on the actions they take in five key areas. The Effort to Disqualify Trump Is Worth It Kena Betancur/AFP via Getty Images

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As the COVID-19 pandemic has underscored the fragility of many business models, it has also intensified the race to adopt cutting-edge technologies. But adoption is only the first step; how these technologies are applied across five key areas will determine who reaches the finish line – and when.

NEW YORK – It is no secret that rapid digitization is upending firms’ operations, systems, and entire business models. Whether companies can both manage the risks and also reap the massive rewards that digital technologies can deliver depends significantly on the actions they take in five key areas.

First, digitization should enable managers to allocate the company’s capital and labor better – in real time. Efficient companies regularly review and upgrade their operations in at least three ways: streamlining existing processes, adopting best practices from outside their organizations, and identifying the most productive use of their assets. Digital technology can enhance all of these activities.

Movie-theater companies, for example, already deploy human capital based on real-time demand trends: in the United States, information about ticket sales and social-media reviews following releases on the East Coast will shape staffing decisions on the West Coast. Similar approaches can be implemented (or enhanced) in a wide range of sectors, boosting efficiency and productivity. The benefits will grow progressively, as companies adjust their hiring practices to target candidates with the relevant expertise.

But, just as fast-growing stores of data can aid management teams, they also risk complicating the picture. Fortunately, digitization can help managers to organize and collate data to enhance decision-making. This is the second key area.

Traditionally, management teams worked with far less information. Businesses tended to operate within one or few jurisdictions. And company decision-makers would hear the...

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