Digitization and It’s Pitfalls

I have just finished a #TechTalk on Twitter. I shared 10 key points on the pitfalls of digitization based on extensive research by McKinsey. If you missed it, below is the compilation of the tweets.


Based on an extensive research conducted by McKinsey, companies are indeed adopting digitization strategies. However, the research proved that many of the companies are not generating the ROIs which they had hoped for. In fact, the digitization strategies adopted imposed a negative effect on revenues and profits. This result is seen across industries, not just any particular industry.

In view of this, it is important for companies to realise ‘what went wrong’. Hence why I created the set of 10 tweets to share 10 key points on the pitfalls of digitisation.

So below are the sharing I made over twitter last week:

Tweet #1: Digitisation is penetrating all sectors. Some core changes are happening in professional services, healthcare and retail.

Tweet #2: Despite the fact that digital does create a lot of pockets of high growth, on average revenue was going down. Why so?

Tweet #3: Research suggests that some companies are investing in the wrong places or investing too much/little in the right ones.

Tweet #4: The top areas where digitization happens includes marketing and product. But very few focus on digitising supply chains.

Tweet #5: Where should companies invest in? Digitizing supply chain will give the largest potential impact on revenues & profits.

Tweet #6: Digitisation of supply chain is key – eg Airbnb & Uber show the power of tapping previously inaccessible sources of supply.

Digitising supply chain includes the ability to tap on new sources of supplies beyond physical boundaries, bring those new supplies to market and drive the demands into an upward growth. This will expand new business opportunities and therefore realising a much greater ROI. Nonetheless, a word of caution: digitisation of supply chain should not be done in isolation – ie the best companies out there adopts a digitisation strategy across all aspects of the business (as explained in my subsequent tweets).

Check out a related article on point 6 here: The Changing Reality: Marble Lobbies VS Virtual Network

Tweet #7: Leading companies invested in digitisation across all aspects and aligned their digital strategies with their corporate strategies.

Tweet #8: Learning from the leaders, companies need to avoid 3 key digitization pitfalls in organization and culture.

Tweet #9: Companies who are bold in digitization will outperform those which adopts the wait-and-see strategy.

Tweet #10: If a company is unable to cause disruption, the next best thing is to adopt a ‘fast-follower strategy’ with great execution.

The full research can be found here.

This article is written by Muhammad Md Rahim, the Co-Founder of Qiscus, based in Singapore. You can reach him on Twitter: @muhammadmdrahim



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